The committee concluded its current monetary policy stance remained appropriate in achieving the two per cent inflation target by spring and managing the potential risks of the pandemic on the economy.
Since its meeting in February, the central bank noted global gross domestic product (GDP) growth was stronger than expected. Today, Fitch Ratings predicted global GDP to increase by 6.1 per cent in 2021, up from previous predictions of 5.3 per cent.
UK GDP growth was also not as weak as forecast, with a 2.9 per cent decline recorded in January. Compared to the previous quarter, this was a one per cent rise.
The committee also said vaccination programmes and a drop in Covid-19 infection rates indicated restrictions would be lifted sooner than predicted in last month’s MPC report.
Along with support measures announced in the Budget, the committee said this would result in stronger consumption growth in Q2 than previously thought.
The unemployment rate was also forecast to be more moderate than anticipated because of the extension of government support schemes.
The MPC said it continued to monitor the economic situation and if the outlook for inflation weakened, it was prepared to do what was necessary achieve the goal of returning to two per cent.
Frances Haque, Santander UK chief economist, said: “The MPC’s decision to leave Bank Rate unchanged at 0.1 per cent was expected this month given the rapid rollout of Covid-19 vaccines along with the path for lifting restrictions remaining on track. Both will help boost confidence and support growth in the UK economy.
“However, the Bank of England remains committed to intervening should the financial markets and the UK economy need additional support measures as we move through 2021.”