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In its latst Financial Stability Report (FSR), the Bank of England (BOE) said that the Monetary Policy Committee (MPC) agreed not to tighten the rates further unless inflation sustainably moving to the target. The BOE also said, that negative policy rates at this time could be less effective as a tool to stimulate the economy.

The Bank’s quarterly Economic Projections suggested the following changes from its May projections.

GDP Forecasts

UK GDP -9.5% in 2020 (May Scenario: -14%), +9% In 2021 (May Scenario: +15%) and +3.5% In 2022 (May Scenario: +3%).

CPI Projections

UK CPI 0.25% in 2020 (May Scenario: 0.6%), 1.75% In 2021 (May Scenario: 0.5%)  and 2% In 2022 (May Scenario: 2.0%).

Unemployment Targets

UK Unemployment 7.5% In 2020 (May Scenario: 8%), 6% In 2021 (May Scenario: 7%).

 

More to come…