The Bank of England is unlikely to predict the next financial crisis, according to one of the central bank’s leading policymakers, who said economic models were unable to provide flawless forecasts for the UK economy.
Monetary policy committee member Gertjan Vlieghe said it was impossible for the Bank to forecast a recession, let alone the next crash, and no amount of fine-tuning models of the way the modern economy operates would change that harsh reality.
Appearing before MPs, Vlieghe warned it was inevitable there would be forecasting errors, which could include missing a cataclysmic event such as the 2008 banking crisis.
He said: “We are probably not going to forecast the next financial crisis, or forecast the next recession. Our models are just not that good.”
via The Guardian
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