UK economy remains “unusually uncertain”, warns BoE

The future of the UK economy remains “unusually uncertain”, the Bank of England (BoE) has warned, as interest rates remain unchanged at 0.1%.

Minutes from the December meeting of the Bank’s rate-setting Monetary Policy Committee suggested rates will stay the same but said it was “ready to take whatever additional action is necessary to achieve its remit”.

The BoE said the rollout of coronavirus vaccines should support a rebound in economic activity and the gradual removal of COVID restrictions.

However, it said recent global activity has been affected by the rise in COVID cases.

UK GDP increased by 0.4% in October, an 8% decrease compared to its level in the same period in 2019. Inflation decreased to 0.3% in November from 0.7% in October, a long way below the Bank's 2% target.

Uncertainty over Brexit also added to the outlook, the Bank added.

The BoE said:

“[The future of the economy] depends on the evolution of the pandemic and measures taken to protect public health, as well as the nature of, and transition to, the new trading arrangements between the European Union and the United Kingdom.”

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