- In its latest Monetary Policy Report, the Bank of England significantly upgraded its outlook for UK economic growth – reflecting a decline in health risks and uncertainty, and greater near-term support from fiscal policy and household spending
- The Bank also appeared more sanguine about the longer-term impact of COVID-19 on the economy, now expecting a lower degree of “scarring” on supply capacity. Furthermore, it now expects a significantly lower peak in unemployment this year, when the Job Retention Scheme expires.
- The forecast changes came against the backdrop of no change in monetary policy from the Monetary Policy Committee (MPC). However, Andy Haldane – the BoE’s outgoing chief economist – voted to reduce the targeted stock of asset purchases (“quantitative easing”), seemingly more swayed by positive economic data.
- Governor Andrew Bailey stressed that the near-term risks to the outlook remained skewed to the downside, most notably from a further wave of Covid infections. However,
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