The GuardianThe Guardian

Bank of England hikes interest rates and says inflation will hit 13%

By Phillip Inman

04 Aug 2022 · 2 min read

Editor's Note

You should read this story to learn why UK has raised its interest rates and why the Bank of England is confident of a prolonged recession this year.

The Bank of England has pushed interest rates up 0.5 percentage points in response to a spike in inflation that it said will hit 13% in October, despite predicting a prolonged recession.

In the worst outlook for the economy since the 2008 banking crash, the central bank said the UK would enter recession in the final quarter of this year, but raised interest rates to 1.75% in an attempt to tackle soaring inflation. It was the biggest jump in borrowing costs in 27 years.

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