The Bank of England has published a staff working paper on how central banks should communicate forecast uncertainty, concluding that fan charts perform best overall at conveying both the central forecast and the uncertainty around it. The research finds that point forecasts anchor expectations slightly more at first, but that advantage is fragile once forecast errors occur. Fan charts materially reduce the subsequent de-anchoring of expectations and help protect credibility when inflation outcomes miss the forecast. The paper reports a two-part experimental study. In the first part, which compared fan charts, point forecasts, ranges, box-and-whisker plots, dot plots and speedometers for public and expert audiences, fan charts were well understood and outperformed other formats in communicating distributional information, while point forecasts conveyed little or misleading information about uncertainty. In the second part, a dynamic experiment with 1,600 UK participants found that forecast errors, especially large "unlucky" errors that moved inflation away from target, caused expectations to move sharply away from the central bank forecast. Fan charts mitigated that effect and also helped participants form more realistic views of the degree of uncertainty, with stronger learning effects when wider fan charts were shown.
Bank of England2026-07-17
Bank of England staff paper finds fan charts best communicate forecast uncertainty and reduce de-anchoring after forecast errors
The Bank of England has published a staff working paper finding that fan charts are the most effective format for communicating forecast uncertainty. Point forecasts anchored expectations slightly more at first, but forecast errors caused sharper de-anchoring, especially after large adverse misses. Fan charts reduced that de-anchoring and improved public understanding of uncertainty.