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The Bank of England has said it expects the UK's economic slump to be less deep than first feared, but could take longer to bounce back from the coronavirus than previously thought.

The central bank revealed its latest forecasts as it held interest rates at 0.1% after its nine-strong Monetary Policy Committee (MPC) voted unanimously.

It improved its "indicative projection" for growth in the economy, predicting that GDP will shrink by 9.5% this year, following an unprecedented intervention by the government aimed at safeguarding businesses and jobs from the impact of the COVID-19 crisis.

In May, the Bank had warned that GDP could dive by 14% this year.

However, it also warned it does not expect the economy to return back to pre-coronavirus levels until "the end of 2021".

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It had previously forecast GDP could recover to its pre-pandemic size by the second quarter of 2021.

As well as holding interest rates, the also said it will maintain its current quantitative easing programme at £745bn.

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