Bank Of England Global GDP Growth Stronger Than Anticipated

The Bank of England BoE on Thursday said “developments in global GDP growth have been a little stronger than anticipated, and the substantial new US fiscal stimulus package should provide significant additional support to the outlook”.

But it cautioned that “the outlook for the economy, and particularly the relative movement in demand and supply during the recovery from the pandemic, remains unusually uncertain”.

Alongside the BoE support, Prime Minister Boris Johnson’s Conservative government has spent £352 billion in emergency measures since the outbreak of Covid-19.

A large part has gone on a jobs furlough scheme that has paid the bulk of private sector wages for millions of workers across the UK.

The BoE on Thursday said it expected unemployment to peak at around 5.5 percent this year, up from the current official level of 4.9 percent.

Annual inflation will meanwhile reach around 2.5 percent, above the central bank’s 2.0-percent target, before falling back down.

Investors are concerned that the reopening of economies and huge government stimulus programmes worldwide will hike inflation, risking higher interest rates down the line.

The Bank of England has created £450 billion ($626 billion, 522 billion Euros) under its quantitative easing stimulus programme since March last year, when Covid-19 prompted Britain’s first coronavirus lockdown.