Bank's recession warning matters to everyone

Comentários · 12 Visualizações

Bank's recession warning matters to everyone

We don't need the Bank of England to tell us times are hard.

สมัครสมาชิกสล็อต The symbol appears in any position of the reels. While in a slot game with payline payline payout rates. The symbol must appear only in the exact location indicated by the payline. Players will receive their own prize money.

Even before its recession warning on Thursday, the typical person's finances were already stretched as prices, particularly for food and fuel, soared.

Half of households cut back on energy usage over the spring, while a third were curbing their spending on food and other staples. Our living standards were going into reverse, on course to do so by the greatest degree since the 1950s.

What the Bank underlined yesterday, though, was how much worse things are going to get - and for much longer than previously thought, with the warning that activity across the UK economy is set to go into reverse until the end of 2023.

The factors behind that have been both largely beyond its control and unpredictable.

Front and centre are those energy bills. By next February, the domestic price cap could be twice what it is right now - and that is largely due to the fallout from the war in Ukraine.

We may not source much gas (less than 5% of our supply) from Russia, but that country restricting the amount of gas it's pumping to Europe has caused alarm and so global wholesale prices are spiking once again.

Those energy bills directly account for about half of the increase in our living costs, some of the rest reflects higher global food prices, which is also a knock on effect of war.

It's this external source of inflation which makes it hard for the Bank of England to get a grip on the problem. Its main tool - raising interest rates - works by engineering a slowdown, leaving borrowers with less money to spend so that businesses have less scope to raise prices.

That's not only less effective when the key source of inflation is rising global costs rather than strong demand, but also means that interest rates add to the pain.