According to the US website of " New York Times " on August 4, Bank of England announced a pessimistic outlook on the UK's economic outlook on Thursday, predicting that as the impact of high inflation gradually emerges, the UK will fall into a long-term recession from later this year. However, the Bank of England has stepped up its efforts to deal with soaring prices, which hiked by 20.5 percentage points, the largest increase since 1995.
reported that the Bank of England raised the benchmark rate to 1.75%, the highest since 2008, as it predicts that the annualized inflation rate will exceed 13% when household energy bills rise sharply in October. This will hit the highest inflation rate in 42 years, six times the inflation target set by the Bank of England.
4, on the streets of London, on the left is the Bank of England building. (Reuters )
Bank of England said that soaring prices are still largely due to the global energy market. In the past three months, the wholesale price of natural gas has almost doubled this winter. The bank predicts that this will push up the upper limit of household energy bills this fall, bringing it to £3,500 (about $4,245), three times that of a year ago.
reports that the prospects for millions of British families are worrying. After deducting factors such as inflation and taxation, it is expected that its revenue will drop significantly this year and next two years, which will be the worst decline since the 1960s.
Bank predicts that the world's fifth largest economy, , will fall into a recession in the last quarter of this year, and the recession trend will continue until 2023.
According to the minutes of this week, policy makers said that "the latest round of rise in natural gas prices has caused the outlook for economic activity in the UK and other European countries" to be severely worsened again." "Currently predicted" that the UK "will fall into a recession."
reported that the rate hike is the sixth rate hike since December last year as the Bank of England is trying to solve the inflation problem. The UK's inflation rate hits its highest level in decades. As inflationary pressure continues and other major central banks have taken more aggressive measures to prevent prices from rising, the Bank of England is facing certain pressure to raise interest rates, with interest rate hikes exceeding the usual 0.25 percentage points.
The Bank of England is the first major central bank in the world to start hikes in response to global inflation, tightening its monetary policy that supports the economy during the COVID-19 pandemic. Last month, the ECB hiked interest rates, its first rate hike in more than 10 years. Last week, the Federal Reserve raised interest rates by 0.75 percentage points for the second consecutive month.
reports that banks are almost powerless in slowing upward trends in energy prices and solving supply chain disruptions, but banks aim to ensure that the skyrocketing price trend does not last long by increasing borrowing costs for consumers and businesses. So far, the unemployment rates in the United States, EU and the United Kingdom have remained low overall, but the risk is that policymakers will lead to a sharp economic downturn and layoffs in the process of trying to reduce inflation. International Monetary Fund warned last month that the global economic recession may be coming.
reported that the Ukrainian war and Western sanctions on Russia have intensified global inflation. These sanctions further disrupted supply chains and pushed up energy prices.
Source: Reference Message Network
