The Bank of England has warned that the British economy is heading into a protracted recession as it raised interest rates to fight inflation.
The Bank of England has warned that the British economy is heading into a protracted recession as it raised interest rates to fight inflation amid fears of 13 or 15 per cent inflation by the end of year.
The Bank of England raised interest rates to 1.75 per cent on Thursday, the highest level since the 2008 financial crisis. The central bank raised the rates in the hopes of mitigating the expected increases to inflation, which it now forecasts as hitting 13.3 per cent this year, a four decade high.that at the end of the year, the British economy will sink into a recession that will last for at least five quarters, with the definition of a recession being two straight quarters of negative growth.
Not only will the recession leave the economy smaller than prior to the Chinese coronavirus crisis, the Bank warned, with 900,000 fewer people employed by 2025, the economic crisis is expected to have a drastic impact on wages. According to projections, real household incomes are expected to decline by the most since records began in 1963, falling by 1.5 per cent this year and 2.25 per cent in 2023.: “I recognise the significant impact this will have and how difficult the cost of living challenge will continue to be for households. Inflation hits the least well-off the hardest.Real wages saw their sharpest decline on record in Britain when considering inflation, the Office for National Statistics revealed on Tuesday.
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