Paul Marshall of Marshall Wace criticises Bank of England over Brexit forecasts

Mark Carney
of England Governor Mark Carney attends a working session during
the One Planet Summit at the Seine Musicale center in
Boulogne-Billancourt, near Paris, France, December 12,


  • Paul Marshall, cofounder of $34 billion UK hedge fund,
    Marshall Wace, accuses the Bank of England of anti-Brexit
  • The Old Lady of Threadneedle Street’s forecasts since
    the vote have been “so far adrift as to be embarrassing,”
    Marshall wrote in the Financial Times.
  • Marshall was a major backer of the leave campaign
    during the run up to the referendum, and donated around
    £100,000 to the campaign.

LONDON — Paul Marshall, a cofounder of British hedge fund giant
Marshall Wace, has accused the Bank of England of being
excessively negative about Brexit, and by doing so, says the
central bank is at risk of ruining its credibility.

Writing in the Financial Times on Wednesday,
Marshall said
that the bank’s persistently pessimistic forecasts about the
negative economic impacts of the vote to leave the EU could now
be considered to mark the beginnings of what he called a
systematic cognitive bias.”

“All of us have these types of biases and good economic
forecasters are careful to be aware of their own prejudices,”
Marshall wrote.

“Not so the Bank of England. It has now come to embody
anti-Brexit cognitive bias to such a degree that it endangers its
credibility as an institution.”

Marshall, it should be noted, was a major backer of the
leave campaign during the run up to the referendum, and donated
around £100,000 to the campaign.

The biggest point of criticism of the bank, Marshall wrote,
centres around its August 2016 forecasts — the first set after
the referendum.

“The bank’s forecasts were so far adrift as to be
embarrassing. And because the Bank of England not only makes
predictions but also sets monetary policy, poor forecasting can
lead to poor policy,” Marshall, whose firm has assets under
management of close to $34 billion.

“Those errant forecasts provided the rationale for last
year’s emergency cut in interest rates and additional
quantitative easing that were, with the benefit of hindsight,

Marshall’s article resurfaces criticisms that were
aggressively levelled at the bank soon after the referendum, when
numerous leave backing politicians called
for the resignation of Governor Mark Carney, over what they saw
as Carney’s embodiment of the bank’s anti-Brexit

In late 2016, Carney faced attacks from the likes of former Tory
leader William Hague, failed Conservative party leadership
candidate Michael Gove, and former chancellors Norman Lamont and
Nigel Lawson.

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Most of his critics at the time felt he was too supportive of the
Remain campaign prior to the EU referendum, and had politicised a
role that is supposed to be purely technocratic.