The Bank of England has called an end to its pandemic stimulus by declaring that “some modest tightening of monetary policy is likely to be necessary” after warning that inflation will peak at 4 per cent later this year, the highest level in a decade.
Under the Bank’s new forecasts, interest rates rise from 0.1 per cent to 0.2 per cent in 2022, an earlier increase than expected at other central banks, and to 0.5 per cent by August 2024. Rates are projected to rise as the economy recovers strongly on the back of the vaccines and the removal of restrictions.
The Bank expects GDP to return to pre-pandemic levels by the end of the year, growing by 5 per cent in the second quarter
