Bank of England raises interest rates and warns about recession

After the monetary policy meeting – which decides on interest rates – the BoE reported that it raised debt costs to 3%, in the face of inflation exceeding 10%, a maximum in four decades.

Inflation: understand what it means and why it is important to monitor it

In small doses and well controlled, inflation is a sign that the economy is working, but the fact is that it worries everyone from mere mortals to leaders in all countries, from the least significant to the great world powers. After all, what is inflation, how is it measured and what are the indices for? O Curto News tells you what you need to know about the subject.

This aggressive increase coincides with a trend among major central banks battling the biggest price rise in decades.

On Wednesday, the Federal Reserve (Fed), the North American central bank, also decided to increase the interest rate by 0,75 percentage points, the fourth consecutive increase in the United States.

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Inflation in England

The Bank of England estimated inflation peaked in October at 10,9% annually, compared with a previous estimate that projected it would peak at a 13% rise in prices.

In the minutes of the meeting, the entity warned of a “challenging outlook” and said it expected the economy “to enter recession for an extended period”. The economy has been contracting since the third quarter, starting a technical recession that, according to projections, will last until the first half of 2024.

“There is a difficult road ahead”, commented the president of the Central Bank, Andrew Ba0iley, at a press conference. “The sharp increase in energy prices caused by the Russian invasion of Ukraine has impoverished us as a nation. The level of economic activity will likely be zero or falling for some time,” he warned.

Source: AFP