Will the Bank of England raise interest rates again?

Recently, due to the massive pandemic effect, global recession, and the ongoing Russia-Ukraine war, inflation has become a serious problem in the UK. According to chief economist Huw Pill, the Bank of England will be likely to rise interest rates.

In order to prevent inflation from leading to wages and prices hike, Huw Pill warns that interest rates are likely to rise further. UK CPI inflation returned to a 40-year high of 10.1% in September on the back of rising food prices. i, in an attempt to prevent inflation leading to a spiral of higher wages and prices.

According to Deutsche Bank (DB), a deep, long-term UK recession may have started. The investment bank's chief UK economist, Sanjay Raja, predicted UK GDP fell by 0.6% quarter-on-quarter from July to September 2022, which could be the start of a recession.

“The drop in Q3 GDP reflects continued weakness in household and business confidence, higher inflation, and higher interest rates in the economy, with household consumption contracting in the quarter, business investment slowing, and government spending falling further,” Raja said.

“We also expect to see a material softening in inventories after two consecutive quarters of historically strong stockpiling, which should push GDP firmly into negative territory,” he added.