Enhancing Central Bank Communications with Behavioural Insights

Abstract

In this joint Bank of England and Behavioural Insights Team study, we test the effectiveness of different approaches to central bank communications. Using an online experiment with a representative sample of the UK population, we measure how changes to the Bank of England’s summaries of the Inflation Report impact comprehension and trust in its policy messages. We find that the recently introduced Visual Summary of the Inflation Report improves comprehension of its main messages in a statistically significant way compared to the traditional executive summary. We also find that public comprehension and trust can be further improved by making the Visual Summary more relatable to people’s lives. Our findings thus shed light on how central banks can improve communication with the public at a time when trust in public institutions has fallen, while the responsibilities delegated to central banks have increased.