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The central banker who once said subprime was contained is leading the Bank of England’s review into its forecasting.
Ben Bernanke, the former Federal Reserve chair, will lead a review into the Bank of England’s forecasting and related processes during times of significant uncertainty.
The U.K. central bank, like others in the industrialized world, did not forecast the huge spike in inflation after the pandemic. Inflation in the U.K. is still elevated, at nearly 8% year-over-year in June.
“The U.K. economy has faced a series of unprecedented and unpredictable shocks. The review will allow us to take a step back and reflect on where our processes need to adapt to a world in which we increasingly face significant uncertainty,” said Andrew Bailey, the governor of the Bank of England, in a statement.
“Forecasts are an important tool for central banks to assess the economic outlook. But it is right to review the design and use of forecasts and their role in policymaking, in light of major economic shocks,” said Bernanke.
The review will begin this summer and conclude next year with the findings to be published in the spring.
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