The UK, according to the Bank of England, is at the start of the longest recession since the regulator began measuring in the 1920s. The British economy already had problems last summer and they will likely last until the first half of 2024, the regulator said Thursday.
Just like the Netherlands, the British economy is struggling with the sharp rise in energy and food prices, among other things. For example, UK inflation stood at 10.1 percent in September. As a result, many families face financial problems.
To curb inflation a bit, the Bank of England has decided to raise interest rates further. The regulator has introduced interest rate hikes since December last year. An increase of 0.75 percentage points was added on Thursday, bringing the interest rate to 3%.
It is hoped that families will save more and spend less. As a result, there is less demand for goods and services and prices go down. Higher interest rates will also make lending more costly for businesses and consumers, which should have a depressing effect on prices.
So the UK’s impending recession could be the longest. But it probably won’t be the worst in British history, the Bank of England thinks. During the Second World War, but also in the 1970s and during the credit crisis, the British economy went through very difficult times.
