Bank of England to Review Forecasting Methods After Inflation Surprises

The Bank of England has announced plans to revamp its approach to forecasting the UK economy following criticism for inaccurate predictions during turbulent periods, including the pandemic, war in Ukraine, and inflation surge. A review found that the Bank's economic forecasting has deteriorated significantly compared to other central banks, with significant shortcomings identified. The Bank's recent errors were attributed to outdated methods and a lack of consultation with staff, according to former Federal Reserve Chairman Ben Bernanke, who criticized the Bank for excessive incrementalism.