Bank of England suffer ‘Michael Fish’ moment after admitting they got Project Fear Brexit forecast wrong
Bank claims their profession is now 'crisis' after comparing economists to famous BBC weatherman who said there would be no hurricane the night before the Great Storm
THE Bank of England has admitted it got its Project Fear scaremongering badly wrong - branding it their “Michael Fish” moment.
Comparing economists to the famous BBC weatherman who said there would not be a hurricane in 1987 the night before the Great Storm, the Bank said their profession is now in “crisis”.
Andy Haldane, the Bank of England’s chief economist, was forced to note there was a massive “disconnect” between their warnings about Brexit before June and the “remarkably placid” state of the economy since the vote to Leave.
And he finally admitted that many of the doom laden forecasts pumped out before the referendum will turn out to be “just scare stories”.
The FTSE 100 also hit a new high, topping 7,200 before closing up 0.08 per cent at 7195.31.
It was the sixth trading day in a row it hit a record closing high — its longest such run since 1997.
Chris Williamson, of IHS Markit, said: “A buoyant service sector adds to signs that the UK economy continues to defy widely-held expectations of a Brexit-driven slowdown.”
The sector, which includes pubs, restaurants and shops, accounts for 80 per cent of the economy.
Before Britain voted Mark Carney, the Governor of the Bank of England, warned in the Britain could slip into a recession after Brexit.
And he said a Leave vote posed a massive threat to the British economy.
Related Stories
But speaking to the Institute for Government in London on Thursday, Mr Haldane said attacks on economists were now “fair cop” since they got it so wrong.
And he compared their Brexit to disaster to their failure to predict 2008 financial crisis.
In a sign of how badly they got it wrong, Mr Haldane said it was as bad as the famous BBC report in October 1987, whether weatherman Michael Fish ruled out the fact a hurricane was “on the way” the Britain.
He said: “Let’s go back to a different crisis, the crisis not in economic forecasting but weather forecasting. Michael Fish getting up: ‘Someone’s called me, there’s no hurricane coming but it will be windy in Spain.’
"It is very similar to the sort of reports central banks issued pre-crisis, that there is no hurricane coming but it might be very windy in sub-prime.”
When probed to the lack of “hurricane” after the Brexit vote, Mr Haldane replied: “It’s true.”
Instead Mr Haldane noted that it was “business as usual” for the British economy.
“We had foreseen a sharper slowdown in the economy than has happened, in common with almost every other mainstream macro forecaster.
“Why has that been the case? We need look no further than the behaviour of the British consumer, the British housing market.
“If you look at how the consumer performed during the course of the last year it’s almost as though the referendum had not taken place,” he added.
During the referendum Brexit backers slammed the Bank for being too gloomy in their predictions about a Leave vote.
The bombshell confession came just a day after The Sun revealed the University of Cambridge concluded that Project Fear had “little basis in reality”.
Some of Britain’s best academics at the top uni’s elite Centre for Business Research scotched the Treasury’s pre-referendum forecasts and said any EU exit dip would quickly bounce back.