Dismal profession far too gloomy about Brexit

By January 6, 2017February 18th, 2021No Comments

Our forecasts are just about as good as Michael Fish’s: Bank of England chief’s stark admission as it’s revealed Britain has the STRONGEST economy in the world despite Brexit warnings

Bank of England’s chief economist Andy Haldane said profession was ‘in crisis’

Said economists suffered Michael Fish moment over financial crisis and Brexit

He admitted it was ‘business as usual’ despite the dire warnings of a recession

Weatherman Mr Fish famously told viewers there would be no hurricane in 1987


6 January 2017

Economists have suffered a Michael Fish moment over the financial crisis and the impact of the Brexit vote, a top Bank of England official declared yesterday.

In a frank admission, the Bank’s chief economist Andy Haldane said his profession was ‘in crisis’ after bungling so many major calls in recent years.

He admitted that despite dire warnings of recession from the Bank and the Treasury, it had been ‘business as usual’ since the EU referendum, with households carrying on as if nothing had happened.

Mr Haldane, 49, compared economic forecasters to weathermen – in particular Mr Fish who in 1987 famously told the nation there would be no hurricane.

Just hours later the worst storm for 300 years battered the UK, claiming 20 lives, flattening 15 million trees and causing £1.5billion of damage.

‘Let’s go back to a different crisis, which is a crisis not in economic forecasting but in weather forecasting that resulted from the 1987 Great Storm,’ he said.

‘Michael Fish getting up, saying “someone’s just called me, hurricane coming. There’s no hurricane coming but it will be very windy in Spain”.

‘That’s very similar to the sort of reports central banks, naming no names, issued pre-crisis. There is no hurricane coming but it might be very windy in the sub-prime sector.’

Mr Haldane’s comments came as figures showed the economy grew by more than 1 per cent in the six months after the vote to leave the EU – adding to the deluge of upbeat data published since the Brexit vote.

In a boost to savers and pensioners with money tied up in the stock market, shares in London also closed at a record high for a sixth day running, a feat last achieved in 1997.

The FTSE 100 index edged 5.57 points higher to 7195.31 – taking gains since the referendum to 13.5 per cent or £216 billion.

Mr Haldane, a key lieutenant of Governor Mark Carney, conceded that the Bank was too gloomy following the EU vote.

‘Fair cop, we had foreseen a sharper slowdown in the economy than has happened,’ he said. ‘If you look at how the British consumer performed during the course of last year, it is almost as though the referendum had not taken place.

‘In terms of many of the real things like pay and jobs, it’s pretty much business as usual.’

Conceding the Bank was too gloomy about the impact of Brexit, Mr Haldane said: ‘The profession is to some degree in crisis.’ He added: ‘If an economist ever tells you they are certain about anything, that is the time to worry.’

Fresh figures yesterday showed the economy grew by 0.5 per cent in the final quarter of 2016, having expanded by 0.6 per cent in the previous three months.

That means output is now 1.1 per cent higher than it was at the time of the EU referendum in June, according to the report by research group IHS Markit.

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