Bank of England: Cautious Optimism Over UK Economic Outlook

Business

In a statement, the policymaking Monetary Policy Committee noted some “positive” recent economic developments as it kept the bank’s main interest rate unchanged at the record low of 0.1%. All nine members of the committee also voted against any further increase in the bank’s bond-buying program.

The British government, which is responsible for the lockdown in England, has laid out a path for easing restrictions over the coming weeks but insists that it will be guided by the “data, not dates.” The other nations of the U.K. — Scotland, Wales and Northern Ireland — are following similar lockdown easing timetables.

By mid-April, the British government hopes that retailers in England selling nonessential items, such as footwear and books, will be able to reopen. Pubs are also set to reopen outdoors from that date, with indoor serving following on May 17.

By Wednesday, more than 25 million people in the U.K. had received a first dose of vaccine, nearly half of its eligible adult population.

However, vaccine supply issues are cropping up and could impinge on the anticipated recovery. On Thursday, the British government said planned vaccinations for people under 50 may be delayed for up to a month amid a shortfall in supply, partly due to reduced deliveries from the Serum Institute of India.

The British economy has been one of the worst-performing over the past year, and many blame that on the Conservative government’s repeated failures to back lockdown restrictions early enough.

In a report Thursday, the well-respected Resolution Foundation think-tank said the delays cost thousands of lives and deepened the economic crisis.

“Going timidly and late on lockdowns has been a disaster, causing many thousands of avoidable deaths,” said Mike Brewer, chief economist at the Resolution Foundation. “Furthermore, delays to restrictions have meant them needing to be tougher and longer-lasting than in other countries, thereby worsening the economic damage.”