The Bank of England has warned Kwasi Kwarteng the economy is in recession and it will most probably need to push interest rates higher following Friday’s tax-cutting mini budget from the chancellor.
On the eve of a major package of support from the chancellor designed to break what he called the economy’s “cycle of stagnation”, Threadneedle Street said the UK economy was heading for a second consecutive quarter of falling output, with gross domestic product set to shrink 0.1% in the three months to September.
However, with energy and food bills still soaring, and inflation not expected to peak until October, the Bank of England raised the cost of borrowing for a seventh successive meeting of its monetary policy committee (MPC) and made clear the new government’s plans risked triggering more interest rate hikes. » | Larry Elliott, Jessica Elgot and Richard Partington | Thursday, September 22, 2022
