Bank of England to update inflation forecasting after Bernanke review

April 12 (UPI) -- The Bank of England said Friday it will reform its inflation forecasting after a review by former Federal Reserve Chair Ben Bernanke.

Bank of England Governor Andrew Bailey said in a statement that the review marked "a once-in-a-generation opportunity to update our forecasting, and ensure it is fit for our more uncertain world."

The review identified 12 recommendations to improve inflation forecasting.

Major themes of those recommendations include improving the bank's forecasting infrastructure, data management, software and economic models and creating a forecasting process that provides more support to the Monetary Policy Committee's decision-making.

"The forecasting and policy challenges faced by the Bank of England in recent years were hardly unique. Still, they have served as a stress test of forecasting at the Bank," Bernanke said. "The Bank, like other central banks and policy institutions, will be working to draw the appropriate lessons from this experience. The goal of this review is to assist in this effort."

The recommendations are also intended to help communicate the committee's view of the economy to the public, including the risks and uncertainties and policy rationale.

According to Bernanke, his review of the Bank of England's forecasting made no judgment on recent decisions by the bank.

He recommended the bank phase in the recommendations, starting with improving the forecasting infrastructure.

The Bank of England announced plans for Bernanke's review in July.

Bailey said then that doing the review "will allow us to take a step back and reflect on where our processes need to adapt to a world in which we increasingly face significant uncertainty."