The economy has become more uncertain in recent years. Large global shocks have affected UK inflation, growth and financial conditions, making the economic outlook harder to assess. To help meet these challenges, the Bank of England is strengthening the tools, analysis and communications that support the Monetary Policy Committee’s (MPC) decisions.
Supporting the Monetary Policy Committee to deliver low and stable inflation
Monetary policymaking has become more challenging in recent years. Since 2020, the UK economy has been hit by a series of major global shocks that have disrupted supply chains, raised costs and prices, and made the economic outlook more uncertain and difficult to assess (From NICE… to not so nice - speech by Ben Broadbent).
In 2023, the Bank’s Court asked Dr Ben Bernanke, former Chair of the Federal Reserve, to conduct an independent review of its Forecasting for monetary policy making and communication. Published in 2024, Dr Ben Bernanke’s review recognised many strengths in the Bank's framework while identifying areas where its tools, processes and ways of working could be strengthened. The Bank accepted the review's wide-ranging recommendations (the Bank’s response) and launched the MPT programme to deliver them.
The MPT programme is a major investment in the Bank’s monetary policy capabilities. Building on Dr Ben Bernanke’s review, the programme looks end-to-end at how the Bank develops analysis, advises the Monetary Policy Committee and explains its decisions.
Our MPT programme is not changing the Bank's fundamental monetary policy framework. Its key features remain unchanged:
In short, we are not changing what monetary policy is trying to achieve, who is accountable for it or who takes the decisions. What is changing is how we support the Committee in making their decisions.
Our vision is a monetary policymaking process that is better equipped to operate in a world characterised by greater complexity and rapid change (Monetary policy in uncertain times - speech by Andrew Bailey). We want to:
Ultimately, these changes will help the Bank better navigate economic shocks and strengthen its ability to deliver low and stable inflation, supporting a more predictable environment for households and businesses.
It’s been more than two years since the publication of Dr Ben Bernanke’s review, and the Monetary Policy Transformation programme has already delivered changes. Much of this work has been happening behind the scenes, laying the foundations for further improvements across the remainder of the programme.
We are modernising the data and analytics infrastructure that supports our assessment of the economy, in line with the Bank's wider Data and Analytics Strategy. Our new platform for time-series data analysis is now ready, allowing us to begin rationalising and migrating our existing catalogue of more than 2 million data series. This will also provide a more accessible and stable environment, helping Bank staff process and analyse data more efficiently.
Alongside improvements to our core forecasting models, we are developing a new generation of economic models and analytical tools. This includes new approaches to better understand developments in the job and energy markets, global economic spillovers and near-term economic conditions.
For example, we use machine-learning techniques to analyse how UK firms set pay, providing new insights into what drives changes in pay and how they respond to changes in inflation and labour market conditions (February 2026 MPR, Box B). We have also been developing new ‘nowcasting’ tools, which combine information from a wide range of economic indicators to produce more timely estimates of UK growth and other key variables, helping us build a more up-to-date picture of the economy at the very short-term horizon, between official data releases (Nowcasting GDP at the Bank of England: a Staggered-Combination MIDAS approach).
We have also built a more rigorous framework to evaluate our forecasts. In January 2026, we published the first (of the Bank's annual) Forecast Evaluation Report and released an open-source Python package on GitHub to help researchers and practitioners evaluate and visualise macroeconomic forecasts. These initiatives help us learn from past forecast performance and continuously improve our models and analytical tools over time.
Together, these developments broaden the range of tools and evidence available to policymakers. By drawing on a wider range of approaches they provide a richer understanding of the economy, its outlook, and the uncertainties surrounding it. They strengthen the analysis base underpinning our policy advice to committee members and help address areas identified by Dr Ben Bernanke for further improvement.
A central objective of the programme is to improve how uncertainty is analysed and incorporated into policymaking (for more, refer to Monetary policymaking at the Bank of England in uncertain times). For instance, we are making greater use of scenarios and a wider range of analytical approaches to explore how the economy might evolve under different conditions, to complement our central forecasts. Recent events, including the conflict in the Middle East, have highlighted the value of this approach: the April and July 2026 Monetary Policy Reports used a range of scenarios to explore how different energy price outcomes could affect the UK economy and inflation: what if higher energy prices persist for longer than expected and begin feed through more broadly into pay and prices across the economy?
We have also introduced illustrative policy rules in our Monetary Policy Reports to show how policy rates might evolve under different economic circumstances (MPR Annex 1). These simulations, by illustrating how monetary policy could respond to a range of developments and transmit through the UK economy, provide additional insight into the trade-offs policymakers may face when setting interest rates.
The changes to our monetary policy communications have been the most visible aspect of the transformation programme to date. Since November 2025, our Monetary Policy Report has included a more concise Summary and a new Overview section setting out the narrative behind the policy decision. The Report also gives greater prominence to analysis on topical policy issues, risks, scenarios and policy strategy, helping audiences better understand the context for MPC decisions.
The MPC Meeting Minutes now include individual members’ paragraphs, providing greater insight into the different perspectives and considerations shaping the Committee’s policy decisions. They also demonstrate how MPC members are drawing on Bank staff analysis, including scenarios and other material presented in the MPR boxes, when explaining their policy judgements.
A key objective of our transformation programme is to ensure our work benefits from external challenge, fresh perspectives and new ideas. We have been strengthening engagement with researchers, practitioners, policymakers and international counterparts, to keep learning from a wider range of expertise and adapting as policymaking challenges evolve.
To support this, we have launched the staff’s Macro Technical Papers series and associated Macro Modelling for Monetary Policy Forums. So far, the Bank has published nine Macro Technical Papers and organised two Macro Modelling Forums, held at the University of Leeds (April 2026) and in London (with NIESR and King’s College London, July 2025), creating new opportunities for external scrutiny, feedback and debate on the tools supporting monetary policy. Alongside wider engagement through events such as the Transforming Monetary Policy conference, these initiatives have helped ensure our work continues to be informed by a broad range of external perspectives.
We are also investing in our people, skills, and organisational capabilities needed to support high-quality monetary policymaking over the long term. We are strengthening the structures, expertise and ways of working within our monetary policy business area, to help ensure that the benefits of the transformation programme become part of how we operate every day. This includes strengthening senior leadership capacity, with a new Executive Director for Monetary Policy and changes to the Chief Economist role to sharpen its focus on intellectual leadership. We are also clarifying roles and responsibilities further and bringing in new skills and expertise, including data scientists and professional programme managers to support the programme’s effective delivery.
Ultimately, our Monetary Policy Transformation is not just about new tools and processes. It is about building a stronger organisation, better equipped to meet the challenges of monetary policymaking in a changing world.
The transformation programme is a multi-year programme and remains ongoing. Our priorities over the next phase include:
The programme's investment phase is expected to conclude in early 2028, although embedding the changes and realising their full benefits will continue beyond that point. We will continue to evaluate the impact of the programme, draw on stakeholder feedback and publish evidence on our progress.
Over time, we would expect the programme to contribute to richer analysis supporting policy decisions, clearer communication of risks and trade-offs, and greater understanding of, and confidence in, MPC judgements. While no framework can eliminate economic shocks or forecast errors, our aim is to ensure that monetary policy making remains resilient, transparent and effective in the face of future challenges.