Central Bank Acts to Combat Soaring Prices, Projects Economic Downturn

  • Bank of England raises interest rates to 1.75%
  • UK projected to enter recession in Q4 2022 and last for five quarters
  • GDP expected to fall by 1.25% in 2023 and 0.25% in 2024
  • Inflation projected to reach around 13% due to energy price increases
  • Labour market remains tight with high vacancies
  • ECB raises key interest rate for the first time in 11 years

The Bank of England (BoE) has raised interest rates from 1.25% to 1.75%, marking the largest increase since 1995 due to ongoing inflationary pressures in the UK and Europe. The central bank projects a recession starting in Q4 2022, lasting five quarters. GDP is expected to fall by 1.25% in 2023 and 0.25% in 2024. Policymakers voted unanimously to increase the base rate for the sixth time in a row. Inflation is projected to reach around 13%, driven by soaring energy prices, with domestic pressures remaining strong due to tight labour market and high vacancies. The European Central Bank (ECB) also raised its key interest rate for the first time in 11 years.

Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about the Bank of England’s decision to raise interest rates, the reasons behind it, and its projections for the UK economy. It also compares the situation with the European Central Bank’s actions. The information is relevant, well-structured, and free from sensationalism or personal opinions.
Noise Level: 2
Noise Justification: The article provides relevant information about the Bank of England raising interest rates and its projection for a recession in the UK. It explains the reasons behind the decision and compares it with the European Central Bank’s actions. The information is accurate and stays on topic without diving into unrelated territories.
Financial Relevance: Yes
Financial Markets Impacted: Bank of England (BoE), European Central Bank (ECB)
Financial Rating Justification: The article discusses interest rates, recession projections, and inflationary pressures which directly impact financial markets and companies through monetary policy decisions made by the BoE and ECB.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk