06 May 2021
The Bank of England on Thursday will confirm that the UK’s economic recovery is stronger than had previously been expected.
The central bank in February predicted that the world's fifth-biggest economy would grow by 5% in 2021, having slumped by 10% in 2020.
However, it is now thought that they will say that Britain’s economy will grow more than 7% this year, which is largely thanks to the successful vaccine rollout.
The BoE will announce its latest forecasts at 12 noon when it is also expected to keep interest rates on hold at 0.1% and its bond-buying programme.
Howard Archer, chief economic adviser to the EY Item Club, said: “It looks highly likely that the Bank of England will revise significantly up its GDP growth forecast for the UK economy in 2021, although it may partly offset this by lowering expected growth in 2022, and also markedly its unemployment projections.”
Recent official data showed the rate of unemployment fell to 4.9% between December and February, as companies were preparing to hire again as the economy gradually opens up after the third national lockdown.
Inflation nearly doubled to 0.7% last month, up from a 0.4% rise in February. But despite this, most analysts believe there will be no interest rate hike until the end of 2022 or perhaps even in 2023.