A recession is coming, according to the Bank of England, and it will be a long one, lasting more than a year.
The economy is not expected to shrink as sharply or as deeply as it did during the financial crisis in 2008, but inflation – the rate of price rises – is set to stay elevated through 2023. This will drive down living standards by the greatest rate on record, according to the central bank.
Borrowing is now more expensive with the Bank of England’s key interest rate raised to 1.75 per cent on Thursday. And the buying power of money is set to be eaten into by inflation which it believes will hit more than 13 per cent later this year.