After keeping interest rates unchanged for 17 months and maintaining its quantitative easing (QE) programme since November 2020, all eyes are back on the Bank of England this week thanks to a confluence of events.
Inflation has risen to 2.5 per cent, above its target of 2.0 per cent. Blockages and delays in the supply chain due, in part, to both the Covid-19 “pingdemic”, that has confined key workers to their homes, and the long-term impacts of Brexit are likely to push prices up further: the Bank’s recently-departed chief economist Andy Haldane thinks inflation could soar to 4 per cent by the end of the year.
New coronavirus case numbers have begun to fall while deaths and hospitalisations have remained low. The International Monetary Fund (IMF) has forecast that the economy will post the joint-fastest growth in the G7 in 2021 at 7 per cent.
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