Former US Federal Reserve Chair Ben Bernanke won’t be paid to conduct his review into the Bank of England’s forecasting, a response to a freedom of information request revealed.
(Bloomberg) — Former US Federal Reserve Chair Ben Bernanke won’t be paid to conduct his review into the Bank of England’s forecasting, a response to a freedom of information request revealed.
Bernanke, an economist, is expected to conduct most of his work from his base in the US, the UK central bank said Tuesday in its answer to a request for information from Bloomberg. The BOE said it will pay for the cost of Bernanke’s travel to the UK where necessary, including flights, accommodation and expenses, and for a research assistant.
“I will be doing many interviews online from the US, to save travel expenses and time,” Bernanke told Bloomberg in an email, though he expected “my most intensive work on the review to take place during in-person visit(s) to London.”
While the BOE said the number and duration of any trips had not yet been decided, it added that the costs would not be material enough as to cause any change to its budget.
Bernanke, now a distinguished senior fellow at public policy nonprofit the Brookings Institution, was appointed to lead a review into the BOE’s forecasting process last month.
The BOE vowed to conduct the review after becoming the target of heavy criticism for failing to predict the persistence of inflation, and wrongly forecasting the longest recession in modern history in November. Now, it’s under fire from some economists for hiking its base interest rate too far in an attempt to bring inflation down, following 14 consecutive lifts taking the base rate to 5.25%.
Lawmakers in the UK have accused the BOE’s nine-member Monetary Policy Committee of “bungling” its job, and Chancellor Jeremy Hunt’s own advisers worry that the Bank risks raising interest rates too far and pushing the UK into an unnecessary recession.
The appointment of Bernanke, a Nobel Prize winner who was credited with acting decisively to contain problems in the sub-prime mortgage market which precipitated the 2008 financial crisis, was widely welcomed by the UK’s financial industry.
Sanjay Raja, chief UK economist at Deutsche Bank, said Bernanke would have a “deep understanding” of the workings and defects of the so-called large-scale general equilibrium models used by the BOE.
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