The UK economy is expected to see a moderate increase in growth over the next few years, with the Bank of England base rate predicted to rise above five per cent. This is according to the latest economic forecasts from the Bank of England, which were released in June.
The Bank of England’s Monetary Policy Committee (MPC) has forecast that the UK economy will grow by 1.7 per cent in 2021, rising to 2.2 per cent in 2022 and 2.3 per cent in 2023. This is an increase from the 1.4 per cent growth forecast for 2020, which was revised down from 1.5 per cent in February due to the impact of the coronavirus pandemic.
In addition to this, the Bank of England has predicted that the base rate will rise from its current level of 0.1 per cent to 5.2 per cent by 2023. This is a significant increase from the historic low of 0.1 per cent, which was set in March 2020 as part of the Bank’s emergency measures to support the economy during the pandemic.
The Bank of England’s forecasts are based on its assessment of the economic outlook and the impact of the coronavirus pandemic on the UK economy. The Bank has said that it expects the UK economy to recover gradually over the next few years, with consumer spending and business investment expected to pick up as restrictions are eased and confidence returns.
However, there are still risks to the economic outlook. The Bank has warned that the recovery could be slower than expected if there are further outbreaks of coronavirus or if businesses and households remain cautious about spending. In addition, any further disruption caused by Brexit could also have an impact on economic growth.
Overall, the Bank of England’s forecasts suggest that the UK economy is likely to see a moderate increase in growth over the next few years, with the base rate predicted to rise above five per cent by 2023. This should provide some welcome news for businesses and households, although there are still risks that could derail the recovery.