Bank of England raises interest rates to 1.75% as recession forecast later this year
The Governor of the Bank of England has defended the delays in raising interest rates.
The Bank yesterday raised interest rates to 1.75% – the highest in 27 years – while warning that Britain will plunge into a year-long recession this autumn.
Mr Bailey said earlier interest rate hikes could have hurt the UK’s economic recovery from the pandemic.
It came after politicians including Attorney General Suella Braverman claimed the Bank was asleep at the wheel and had let inflation spiral out of control.
Mr Bailey told BBC Radio 4’s Today program that he did not believe the Bank had moved too slowly and earlier action could have caused a recession.
“We don’t make policy in hindsight,” he added.
“I would challenge anyone sitting here a year ago, two years ago, to say that there will be a war against Ukraine and it will have this effect on inflation.”
Next Prime Minister will have to find ‘far more billions to help households pay skyrocketing energy bills’
The next prime minister will have to find “many more billions” of pounds to help households pay soaring energy bills, the head of a highly influential think tank has warned.
Paul Johnson, director of the Institute for Fiscal Studies, also said struggling public services will need more investment after the Bank of England predicted the UK would be plunged into the longest crisis since. 2008.
Sources in Liz Truss’s camp have not denied that her planned emergency budget could arrive as early as September 21, as the dire state of the economy becomes the main issue in the race for Downing Street.
Read the full story below from our Whitehall editor, Kate Devlin:
Next Prime Minister will have to find ‘billions to help households pay soaring energy bills’
Think tank also warns public services will need more investment
Thomas KingleyAugust 5, 2022 1:15 p.m.
Responding to falling UK house prices Russell Galley, Managing Director of Halifax, said: “It is important to note that house prices remain over £30,000 above the same period last year.
“While we shouldn’t read too much on a single month, especially since the fall is only fractional, a slowdown in annual house price growth has been expected for some time.
“Leading housing market indicators have recently shown slowing activity, while rising borrowing costs are adding to the squeeze on household budgets amid unusually high house price-to-income ratios.
“That said, some of the dynamic market drivers we’ve seen in recent years – such as the extra cash being saved during the pandemic, fundamental changes in how people use their homes and investment demand – remain evident.
“As a result, a slowdown in annual house price inflation still seems the most likely scenario.”
Thomas KingleyAugust 5, 2022 12:48 p.m.
Average UK house price drops month-on-month for first time since June 2021
The average UK house price fell in July from a record high the previous month, marking the first month-on-month fall since June last year, an index showed.
After a year of exceptionally strong growth, house prices fell 0.1% month-on-month in July, Halifax reported.
That was a £365 month-on-month drop in cash, compared to June’s record average house price of £293,586. In the UK, the annual rate of price growth slowed to 11.8% from 12.5% in June.
In Scotland, the average house price hit a record high of £203,677, although it saw a slight slowdown in annual house price growth in July to 9.6% from 9.9% in the month previous.
Thomas KingleyAugust 5, 2022 12:25 p.m.
Ben Shephard slams government for being too ‘busy’ for GMB interview amid recession forecast
Ben Shephard has criticized the government for refusing to send a minister to appear on Good Morning Britain amid warnings of a year-long recession this autumn.
During the Friday 5 August morning episode of GMB, host Shephard said that although they had asked for a Tory minister to appear on the show as they were criticized for ‘being absent in times of crisis “, they didn’t.
Showing an empty chair sitting against a backdrop of Westminster, he said: ‘We have invited a minister to the show. Despite what we just heard…they didn’t want to show up. They don’t have time for us in their busy schedule.
Read the full story below:
Ben Shephard slams Tories as GMB interview chair sits empty amid recession forecast
“They didn’t want to show up. They don’t have time for us in their busy schedule,’ the presenter said
Thomas KingleyAugust 5, 2022 12:05
Bank of England Governor Andrew Bailey said soaring inflation “concerns me most” amid political criticism over the bank’s swift action to deal with the current economic crisis.
“We are at the center of things…
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This notice was published: 2022-08-05 11:45:51