The Bank of England's Monetary Policy Committee has voted unanimously to maintain Bank Rate at 0.1%.
Its latest report shows that, UK GDP is expected to have risen by 5% in Q2, leaving it around 4% below its pre-pandemic level and slightly stronger than expected in the May Report.
GDP is expected to grow by around 3% in Q3, somewhat weaker than expected in the May Report, with a small negative impact from recent developments in the pandemic. UK GDP is projected to recover further over the remainder of the year, reaching its pre-pandemic level in Q4 2021, with demand growth boosted by a waning impact from Covid.
Twelve-month CPI inflation rose to 2.5% in June, above the MPC’s 2% target and 0.8 percentage points higher than expected in the May Report. CPI inflation is projected to rise temporarily in the near term, to 4% in Q4, owing largely to developments in energy and other goods prices, before falling back to close to the 2% target.