Other forecasters' expectations

Annex of the Monetary Policy Report - January 2020

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

On average, respondents expected four-quarter GDP growth to be broadly constant at between 1½% and 1¾% over the next three years (Chart A). External forecasters’ projections are higher on average than the MPC’s central projection at the one-year horizon, but lower three years ahead.

Table 1 Averages of other forecasters’ central projections

Source: Projections of outside forecasters as of 17 January 2020.

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

Chart A On average, forecasters’ central projections for GDP growth are a little below the MPC’s in the medium term

Projections for GDP

Source: Projections of outside forecasters as of 17 January 2020.

On average, external forecasters expect inflation to return gradually towards the target over the forecast period, reaching 2% at the three-year horizon (Chart B).

External forecasters’ projections for Bank Rate were higher on average than the market-implied path upon which the MPC’s projections are conditioned. Those external projections two and three years ahead have fallen slightly since November, such that the difference between them and the market-implied path has narrowed somewhat (Chart C).

Chart B Forecasters project inflation to return gradually to the MPC’s target

Projections for CPI inflation

Source: Projections of outside forecasters as of 17 January 2020.

Chart C Forecasters’ average central projection for Bank Rate remains well above market interest rates

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

Sources: Bloomberg Finance L.P. and projections of outside forecasters as of 17 January 2020 and 25 October 2019.

(a) Estimated using instantaneous forward overnight index swap rates in the 15 working days to 22 January 2020 and 30 October 2019 respectively.

  1. For detailed distributions, see ‘Other forecasters’ expectations’.

This page was last updated 31 January 2023