After starting the week in a strong position, sterling was slightly weaker yesterday after Bank of England officials commented on the UK’s economic recovery. Whilst taking questions from MPs in the Treasury Committee, policymakers warned that Britain’s economy could suffer more damage than anticipated by the central bank last month.
After initially predicting that the economy could be back to pre-COVID levels by the end of 2021, officials warned that it could, in fact, take several years for the economy to recover. One official said that output could even be permanently lower. Governor Andrew Bailey also said that the Bank would consider cutting interest rates if there is a strong case for it.
Later today, Composite and Services PMI figures will be released, which will reveal how the UK economy is faring.
