The health of the British economy is not doing well, and has started to occupy the mind, to the point that the Central Bank of England issued a strong warning yesterday, Thursday, that the country of the world’s sixth economy is facing the longest recession. since the 20s of the last century, and announced the largest increase in interest rates. Three decades ago he took it to the highest level in nearly 15 years, 0.75 percentage points to 3% to curb inflation.
And what emerged from an analysis of the bank’s forecasts, coming from the famous Resolution Foundation for its studies, that households are facing the worst pressure since World War II on their real income, which is the value of income after adjustment. to inflation, where the family media will be worse than £ 800 next year, i.e. $ 900, as inflation, which erodes the value of income, will cause a loss media of £ 66 a month, the poorest 10% of households are the hardest hit as they spend double theirs budget in food and services, as prices have risen faster quest’year.
Worse than what we hear in the video above from Andrew Bailey, Governor of the Bank of England, is what he told Channel 4 TV yesterday. in Britain, which within hours was separated from the country by destruction and a complete financial collapse after the decisions made by the former prime minister, Liz Tra, and said, Bailey: “The markets were up and down, the main one was the market. of government bonds, which affects pension funds (..) It was necessary to intervene in hurry, and the bank started buying bonds and spent £ 19.3 billion for it ”or more than $ 21 billion.
As for the analysis of what the bank expects, Ford predicts that more than 8 million people will face one media of 3,000 pounds in more in the rate mortgage annual notes in Arabic as a “mortgage payment” when their fixed-term contracts expire, while more than two million households will be exposed to immediate damage from their loan. Real estate, because the interest rate is variable, so I took in loan with interest that was set at a certain percentage, and now I have found that the percentage has increased in one moment in whose income has decreased.
Unemployment is doubling and the pound is weak
The Bank of England also predicted, based on an interest rate hike of more than 5%, for example, that Britain would face a two-year recession, which could reduce economic activity by around 3%. and double unemployment from 3% to around 6.5%, and that pound would drop 2% against the US green currency, Faisal. At $ 1.11, according to what Al-Arabiya summarized today, Friday.net, in a report by the British newspaper The Times, in he cited the governor said that the rate hike was necessary to prevent inflation from getting out of control.
Governor Bailey insisted that the market and its affiliates “are overestimating how much interest rates would rise next year” because, in his view, they would reach far less than the 5.25% peak they had priced at. investors, while inflation, which reached 10.1% last September, is expected to peak at 11% by the end of the year, and then fall “sharply” from the summer of next year.
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