Given how much political and financial capital is expended on producing and communicating them, economic forecasts are in a pretty dire rut as a tool for influencing the public.
Leave aside, if you can, the question of whether you believe them generally, dismiss them en masse, or like them on some topics but not on others (and whether that coincides with when they agree with your views).
Consider instead their place in the political landscape. The broad reputation of economic forecasts is almost universally woeful. Having at one time been treated with implicit respect – those clever economists with their complex models – the reverse is now true. Either people tend towards pre-emptive scepticism or they are openly hostile.
Even politicians, who tend to lag behind public opinion by some years, appear less keen on trumpeting official forecasts as central planks of any given argument. The Chancellor of the Exchequer (“Spreadsheet Phil”, don’t forget) holds to the practice – though even then not as obsessively as Gordon Brown once did – but it’s notable that his would-be successors now tend to reach for fundamental principle to lend their speeches authority.
The roots of this disillusionment with forecasting surely lie in the Brown era. His own endless capacity for working the political angle of every number played a part, but really it was the system-wide failure to see the financial crisis coming that did the most damage.
Politics deepened the wounds and made them scar tissue. George Osborne, ever a close student of Brown, displayed a pretty shameless capacity to miss almost every target and prediction without comment, never mind apology. His politicised use of forecasts reached its nadir during the EU referendum, when Vote Leave were able to skewer his over-egged predictions by repurposing a 2014 SNP line: “Project Fear”.
The Remain campaign’s overconfidence that alarmist forecasting would secure victory led them to make a serious mistake: not only did the excess of spooky figures harm their campaign, but they made testable short-term predictions of instant recession after a Leave vote which then visibly did not come true.
They were out to win, of course, not to serve the reputation of economics, so they might not care. But the harm was still done. Now any OBR number, on the impact of any political decision, is routinely believed or disbelieved on essentially partisan lines.
You might think that fair or unfair. It’s good that people have developed a greater scepticism of numbers and authorities which were undoubtedly being abused to serve political ends.
At the same time, economic forecasting – done well, and independently, and honestly – has potential to be an informative tool. Businesses use it for good reason (though not always with success).
And – like polling after 2015, for example – it should be possible to learn from and correct mistakes. Predictions are only ever testable against real events, and getting things wrong is part of learning and improving.
The difficulty facing economic forecasters, in and outside government, and politicians who wish to be informed by and inform voters using such forecasts, is how to restore a reputation so severely damaged by serious mistakes and equally serious misuse by those in politics. It’s hard to see any road to do so which isn’t long and uncomfortable for all involved.