The BoE has lifted its forecasts and expects annual average GDP growth of around 7.25%, compared to its projection of 5% back in February.

It now projects that the economy will be back at pre-COVID levels by the fourth quarter of 2021.

Frances Haque, Santander UK chief economist, said: “The MPC’s decision to leave Bank Rate unchanged at 0.1% was expected given the path for lifting restrictions continues on track, along with a fall in infection rates supported by the swift rollout of the COVID-19 vaccination programme.

“Both will help boost confidence and support growth in the UK economy which is reflected in the updated forecasts in the Monetary Policy Report published today where the Bank raised its forecasts for growth to 7.25% for 2021 and lowered the peak of unemployment to 5.4%.

“However, risks to the forecast remain both from the emergence of different virus variants as well as the possibility of increasing inflation.

“On that basis the Bank of England remains committed to intervening should the financial markets and the UK economy need additional support measures as we move through the rest of the year.”