Bank of England expects UK to fall into longest ever recession

  • Leader
    November 4, 2022 10:40 AM CDT

    Bank of England expects UK to fall into longest ever recession

     

    We have friends in the UK. The American economy is also struggling. How long and how far can this go?

    The Bank has done something it doesn't normally do in the published minutes of its decisions - it has given guidance that seems to suggest a peak in interest rates of about 4.5% next autumn.

    For those with a glass half-full - this is lower than the 6% assumed just a month ago in the post mini-budget market turmoil.

    While government borrowing costs and the level of the pound has somewhat recovered after a series of U-turns since, mortgage markets and business loans are still showing some stress, adding to the prolonged hit to the economy.

    The forecast predicts that the unemployment rate will rise, while household incomes will come down too.

    It is a picture of a painful economic period, with the UK performing worse than the US and the Eurozone. Indeed, what was forecast as a sharp energy recession just three months ago, is now a shallower, but more prolonged energy and mortgage shock.