Two-Year Recession coming for UK?

By Dana Malcolm

Staff Writer

#UnitedKingdom, November 4, 2022 – The Bank of England says the country may be heading towards its longest recession in history, possibly up to two years long. The announcement comes after the BoE and the US Federal Reserve raised interest rates once again, this time within 24 hours of each other as inflation in both countries continues to outpace efforts to control it.

Interest rates in the UK now stand at the highest rates in 33 years.

In its latest monetary policy summary the bank said the main culprit is rising gas prices, “High energy prices continue to weigh on spending, despite an assumption of some fiscal support for household energy bills over the next two years. As a result, the UK economy is expected to remain in recession throughout 2023 and 2024.”

Inflation in England is now at 10.1 percent, this is eight percent higher than the two percent goal set by the BoE. Inflation isn’t expected to fall until at least mid-2023 and then for the UK at least there’s worse news. It will pass the ideal two percent mark set by the BoE and continue to fall to zero percent by 2025 thanks to ‘a steadily rising unemployment rate,’  the bank says.

Unemployment is expected to reach up to 6.4 percent, nearly double the current 3.7 percent.