United Kingdom

UK heading for recession as inflation to rise over 13%, Bank of England warns

An increase in interest rates to 1.75% announced today came as officials predicted a UK recession will begin in the fourth quarter, and last all the way through next year

The forecasts, based on average energy bills increasing by 75 per cent to around £3,500 in October, also highlight the scale of the challenge awaiting the victor of the race to replace Boris Johnson as UK prime minister. Picture: Getty

The Bank of England has raised its interest rates to 1.75 per cent, its biggest hike in 27 years, as it warned the UK is heading for more than a year of recession under the weight of soaring inflation.

The half-point increase was backed by eight of the bank’s nine policy makers, who also kept up a pledge to act forcefully again in the future if needed, potentially putting similar hikes on the table for ...