The Monetary Policy Committee member said the central bank was experimenting with several uses for the technology, including providing early warning signs of a financial crisis, analysing the labour market, and short-term predictions about the direction of consumer prices. 

Greene said there were “massive” opportunities to use AI to help track the economy but added that central banks should use the technology judiciously. 

The Brown University economist was speaking was speaking at a conference at King’s College, London. 

Greene said the Bank has used “machine learning techniques” to help produce inflation forecasts.  

She added that staff found these models are “more accurate at forecasting consumer price inflation at shorter time horizons so it can be useful there, particularly as cross checks to more traditional models.” 

However, Greene was reserved about the effect AI might have on the wider economy. 

She said: “There is an argument that AI should boost productivity growth and quite quickly.  

“This could happen through income effects, so workers will earn more and will either work less and have more leisure time or will work the same and just consume more.” 

“I have my doubts that we’ll see real productivity gains over my forecast horizon, which again is two to three years.” 

Her comments come as the Office for National Statistics admitted today that inflation was overstated in April by 0.1%, due to an error in the vehicle excise duty data provided by the Department for Transport, which is used to calculate consumer price inflation. 

The cost of living jumped to 3.5% in April from 2.6%, which was higher than expected. 

The government’s data body does not plan to revise its inflation data, but will use the correctly weighted data from now on, meaning no further statistics will be affected. 

Greene’s comments also come after the Bank said in November it had begun the biggest “root-and-branch” reforms to the way it makes and communicates rate-setting policy in almost 30 years. 

These reforms follow a review last April by former US Federal Reserve chair Ben Bernanke review, commissioned after the Bank failed to predict inflation would hit a four-decade high of 11.1% in 2022, sparked by energy price rises and post-pandemic supply chain shocks. 

The Bank has promised to change:

• Its data infrastructure and our modelling framework 

• The inputs into policymaking, including “the role of the forecast and scenarios, and their underlying assumptions” 

• The way MPC discussions are structured 

• How data is used to inform the MPC’s policy decisions 

• How the Bank communicates its “monetary policy decisions, outlook and risks to both financial markets and the general public” 

The overhaul sparked by the Bernanke review is being overseen by Bank deputy governor Clare Lombardelli.