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UK/Spain News

Bank of England holds rates as it predicts unemployment jump

Photo: Yui Mok/PA Wire

The Bank of England has held interest rates at 0.1% as it warned that it expects UK unemployment to jump to 7.5% by the end of the year.

Its nine-strong Monetary Policy Committee (MPC) voted unanimously to hold rates.

The central bank also said it will maintain its current quantitative easing programme at £745 billion.

The MPC said its central projection forecasts that GDP will continue to recover in the near-term, but is not expected to exceed its levels from the end of 2019 until at least the end of 2021.

It also forecast that unemployment will jump, with the rate reaching 7.5% at the end of 2020, before gradually declining from the start of next year.

A consensus of analysts had said they expected rates to be held, while quantitative easing plans were also expected to remain unchanged.

Rates have already been slashed twice, from 0.75%, since mid-March as part of the Bank’s measures to try and keep the economy afloat.