Bank of England expects UK to fall into longest ever recession

image of banknotes and a prepayment key by Lydia.

https://www.bbc.com/news/business-63471725

The Bank of England has warned the UK is facing its longest recession since records began, as it raised interest rates by the most in 33 years.

It warned the UK would face a “very challenging” two-year slump with unemployment nearly doubling by 2025.

Bank boss Andrew Bailey warned of a “tough road ahead” for UK households, but said it had to act forcefully now or things “will be worse later on”.

It lifted interest rates to 3% from 2.25%, the biggest jump since 1989.

By raising rates, the Bank is trying to bring down soaring prices as the cost of living rises at its fastest rate in 40 years.

https://www.bbc.com/news/business-63471725

BBC: Bank of England: Five things we now know about the UK economy

Here are five things we learned from the central bank about the future of the economy.

BBC: Bank of England: Five things we now know about the UK economy

Continue ReadingBank of England expects UK to fall into longest ever recession

OBR forecasts likely to show £60bn-£70bn hole after Kwarteng’s mini-budget

https://www.theguardian.com/politics/2022/oct/07/obr-forecasts-likely-to-show-60bn-70bn-hole-after-kwartengs-mini-budget

Kwasi Kwarteng has been handed independent forecasts on the state of the UK finances that are expected to show a hole of more than £60bn left by his sweeping tax cuts and a sharply slowing growth outlook.

Sir Charlie Bean, a ex-member of the independent watchdog and a former Bank of England deputy governor, said the document would probably show a large shortfall for the exchequer.

“It will be in the order of £60bn to £70bn relative to its previous forecasts,” he said, adding that Kwarteng would face three options: further U-turns on his tax-cutting plans, deep cuts to public spending, or risking the ire of already rattled financial markets by substantially adding to the national debt.

“What he’ll be confronted with, and I don’t think to be honest most observers and MPs have really woken up to this yet, is the extent to which the public finances has deteriorated since the spring,” Bean said.

Continue ReadingOBR forecasts likely to show £60bn-£70bn hole after Kwarteng’s mini-budget