The governor of the Bank of England (BoE) came forward to give an overview of the development of the post-pandemic UK economy after a year. He expressed the stance that he was optimistic with the UK economy and at the same time should be cautious. He also expects no major inflation spikes.
The UK had previously been among the countries to record the highest Covid-19 deaths in Europe and experienced the biggest economic contraction in 300 years. Nevertheless, the rapid launch of the Covid-19 vaccination program has reached more than 40% of adults for the first injection.
Finance minister Rishi Sunak's decision last week to extend the employment sector support program until the end of September and this will limit unemployment. The financial budget announced by Sunak also includes measures that support economic growth through substantial investments in infrastructure, skills and innovation.
Even so, Bailey noted there is a lot of uncertainty in the economic changes that are taking place post-Covid-19. Last month, the BoE stated the British economy was likely to decline by 4% in the first three months of 2021 before recording a recovery.
Of late, government bond yields in the UK and other countries have risen sharply as investors expect higher growth and inflation. Thus the task of the administration at this point is to achieve the inflation rate as targeted.
