Bad forecasting costs lives. New analysis by Bloomberg has found that there was never a point in 2023 when the consensus estimate of economists of inflation matched the figure that then came from the Office for National Statistics. For four months actual inflation numbers fell out of the entire range of UK forecast estimates. That’s the worst record in the G7….

The Bank of England massively overshot its inflation prediction at the end of 2022 – predicting 13.1% with the actual figure at 10.8%. Ratcheted-up interest rates followed as the BoE’s economists then underestimated the resilience of the high inflation “blip” in the first half of 2023 before overestimating price pressures in the second half. Its economists will have a heavy influence on the Monetary Policy Committee’s interest rate decisions – which determine mortgage and borrowing costs for the economy. No wonder the Bank was attacked by the Lords for a “dramatic” fall in public confidence…

We have fully geared economic policy to run off of accurate objective forecasting that there has never been. Forecasters’ credibility gap is making and breaking the political careers of PMs and chancellors without accountability. The shackles of false gold-plated projections will continue to trip up politicians unless they are broken…

See also: Tories Rally Against OBR’s Massively Inaccurate Forecasting