The Bank of England has maintained the same volume of bond buybacks in the amount of 895 billion sterling. It will continue to pump about 4.4 billion pounds a week into the markets. The bank's interest rate is kept at 0.1%. The report says that the monetary regulator does not intend to tighten monetary policy until there are clear signs of economic recovery. All 9 committee members voted unanimously for this decision.
The UK's economic outlook is starting to improve due to a swift coronavirus vaccination campaign and the government’s decision to extend vacation benefits for those who have lost their jobs due to the Covid-19 quarantine. Governor Andrew Bailey tries to counterbalance the apparent sharp decline in GDP in the first quarter and predicts a peak in unemployment at the end of the year. Expectations of a quick economic recovery allow the monetary regulator to move away from the policy of further easing.
At the same time, the report indicates that the outlook for the economy, and especially the change in supply and demand during the recovery from the pandemic, remains uncertain. It depends on the spread of the pandemic, quarantine measures, and how households, businesses, and financial markets respond to these events.
After the announcement of the decision, the sterling declined slightly to 1.3935. The UK Gilts yield is stable at 0.89%.
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