Interest rates LIVE: Bank of England names date UK to enter recession – new hike CONFIRMED

THE Bank of England has warned the UK is set to fall into its longest recession since the financial crisis and inflation will peak at more than 13 percent as gas prices soar.

By Aliss Higham, Francesca Edwards, David Maddox

15:18, Thu, Aug 4, 2022

Bank of England forecasters predicted the Consumer Prices Index inflation will hit 13.3 percent (Image: GETTY)

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Bank of England forecasters predicted the Consumer Prices Index inflation will hit 13.3 percent in October, the highest for more than 42 years, if regulator Ofgem hikes the price cap on energy bills to around £3,450. The bank said energy prices will push the economy into a five-quarter recession – with gross domestic product (GDP) shrinking each quarter in 2023.

• It comes as the central bank raises interest rates from 1.25 percent to 1.75 percent today.

The Bank’s Monetary Policy Committee (MPC) said: “The United Kingdom is now projected to enter recession from the fourth quarter of this year.

“Real household post-tax income is projected to fall sharply in 2022 and 2023, while consumption growth turns negative.”