Abstract
This article evaluates the density forecasts of inflation published by the Bank of England and the National Institute of Economic and Social Research. It extends the analysis of the Bank of England’s fan charts in an earlier article by considering data up to 2003, quarter 4, and by correcting some technical details in the light of information published on the Bank’s website in Summer 2003. National Institute forecasts are also considered, although there are fewer comparable observations. Both groups’ central point forecasts are found to be unbiased, but their density forecasts substantially overstated forecast uncertainty.
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