The Bank of England (BoE) has predicted that the UK will enter arecession before the end of the year.
The prediction, backed up by the BritishChambers of Commerce (BCC), follows consecutive rises in interest rates, withinflation reaching a 40-year high of 10.1% in July.
Although the BoE expects the economy tocontract over 2023, the BCC predicts that it will grow slowly over the nextyear at 0.2%.
Both agree that inflation, as measured bythe consumer price index rate, will hit a peak of around 14% in the lastquarter of 2022.
The sharp rise in inflation is due toincreasing energy costs and supply chain issues following the Covid-19 pandemicand the war in Ukraine.
Alex Veitch, director of policy at theBCC, said:
“We have revised our projected inflationrate upwards by four percentage points to a new high of 14%.
“Inflation is running rampant, and it isnot only impacting the cost of doing business but also the ability of somefirms to keep their doors open.
“Time is fast running out. The Governmentmust step up to the plate and do what is needed to protect businesses,livelihoods and jobs.”
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