According to the Evening Standard today, the Bank of England’s growth forecast has been slashed and the inflation forecast is little changed. The former has been cut by 0.3 percentage points in 2016 and the latter by 0.4 points. Umm. Surely if 0.3 is slashed, 0.4 can’t be little changed.
Please note: I really like the Evening Standard and they are not the only paper that does this.
That said, when I see this inappropriate use of words I always wonder why. Bear in mind that at least three or four people will have read this before it was published so it is not an accident. Two reasons come to mind: number blindness (no one realised that the numbers do not justify the language) or an agenda is being pushed?
As we are nearly half way through 2015, there’s little “forecasting” to be done for this year’s numbers – given the economy is broadly stable, the 2015 “forecast” will be derived by putting some numbers in a spreadsheet. So to look at 2016, and proper forecasting, the Standard reported that “The Bank’s UK inflation forecast was little changed …… inflation at the end of 2016 is seen at 1.7 per cent, down from 2.1 per cent last time.” On growth, the headline said: “Economy still solid says Carney after forecast for growth is slashed” while the second paragraph read: “Growth for 2016 is revised down from 2.9 per cent to 2.6 per cent.” As the story was less dramatic than the headline perhaps it was the subs’ desire to draw in readers that is the problem?
For most economists, 0.3 percentage points is well within the margin of error for the data, which is likely to be revised at least that much post-publication, let alone a forecast that far out!
The write-up of the labour market data was also a bit confused in its choice of words. It read: “…. upbeat jobless figures showed the number of people out of worked dipped by 35,000 to a seven-year low of 1.83 million in the three months to March although the quarterly fall was the smallest for almost two years.” Clearly the “upbeat” was not a reference to the smallest fall for two years.
So the story was something like:
Growth forecasts down a touch but still above trend. Inflation dips too but still around the target 2 per cent. Unemployment still falling but at a slower rate.
But that’s too short and not exciting enough, they’ll say. What do we want from our news?
Note: the print version had a different headline from that now on-line – but “slashed” is still there!