Alongside a rather defensive interest rate hike today, the Bank of England unveiled some alarming forecasts for economic growth. The BoE predicts the economy will be in ‘recession for a long period’ – until mid-2024 – with inflation peaking around 11 per cent.
While the Bank is predicting that the recession will be shallower than other contractions, we are looking at the longest recession on record. The Bank thinks recession is already underway (the economy contracted by 0.3 per cent in August –we will get September’s figures next week) and will last for two years. The driving factors for economic contraction, the Bank thinks, will be ‘high energy prices and materially tighter financial conditions’. The former is in constant flux, both in regard to both the wholesale price of energy but also on-and-off government intervention.
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in