LONDON, Aug. 6 (Xinhua) -- The Bank of England (BoE), Britain's central bank, announced Thursday an unchanged interest rate at 0.1 percent, saying its challenge at present is to respond to the economic and financial impact of the COVID-19 pandemic.
In a report issued by the BoE, its Monetary Policy Committee (MPC) voted unanimously to maintain rate at 0.1 percent and hold the existing programs of British government and corporate bonds with target of 745 billion pounds (977.8 billion U.S. dollars) at a meeting ending on Aug. 4.
Meanwhile, the BoE predicted that the unemployment rate will "rise materially" in the near term, reaching around 7.5 percent by the end of the year and declining gradually from the beginning of 2021 onwards.
The central bank stated that although many workers have already returned to work from furlough, but "considerable uncertainty remains about the prospects for employment after those support schemes unwind."
In terms of economic growth, the BoE expected the gross domestic product (GDP) "is not projected to exceed its level in 2019 Q4 until the end of 2021."
Noting 12-month consumer price index (CPI) inflation, which increased to 0.6 percent in June from 0.5 percent in May, the bank said the CPI is expected to "fall further below the 2 percent target and average around 0.25 percent in the latter part of the year."
Conditioned on prevailing market yields, "CPI inflation is expected to be around 2 percent in two years' time," added the BoE.
As the outlook for the country's and global economies unusually uncertain, the central bank said it "does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2 percent inflation target sustainably."
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