Crash was economists' 'Michael Fish' moment, says Andy Haldane


Crash was economists' 'Michael Fish' moment, says Andy Haldane
The failure to predict the financial crisis was a "Michael Fish" moment for economists, the Bank of England's chief economist has said.

Andy Haldane compared financial forecasts to the famously inaccurate forecast by the BBC weatherman, ahead of the UK's great storm of 1987.

He said the profession was "to some degree in crisis" following the 2008-09 crash and the Brexit vote.

The Bank denies claims it gave gloomy forecasts to support the Remain side.

Mr Haldane was speaking to an audience at the Institute for Government in London on Thursday, when he made the comparison between economists and weather forecasters.


"Remember that? Michael Fish getting up: 'There's no hurricane coming but it will be very windy in Spain.' 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.'

"Look at how weather forecasting has changed itself in the period since. Actually there has been a dramatic improvement in our capacity to forecast the weather... a revolution in weather forecasting.

"Much more data is being thrown at the problem and that has brought about a transformation. And some of the self same could be true if we move from weather forecasting to economic."

On being asked whether there had been the economic "hurricane" forecast after the Brexit vote, he quipped: "It's been very windy in Spain."

But he told the audience at the Institute for Government: "It's true, again, fair cop. We had foreseen a sharper slowdown in the economy than has happened, in common with almost every other mainstream macro-forecaster."

He said that had been a "thoroughly good thing" and was largely down to the British consumer and British housing market - saying it was "almost as though the referendum had not taken place" and people's spending power had not been "materially dented" in 2016.

But he added there were "reasonable grounds" for thinking 2017 might be a "somewhat more difficult year" for the consumer as the fall in the exchange rate began to affect prices. But he said there was "nothing inevitable" about that - it was just a "best guess".

In 2012, on the 25th anniversary of his infamous broadcast, Mr Fish recalled: "The computer is the thing that did the forecast but... it was unfortunate that the computer lacked a huge amount of data from the area the storm was developing - but of course we didn't have the mega-computers that we have now."



Add Comment

all comments

  Other news

more
US Sanctions Firms Working With North Korea, Iran

US Sanctions Firms Working With North Korea, Iran..

24-Mar, 16:10

A television screen shows a news program reporting about North Korea's...

Row over US ISP customer data sales

Row over US ISP customer data sales..

24-Mar, 13:18

US politicians have voted to remove rules that demanded ISPs got...

Jay Z plans Trayvon Martin TV series and film

Jay Z plans Trayvon Martin TV series and film..

24-Mar, 10:08

The shooting of black teenager Trayvon Martin by a US neighbourhood...

A vote with few voters

A vote with few voters..

24-Mar, 23:42

Hong Kong chooses its next leader on Sunday in a vote overshadowed by...

3 Decapitated Bodies Found in Somalia After Abduction

3 Decapitated Bodies Found in Somalia After Abduction..

01-Feb, 12:46

Somalia residents say they have found three decapitated bodies just days...

Colombia keeps cocaine from spoiling Valentine's Day flowers

Colombia keeps cocaine from spoiling Valentine's Day flowers..

14-Feb, 00:14

Cocaine is probably the last thing most people think about when buying...

Always Spring Episode 66

Always Spring Episode 66..

30-Jan, 08:43

The following Always Spring Episode 66 English Sub has been released....

Romania: thousands attend pro-government rally

Romania: thousands attend pro-government rally..

25-Feb, 06:58

Thousands of people turned out for a pro-government rally in southern...