Stop worrying about inflation, part two

A graph and a table for anyone who doubts the MPC's overconfidence.

The fan chart below depicts the probability of various outcomes for CPI inflation in the future. This is the famous fan chart.

The MPC's forecast by quarter -- based on market rates and £200bn of quantitative easing -- is reported in the first column. The second reports the probability that inflation will be below 1 per cent.

MPC's inflation forecasts
Year and quarter MPC inflation forecast % Likelihood of inflation being less than 1 %
2010 Q4 3.27 <5
2011 Q1 3.61 <5
2011 Q2 3.47 <5
2011 Q3 3.29 <5
2011 Q4 3.03 6
2012 Q1 2.12 21
2012 Q2 1.97 25
2012 Q3 1.94 27
2012 Q4 1.85 30
2013 Q1 1.83 31
2013 Q2 1.85 31
2013 Q3 1.9 30
2013 Q4 1.96 28

 

From 2012 Q1, inflation is below the target. There is a significant chance that inflation will be below 1 per cent. But this is all based on a very optimistic growth forecast that may not pan out -- and if it doesn't, inflation will be even lower. There is every likelihood that the MPC's forecast for growth will be lower in their new inflation report to be published next week.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.