Bank of England warns Brits to brace for U.K.'s longest recession ever
CBSN
Britain's central bank warned on Thursday that the U.K. is facing its longest-ever recession, and it predicted the country's unemployment rate could double by 2025. The Bank of England's announcement came as it raised the base interest rate from 2.25% to 3%, giving it the most significant hike in 33 years amid dire economic forecasts.
Inflation has been soaring in the United Kingdom at its fastest rate in decades, with food and energy prices exploding, due in part to Russia's invasion of Ukraine. The bank believes that by raising its benchmark interest rate, and thus increasing the cost of debt, including mortgages, it will encourage people to stop spending money and contribute to lowering prices.
Bank boss Andrew Bailey acknowledged a "tough road ahead," and he warned that action had to be taken now by the government or things "will be worse later on."
