The Bank of England has kept interest rates on hold at a record low of 0.1 per cent despite slashing its forecast for the UK economy this year.
In a unanimous vote, the Bank’s nine-member Monetary Policy Committee also chose not to expand its £895bn money-printing programme.
The MPC forecasts that the UK economy will have shrunk 8 per cent last year, a “materially” stronger performance than it had predicted in November.
However, the central bank reduced its estimate for economic growth from 7.25 per cent to 5 per cent for this year, while increasing its forecast for next year from 6.25 per cent to 7.25 per cent.
“Covid 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 MPC’s latest report said.
Gross domestic product (GDP) is expected to fall by around 4 per cent in the fi