When challenged on the Bank of England’s poor record of economic forecasting by Ed Conway of Sky News this morning, Mervyn King said:
‘This isn’t a spot the ball contest where you’re trying to hit one point on the picture. This is a question of assessing the balance of risks…
We don’t pretend to have a crystal ball to see the future. All we can do is assess the balance of risks. I think this is a reasonable judgment about the balance of risks. It doesn’t say that there will be a recovery. It says that in our central view there will be a recovery, and there are risks on both sides to that — both on the upside and on the downside.’
King’s defence is that the Monetary Policy Committee doesn’t give a single figure for what it expects growth or inflation to be, but rather probabilities of them falling within various ranges — presented in pretty fan charts.
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