Bank of England has now started monitoring what the British people are searching on the Internet and what they are sharing on social networks including Facebook and Twitter for collecting unconventional economic data.
It is reported special team has been set up by BoE to explore how the new data can help them in improving the picture of Britain’s recovery. This will also help them in deciding whether to change interest rates.
BoE chief economist Andy Haldane said analysis of the frequency of online prices searching and that of job may provide them with insights into inflation and unemployment.
He added further that such data will be better than official data as it could be more timely. Also, the official statistics may tend to lag.
Haldane said a new advanced analytics team are put into work to construct little models and also methods for extracting the data. They have a data lab too and their experiment would bring a big strategic change for the bank.
Earlier this year the bank imposed new constraints on housing market and the decision was based on the new data sources that included database on mortgages.
However, things may not be so rosy as it is seen. An article in Forbes says the bank needs to be careful as a similar project by Google was disappointing. It was dubbed as Google Flu and the Google Trends monitored influenza symptoms and cures. However, the data was not helpful to researchers in determining the incidence of flu.
