The Bank of England is in denial. Brexit shows people don't act rationally | Robert Skidelsky

Economists get it wrong because they don't understand our reactions to uncertain situations such as our exit from the EU

Early last month, Andy Haldane, chief economist at the Bank of England, blamed"irrational behaviour" for the failure of the BoE's recent forecasting models. The failure to spot this irrationality had led policymakers to forecast that the British economy would slow after last June's Brexit referendum. Instead, British consumers have been on a heedless spending spree since the vote to leave the European Union; and, no less illogically, construction, manufacturing, and services have recovered.

Haldane offers no explanation for this burst of irrational behaviour. Nor can he: to him, irrationality simply means behaviour that is inconsistent with the forecasts derived from the BoE's model.

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