Finally, here’s Reuters’ take on a Fed meeting overshadowed by the US election:

The Federal Reserve kept its loose monetary policy intact on Thursday and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery threatened by a spreading coronavirus pandemic and facing uncertainty over a still-undecided presidential election.

Results from Tuesday’s vote were still being tabulated in a few key states, though Democratic presidential nominee Joe Biden was near the minimum 270 votes in the state-by-state Electoral College needed to win the White House.

The policy statement released after the U.S. central bank’s latest two-day meeting did not mention the election.

In a news conference after the release of the statement, Fed Chair Jerome Powell said the U.S. economy is now recovering more slowly after being boosted earlier in the year by fiscal aid and the re-opening of some businesses.

“The overall rebound in household spending owes in part to stimulus payments and expanded unemployment benefits, which provided essential support to many families and individuals,” Powell told reporters.

He also said the recent rise in coronavirus infections in the United States and abroad was “particularly concerning,” and said social distancing and masks were needed to help contain the virus and support the economy.

“A full economic recovery is unlikely until people are confident that it’s safe to reengage in a broad range of activities,” Powell said.

The key message from Jerome Powell tonight is that fiscal and monetary policy both have an essential role to play in helping the economy.

So with the Covid-10 pandemic continuing, and previous fiscal support running out, “It’s likely that further support is likely to be needed from monetary policy & fiscal policy”, he says.

Federal reserve chair Jerome Powell is holding a press conference now to explain why the Fed left policy unchanged.

Powell says the US economy has ‘continued to recover’, but in recent months the pace of this recovery has moderated.... as has the pace of job creation.

He pledges that the central bank will not lose sight of the millions of people out of work following an economic dislocation that has “upended lives” and “created uncertainty”.

Looking ahead, Powell says the outlook for the economy is extraordinarily uncertain.

The recent rise in Covid-19 cases is very concerning, he continues:

It’s extremely hard to see the Fed making any interesting changes until the US election is resolved.

As Aaron Anderson, SVP of Research at Fisher Investments, puts it:

“The Fed has been clear that changes to monetary policy are off the table for the time being, and Powell is standing firm on additional easing. Economic data is improving, which has included a very strong Q3 GDP report.

Markets have been a little rocky with both stocks and bonds pulling back recently, but not dramatically. We expect the Fed to remain comfortable with the status quo for now, at least until the political backdrop becomes more clear.”

On Wall Street, stocks are continuing to reverse those recent losses - with the Dow up another 572 points (2%) today.

Richard Flynn, UK managing director at Charles Schwab, explains why the Fed’s decision is hardly a surprise:

“The decision to hold rates will not shock the market. The Fed has indicated that the federal funds rate is likely to be held near zero for several more years until it sees inflation rise, while expanding its balance sheet and using its special facilities to lend.

However, these tools are stretched already. Many Fed officials have been urging Congress to pass more fiscal relief, as that would likely have a more immediate effect in boosting growth, employment, and inflation.

Bentley, the luxury carmaker, will stop making fossil fuel cars by 2030 and aims to be completely carbon neutral at the same time, in one of the most ambitious plans of any UK car manufacturer in the transition towards electric vehicles.

It will stop building cars with traditional internal combustion engines within six years, instead making hybrids and then its first battery electric cars in 2025. By 2030 it will sell only pure battery electric vehicles, with zero-carbon exhaust emissions.

The rapid transition will mean that a company famed for enormous 12-cylinder petrol engines, with large carbon dioxide emissions to match, aims to become one of the UK automotive industry’s leading champions of environmental sustainability.

We have some late takeover excitement too.

Insurance group RSA has received a £7bn approach from Canadian insurer Intact Financial and Danish insurer Tryg.

In a statement to the City, after the market closed, RSA says:

The Board of RSA Insurance Group plc (“RSA” or “the Company”) notes the recent media speculation regarding the possibility of an offer for the entire issued share capital of the Company and confirms that on 2 October 2020 it received a proposal from Intact Financial Corporation and Tryg A/S (together, the “Consortium”) regarding a possible offer for the Company “the Proposal”).

This may or may not lead to an offer being made for RSA.

The Proposal comprises 685 pence in cash per RSA share, plus payment by RSA of the announced interim dividend of 8 pence per share.

Shares in RSA shot up by 45% just before the close of trading, to 670p, from 459.7p yesterday. That followed a Bloomberg report that an approach had been made.

RSA also says that it has indicated to the Consortium that it would be minded to recommend the Proposal, subject to satisfactory resolution of the other terms of the possible offer, including a period of due diligence.

Accordingly, RSA is engaged in discussions with the Consortium in relation to the possible offer.

Today’s selloff has pushed the dollar down-- just as Bitcoin hits its highest level since 2018....

Some late legal news. Dominic Chappell, the businessman who bought the BHS retail chain for £1, has been been jailed for six years for evading £584,000 in taxes.

Chappell, failed to pay the tax on £2.2m in income he received after buying the chain in 2015 from Sir Philip Green - the year before it collapsed.

The US dollar is weakening against other major currencies today.

Sterling has risen almost a cent and a half against the dollar, to $1.312 -- not perhaps the obvious reaction to the Bank of England boosting its money-printing QE programme.

The euro is also rallying, up nearly a cent at $1.181.

David Madden of CMC Markets says investors are in a risk-on mood, which usually puts the dollar out of favour:

The US dollar is in the red as traders are content to take on more risk and plough their cash into equities and metals – assets that are considered to be riskier.

No change from the Fed is expected this evening and seeing as there is political uncertainty in the US, we won’t be getting any fiscal boost from the government anytime soon, and therefore the central bank will probably reiterate its willingness to support the economy.

Bloomberg’s Joanna Ossinger has a few theories for bitcoin’s strong rally over $15,000 today:

Whether it’s uncertainty from the U.S. election, the future of the pandemic or simply more investor interest, the cryptocurrency is at the highest level since January 2018.

The digital currency has been benefiting from high-profile investments from the likes of Square Inc. and Paul Tudor Jones. JPMorgan Chase & Co.’s JPM Coin was reportedly used to make a payment for the first time. Proponents argue bitcoin can be a diversifier in times of uncertainty, so events like lockdowns across Europe or delays of U.S. election results could be fueling its rise.

But Bitcoin has a track record of volatility, of course...

Bitcoin has made parabolic runs upward before, notably December 2017 and mid-2019, before major tumbles. And many strategists and investors are skeptical. Empire Financial Research’s Whitney Tilson said in an email Wednesday that he still regards cryptocurrencies as “a techno-libertarian pump-and-dump scheme” and recommends most investors avoid them.

Our economics editor Larry Elliott spots a change in Rishi Sunak’s furlough scheme announcement today:

There is a limit to what the Bank of England can do to boost activity, and that piles extra pressure on Sunak. Over the past couple of months, the chancellor has dropped talk of saving only “viable” jobs and is now in “whatever it takes” mode.

It was significant that his latest statement did not include any mention of eventually taking steps to reduce the record peacetime deficit the UK will run in the current financial year. The risk of doing too little is seen as greater than that of doing too much.

The market reaction to the US election is ‘incredible’, says Saxo Bank’s John Hardy.

Equities and bonds have gone ‘almost vertical since Election Night’, he writes, despite president Trump hotly contesting the results and the prospects for two years of ugly political gridlock.

There may be technical reasons for this wild bounce:

The most likely immediate driver of the action could simply be that the market has put on excessive volatility hedges on the election uncertainty, and that the unwinding of these hedges (despite the outcome) means the need to unwind short equity futures and short U.S. T-bond futures contracts.

But is gridlock really good for markets?. Hardy suggests risk sentiment could fade....

Other, less obvious, contributions to the enthusiasm are that the avoidance of the “Blue Wave” scenario means we avoid any corporate tax hikes and the possibly of much lower inflation risks on the shortfall of stimulus. Further down the road, one has to wonder if risk sentiment on the outlook could quickly be tempered or worse after this initial relief trade on the risks to growth on lower stimulus prospects and economic scarring from the Covid-19 crisis.

Yes, the Fed will try to do more at the margin, but monetary policy is weak medicine compared to fiscal policy at the zero boun

The New York stock exchange has also opened higher, as yesterday’s post-Election Day rally continues.

The Dow Jones industrial average has risen by 1.4%, or 389 points, to 28,237. The broader S&P 500 index is 1.7% higher, while the tech-focused Nasdaq is 2% higher.

Investors seem to be pricing a split government in Washington, with Democrat hopes of a Blue Wave in the Senate fading. If the Republicans maintain their majority in the upper house, there is less chance of higher taxes on corporations, and tighter regulation of technology firms.

Adam Vettese, analyst at multi-asset investment platform eToro, says:

“Markets seem to be banking on Joe Biden becoming the next US President with US indices up yesterday, despite the fact the result is not yet nailed on.

“The futures market indicate that US shares will open strongly, indicating that investors are brushing off Donald Trump’s threats to contest the result in court.

“If Biden does become President but the Democrats don’t win control of the Senate, that makes the threat of tax rises recede a little, which will please markets.

“But either way, the main focus now should be agreeing a fresh stimulus package to shield the US economy from the economic fallout a second wave could cause.

European stock markets are racking up their fourth day of gains this week, as investors continue to watch the US election drama unfold.

The main indices are all higher, with Germany’s DAX leading the way with a 1.4% gain.

The FTSE 100 is up around 0.5%, or 29 points, at 5913, the highest in over two weeks.

The Bank of England’s new £150bn QE stimulus programme has reminded investors that central banks aren’t out of firepower in the face of the Covid-19 slump.

Chris Beauchamp, chief market analyst at IG, says:

“Stock markets continue to take the US election in a positive frame of mind, and with the BoE throwing more QE into the fray, the second central bank to do so in a week, the outlook for stocks continues to brighten.

“Last week’s selloff looks more and more like pre-election jitters, a bout of nervousness that has been reversed even more swiftly than it appears.

“It is true that the US election is yet to be officially decided, but Biden seems likely to cross the 270 vote threshold in coming days, potentially rendering Trump’s legal challenges irrelevant, and with this bump in the road removed, stock markets can rally once more.

“The BoE’s outlook for the UK economy is understandably grim, prompting the move towards more QE, but as in the US the real boost will come from fiscal stimulus, and at least here there is some good news thanks to the chancellor’s decision to extend furlough.

On the other hand, the Institute of Fiscal Studies is not impressed by the furlough scheme extension:

Resolution’s Torsten Bell is also concerned that the government’s support is not well targeted.

Following Rishi Sunak’s latest furlough scheme extension, there are also calls for more help to prevent unemployment spiralling even higher next year.

Nigel Morris, employment tax director at MHA MacIntyre Hudson, says:

“A UK wide furlough scheme with a fixed end-date and the flexibility to manage local and regional restrictions will be a real help for business drawing up their budgets. Companies now know what they need to pay out in NIC and pension costs over the coming months.

The fact the Job Retention Bonus (JRB) and Job Support Scheme (JSS) have been deferred also provides additional clarity; businesses no longer face the prospect of grappling with a whole new set of rules, or the admin juggling act of using multiple support schemes.

Kate Nicholls, CEO of industry group UK Hospitality says the new furlough extension will save jobs, but it’s not enough on its own:

“Extending the furlough scheme is a big boost and will help secure hospitality jobs in the medium term across the whole of the UK. Keeping jobs alive during this lockdown and throughout a bleak-looking winter period, which is likely to see businesses trading under severe restrictions, is key to the future survival of the sector.

“Hospitality is facing a tough winter ahead, though, and businesses will need additional support if they are to survive. We will need enhanced grant support to keep venues alive and a solution to the ongoing rent debt problem that continues to linger over the sector. These must come alongside a clear roadmap for a return to business. Without these, the extended furlough scheme alone is not enough to keep hospitality alive and will have been a wasted investment of public funds.

“Surviving the winter is just the first step, too. Beyond that we need action to ensure that businesses can be revived and the sector can play its part in rebuilding the economy. Extending the VAT cut and business rates holiday, coupled with extensive Government promotion of tourism and hospitality, will be the bare minimum required.”

Mike Hibbs, employment partner at law firm Shakespeare Martineau, agrees that winter will be tricky for many firms:

“Even under a new lockdown, many sectors – retail and hospitality - will be preparing for Christmas trading and managing staffing levels could prove to be tricky. A careful juggling act will be needed to strike a balance between taking advantage of the furlough scheme and ensuring adequate staff numbers are in place to meet heightened demand.

“Whilst millions of jobs will be protected over the winter months, a question mark does still hover over whether the Government is still simply delaying the inevitable cliff edge of job cuts, which was expected in October. Businesses should use this time wisely to seize every opportunity to make the most of the support available, whilst taking every measure to ensure that as many furloughed employees as possible can come back into work full time once the scheme ends.

You’d be forgiven for losing track of the government’s various job protection schemes...

The Bank of England and the Treasury have delivered a double-whammy of fiscal and monetary help today -- £150bn of fresh stimulus, swiftly followed by the furlough extension.

The Bank of England’s new quantitative easing move will help keep government borrowing costs very low, and mop up more of the huge deficit incurred under the pandemic [the government sells the debt to investors, who sell it onto the BoE].

Yael Selfin, chief economist at KPMG UK, reckons the UK could end up borrowing £400bn this financial year - more than double the record after the financial crisis.

But she also warns that some jobs have already been lost before today’s announcement:

“Announcements today by the Bank of England and the Chancellor will save some jobs in the most affected sectors although may come too late for some businesses that have already made plans to downsize.

“The Government will now need to focus on providing additional support to those who will lose their income despite the extra measures - and many workers will require help in retraining so they can move to other parts of the economy where growth is likely to be.

“The cost of these measures will add to government borrowing this year and could reach at least £400bn for the financial year ending March 2021. However, the Bank of England’s additional QE efforts will help keep funding costs low despite these high figures.”

The latest healthcheck on UK construction shows that housebuilding is pretty strong, but civil engineering is much weaker.

IHS Markit’s monthly PMI survey shows that home construction was “by far the best-performing area of construction activity in October”, with builders reporting pent-up demand and improving housing market conditions in recent months.

Commercial activity also rose, but less strongly, while civil engineering activity shrank at a faster rate.

So overall, construction kept growing, but at the slowest rate in five months.

Markit’s construction PMI dropped to 53.1, from 56.8 in September (anything over 50 shows growth).

Here’s the breakdown:

New order books grew at the strongest pace since December 2015. But disappointingly, building firms kept cutting staff last month.

Markit says:

Efforts to reduce overheads and ongoing economic uncertainty contributed to a further decline in staffing numbers across the construction sector.

The rate of job shedding was nonetheless much slower than seen in the second quarter of 2020.

Here’s the full story:

Treasury Committee chair and Conservative MP Mel Stride is renewing calls for the Treasury to release forecasts about the “economic impacts and the associated harms” of all the Covid interventions considered by the government, including new lockdown measures in England.

He told the Guardian on Thursday:

“It would be almost inconceivable for government to be taking decisions without even thinking about these issues and I’m 99.9% certain that the Treasury will have done this work, and therefore I believe it should be made public.”

Sage minutes from September suggest the Treasury has been working on that analysis. But the Treasury has so far refused calls to release that information to the public, saying official forecasts are left to the Office for Budget Responsibility (OBR).

But Stride said the estimated impact of the month-long lockdown is “not something that the OBR opines upon directly, but it is something that the Sage minutes of the 21st of September state that the government’s chief economic adviser has been engaged upon.”

Stride originally wanted the data released before yesterday’s Commons vote on the lockdown measures. He backed that vote, but said “there are lots of questions that remain unanswered.”

Stride hopes the data is released before the next OBR report on 25 November.

“I see no reason why we shouldn’t get it well before that. And really... the sooner the better.”

“We will continue to push and will continue to press, and I’ll publicly continue to make the argument [for the forecasts to be released].”

Peter Dixon, senior economist at Commerzbank, reckons the Bank of England may need to consider cutting interest rates below zero next year, if the situation doesn’t improve.

He points out that the power of QE diminishes, the more of it you do (government bond yields are already near record lows):

The BoE did not give any further insight into its thinking on negative interest rates, having set out its views in the August monetary policy report.

Futures markets continue to edge closer to pricing in negative rates although they are not expected to come into effect before next summer. As it current stands, the markets are pricing an overnight rate of minus 8.2 bps by September 2021 versus plus 5 bps today which implies a probability in excess of 50% of a 25 bps cut. Our forecast remains predicated on the assumption that interest rates will not fall below zero but there are mounting risks to this view.

For one thing, negative rates are in operation in a number of economies around the world as they become an accepted part of the monetary policy toolkit. In addition it is widely accepted that the marginal benefits of QE become smaller, the higher is the total of assets purchased. If the economy does not improve as the BoE expects, the negative rates option will get serious consideration.

The Bank of England’s projection that unemployment will hit 7.75% next summer is a another blow to companies reliant on consumer spending.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says:

As the unemployment rate is forecast to increase to around 6.3% by the end of the year and to almost 8% early in 2021, consumer demand is likely to take another hit as incomes are squeezed. That will make it even harder for businesses relying on discretionary spending to bounce back.

There is going to be a painful period ahead, as companies are forced to adapt to the change in consumer demand and the shift to online and there could be supply shortages if companies don’t get the investment they need to transform.

Many of those companies have just been ordered to lock down, leaving many extremely worried about Christmas trading.

Supermarket chain Sainsbury has highlighted the impact of Covid-19 on the economy, by outlining plans to cut up to 3,500 jobs.

The group is closing most of its standalone Argos outlets (in favour of collection points and sites within its supermarkets), and also shuttering its meat, fish and deli counters,

My colleague Sarah Butler has the details:

Up to 3,500 jobs are at risk at Sainsbury’s as the supermarket closes more than 400 standalone Argos stores and cuts all meat, fish and deli counters.

The supermarket said about 150 Argos stores would be moved into its supermarkets to crack down on costs.

The changes come as Sainsbury’s said 40% of its sales were now online – compared with 19% a year ago. The company said it aimed to find new roles for all the staff affected and it would boost the overall number of people it employed by 6,000 by March.

Simon Roberts, the chief executive of Sainsbury’s said: “Covid-19 has accelerated a number of shifts in our industry. Investments over recent years in digital and technology have laid the foundations for us to flex and adapt quickly as customers needed to shop differently.”

Sainsbury’s hopes to find jobs for the 3,5000 people affected -- and is aiming to grow its workforce by 6,000 this financial year. But those new jobs might not suit someone whose losing their role in Argos or on the deli counter, of course (depending on skill set, location, working hours...)

On the counter closures, Sainsbury’s explains:

We closed our meat, fish and delicatessen counters in March as we focused all our efforts on feeding the nation. Customers have told us they are happy buying these products in the aisle. We have therefore decided to close permanently our meat, fish and delicatessen counters.

Our pizza and patisserie counters remain open and we continue to freshly bake bread in 1,348 stores

Reuters is reporting that the Bank of England will ‘look into’ how its £150bn QE expansion - larger than the City expected - was reported in today’s Sun newspaper, and online last night.

Here’s their story:

Bank of England Governor Andrew Bailey said he would look into how The Sun newspaper was able to report that the central bank would expand its asset purchase programme by 150 billion pounds ($196 billion), hours before it was officially announced.

Leaks of BoE policy decisions are almost unheard of, but a series of government decisions on COVID measures, including economic support, have been reported in British newspapers ahead of their official announcement.

“Yes, we will look into it,” Bailey told reporters when asked about the Sun report in a news conference after the BoE had officially announced the quantitative easing decision.

In a report first published online around 2130 GMT, The Sun said that unspecified sources had told it the BoE’s stimulus would be larger than the 100 billion pounds largely expected by economists and was “likely to be around 150 billion pounds”.

The same article also said finance minister Rishi Sunak would broaden job furlough support in a statement to parliament also due on Thursday.

Before the announcement of the BoE decision at 0700 GMT, only the central bank and Britain’s finance ministry would officially have known the decision.

A finance ministry representative sits in on deliberations of the BoE’s Monetary Policy Committee, and Sunak must formally approve expanded asset purchases.

Michael Hewson, chief market analyst at brokers CMC Markets, said the apparent leak was “extremely concerning” and that there needed to be a full inquiry.

“These policy decisions are important macroeconomic events, and given the Bank of England also acts as a regulator, it’s bang out of order,” he said.

Last month Britain’s Financial Conduct Authority concluded there had been no misconduct when a company contracted by the BoE to help provide video feeds of its public news conferences also sold traders slightly faster audio of the same event.

The BoE said its staff should have spotted what it viewed as misuse of its broadcast feeds sooner, and barred the business from working with it in future.

And here’s a tweet of the story from last night:

The BoE’s latest Monetary Policy report, which outline its latest growth and inflation forecasts, is online here.

The minutes of the Bank’s monetary policy committee meeting, where it voted to increase QE by £150bn, are here.

Today’s decision to expand its stimulus by £150bn means the Bank of England has roughly doubled its QE programme this year.

Back in March, the BoE boosted the package by £200bn to £645bn after global stock markets crashed as the Covid-19 pandemic began to sweep the globe.

It then added another £100bn in June, amid concern that UK unemployment would rise sharply, particularly in hospitality.

The Bank uses this nearly created money in its asset purchase scheme, buying UK government bonds (gilts) from commercial banks.

(it is now planning to increase its UK gilts holdings to £875bn, and also keep holding £20bn of corporate debt).

The idea is to drive down borrowing costs, encouraging bank lending, stimulating economic growth and protecting jobs at a time when interest rates are already at record lows (0.1%).

Laith Khalaf, financial analyst at AJ Bell, points out that the current ultraloose monetary policy is a blow to cash savers:

This is all terrible news for cash savers, who have endured more than ten years of ultra low interest rates. £210 billion now sits in cash accounts that don’t pay any interest, up from £26 billion in 2008. A further £837 billion is held in accounts paying on average 0.13%.

“This money is slowly but surely losing its buying power, even though inflation is currently so low. That won’t be the case for too long, as inflation is expected to move back towards 2% in the first half of next year as lower energy prices fall out of the equation.

The Bank of England is predicting that the UK will suffer a much deeper Covid-19 recession than the US or the eurozone.

While UK GDP is now forecast to shrink by 11% this year, US GDP is only expected to fall by 3.75% while the eurozone faces a 6.75% contraction.

The global economy is seen shrinking by around 5%, as this chart shows:

The UK has a large services sector, and a strong reliance on consumer spending. So lockdown measures and physical distancing rules clearly hit those parts of the economy.

But.... with England and Wales suffering among the highest per capita death tolls of the coronavirus pandemic among industrialised nations, the UK hasn’t done well on either the ‘health’ or ‘wealth’ measure.

ITV’s Robert Peston tweets that this raises ‘big questions’ over the government’s handling of the pandemic:

Here’s ITV’s Joel Hills on the Bank’s new forecasts:

[that furlough extension is why the unemployment peak has been pushed back to next summer]

Today’s Bank of England forecasts show that hopes of a V-shaped recovery have fizzled out.

Back in June, chief economist Andy Haldane said the recovery looked to be ‘so far, so V’, with economic growth rebounding faster than expected.

Not any more -- the new forecasts look much more like a W, with a double-dip contraction this quarter and a slower recovery:

Here’s James Smith of Resolution Foundation’s take:

On Brexit, this chart from the BoE shows that a third of UK firms say they’re only partly prepared for new trading arrangements.

But....the share of partially prepared firms tends to be higher in sectors where a relatively large proportion of firms trades directly with the EU.

The Bank explains:

For example, over 40% of businesses in the wholesale and retail, manufacturing, and transport and storage sectors report that they are partially prepared for the end of the transition period, or not at all.

Fewer businesses report that they are partially prepared in the accommodation and food services and construction sectors, where a higher share of firms do not trade with the EU.

The BoE is now predicting that the UK economy will shrink by 11% this year -- including a 2% contraction in October-December.

That’s based on the assumption that the various lockdowns imposed this autumn end as planned, and that previous restrictions remain in place until the end of the first quarter of 2021.

The Bank explains:

Those restrictions include heightened England-wide measures for the period 5 November to 2 December, following an intensification of regional and subregional tiered restrictions; the five-level system of restrictions announced by the Scottish Government that came in on 2 November; the firebreak lockdown in Wales scheduled to end on 9 November, after just over two weeks; and a four-week period of additional restrictions in Northern Ireland ending on 13 November.

Subsequently, restrictions are assumed to loosen somewhat. For the UK as a whole, the average level of restrictions that was prevailing in mid-October is assumed to take effect, and remain in place until the end of 2021 Q1.

And here’s economist Julian Jessop on the Bank’s new unemployment forecasts:

Actually... on unemployment the Bank seems to have pushed back its forecast for the peak, due to the recent job retention measures taken by the government.

Today’s forecasts now show unemployment at around 6.25% at the end of this year, down from 7.5% expected three months ago.

But, unemployment is then expected to rise to 7.75% by the middle of 2021, as explained:

As the FT puts it:

With the furlough scheme having been reinstated, the MPC expected unemployment to remain significantly lower than its forecast from September, but still rise from the current 4.5 per cent rate to 7.75 per cent by next summer.

As a result, the Bank’s forecasts for unemployment in 2021 are now higher:

The BoE now expects that the UK economy won’t return to its pre-pandemic size until the first quarter of 2022.

That’s a downgrade - previously, the BoE had expected the recovery be complete by the end of next year.