The Bank of England raised its interest rate again despite the risk of recession

The Bank of England raised its interest rate again despite the risk of recession

The monetary institution had already applied in August a rise also of 50 basic pointsthe largest increase in 27 years, despite warning of the risks of recession, to contain inflation that is at its highest level in the last 40 years.

The Bank also expanded its inflation expectations: projects that it will remain above the 10% for a few more months, once October has passed, a month for which he expects the general rise in prices to remain at eleven% YoY

The continent is weeks away from the start of the winter period, with a energy crisis Developing. Energy prices have skyrocketed since the start of the war in ukraine and they still stand tall. Russia has suspended gas supplies to the continent and threatened to cut off all supplies if the G7 insists on setting maximum price ceilings for Russian oil.

The UK has already taken steps to reduce the impact of energy prices in cost of living: They froze the prices of home rates for two years and those of companies for six months. They also announced the removal of taxes on fracking to stimulate the production of hydrocarbons.

The rise in rates is a measure that is being taken throughout the world with the aim of containing inflation. This Wednesday the United States Federal Reserve raised its interest rate to a range of 3%-3.25%. A similar measure was taken by the European Central Bank (ECB), which applied the largest increase in its history, despite the fear of some directors that the rates will enter a contractionary terrain and impact activity. The same concern was expressed by some companies, which warned about the effect of these measures on the economy.

Source: Ambito

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