Bank of England Makes , Biggest Interest Rate Hike in 27 Years.
On August 4, the Bank of England raised
interest rates by half a percentage point.
'The New York Times' reports that it
was the largest increase since 1995.
The move comes as policymakers attempt
to combat inflation while also warning Britain
that a long recession is forecast for later this year.
The bank predicted that the annual rate
of inflation would rise above 13% when
household energy costs climb higher in October.
If that increase comes to pass,
it would be the highest level
of inflation in over forty years.
The bank attributes much of the surge
in prices to the global energy market.
The price of wholesale
natural gas has nearly doubled
in the past three months. .
Meanwhile, incomes adjusted
for inflation and taxes are predicted
to drop sharply in 2022 and 2023.
It would mark the worst decline
since the 1960s.
In June, consumer prices rose 9.4%,
faster than inflation in the United States
and the European Union.
According to the bank, these factors are forecast
to combine and bring about a recession in the last
quarter of 2022 that will last through the end of 2023