According to the Bank of England, the rapid COVID-19 vaccination programme will the UK’s economy to bounce back again after much struggle amid the pandemic. The economy is estimated to shrink by 4.2 percent in the first quarter of 2021, amid stricter lockdown restrictions to reduce the spread of the virus.
As consumers gain more confidence, policymakers are expecting a rebound this spring. The Bank of England told High Street lenders to get ready for negative interest rates, even as it ruled out an imminent move.
If the current vaccination programme in the UK is successful, the economy will “recover rapidly” in 2021. The governor of the Bank of England, Andrew Bailey, described the vaccine rollout as “excellent news” that would boost the return to normal life.
We do think that that is going to support a sustained recovery throughout the rest of the year.Andrew
The latest Monetary Policy Report revealed that the positive vaccine news had increased in holiday bookings in the UK later this year, although the country still mutes overseas bookings.
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While government support schemes are supposed to reduce any immediate rise in unemployment, the rate of unemployment is projected to increase to 7.8% later this year.
The Bank of England revealed that the ability to control any new strains of the virus and also the willingness of households to spend will determine the rebound in economic activity.
The banks said that most people now expect everything to become normal within a year. However, there could be some voluntary social distancing as it was done in nations where restrictions have already been eased substantially.
The Covid vaccination programme would be expected to lead to an easing of social distancing restrictions reduced economic uncertainty and higher activity, although the timing of those effects is hard to predict.The Bank