Bank Of England To Use Social Media To Predict Economic Trends

Finance is a very complicated business isn’t it? Inflation, interest rates, foreign currency rates, borrowing, lending, mortgages and business loans etc. all make for a set of parameters that are in constant flux. It’s no wonder that the banks turn to technology to assist them in the use information to try to gain some economic stability. The Bank of England is the central bank in charge of determining interest rates for millions of UK residents. So being able to predict economic trends is of massive importance. In order for them to try and accomplish this, the Bank of England has lots of tools at  their disposal.

The only trouble with research is that it more often than not depends upon analysing and assessing trends that have already occurred. The banks know this and are trying to turn to better models to follow in an attempt to gain a greater understanding.

The Bank of England has recently set up a special Taskforce which will begin scraping searches and social networks, such as Facebook and Twitter, for some more information about the state of economy in Britain.

Sky News states, the world’s eighth oldest bank will assess the frequency of job searches and monitor prices online in an attempt to understand potential unemployment rates and monitor the rates of inflation.

The information provided will also gauge the language used on social networks to in order to better understand the state of some financial markets. This is yet another example of the shift towards “big data,” whereby firms collect and analyse massive sets of digital data, rather than using a traditional database technique in order to detect patterns as they occur.

The Bank of England says it has used these techniques to help impose new controls on the housing market earlier in 2014 and  they hope this “big shift from the past” will better assist them in judging the UK’s financial status in the future.

[Image via thewestsidestory]

SOURCE: http://www.engadget.com/2014/12/29/bank-of-england-social-economy