Treasury's 'over-optimistic' forecasts hinder MPC

clock

The House of Lords have criticised the Treasury for producing "over-optimistic" forecasts which is making it "more difficult than it needs to be" for the Bank of England to set interest rates.

A report published today by the House of Lords Economic Affairs Committee, on ‘The Current State of Monetary Policy’ also recommends the Bank of England should carry out more research into the link between rising house prices and consumer spending. The Committee, which includes two former Chancellors - Lord Lamont and Lord Lawson, states the over optimistic growth forecasts over the last five years has led to under-estimates of the budget deficit and borrowing requirements. As a result the report argues this situation has been unhelpful in setting interest rates and suggests this may h...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Looking beyond the oil shock

Looking beyond the oil shock

'A few weeks ago, there was genuine reason for optimism'

Fahad Hassan
clock 27 July 2026 • 4 min read
What does a new PM and chancellor mean for investments?

What does a new PM and chancellor mean for investments?

'What is important is what happens over the long term'

Jasper Thornton Boelman
clock 23 July 2026 • 4 min read
SJP rebrands global equity income fund and reduces charges

SJP rebrands global equity income fund and reduces charges

Appoints Acadian as investment adviser

Patrick Brusnahan
clock 22 July 2026 • 1 min read