The Bank of England will see 446 employees leave in the coming months after more than 700 applied for a voluntary exit scheme launched in December to cut costs and fund a major overhaul of the central bank’s economic forecasting systems.

According to reporting by Financial News, the programme attracted 712 applications from the Bank’s workforce of more than 5,700, far exceeding the number ultimately accepted. The central bank said the departures represent roughly 8 per cent of staff and form part of a wider drive to reduce operating costs by about £45m in the next financial year.

The Bank will pay £36 million in settlement payments to the employees leaving under the scheme, an average of about £81,000 per person. The cost-cutting initiative is intended to generate roughly £35 million in annual savings, covering most of the targeted reductions in day-to-day expenditure.

A Bank of England spokesperson said the voluntary programme is part of a broader transformation of the institution’s operations. “The Bank is currently implementing a significant, multi-year transformation of our operations ensuring we are efficient, resilient, fit for the future and stick to our budget,” the spokesperson said. “As a result of the mutually agreed, time-limited resignation scheme launched last year, just under 450 staff will depart the Bank in the coming months.”

The savings push follows a review led by former Federal Reserve chair Ben Bernanke that examined weaknesses in the Bank’s forecasting framework during the recent inflation surge. The report concluded that while the Bank’s projections were broadly comparable with those of other central banks, the technology and analytical infrastructure supporting them required substantial improvement.

Ben Bernanke said the systems used to produce the Bank’s projections had fallen behind modern standards. The software and modelling tools were “out of date” and “not adequately maintained”, he said, adding that years of “makeshift fixes” had produced an inflexible structure that limited the ability of staff to carry out detailed analysis.

Governor Andrew Bailey had warned when launching the scheme that further job reductions could still occur if savings targets were not met. “We cannot rule out compulsory redundancies later down the line,” Bailey said at the time.

The voluntary departures follow a period of rapid expansion at the Bank, which has added more than 1,000 employees over the past five years. According to Bloomberg, the central bank is also reviewing property assets and other spending as it seeks additional efficiencies to stabilise its budget.

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