The Bank of England says the UK economy is recovering from the Covid recession faster than expected as vaccine rollouts continue
- The central bank, led by Governor Andrew Bailey, is expected to raise its growth forecasts for the UK when it releases its latest monetary policy report
- When it was last updated in February, the bank saw production grow 5 percent this year after plummeting 9.8 percent in 2020
- As another sign of the UK’s recovery, the Institute of Economic Affairs believes that no “immediate action” is required to help pay off the £ 2 trillion national debt
The UK economy is recovering from the coronavirus recession faster than expected as the vaccine rollout continues, the Bank of England will state this week.
The central bank, led by Governor Andrew Bailey, is expected to raise its growth forecasts for the UK when it releases its latest monetary policy report on Thursday.
In its last update in February, the bank saw production grow 5 percent this year after plummeting 9.8 percent in 2020. Unemployment should also rise to 7.8 percent.
Optimism: The Bank of England, led by Governor Andrew Bailey (above), is expected to increase its growth projections for the UK
However, given the improving outlook, this seems overly pessimistic.
Howard Archer, chief economic advisor for the EY Item Club forecast group, said: ‘The economy appears to have started the second quarter very well, benefiting from the easing of restrictions and the continued introduction of vaccines.
‘The continued short-term economic support in the March budget also appears to have boosted confidence.
“Significantly, the labor market is showing resilience and survey results suggest that companies are more confident about hiring workers.” Goldman Sachs said last week it expects the UK economy to grow by a “remarkable” 7.8 percent this year – the fastest growth rate in the post-war period. Britain would leave the US and the euro zone.
As another sign of the UK’s recovery, the Institute of Economic Affairs (IEA) believes that no “emergency action” is required to help pay off the £ 2 trillion national debt.
In a report released today, the prestigious think tank said tax hikes were “pointless” and instead advised tax officials to focus on controlling spending and putting in place policies to encourage growth.
After analyzing other periods when the national debt skyrocketed – during the two world wars and the revolutionary Napoleonic wars of the 18th-19th centuries, Century – said the IEA: “Large debts are far from unknown. And it would be wrong and pointless to jump to tax increase measures.
“Debt can be managed, and the best way to do it is to stimulate economic growth … by removing unnecessary regulations and simplifying taxes.”
While the bank is unlikely to raise rates any more, it is expected to slow the pace of QE at this week’s monetary policy committee meeting.