Plans to reopen may mean ‘slightly stronger outlook’ but UK’s economic future remains dependent on further progress toward ending pandemic, says Bank
The Bank of England has said it expects the economy to recover strongly this year as coronavirus restrictions are lifted but it warned that the outlook remains “unusually uncertain”.
Announcing that it would keep its main interest rate on hold at a record low of 0.1 per cent, the Bank said the roadmap for reopening may mean a “slightly stronger outlook” for spending growth; however, the economy remains 10 per cent below its pre-pandemic level.
All nine members of the Bank’s Monetary Policy Committee voted not to change rates or add to the £895m money-printing programme.
The Bank highlighted reasons for optimism including better than expected economic data in January and the extension of the furlough scheme which means unemployment will rise less than previously forecast.
Since the Bank’s last forecast in February “developments in global GDP growth have been a little stronger than anticipated, and the substantial new US fiscal stimulus package should provide significant additional support to the outlook”, the MPC’s report said.
It cautioned that any economic rebound is dependent on continued progress in suppressing the virus.
