How to improve the Bank of England's forecasts

The piece examines how the Bank of England’s economic forecasting could be enhanced. Milas and Papapanagiotou present evidence that time-varying parameter models incorporating 20 variables, particularly Divisia M4 money growth, produce superior density forecasts compared to the BoE’s current methodology, especially during turbulent periods like the 2008-2009 financial crisis and the 2022 inflation surge.