The United Kingdom, according to the Bank of England, is at the beginning of the longest recession since the regulator began measuring in the Twenties of the last century. Last summer, the British economy was already in trouble and they are likely to continue until the first half of 2024, the regulator said on Thursday.
The British economy is struggling with sharply rising prices for energy and food, among other things. For example, inflation in the UK came to 10.1 percent in September. As a result, many households are experiencing financial difficulties.
In order to curb inflation, the Bank of England has decided to increase its interest rates even further. The regulator has been raising interest rates since December last year. On Thursday, there was an increase of 0.75 percentage points, so that the interest rate is now at 3 percent.
It is hoped that households will save more and spend less. As a result, there is less demand for goods and services and prices fall. The higher interest rate also makes borrowing more expensive for companies and consumers, which should have a depressing effect on prices.
Thus, the approaching recession in the UK may become the longest. But she probably won’t be the worst in British history, the Bank of England thinks. During the Second World War, as well as in the seventies and during the credit crisis, the British economy had very hard times.