The regulator expects UK GDP to contract by 0.5% in the third quarter, marking the start of recession.
The Bank of England has announced an increase in the base interest rate from 2.25% to 3% per annum. This was reported on the regulator’s website on Thursday, November 3.
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It is indicated that all nine members of the Monetary Policy Committee (MPC) voted in favor of the rate hike. Furthermore, seven were in favor of an increase of 75 bp, and one vote was cast for increases of 25 and 50 bp.
The rate was raised for the eighth consecutive meeting, and the rate of increase is a record since 1989. At the same time, most MPC members believe that rate increases will continue.
The Bank of England also published updated macroeconomic forecasts. Thus, the regulator expects a 0.5% reduction in UK GDP in the third quarter, marking the beginning of a recession that could last eight quarters. The Central Bank predicts that inflation will rise to around 10.9% this year, while the previous forecast gave a peak inflation of 13%.
In 2023, the Central Bank still expects the British economy to shrink by 1.5%, and in 2024 it predicts a contraction of 1%, and not 0.25%, as was the case in previous forecasts.
It was previously reported that in Britain for two years the price of gas and electricity has been frozen. Ordinary households in the country pay no more than 2,500 pounds a year for gas and electricity.
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Source: korrespondent
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