Bank of England expects UK GDP to grow by 7.25% in 2021

The Bank of England's (BoE) latest forecasts showed that the economy is expected to expand by 7.25% in 2021, unchanged from May's forecast.

Additional takeaways

"Bank of England sees UK CPI 2.07% in two years' time, based on market interest rate expectations (May forecast: 1.96%)."

"Bank of England sees UK CPI 1.89% in three years' time, based on market interest rate expectations (May forecast 1.93%)."

"Bank of England sees UK CPI 3.28% in one year's time, based on market interest rate expectations (May forecast: 2.31%)."

"Bank of England sees UK GDP +6% in 2022 (May forecast: +5.75%)."

"Bank of England sees UK GDP +1.5% in 2023 (May forecast: +1.25%)."

"Bank of England sees UK unemployment 4.75% in Q4 2021 (May forecast: 5%)."

"Bank of England sees UK unemployment 4.25% in Q4 2022 (May forecast: 4.5%)."

Market reaction

Following an initial spike to 1.3944 after the BoE's policy decision, the GBP/USD pair lost its traction and was last seen rising 0.2% on the day at 1.3913.