‘Collective amnesia’ before crisis, admits rate-setter Andy Haldane

Bank of England rate-setter Andy Haldane, who recently labelled the financial crash the economics profession’s “Michael Fish moment”, on Tuesday said policymakers were guilty of “collective amnesia” in the build-up to the recession.

He told the Treasury Select Committee that “over the years we have made sizable errors... the most notable of which were around the financial crisis”.

The Bank’s chief economist said the danger of leverage had been underestimated, adding: “I think there was a degree of collective amnesia... some of the lessons of history had been forgotten to some degree.”

But Haldane (pictured) stressed economists, like meteorologists in the wake of the 1987 hurricane which Fish failed to predict, had learned their lessons and improved their modelling.