The Bank of England has published it’s quarterly Monetary Policy Report, which sets out the economic analysis and inflation projections that the Monetary Policy Committee uses to make its interest rate decisions.
COVID-19 continues to hit spending, incomes and jobs in the UK. It has put a big strain on UK businesses’ cash flow, and is threatening the livelihoods of many people.
The Bank’s job is to ensure inflation (the pace of price rises) returns to our 2% target sustainably. Low and stable inflation supports jobs and growth and helps people plan for the future.
In response to the COVID-19 pandemic, the Bank has taken prompt and substantial action to help households and businesses.
It is supporting the economy through low interest rates and quantitative easing. This keeps the cost of borrowing low to support households and businesses.
Spending in the economy remains well below normal levels and inflation is much lower than our target.
Vaccines should help the UK economy recover rapidly later this year.
And inflation should return to around the Bank’s 2% target.
The Bank has kept the interest rate at 0.1%, and the amount of quantitative easing at £895 billion.
A full summary and link to the in-depth report can be found on the Bank of England website here.