Thus, initial data are, in part, sophisticated guesses based on what is known as the birth–death model of firms.
Before this crisis, there was a strong preference, globally, for forward guidance, but recent events are really testing central bank communication. We’ve all been reminded that forecasts are flawed and that circumstances change fast. Plans that looked measured and reasonable at one point can look wholly inappropriate at another. As the MPC, we’ve not made any promises about future policy rates.