The Bank of England announces that the British economy is recovering from a Covid recession faster than expected as the vaccine continues to be rolled out
- The central bank, led by Governor Andrew Bailey, appears ready to raise its UK growth forecasts when it publishes its latest monetary policy report.
- In its latest update in February, the bank set a 5 percent increase in production this year after a 9.8 percent decline in 2020.
- In another sign of the UK’s recovery, the Institute of Economic Affairs believes there is no need for “emergency measures” to help pay off the UK’s £ 2 trillion debt.
The British economy is recovering from a coronavirus recession faster than expected As the vaccine continues to roll out, the Bank of England will announce this week.
The central bank, led by Governor Andrew Bailey, appears ready to raise its UK growth forecast when it publishes its latest monetary policy report on Thursday.
In its latest update in February, the bank announced a 5% increase in production this year after a decline of 9.8% in 2020. Unemployment is also set to rise to 7.8%.
Optimism: The Bank of England, led by Governor Andrew Bailey (above), appears poised to raise the UK’s growth forecast
However, as the outlook improves, this appears very pessimistic.
Howard Archer, chief economic advisor to the forecast group EY Item Club, said: “ The economy appears to have started the second quarter a lot, capitalizing on the easing of restrictions and the continued roll out of the vaccine.
The additional near-term support for the economy introduced in the March budget appears to have lifted confidence as well.
“Significantly, the labor market is showing resilience and the survey evidence indicates that more confident companies are preparing to take on workers.” Goldman Sachs said last week that it expects Britain’s economy to grow 7.8 percent this year – the fastest growth rate after the war. It will see a Brexit from the US and the Eurozone in its wake.
In another sign of the UK’s recovery, the Institute of Economic Affairs (IEA) believes there is no need for “emergency measures” to help pay off the UK’s £ 2 trillion debt.
In a report published today, the prestigious think tank said the tax increases would be “ineffective,” instead advising Treasury officials to focus on controlling spending and introducing measures to boost growth.
After analyzing other periods in which the national debt rose – during the two world wars and the revolutionary Napoleonic wars of the eighteenth and nineteenth centuries – the International Energy Agency said: “Large debts are not known at all. It would be misleading and pointless to jump to tax-raising measures.
“Debt can be dealt with and the best way to do it is to encourage economic growth … by removing unnecessary regulation and simplifying taxes.”
Although the bank is unlikely to raise interest rates yet, it is expected to slow the pace of quantitative easing at this week’s MPC meeting.