The Bank of England can’t blame IT for its dodgy forecasts

It hires the cleverest young graduates every year. It brings in talent from around the world. And it has the budget to acquire all the resources it needs. With all this at its disposal, you would think the Bank of England could at least come up with a better excuse for its dismal record on forecasting how the economy works than blaming it all on a creaking IT system. Its response to the review published today by the former Federal Reserve chairman Ben Bernanke is not going to wash – and sooner or later the Bank will need an honest reckoning with its failings over the last decade. 

When Bernanke was appointed to review how the Bank was operating it would have been reasonable to expect him to recommend some radical changes. After all, the Bank allowed inflation to soar to four times its legally mandated target, and it looks like inflation will stay stubbornly high even as it comes down across the rest of the world.