The Bank of England has decided through a unanimous decision to keep the base rate at 0.1 per cent along with the continuation of its quantitative easing programme.

As well as this, the monetary policy committee says that moving the rate into negative territory is part of a policy toolkit that is currently “under review.”

Regarding the UK economy, the BoE says that GDP is not expected to rise above Q4 2019 levels until the end of 2021 –  meaning the country missing out on two years’ expected growth – and that unemployment is likely to hit 7.5 per cent by the end of 2020.

While a 9.5 per cent contraction is some way off the initial fears of a 14 per cent contraction, it is still the biggest annual drop in a century.

The report sets out growth rates of 9 per cent in 2021 and 3.5 per cent in 2022.

It also expects inflation to drop to 0.25 per cent later this year, rising to 2 per cent by Q3 2022.

The BoE adds that, presently, “housing market activity appears to have returned to close to normal levels, despite signs of a tightening in credit supply for some households.”

Throughout its report, the bank repeatedly iterates that economies across the world are in a state unusually high uncertainty, and so medium-term projections are “a less informative guide than usual.”

Kensington Mortgages capital markets and digital director Alex Maddox says: “The MPC seems to be holding back some of its firepower in case we see a downwards lurch in activity. The economy is beginning to reopen, which is good news, but most economists are predicting unemployment to rise by a significant amount in the fourth quarter once the furlough scheme ends.

“Until the MPC sees the true magnitude of post-furlough job cuts, they want to keep options open – which may even include negative rates.”