Gauging the Globe: The Bank's Approach to Nowcasting World GDP

10 Pages Posted: 5 Dec 2018

Date Written: September 21, 2018

Abstract

Global activity is a key driver of UK GDP and a bellwether of prospects. Nowcasting global GDP growth, or predicting outturns ahead of their release, is therefore a key input into the Monetary Policy Committee’s assessment of the UK economic outlook.

The Bank uses a suite of models to assess the momentum in the world economy in real time. A wide range of financial market, survey-based and high-frequency output indicators are used to inform the suite.

The statistical suite of global nowcasting models tends to provide an accurate assessment of global activity growth, and significantly outperformed a simple model that did not benefit from the use of high-frequency data during the financial crisis.

Suggested Citation

Kindberg-Hanlon, Gene and Sokol, Andrej, Gauging the Globe: The Bank's Approach to Nowcasting World GDP (September 21, 2018). Bank of England Quarterly Bulletin 2018 Q3. Available at SSRN: https://ssrn.com/abstract=3293714

Gene Kindberg-Hanlon (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Andrej Sokol

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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