Bank of England keeps interest rate on hold at 0.1 per cent as hopes of economic recovery build

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The Bank of England has said it expects the economy to recover strongly this year as coronavirus restrictions are lifted but warned that the outlook remains “unusually uncertain”.

Announcing that it would keep its main interest rate on hold at a record low of 0.1 per cent, the Bank said the roadmap for re-opening may mean a “slightly stronger outlook” for spending growth, however the economy remains 10 per cent below its pre-pandemic level.

All nine members of the Bank’s Monetary Policy Committee voted not to change rates or add to the £895m money-printing programme.

The Bank highlighted reasons for optimism including the extension of the furlough scheme which means unemployment will rise less than the MPC had forecast in February.

It cautioned that the outlook for supply and demand remains unusually uncertain with an economic rebound dependent on continued progress in suppressing the pandemic.

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