BrexitCentral: The Treasury’s record of economic forecasting is so poor, it should have given up trying years ago

Lies, damned lies and Whitehall models: this is the take-home message from a new report, Alternative Brexit Economic Analysis, issued today by Roger Bootle, Gerard Lyons, Julian Jessop and Patrick Minford.

It turns out that the mandarins have been up to their old Project Fear tricks again and this time they have been well and truly outed.

By way of a quick rehash: in the Brexit referendum campaign, the Treasury used a rigged version of its preferred gravity model in an all-out effort to scare the electorate into voting Remain. By “rigged”, I mean just that: the model ruled out any possible benefit from Brexit by assumption, and was set up so that it could not possibly give any forecast other than that Brexit would be bad. That model and its forecasts came in for withering criticism and its pessimistic Brexit forecasts turned out to be way off the mark. The subsequent performance of the UK economy has instead vindicated the forecasts of Patrick Minford, Tim Congdon and others who had forecast business as usual. The Treasury had destroyed its own credibility.

Fast forward two years and the good news is that Whitehall have got themselves a better model. The bad news is that the new model is proving to be of no benefit because they are abusing it in much the same way as they abused their earlier model. And they are doing their best to keep details secret, lest anything leak out that might trigger a fresh round of criticism.

To read Kevin Dowd’s piece for BrexitCentral in full, click here.

sign up to our Newsletter