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Forecast Summary 2017

Key Highlights:

  • UK RGDP is expected to grow by 2.84% in 2018. However, the forecast variance is 1.42% across models.

  • UK Inflation is expected to be 2.52% in 2018. However, the forecast variance is 1.44 across models.

  • In comparison, UK Treasury Independent Consensus Forecasts are 1.2% and 3.2% for UK RGDP and Inflation.

Forecasts for the UK Economy 2018

  RGDP Growth Inflation
  Mean Dispersion Mean Dispersion
Autoregr. Moving Average 2.64 [-1.1 - 6.5] 5.08 [-6 - 15.4]
TVP Factor Augmented VAR 2.24 [-7 - 11.5] 1.81 [-9.2 - 12.8]
Bayesian VAR 2.99 [-0.2 - 6.1] 2.57 [-5.6 - 10.6]
Fin. Threshold VAR 2.99 [-0.2 - 6.1] 2.23 [-5.7 - 10.1]
Large Bayesian VAR 2.39 [-0.4 - 5.1] 2.39 [-5.4 - 10.2]
Fin. Smooth Transition VAR 4.32 [1.5 - 7.1] 4.63 [-3.3 - 12.6]
Threshold VAR 3.49 [0.5 - 6.4] 2.35 [-5.2 - 9.7]
Smooth Transition VAR 4.40 [1.6 - 7.2] 2.62 [-5.6 - 11.1]
DSGE 0.92 [-23.4 - 25] 0.04 [-12 - 11.9]
TVP VAR 2.68 [0.3 - 5.1] 1.66 [-1.3 - 4.5]
Markov Switching VAR 3.40 [2.1 - 4.8] 2.90 [-2.1 - 7.8]
Mixed Frequency VAR 0.00 [-0.1 - 0.1] 1.79 [-4.6 - 8.1]
Unobserved Component SV 4.29 [1.6 - 7] 3.35 [-2.2 - 8.8]
BVAR Common SV 2.95 [0.9 - 5] 2.13 [-2.6 - 6.9]
BVAR t Disturbances 2.89 [0.8 - 5] 2.24 [-3.6 - 8.1]
Average 2.84   2.52  
Highest 4.40   5.08  
Lowest 0.00   0.04  
Variance 1.42   1.44  
Average: Average of forecasts across Cremfi Forecast. Project Models
Dispersion: 10% - 90% Quantiles of Forecast Distribution. TVP: Time Varying Parameter,
DSGE: Dynamic Stochastic General Equilibrium, VAR: Vector Autoregressive, SV: Stochastic Volatility
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