The Bank of England (BoE) said Thursday the UK economy will enjoy a stronger than expected recovery this year as the country eases its coronavirus pandemic lockdowns quicker than earlier anticipated.
The improved outlook comes as the BoE kept its main interest rate at a record-low 0.1 percent following a regular policy meeting this week.
The UK economy is expected to rebound by 7.25 percent this year thanks to "the slightly earlier easing of restrictions," the central bank said in a statement as it upgraded its prior guidance of a 5.0-percent expansion.
The UK economy tanked by 9.8 percent last year, Britain's biggest slump in three centuries – and the worst G7 performance – on the back of COVID-19 lockdowns.
Activity is now expected to rebound this year after England's latest COVID-19 lockdown, which was implemented in early January, was partially eased last month following rapid progress in the national vaccination drive.
"The outlook for the economy ... continues to depend on the evolution of the pandemic, measures taken to protect public health, and how households, businesses and financial markets respond to these developments," the BoE said in a statement.
The BoE also voted at its Wednesday meeting to maintain the vast amount of stimulus pumping around the UK economy.
As the pandemic erupted in March 2020, the BoE slashed its key interest rate to a record-low 0.1 percent, where it has remained.
It also began pumping huge sums of new cash into the economy.
The bank has created 450 billion pounds ($626 billion) under its quantitative easing stimulus program since March last year, when COVID-19 prompted Britain's first coronavirus lockdown.
Prior to this, it had pumped hundreds of billions of pounds worth of Quantitative Easing (QE) into the UK economy over a decade in the wake of the 2008-09 global financial crisis and Brexit.
The central bank's total QE package stands at 895 billion pounds.
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