Bank of England predicts’very tough’ two-year recession.
- The Bank of England raised interest rates by the most since 1989 on Thursday to tackle sky-high inflation that it predicted would plunge Britain into a recession until mid-2024.
- After a normal meeting, the BoE raised borrowing costs by 0.75 percentage points to three percent, the highest level since the 2008 global financial crisis, to reduce UK inflation, which it expects to reach a four-decade high near 11 percent.
- “It is a rough path ahead,” BoE governor Andrew Bailey told a press conference.
“After Russia invaded Ukraine, energy prices skyrocketed, making us impoverished. Economic activity may stagnate or decline for a while “warns.
- As food and energy prices rise, central banks are tightening rates.