Choppy times ahead

“Looking ahead, the UK economy is facing a major rebalancing away from private and public consumption and towards net exports. Achieving that rebalancing, while confronting these headwinds, is likely to mean a choppy recovery.” (Mervyn King on prospects for the UK economy over the next couple of years).

Details here of the Bank of England’s latest inflation forecasts.

But as Chris Giles pointed out in an article in the Financial Times earlier on this week:

“Despite having hundreds of economists working in the Bank, and the most sophisticated suite of economic models in the UK, the monetary policy committee’s forecasts since 1997 have achieved no better outcome than if the committee had simply predicted the average level for inflation and growth over the 13-year period”

Hat tip to Michael Owen for spotting this excellent FT analysis. FT audit casts doubt on Bank’s forecasts