Bank of England Receives “Low Marks” for Analytical and Forecasting Abilities

Former Fed Chairman Ben Bernanke: “The accuracy of the British central bank's forecasts has deteriorated significantly”

Ben Bernanke

The Bank of England has been accused of incompetence. An independent review by a panel of experts, led by former Federal Reserve chairman Ben Bernanke, said the UK central bank “suffers from significant weaknesses” in economic forecasting that have “undermined its ability to primarily control inflation trends.”

According to the conclusions reached by Bernanke and his team of analysts, the accuracy of the British regulator’s forecasts leaves much to be desired and has “deteriorated significantly” since the covid pandemic. Bernanke said the Bank of England’s core economic model was “no longer fit for purpose,” and this had “impaired the ability to forecast the consequences of more significant events, such as the war between Russia and Ukraine.”

Bernanke’s negative assessment certainly did not please Bank of England Governor Andrew Bailey, who had to “accept the recommendations of the independent review,” acknowledging through gritted teeth “the need to adapt the bank’s forecasting process for the modern era and learn from the mistakes of the past.”