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

Risk Warning Review plans aim to address 'negative framing' of investing

Risk Warning Review plans aim to address 'negative framing' of investing

Lowest investment rate in G7

Alex Sebastian
clock 09 April 2026 • 2 min read
Equity fund outflows hit £1.44bn during war-torn March

Equity fund outflows hit £1.44bn during war-torn March

Calastone Fund Flow index shows

Professional Adviser
clock 09 April 2026 • 2 min read
Quality investing: Holding conviction when markets test investors

Quality investing: Holding conviction when markets test investors

Quality investors have no doubt had their conviction 'severely tested' of late

Scott Spencer
clock 31 March 2026 • 5 min read