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Bank of England: Bank of England says UK is in recession as interest rates rise to 14-year high

The Bank of England Media reports have raised interest rates in the UK by 0.5 percentage points to 2.25 per cent in an attempt to combat soaring inflation amid the cost of living crisis.

It was the seventh straight bank rate hike, but the increase was smaller than many investors expected, The Guardian reported.

Today’s rate hike – the second 50bp hike in a row – shows the Bank is trying to stem persistent inflation, despite concerns about the economy.

The decision by the Bank’s monetary policy committee brought interest rates to their highest level since 2008, The Guardian reported.

The Bank of England is concerned that the UK is already in recession, partly due to a bank holiday to mark the Queen’s funeral.

Bankers have downgraded their growth forecasts and now expect GDP to shrink 0.1% in the third quarter of the year.

That would follow the 0.1% decline recorded in April-June – this is the second straight quarterly decline.

A month ago, the Bank had predicted the economy would grow 0.4% in July-September.

But weaker-than-expected growth, just 0.2% in July, and a state bank holiday on Monday, prompted it to cut its forecast.

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