The hit from “Plan B”, the MPC and better news on shortages

The government’s recently-imposed “Plan B” COVID-19 restrictions mean there is a good chance that the economy contracted in December. If the pressure on the NHS increases, restrictions might be tightened further, implying substantial downside risks to Q1 next year too. Against this backdrop, we no longer expect the Bank of England to raise interest rates from 0.10% next Thursday.

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