risks around energy prices and inflation persistence. 8. this is likely to include an array of models, including those highlighted in dr bernanke ’ s review, such as those that feature a rich description of the monetary transmission mechanism, alternative expectations formation processes, detailed descriptions of the labour market, the uk's trading relationships and other important aspects of the supply side of the economy. 9. one approach could be through more systematic forecast combination. this idea dates back at least as far as bates and granger ( 1969 ), who showed that a weighted average of two unbiased forecasts will always perform at least as well as the best model. a more recent literature has applied combination beyond point forecasts to the whole distribution of outturns : density combination approaches were first raised in wallis ( 2005 ), reviewed recently in aastveit, mitchell, ravazzolo, van dijk ( 2018 ) and for quantile forecasts in aastveit, ter ellen, mantoan ( 2024 ). 10. the bank of canada, for example, is planning a new generation of models, featuring a new workhorse macroeconomic model and a suite of alternative models to better support a risk management approach to monetary policy ( coletti, 2023 ). 11. we continue to value the input from market participants and technical experts, including via the market participants survey ( maps ). 12. for example, a working paper published by bank staff in july ( kanngiesser and willems, 2024 ) proposes a systematic approach for central banks to leverage past forecasts and associated errors with the aim of learning more about the structure and functioning of the underlying economy. 13. the latest research suggests that simpler communication improves understanding and trust among those with an economics background, as well as the general public ( mcmahon & naylor, 2023 ). 14. for example, van der bles et al ( 2019 ) contains helpful advice to communicators of uncertainty. clare lombardelli deputy governor, monetary policy ©2024 bank of england

##ke ’ s recommendations was around changing our external communications to better communicate uncertainty around how the economy may evolve and what that means for monetary policy. dr bernanke recommends that we ‘ move cautiously ’ in adopting changes to communications. he is right, not least because of the importance of clear communication for monetary policy. a landscape with a baseline forecast and scenarios brings huge opportunities for communicating uncertainty, but also challenges on clarity. clear communication is a key part of ensuring trust in what we do. and by increasing understanding of our reaction function, it can improve the effectiveness of monetary policy. and we know that the simpler the communication, the better. substantive changes to our external communications will take time. one challenge is how to communicate uncertainty in the best way possible. the fan charts were a major innovation when they were introduced in the 1990s, but i agree with dr bernanke that there are better ways to convey uncertainty. scenarios will help us here, they will enable us to provide narratives about how the economy may differ from the baseline projection, why, and what that would mean. but we will need to draw on the advice of others to communicate the degree of uncertainty and the balance of risks effectively. and that may include learning from disciplines other than economics. implementing our new approach these changes will require a substantial improvement in our technology. this was dr bernanke ’ s first recommendation, and one to which he assigned a high priority. with technology changing rapidly and the challenges of recent years we have slipped behind the frontier. dated technology impedes the ability of bank staff to support the mpc because even some quite routine analytical tasks involve a great deal of manual processing. it also impedes our ability to draw on new and different types of data. of course, data are the lifeblood of our policy analysis : we are all data obsessives on the mpc. the evolving data help us gauge the forces that are acting on the economy and are key to our assessment of the medium - term outlook and risks. this is an exciting area of innovation. for example, the digitisation of transactions means high - frequency and granular data are increasingly available, and the data technology to process such data is also evolving rapidly. we have an extensive work programme well underway. this is the largest modernisation of our time - series data capabilities in 25 years. and is part of a more general transformation programme to modernise the bank's data infrastructure ( benford, 2024a ) including moving to the cloud