Bank of England sets new growth target of 7.25% in 2021
The Bank of England confirmed Thursday that it upgraded its UK growth forecast, suggesting that it will not raise interest rates in the near future.
This is despite the possibility that inflation will develop the head.
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A recent meeting of the Central Bank’s Monetary Policy Committee changed interest rates at a low coronavirus rate of 0.1%, a low coronavirus, in line with analysts’ expectations.
The Bank of England also had a hold on its quantitative easing program at £895 million.
Its monetary policy report says the UK is recovering from the biggest drop in economic output, more than 300 years faster than initial expectations, thanks to the vaccine rollout.
The central bank set its new growth target for 2021 at 7.25%, up 2.25% from previous expectations, but output fell 1.5% in the first quarter.
The report states: “GDP (GDP) is expected to increase sharply in the second quarter of 2021, but activity for that quarter could be about 5% below the average 5% in the fourth quarter of 2019.
“GDP is expected to strongly recover from pre-existing levels for the remainder of this year, provided there are no restrictions on domestic economic activity.”
“We are pleased to announce that Giles Coghlan, chief currency analyst at HYCM. Interest rates and asset purchases remained the same, and these were important headlines that investors and traders had seen. ”
“But looking at the minutes, it is important to note that the BOE is adopting a more optimistic outlook for the UK economy. They say that the country’s GDP will fall below forecast in February. The success of the vaccine rollout is clearly playing a major role in this. Importantly, the estimated £150 billion in savings accumulated by consumers over the past 14 months or so is It is expected to be steadily freed to the economy within the next few months.”
“Uncertainty is dissipating and we see GBP and FTSE 100 proceed to the first mild bullish execution right after the decision. In the medium term, this trend is as lockdowns readily measure. It is expected to continue. Of course, the GBP’s aggressive performance will be welcomed by holiday makers. As many Brits prepare to travel abroad again later this year, it’s like the USD and Euros. Sterling’s improved strength against things certainly helps consumers,” Coghlan added.
