Data-based methods of flow forecasting are becoming increasingly popular due to their rapid development times, minimum information requirements, and ease of real-time implementation, with transfer function and artificial neural network methods the most commonly applied methods in practice. There is much antagonism between advocates of these two approaches that is fuelled by comparison studies where a state-of-the-art example of one method is unfairly compared with an out-of-date variant of the other technique. This paper presents state-of-the-art variants of these competing methods, non-linear transfer functions and modified recurrent cascade-correlation artificial neural networks, and objectively compares their forecasting performance using a case study based on the UK River Trent. Two methods of real-time error-based updating applicable to both the transfer function and artificial neural network methods are also presented. Comparison results reveal that both methods perform equally well in this case, and that the use of an updating technique can improve forecasting performance considerably, particularly if the forecast model is poor.