LONDON (Realist English). Britain is facing the longest recession since the start of observations, its economic downturn will last until 2024. This is stated in the report of the Bank of England.
The currency regulator described the prospects for the British economy as “very difficult,” noting that unemployment will double to 6.5% amid a two-year recession.
The Bank of England forecasts a decline in GDP of about 0.75% in the second half of 2022, reflecting a reduction in real incomes due to rising prices on energy and goods. The British pound fell by 2% against the US dollar and by 1.2% against the euro.
Growth is expected to continue to decline during 2023 and the first half of 2024, as “high energy prices and tougher financial conditions affect costs.”
Earlier, the regulator raised the base interest rate by a historic 75 basis points — the largest increase since 1989. The Bank of England’s efforts are designed to reduce inflation, which reached a 40-year high of 10.1% in September 2022.
The governor of the Bank of England, Andrew Bailey, explained in an interview with CNBC that the limited labor market continues to exert strong inflationary pressure, even though the regulator predicts a fall in prices below 10% in the second quarter of 2023.
