Or to put it another way, the Bank’s fan charts are fanning out so much it’s ridiculous.

Here are two, via the Bank of England’s latest Inflation Report:

First on GDP (getting a bit negative there…):

The really interesting bit here? The BoE’s  perspective on recessionary risks from Europe:

To the extent that such risks are already reflected in asset prices, funding costs and confidence, they will be captured in the MPC’s projections. But beyond that, the MPC sees no meaningful way to quantify such risks and they are therefore excluded from its fan charts…

…And the second fan chart on inflation. Looking at 5 per cent by the time 2011 is over. Amazingly the Bank thinks that it’ll be down to a mere 1.8 per cent in two years’ time. Amazing, but when the risk to growth is getting that unquantifiable…

Related link:
Chart du jour, zen and the art of inflation-targeting – FT Alphaville

This entry was posted by Joseph Cotterill on Wednesday, August 10th, 2011 at 10:50 and is filed under Capital markets. Tagged with bank of england, Deflation, eurozone, inflation, Recession, UK, uk economy. Edit this entry.