Home Breaking News Bank of England warns that ‘UK is heading for a recession’ which will be a ‘pretty bleak winter of discontent’ for many

Bank of England warns that ‘UK is heading for a recession’ which will be a ‘pretty bleak winter of discontent’ for many

by LLB Finance Reporter
5th May 22 1:27 pm

The Bank of England (BoE) has warned that the “UK is heading for a recession” as the annual heading rate of inflation is at 7%.

By the autumn the BoE estimates that the UK is heading towards a rate above 10%, which is the highest rate of inflation since 1982.

Between October and December the Bank estimates the economy will contract by almost 1% and the BoE will raise interest rates to 1%, which is the highest since 2009.

Senior investment and markets analyst at Hargreaves Lansdown Susannah Streeter warned that the UK is heading for a “pretty bleak winter of discontent.”

Streeter said, “The last time rates were at 1% was in February 2009 as the repercussions of the global financial crisis were taking hold, and Lily Allen was at number 1 in the UK music charts with her aptly named track The Fear.

“Right now that mood music is back with policymakers at the Bank of England clearly sharing fears that unless action is taken now to lower demand in the economy, inflation will spiral out of control, which could cause even more pain for the economy.

“Already it’s predicting inflation will shoot up to a frightening 10% with a rise in the energy price cap set to cause more financial pain in the Autumn.

“With more interest rate rises expected alongside elevated commodity prices that are set to squeeze consumer and company spending power, this pincer movement is expected to lead to a contraction in economic output by 0.25% in 2023.”

She added, “The stage is set for a pretty bleak winter of discontent with the economy heading into reverse and little end in sight to rising prices given the ongoing toll the war in Ukraine is having on commodity markets.”

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