BANK OF ENGLAND OUTLINES LONG-TERM PREDICTIONS FOR ECONOMIC RECOVERY FROM COVID-19 

Interest rates may rise in the next three years if there is a strong economic recovery from the pandemic, according to one of the Bank of England's leading policymakers (The Times, £). Gertjan Vlieghe, who will be stepping down from the bank's monetary policy committee this summer, predicted that rates may need to rise by more than one per cent if unemployment ends the year at current levels and pressure rises on wages. 

The bank had cut rates to 0.1 per cent at the beginning of the pandemic and there had been speculation that negative interest rates could be introduced. In the monthly report released yesterday, the Bank predicted the economy will grow by 7.25 per cent in 2021, making it the strongest growth since records began in 1949 (City AM). The Bank's forecasts assume that unemployment will peak at 5.5 per cent, and the economy will recover to its pre-pandemic level by Christmas (The Times, £).

This comes amid tentative signs of recovery in the UK in recent weeks. Figures released from Transport for London have shown that the most people travelled into London last week since the outbreak of coronavirus in March last year. However, despite this rise in travelling activity, the number of commuters venturing into the city still stands at just over a quarter of pre-pandemic levels (City AM).

NEGOTIATIONS SET TO CONCLUDE ON A GLOBAL MINIMUM CORPORATION TAX

Agreement on a minimum global corporation tax that would drastically increase tax bills for multinationals, could be finalised next week (The Times, £).

The US President, Joe Biden, has led proposals for all states to implement a minimum 15 per cent tax rate. The proposal has been supported by all G7 nations, except for the United Kingdom, who wish to simultaneously negotiate a solution for digital tax reform.  

Developments in negotiations on a global minimum corporation tax come at the same time the UK is considering a carbon tax on imports. The Prime Minister is considering a new tax to ensure that companies do not offshore their emissions and to protect farmers from being undercut by rivals with lower regulatory burdens (City AM).

NEWS IN BRIEF

A group of MPs have called on the government to expand the dormant assets scheme to fund financial education for children (Daily Telegraph). 

Pubs and bars expect to sell 21 million fewer pints than usual over the coming Bank Holiday Weekend, according to the British Beer and Pub Association (BBPA). The trade body said that restrictions which only permit table service are hampering the hospitality sector's recovery from the coronavirus pandemic (City AM). 

A new Covid-19 test which can give results in five minutes based on a saliva sample has been developed by researchers in Australia, and described as a potential game-changer in tackling the pandemic (City AM). 

Cases of the so-called ?Indian variant? of Covid-19 have more than doubled in the UK over the past week, according to Public Health England (Reuters). 

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