The UK’s interest rate has risen to its highest level since 2009 as the Bank of England attempts to control the spiralling rate of inflation
The rate will rise from 0.75 to 1.00 per cent,The Bank’s monetary committee announced
In its quarterly report the Bank said that it expects inflation to peak at 10 per cent from its current rate of 7 and that the economy will weaken
It expects inflation to fall to its target rate of 2 per cent in two years time
Surveys of business activity have generally remained strong. There have, however, been signs from indicators of retail spending and consumer confidence that the squeeze on real disposable incomes is starting to weigh on the household sector.
The Bank added that UK GDP growth is expected to slow sharply over the first half of the forecast period.
@That predominantly reflects the significant adverse impact of the sharp rises in global energy and tradable goods prices on most UK households’ real incomes and many UK companies’ profit margins. Although the unemployment rate is likely to fall slightly further in the near term, it is expected to rise to 5½% in three years’ time given the sharp slowdown in demand growth.
