Bank of England: Economy to rebound strongly due to vaccine

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The UK's rapid Covid-19 vaccination programme will help the economy rebound strongly this year, according to the Bank of England.

The economy is expected to shrink 4.2% in the first three months of the year amid tighter lockdown restrictions to slow the spread of the virus.

However, policymakers expect a rebound in the spring as people become more confident about spending.

It came as the Bank held interest rates at 0.1%.

In its latest Monetary Policy Report, the Bank said economic growth was expected to "recover rapidly [in 2021], with a successful vaccination programme supporting a "material recovery in household spending".

A survey by the Bank said positive vaccine news had driven an increase in UK holiday bookings later this year, though overseas bookings remained muted.