Box sets » Uncertainty

Chart 2.G: CPI inflation and Bank Rate: central forecast versus alternative scenarios
Inflation risks intensified after we closed our pre-measures forecast for the October 2021 Budget. This box showed two stylised scenarios embodying higher and more persistent inflation than in our central forecast to highlight the uncertainty surrounding the outlook. In one scenario inflation was driven mainly by pressures in the product market, and the other mainly pressures in the labour market, which had different implications for wages and consumption.

Economy categories: Labour market, Inflation

Cross-cutting categories: Uncertainty

Chart 4.C: 10,000 simulations of current balance and change in PSND in 2024-25
We illustrate the uncertainty around our forecasts using a variety of approaches. This box described using stochastic simulations to produce fan charts, which could be used to enhance presentation of uncertainty in future EFOs, and showed some experimental results.

Fiscal categories: Public sector net debt

Cross-cutting categories: Fan charts, Uncertainty