The UK central bank on Monday set out the terms of reference for Bernanke’s review, focusing the former US Federal Reserve chair on five key aspects of the process. Those include “the appropriate conditioning assumptions in projections, including the interest rate path on which the forecast is based.”
The review is focused on the lessons to be learned for future forecasts “during times of significant uncertainty.” It will not pass judgment on past policy decisions, the terms of reference showed. Last November, when the rate path partially reflected the chaos caused by the Liz Truss budget program, the forecast was for a deep recession that Governor Andrew Bailey tried to play down in his subsequent public comments.
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