It has “significant shortcomings” in making predictions and relies on out-of-date IT systems.
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At 5,000, it has too many staff and should employ “fewer but more experienced” workers to crunch the numbers.
Families have paid the price with the highest borrowing costs in 15 years following 14 consecutive interest rate rises.
Ben Bernanke, former US Federal Reserve chairman, was invited to review the Bank after its woefully gloomy and wrong prediction that the UK would face a two-year-long recession.
Mr Bernanke found that its forecasting had “deteriorated significantly” and was relatively less accurate than most, including Canada’s Norges Bank and New Zealand’s central bank.
He made 12 recommendations in an 86-page report to help the Bank react better and faster to changing circumstances.
Mr Bernanke found that vital IT software which the Bank relies on to make its forecasts was “out of date and lacks important functionality”.
Governor Andrew Bailey yesterday refused to apologise for mistakes in forecasting and said the Bank “doesn’t do hindsight”.
He said it was impossible for central banks to predict the huge inflationary shocks from Russia’s invasion of Ukraine.
Mr Bailey said “I don’t think it’s reasonable for any monetary policy committee to foresee war”.
And here we grow
BRITAIN put its short recession behind it as the economy grew for the second month in a row, figures show.
Gross Domestic Product went up 0.1 per cent in February after 0.3 per cent in January, according to the Office for National Statistics.
The rise was boosted by car-making and services including hairdressers and hospitality.
PM Rishi Sunak called it “evidence the economy’s turned a corner”.
The Bank of England is predicting growth “higher than forecast”.