Bank of England could use Twitter and Facebook to support its decisions

The Bank of England is looking into the use of social media to help it make decisions based on more timely economic information

The Bank of England is considering using social media to help it make decisions based on more timely economic information.

Data generated through social media activity could soon influence decisions on interest rate levels set by the regulator as it identifies how this data can improve the overall economic picture.

In an interview with Sky.com, Bank of England chief economist Andy Haldane said data from social networks could be more timely than official data.

"Official statistics tend to be lagging and tend to be revised. And what this scraping of the web can do is give us a better read on what's going on," he said.

The frequency of internet job searches and online prices can give an insight into future unemployment and inflation, according to Haldane. 

"[Informal sources of data] have been somewhat more reliable in picking up the uptick in the fortunes of the economy,” he said.

Financial services regulators have been keeping a close eye on the use of social media in the banking sector. It has recognised the advantages for banks that use it as a tool, but has also set strict rules about its use.

Investment companies are also using social media for sentiment analysis. In the US stock exchange, Capital Market Exchange is using it to provide insights on the corporate bond market to investment managers.

UK finance firms are also using social media to improve their responses to customer queries. Nationwide recently launched a 24-hour Twitter response service.

The building society's chief operating officer, Tony Prestedge, said: “In the short time businesses have been using social media, Twitter has quickly become the channel of choice for customers who want to talk to companies, whether it is to ask questions or share their opinions.”

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