The fan chart is designed to strike the right balance between these two hazards, by giving a broad brush articulation of the distribution that the Committee judges appropriate. But there is always room for improvement. So we turn to some of the ideas we have considered for providing additional information on particular aspects of the distribution, to help deal with some of these difficulties. For example, the next chart shows how the distribution has changed since the previous forecast by placing the two distributions side by side, as in [Slide 15]. This chart shows that the most likely outcome in the dark red band has shifted down compared with the earlier forecast. But that change in the most likely outcome is not reflected to the same degree in the rest of the fan chart – and that is because there has been an offsetting upwards shift in the balance of risks. This is most clearly seen by noting how the dark line is flatter than the light one on the right hand side of the chart, and steeper than it is on the left. As we discussed earlier, the aim of MPC communication is to convey useful information about the broad distribution, without being driven to spurious accuracy. There are many ways we can do this. One idea that we are investigating is to show charts of the MPC’s view of the probability that inflation will be above the 2% target at a particular point in time. This is shown in [Slide 16].
The Bank of England could publish all of the many documents which it creates internally each month. But that would simply make it harder for the really important information to get through. Less can be more. We could have minute by minute revisions to weather forecasts or terrorism threat estimates, but that might overwhelm genuine flood or bomb warnings to which we want people to respond. 16 Second, communication can sometimes aggravate market failures. Suppose the RSPB knows a secret location where rare birds are nesting. To preserve biodiversity, there may be a great benefit to ensuring the birds can nest undisturbed. If the RSPB reveals its secret, bird watchers may converge on the location. Here, less than full transparency mitigates the problem. An example in the same spirit is whether or not use by commercial banks of the Bank of England’s lending facilities should be concealed. If use of the facility were made public,  15  For an exposition of the credibility problem in monetary policy, see Kydland and Prescott (1977); for an account of the benefits of central bank independence, see Fischer (1994). 16  This idea has received theoretical attention recently following the encouragement of Sims (2003). He sketches a model in which agents are “rationally inattentive”, focusing only on information which they diagnose makes an important contribution to minimising forecast errors.