Connect with us


Recession: the price Britain will pay to control inflation | Cost of living crisis




Rising unemployment. Inflation above 10%. Energy prices are soaring. The standard of living has collapsed. The message from the Bank of England was clear: the 1970s are back.

The word stagflation did not appear in the more than 100 pages of the Threadneedle Streets monetary policy report. Yet a period of weak growth and rapidly rising prices is precisely what the Bank says is in store for the UK. The current rebound from the lockdown will be short-lived and, in a real blast from the past, the economy will be dragged into recession to bring inflation under control.

The pain is not likely to go away quickly. The economy is expected to contract by 0.25% in 2023 and remain weak for the next two years. Unless things improve significantly, the next legislative elections will take place against a backdrop of weak growth and long queues.

Just like in the 1970s, the Bank says that external factors are mainly to blame. In 1973, it was the Yom Kippur war that led to inflation of 25% in mid-1975. This time it’s war in Ukraine. The Bank forecasts another 40% increase in the energy price cap in October, bringing the average annual household bill to 2,800.

There may be arguments about whether the UK is technically heading into recession because the Bank is not forecasting two consecutive quarters of falling output, but it will certainly feel like it. The standard of living is about to take its biggest hit in decades. In another echo of yesteryear, the pound plunged in currency markets following the Bank’s interest rate decision.

“,”caption”:”Sign up for the first edition, our free daily newsletter every weekday morning at 7am BST”,”isTracking”:false,”isMainMedia”:false,”source”:”The Guardian” ,”sourceDomain”: “”}”>

Sign up for First Edition, our free daily newsletter every weekday morning at 7am BST

Six months ago, the Bank expected inflation to peak at 5%. He now thinks it will hit just over 10%, by far the highest level since Threadneedle Street gained operational independence 25 years ago.

The Bank says there is little it can do to prevent the damage to household budgets and corporate profit margins from rising global energy profits, and that its task is to achieve the goal of government’s 2% inflation while minimizing damage to the economy. Faced with the dilemma of worrying more about the risk of recession or entrenched inflation, the Bank opted for a middle course, raising interest rates by a quarter point to 1%, their all-time high. since early 2009. But the vote was not unanimous: three of the nine members of the Monetary Policy Committee (MPC) wanted an increase of half a point.

Having been too optimistic about the economy in the past, the Bank may now be too gloomy. There are two reasons for this. The first is that the Threadneedle Streets forecast is based on what financial markets think will happen to interest rates and given the prospect of prolonged stagnation, the city’s current belief that the costs of borrowing will peak at 2.5% seems far too high. The Bank says this would cause inflation to fall to 1.3% well below its target in three years. Two members of the MPC think it is possible that no further tightening is needed.

The second reason is that it’s hard to imagine the government watching the economy slide into recession without doing something to ease the pain. The Bank increased the pressure on Rishi Sunak to act and act big.




The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos


to request, modification Contact us at Here or [email protected]