Other forecasters' expectations

This annex reports the results of the Bank’s most recent survey of external forecasters, carried out in October. The results of this survey are summarised in Table 1.^[1]

On average, respondents expected four-quarter GDP growth to pick up slightly over the next three years to 1.7% in 2022 Q4. That is lower than the November Report forecast (Chart A).

Table 1 Averages of other forecasters’ central projections

Source: Projections of outside forecasters as of 25 October 2019.

(a) Twelve-month rate.
(b) Four-quarter percentage change.
(c) Original purchase value. Purchased via the creation of central bank reserves.
(d) Index: January 2005 = 100.

Chart A On average, forecasters’ central projection for GDP growth is a little below the MPC’s

Projections for GDP

Source: Projections of outside forecasters as of 25 October 2019.

On average, external forecasters expect inflation to remain broadly stable over the next three years, at around 2%. That is higher than the November Report forecast at the one-year horizon, but lower at three years (Chart B).

External forecasters’ central projections for Bank Rate in one and two years’ time were lower, on average, than three months ago, while they were broadly similar at the three-year horizon (Chart C). The average central projection for Bank Rate remained well above the market-implied path upon which the November Report forecast is conditioned.

Chart B Forecasters project inflation to remain close to the MPC’s target

Projections for CPI inflation

Source: Projections of outside forecasters as of 25 October 2019.

Chart C Forecasters’ central projection for Bank Rate remains well above the market path

Market interest rates and averages of forecasters’ central projections of Bank Rate

Sources: Bloomberg Finance L.P. and projections of outside forecasters as of 25 October 2019 and 19 July 2019.

(a) Estimated using instantaneous forward overnight index swap rates in the 15 working days to 30 October 2018 and 24 July 2019 respectively.