UK Faces Severe Recession and High Unemployment, Inflation Expected to Decline in H2 2023

  • BoE raises interest rates to 3%
  • UK set for longest recession since records began
  • Recession predicted to last over eight quarters until middle of 2024
  • Unemployment forecasted to hit 6.5%
  • Inflation expected to decline at pace in H2 2023

The Bank of England (BoE) has increased the base rate of interest to 3% as it warns that the UK is set for its longest recession since records began. The BoE predicts the recession to be less severe than the financial crash of 2008 and the 1980s, lasting over eight quarters until the middle of 2024. During this period, unemployment is forecasted to hit around 6.5%, while high inflation (currently at 10.1% in September) is expected to decline at a pace in the second half of 2023. The BoE stated that further interest rate increases may be required for a sustainable return of inflation to target, albeit to a lower peak than financial markets predict.

Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about the Bank of England’s decision to raise interest rates and its predictions for the UK economy. It includes relevant details about the expected recession duration, inflation, and potential future actions by the BoE. The information is based on the central projection and does not include sensationalism or personal opinions.
Noise Level: 3
Noise Justification: The article provides relevant information about the Bank of England raising interest rates and its predictions for the UK economy, including recession duration, unemployment rate, and inflation. It also acknowledges uncertainties in the outlook. However, it could benefit from more analysis or context on why these changes are happening and their potential consequences.
Financial Relevance: Yes
Financial Markets Impacted: UK financial markets and UK-based companies
Financial Rating Justification: The article discusses the Bank of England raising interest rates, which directly impacts financial markets and UK-based companies through changes in borrowing costs and economic conditions.
Presence Of Extreme Event: b
Nature Of Extreme Event: Financial Crash or Crisis
Impact Rating Of The Extreme Event: Severe
Extreme Rating Justification: This rating is based on the significant economic impact, including a recession lasting over eight quarters, high inflation (10.1%), and unemployment projected to reach 6.5%, which can have long-term consequences for the UK economy.

Reported publicly: www.retailsector.co.uk