The United Kingdom (UK) is preparing for a recession next year after the Bank of England projected that the economy would shrink for five consecutive quarters, IgbereTV reports
It was gathered that the economy will first contract in the fourth quarter of 2022, at a period the Bank of England estimates inflation will rise to 13%, from its present level of 9.4%.
According to the governor of the bank, Andrew Bailey, on Thursday, the soaring inflation will push the UK economy into recession in 2023, and to tame the rate, the country would increase the interest rate to raise borrowing cost.
“The main way we can bring inflation down is to increase interest rates. Higher interest rates make it more expensive for people to borrow money and encourage them to save.” Bailey said.
“That means that, overall, they will tend to spend less. If people on the whole spend less on goods and services, prices will tend to rise more slowly. That lowers the rate of inflation.” The Bank of England governor asserted
