The Bank expects the economy to grow by 7.25% this year. At their latest meeting, bank policymakers voted to hold interest rates at a record low of 0.1%.
The BoE’s report outlined that UK GDP is expected to rise by around 41/4 % in the second quarter of 2021 as more people are vaccinated and COVID restrictions are relaxed. The Bank stated that high-frequency indicators of economic activity, including motor vehicle traffic, retail footfall and restaurant bookings, have picked up over recent weeks.
However, the Bank also revealed that the economy shrank by almost 10% in 2020, marking the sharpest decline in 300 years.
Its report stated: ‘GDP is expected to rise sharply in 2021’s second quarter, although activity in that quarter is likely to remain on average around 5% below its level in the fourth quarter of 2019.
‘GDP is expected to recover strongly to pre-COVID levels over the remainder of this year in the absence of most restrictions on domestic economic activity.’