(adds fresh comments) May 6 (Reuters) - The Bank of England said on Thursday it would slow the pace of its bond-buying as it sharply increased its forecast for Britain’s economic growth this year after its coronavirus slump. The BOE kept its bond-buying programme unchanged at 895 billion pounds ($1.24 trillion), as expected by economists polled by Reuters but said it would slow bond-buying to 3.4 billion pounds a week between May and August, down from its current pace of 4.4 billion pounds a week. The pound and British two-year gilt yields fell after the announcement before recouping those falls. Below are comments from analysts on the meeting outcome. AMBROSE CROTON, GLOBAL MARKET STRATEGIST, JPMORGAN ASSET MANAGEMENT “Today’s MPC decision to keep policy unchanged comes as no surprise as the economic recovery is still in its early days and monetary policy has already been somewhat prescribed for the coming months. The Bank did acknowledge that the economic outlook had improved markedly since its February forecast round, raising its forecasts for growth.” “Indeed, the punchy cocktail of a reopening economy and excess consumer savings means that the UK economy should be set for a party for the remainder of the year. As such, any prospect of negative interest rates seems to have sailed for now and the Bank’s next interest rate move is likely to be higher.” PAUL CRAIG, PORTFOLIO MANAGER, QUILTER INVESTORS “The Bank of England remains super cautious with its monetary policy but for how long this can be sustained remains to be seen. It has done a stellar job in supporting the economy and financial markets through challenging waters, but consumers and investors must be prepared for the beginning of a tapering programme to reduce the scale of quantitative easing in-line with the vaccination roll-out and the economic reopening.” “Given we are just over a month away from the government declaring life ‘back to normal’ we should not be surprised to see the BoE eventually have to act later in the year to counteract any of the effects of this economic awakening. We think it is unlikely the UK will see long-term sustained inflation given potential growth is still down from where it was at the turn of the millennium and the economic scarring is still unknown at this stage.” “So while we welcome the upgrade in growth forecasts, they may only force the Bank’s hand if they can be truly sustained.” DEAN TURNER, ECONOMIST, UBS GLOBAL WEALTH MANAGEMENT “Markets were eagerly awaiting to see if the Bank of England would lean further towards the hawkish end of the central bank spectrum, and those who expected this to be revealed today were not disappointed. The Bank’s decision to slow the pace of purchases was inevitable at some point and doing so now means there will be less of cliff edge later in the year.” “The upgrades to the growth outlook were also widely expected considering the recent Budget, but the message is still one of caution. The Bank said that clear evidence that progress is being made will be needed before they consider their next policy move. In our view, this points to the Bank keeping base rates unchanged for some time yet.” “On balance, we think that the slightly more hawkish outcome of the May meeting will be one factor that will help sterling make further gains between now and the end of the year.” RICHARD MCGUIRE, HEAD OF RATES STRATEGY AT RABOBANK, LONDON “We had the initial headline that the overall purchase target was unchanged and that was greeted positively by markets given that there had been some speculation of a possible reduction in purchase volumes. And then it appears that the market responded to the headlines that the BoE would slow the pace of bond purchases. As the dust settles, there are also upbeat macro economic forecasts as well but overall it is a modest response. Net-net, gilts are softer but modestly so. Sterling also did a double take on the headlines, reversing direction when it became clear that the pace of purchases would slow. So that was modestly positive for the pound.” JOHN GOLDIE, FX DEALER AT ARGENTEX, LONDON “Sterling dipped sharply on the release, as asset purchases and base rate were kept on hold, but the revisions to the Committee’s outlooks were sufficient to motivate sterling buyers to push it higher again.” (Reporting by London markets and finance team;) Our Standards: The Thomson Reuters Trust Principles.