This memorandum describes the role of the main components of a forecast, and the way they impinge on its overall accuracy, in the context of forecasting in the Bank of England. It begins with a brief discussion of the purposes of forecasting in the Bank and goes on to describe the part played by its macroeconomic model. Data problems are described, along with the role of judgment and assumptions. The issue of whether the Bank's forecasts should be published is then considered. Most of the questions raised by the Committee are addressed in the course of the foregoing discussion but in order to complete the responses, and to assist the Committee, answers are summarised in a concluding section.
Macroeconomic forecasting in the Bank of England