Powerful Lords committee damns Bank of England over inflation forecasts

Report says lack of ‘intellectual diversity’ at senior level and too wide a range of priorities led to errors and fall in public confidence

The Bank of England’s reliance on “inadequate” forecasting models and a lack of intellectual diversity within its most senior ranks contributed to inflation sticking at among the highest levels in decades, a Lords report has found.

In a report critical of Threadneedle Street, the powerful Lords economic affairs committee said the central bank had made “errors” in its handling of the inflation shock triggered after the Covid pandemic and Russia’s invasion of Ukraine.