Monetary Analysis
We support one of the Bank’s most high-profile activities – the monthly interest rate decision by the Monetary Policy Committee (MPC) which enables the Bank to meet the inflation target. We carry out analysis that is crucial to this decision, and also help to explain it to the wider world.
Our job is to understand the current economic climate and forecast future developments. To work out what’s going on now, we look at a wide variety of official statistics, survey indicators and financial market data. These cover the UK as well as major overseas economies. We also have twelve representatives around the UK who speak to local businesses in order to gauge conditions ‘on the ground’, and explain the thinking behind monetary policy decisions.
To work out where the economy is going over the next few years, we use a range of economic models to produce a macroeconomic forecast each quarter. Our findings are then presented to MPC members, who take them into account when setting interest rates. This forecast is communicated to the general public through the Inflation Report.
Underpinning this regular work, Monetary Analysis also conducts longer term policy-related economic research, which feeds in to publications such as the Quarterly Bulletin, the Bank’s working paper series and a wide array of economic journals.