Employer Project - A Team's Collaboration

Sentiment Analysis for the Bank of England

Overview:

As part of the LSE Data Analytics Career Accelerator, I collaborated on a team project for the Bank of England. Our objective was to assess whether sentiment in central bank speeches could reflect or even influence major economic indicators like interest rates, inflation, and GDP.
We analyzed 24 years of speech data using Python, NLTK, and the Loughran-McDonald financial sentiment dictionary. The project involved time series analysis, tone classification (hawkish/dovish/neutral), and regression modelling. During the fourth week of the project, I served as team leader, coordinating task allocation, resolving coding issues, and incorporating facilitator feedback to improve our analysis.

Key Contributions:

• Led the team through a critical project phase, ensuring task clarity and inclusive decision-making.


• Integrated a newly recommended sentiment analysis library and resolved technical errors across multiple codebases.


• Proposed improvements to deliverables, such as roadmap and risk sections, enhancing both the final report and presentation quality.


• Fostered collaboration in a high-pressure environment, balancing leadership with diplomacy.

Key Insights:

• Sentiment Mirrored Economic Stress: Negative sentiment spiked during financial crises, for example during 2008, Brexit and COVID-19.


• Tone Trends: Hawkish tones dominated during inflationary periods, while dovish tones took precedence during downturns.


• Limited Predictive Power: Sentiment reflected conditions but did not reliably predict economic indicators.


• Positive Sentiment Stood Out: Positive sentiment was identified as a top feature in feature importance analysis across indicators.

Recommendations:

• Use sentiment strategically to support market confidence—especially during uncertainty.


• Maintain speech clarity; complexity doesn’t enhance sentiment impact.


• Treat sentiment analysis as a contextual tool rather than a predictive model.

Click on the link below to view the final presentation.