What did the BOE's conventional forecasting miss and how has climate scenario analysis changed the way the bank now approaches its inflation projections?

Yeah.

So in the past few years, energy prices have mainly been driven by big global shocks like Russia's invasion of Ukraine and the recent conflict in the Middle East.

And those hard to forecast geopolitical events have been a really big contributor to upward moves on inflation and also errors in our inflation forecasts.

And we published some work last year where we kind of go through and decompose the inflation forecast errors that we've made.

But I think the insight that you're referring to is that at the same time, carbon prices in the emissions trading scheme have also been rising.

And so while these transition policies, the other energy market developments that I mentioned, and the broader macroeconomic environment can, of course, interact in ways that are hard to disentangle in real time, we've done some research that suggests changes in carbon pricing do matter for inflation dynamics.

super interesting i'll definitely be tracking that but i wanted to change lanes and come back to the ngfs which you've obviously been pretty involved with and which has grown from eight to i think over 130 members in the last decade that's pretty remarkable convening power among central banks but as we know convening isn't necessarily the same as acting So what in your mind has the NGFS changed to influence how central banks approach climate risk? Where's the gap between the scenarios the NGFS publishes and what central banks themselves are actually doing with them?

And action.

Okay, I was born in, not born in, but I lived in Little Compton, whole life.

Great town, yeah.

Grew up there.

Went to the Wilbur McMahon School, which is the public school in Little Compton, until sixth grade when I went to Gordon School in Providence, East Providence.

Ursula's my sister, as you all know, or most of you know, probably.

Okay.

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