- The Bank of England’s latest monetary policy report surprised with its gloomy economic projections
- But in a time of high uncertainty, individual forecasts should not be given too much weight
August’s monetary policy report saw the Bank of England (BoE) announce a 0.5 percentage point increase in interest rates. That much was expected. But what caused shockwaves was the BoE’s predictions for the UK economy, which were significantly more pessimistic than May’s forecasts. Under the latest projections, the economy will soon enter recession – and stay there for over a year.
But though there is widespread consensus that the economic outlook has darkened, there is a chance things might not be quite as bad as the BoE’s forecasts suggest.