Treasury forecasts and the post-Brexit UK economy | Letters
In a way Steve Baker is right (Backlash over minister's claim that government forecasts are never right, 31 January), because it is nigh impossible to predict with precision a particular outcome in a world characterised by lots of unknowns. The Bank of England, among others, has long recognised this and provided a measure of uncertainty around its forecasts. In the case of Brexit, however, economic studies are not attempting to predict a final outcome but what will happen under different assumptions about the form of Brexit. The actual behaviour of the economy will not only reflect these assumptions but also other factors, such as growth in the US and other economies.
So it will not be possible to judge the quality of the economic analysis of Brexit from what actually happens in the economy. Actual growth in the future will be a mixture of Brexit- and non-Brexit-related influences. In order to evaluate the analysis of Brexit after the event it would be necessary to isolate the influence of the non-Brexit factors. In that sense, economic forecasts can neither be proved right nor wrong in terms of Brexit since any forecast errors might be put down to non-Brexit reasons. The importance of economic analysis of Brexit is in the assessed contribution of the Brexit effects to any future development of the UK economy. So after Brexit, only time and serious analysis can reveal whether the economic models were right or not.
John Whitley
(Former Bank of England forecaster) Lymington, Hampshire