Central Banks
UK Recession Guaranteed With BOE Outlook for 500,000 Job Losses
- Leadup to next election will be painful for British voters
- UK diverges from US as energy costs bite harder in Europe
WATCH: BOE Governor Bailey Says 75 Point Hikes Are Not the New Normal
Source: Bloomberg
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Britain is headed for a deep recession, with the Bank of England working to clamp down on inflation in a move that may cost the economy at least half a million jobs.
The UK central bank pushed through its biggest interest rate increase in 33 years on Thursday, bringing the benchmark lending rate to a 14-year high of 3%. It estimated unemployment may rise to just above 5% even if borrowing costs remain steady and the economy may shrink 1.7% over 18 months -- not recovering for three years.