Powerful Lords committee damns Bank of England over inflation forecasts
Powerful Lords committee damns Bank of England over inflation forecasts
Report says lack of ‘intellectual diversity’ at senior level and too wide a range of priorities led to errors and fall in public confidence
of course none of this is the government’s fault, and there’s definitely no “intellectual diversity” issue there either
The massive inconsistencies in government were the most obvious failures of the last 14 years. The BoE has two mechanisms to play with - interest rates and Quantitative easing. These are mechanisms that take months to gauge the outcome from. It is impossible to apply long term solutions with such a catastrophic approach to governing.
Car manufacturers do not know what is happening in 4 weeks time when the new rules are being applied. Rules that are being negotiated at a pace now. Everything is kneejerk with this crew. There is no consideration for anything outside of the party in fights.
This is the best summary I could come up with:
The Bank of England’s reliance on “inadequate” forecasting models and a lack of intellectual diversity within its most senior ranks contributed to inflation sticking at among the highest levels in decades, a Lords report has found.
In a report critical of Threadneedle Street, the powerful Lords economic affairs committee said the central bank had made “errors” in its handling of the inflation shock triggered after the Covid pandemic and Russia’s invasion of Ukraine.
Highlighting incorrect forecasts made in 2021 for inflation to cool, it said possible reasons included a “perceived lack of intellectual diversity” at the central bank.
At the time, it expected inflation to fall back as global supply bottlenecks eased, while the end of the government’s furlough scheme complicated its decision.
Energy prices were rising before the war, but then surged to among the highest levels on record after the February 2022 invasion, driving UK inflation to peak at a 41-year high of 11.1% by October 2022.
Calling for reforms to help manage future inflation shocks, the Lords report said the government should “prune” the Bank’s remit to reduce the number of issues it is focused on, while introducing a review of its responsibilities every five years.
The original article contains 462 words, the summary contains 199 words. Saved 57%. I'm a bot and I'm open source!