Bank of England: UK Economy is Recovering

Battling the double whammy of Brexit and a deadly pandemic is no easy task for UK Prime Minister Boris Johnson and the Bank of England.

On the other hand, Great Britain’s economy is already showing some signs of a silver lining after long months of challenges.

In the latest update, the BOE expected the UK economy to recover by 5% during the year. 

For the record, the country has been one of the most battered among developed nations last year which sent it to a long period of recession and a 10% annual contraction. 

Meanwhile, economists have given a much bullish expectation of a 7% expansion during the year as consumer services pick up.

For the record, the world’s fifth-largest economy’s gross domestic product is heavily reliant on the services sector, especially on face-to-face consumer services.

Currently, the United Kingdom is one of the leading entities in the countries with the most number of vaccinated citizens.

In an estimate from Our World in Data, around 15.8 Britons have already been fully inoculated and 50.7 doses of the shot have been administered.

This result represents that 23.8% of the total population has now received the vaccination. Such is not far from the United States’ 32.3%.

The country is also focusing much on ramping up the process despite encountering roadblocks posed by the AstraZeneca shot.

Last week, the UK Medicines and Healthcare Products Regulatory Agency reported 41 new cases of rare blood clots among patients who received the Oxford-AstraZeneca shot.

Bank of England Monetary Policy Eyed

Amid assumptions that the UK is finally out of the eye of the storm, the market’s focus is currently rested on the Bank of England monetary policy.

The central bank will update spectators on Thursday at noon regarding its current and future monetary plans, focusing on interest rates and bond-buying scheme.

Currently, the BoE has adopted a record-low interest rate along with its desire to support the economy from falling again.

Similarly, the bond-buying scheme is currently at 4.4 billion sterling pounds a week, both indicating a dovish monetary stance.

There is a consensus among economists that the government debt yield distribution might slow to 3.2 billion pounds a week.

On the other hand, the interest rate might linger for longer as policymakers should ensure that the change is taking gradually to prevent the economy from overheating.

An update on inflation targets will also make an appearance at the meeting.