Aug. 5 (EIRNS—Exercising more candor in threatening its subject population than certain other central banks we might mention, the Bank of England on Aug. 4 forecast a 13.3% official rate of annual inflation in the U.K. within two months, and continuing right through 2023 at that level or near it; and a serious recession, lasting from October 2022 until at least the end of 2023. Wishing, perhaps, to make sure of that last part, the bank kept on raising its discount rate into an economic contraction—it hiked by 0.5% for the first time in three decades, to 1.75%. The bank’s Monetary Policy Committee (MPC) blamed all of this, of course, on Russia, and asserted, “There is a risk that a longer period of externally generated price inflation will lead to more enduring domestic price and wage pressures.” (https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/august-2022 )
Official U.K. inflation was, as of June at 9.4%, not that much higher than the European average rate of 8.9%. Although the bank was not claiming to be forecasting inflation and lengthy recession for Europe as a whole, it might as well have been.
The average U.K. household energy bill forecast by the MPC by the autumn is a poverty-inducing £3,600/year or so, equivalent to about $375/month for U.S. households.
