UK already in recession, warns BankThe UK is already in recession, the Bank of England warns, and it could be a prolonged one too.
The Bank estimates that the UK entered recession in the third quarter of this year, as household incomes were squeezed by higher global energy and goods prices.
Alarmingly, it predicts that this downturn will last until mid-2024.
GDP will keep falling throughout 2023 and even in the first half of 2024, the Bank fears, as “high energy prices and materially tighter financial conditions weigh on spending”.
It warns:
The MPC’s latest projections described a very challenging outlook for the UK economy. It was expected to be in recession for a prolonged period and CPI inflation would remain elevated at over 10% in the near term.
Unemployment is expected to rise too, with the jobless rate seen hitting almost 6.5% by late 2025 – up from just 3.5% at present.
NEW: Bank of England increases interest rates by 0.75pp to 3 per cent, the biggest hike for more than three decades
BoE warns UK already in recession, and it could be a longest since records began as it forecasts a “very challenging outlook” t.co/884jL5X67e
— Beth Rigby (@BethRigby) November 3, 2022