CITY AM – UK economy not out of the woods yet

UK recession still on the cards after aggressive Bank of England interest rate hikes

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CITYAM SAYS A recession is still on the cards in the UK despite the economy performing much better than experts predicted just a few months ago, new forecasts out today project.

Higher interest rates and households responding to the cost of living crunch gripping their finances by trimming spending is tipped to push GDP 0.3 per cent lower this year, according to consultancy KPMG.

Families are being hit by the worst inflation surge in four decades and the Bank of England jacking up borrowing costs to tame it.

Bank Governor Andrew Bailey and his team of economists bumped rates up for the eleventh time in a row last week to 4.25 per cent, a post-financial crisis high, as he stepped up the central bank’s fight against inflation, which rose to 10.4 per cent last month.