Bank of England has consistently overforecast UK’s GDP growth in the last 4-5 years…
Analysis of BoE’s UK Quarterly GDP forecasts from the last 23 Inflation Reports shows two important aspects. This is illustrated in chart below. Gray dots show quarterly GDP forecast pre Brexit Referendum, and Red dots show GSP forecast post Referendum. The Black line shows actual GDP performance. Findings are:
1 – GDP growth has been significantly lower post Brexit referendum
2 – Actual GDP growth has since 2014 been at the lower end of BoE’s forecast range
One can also see that BoE has systematically been overforecating GDP growth in recent Inflation Reports. Is this deliberate, i.e. to stabalise markets and provide a more optimistic outlook?
Gert Kamstrup 