Posted 11/27/2023, 12:01:45 AM
UK Lords Committee Criticizes Bank of England for Inflation Forecasting Failures and Lack of Diversity
- Powerful Lords committee critical of Bank of England's inflation forecasts and reliance on "inadequate" models
- Report says lack of intellectual diversity at Bank and too many priorities in its remit contributed to high inflation
- Bank started raising rates in Dec 2021 as inflation surged, but initially expected it to fall back quickly
- Energy prices spiked after Russia invaded Ukraine, driving UK inflation to 41-year high of 11.1% in Oct 2022
- Lords committee calls for reforms to help manage future shocks, including streamlining Bank's responsibilities and reviewing its remit every 5 years