emperors_new_clothes_2022_14Feb2023_smaller
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[uk_rpi] [estimation_errors] [alternative_UK_indices] [expectation_charts]

Looking forward, using the different indices available (either gilts and Bank of England spot or forward rates), what inflation rates would be expected? The expectation possibilities considered are “spot v forward”, “forward v gilt” and “gilt v spot”. While none of the expectations were negative, the spot value fell to 0.5% at the end of 2008 (during the financial crisis). For forward (gilts), the minimum expectation was 1.8% (2.3%) in 2008 (2002). What really matters is how well these estimates performed against reality.