+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

Ex-Bank of England forecaster: Brexit predictions from economists aren't 'lunatic'

Nov 29, 2016, 13:52 IST

Advertisement
Martin Weale.Jason Alden - Pool/Getty Images

Leading British economist Martin Weale defended his profession from a recent wave of criticism, saying that economic forecasts are necessary but "simply the best you can do."

The former Bank of England interest rate setter has also aligned himself with prominent economic institutions by predicting a squeeze on pay and spending next year as inflation bites.

Pro-Brexit papers such as the Daily Mail and Daily Express and politicians, such as former education secretary Michael Gove and leading Tory backbencher Jacob Rees-Mogg, have all heavily criticised economists in recent weeks for what they see as overly pessimistic Brexit forecasts both before and since the vote.

Almost all banks and economic think tanks predicted a recession if Britain voted for Brexit ahead of the June 23 vote. But most backtracked on the forecasts after the shock vote.

Gove said the profession is in "crisis" and Rees-Mogg, who sits on the Treasury Select Committee, said some of the borrowing assumptions made by the Office for Budget Responsibility (OBR) in its audit of last week's Autumn Statement are "lunatic."

Advertisement

The Daily Mail on Friday also attacked the Institute of Fiscal Studies for predicting the longest period of wage stagnation in 70 years due to rising inflation.

Martin Weale told the BBC in an interview on Tuesday: "I think describing forecasts as lunatic really doesn't help anyone at all."

"Forecasting is uncertain, that's the nature of things, forecasts aren't wrong or right, they are simply the best you can do."

Advertisement
Pro-Brexit politicians and newspapers have attacked economists for being overly pessimistic.Charlotte Ball PA Wire/PA Images

Weale was a member of the Bank of England's influential Monetary Policy Committee (MPC) from 2010 to July of this year, helping to set the Bank's base interest rate.

Weale told the BBC: "Economists don't produce a collective view. People agree on some things and disagree on other things."

He added that economists "carry out a review of their forecasting errors and look at them to try and understand what can be learned from them."

He said Gove was setting up a "straw man to knock down in order to justify his own position."

Weale also aligned himself with current Bank of England, Treasury, and OBR forecasts, predicting a "squeeze" on pay and a slowdown in consumer spending as inflation accelerates due to the weak pound.

You can read the full BBC interview here.

Advertisement

NOW WATCH: Richard Branson: Entrepreneurs need to fill the gap where government is lacking

Please enable Javascript to watch this video
You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article