UK economy to be in recession for more than a year, Bank of England warns as it hikes rates – By Paul Kelso (Sky News) / Aug 4, 2022
The Bank of England pushes interest rates up by half a percentage point – the sixth rise since December and the biggest rise since 1995.
The UK economy will be plunged into recession for more than a year this autumn as rising energy prices push inflation above 13%, the Bank of England has warned.
In a bleak outlook for consumers and business, the bank forecast five quarters of economic contraction and a 5% fall in real-terms living standards, and increased interest rates by 0.5 percentage points, the largest single rise in 27 years.
The bank’s baseline forecast is for GDP to fall by 1.25% in 2023 and 0.25% in 2024, the first instance of two years of annual economic contraction since the 1960s.
The bank’s Monetary Policy Committee voted 8-1 to increase the base rate to 1.75%, an attempt to prevent the inflationary impact of soaring energy prices being compounded by domestic price and wage pressures.
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