Feb. 4 (UPI) -- Britain's central bank on Thursday lowered its economic expectations for 2021, but said there will be rapid growth -- particularly later in the year as the COVID-19 vaccine is given to more people.
In its updated forecast, the Bank of England projects a 4% decline for the first three months of 2021.
For 2021 as a whole, however, the British economy is projected to grow by 5%. Much of that growth will be seen in the second half of the year, the bank said, when coronavirus cases are expected to be under greater control through the availability of vaccines.
Looser pandemic-related restrictions as the year goes on will also be key in aiding the economy, the outlook says.
In its previous assessment, the central bank projected 7.5% overall growth in 2021.
The bank said Britain's economy is projected to "recover rapidly toward pre-Covid levels over 2021, as the vaccination program is assumed to lead to an easing of COVID-related restrictions and people's health concerns."
Britain was one of the first countries to start distributing vaccines in December. It's also navigating a new post-Brexit trade deal with the European Union in 2021.
The bank also said the British labor market is "difficult to interpret" due to varying effects of the pandemic.
"The government's employment support schemes are likely to limit significantly the immediate rise in unemployment. A further increase in unemployment is projected over the next few quarters."
The Bank of England decided on Wednesday to keep key interest rates at 0.1%.
