The pound is strong against the euro and the dollar this morning, as the Bank of England’s monetary policy update was more positive than expected. As well as keeping interest rates on hold and leaving its quantitative easing programme unchanged, the Bank said the recovery had been “earlier and more rapid” than it had assumed in May.
However, it added that the growth outlook is “unusually uncertain”, predicting the economy to grow 9% in 2021, and 3.5% in 2022. It cited unemployment as the biggest concern, saying “Considerable uncertainty remains about the prospects for employment after those support schemes unwind.”
PMI data released yesterday showed that UK services and manufacturing grew at the fastest rate in more than five years last month. This had little impact on the pound, however.
