Financial chaos to force significant rate rise, Bank of England warns | Rob Harris
The governor of the Bank of England has warned that interest rates may need to rise in the short term by more than previously expected following the financial turmoil caused by the British government’s mini-budget.
Britain’s economy is teetering in brink of a recession with gross domestic product, the measure of the quantity of goods and services produced, shrinking by 0.3 per cent in August from July following a slump in manufacturing and by maintenance work that slowed the oil and gas sector. Having taken office just 40 days ago, Truss sacked her chancellor and close political ally Kwasi Kwarteng after the value of the pound collapsed to record lows against the US dollar and British bonds plunged in response to an energy package worth tens of billions of pounds and £45 billion of debt-financed tax cuts.
But he said officials would “not hesitate to raise interest rates to meet the inflation target” of 2 per cent. The warning came just weeks after the bank hiked interest rates by 0.5 percentage points to 2.25 per cent on September 22.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
‘Time’s up’: what the papers say about Liz Truss and her fight to stay prime ministerTurmoil in Tory party takes centre stage after unconvincing moves by an unrepentant Truss to fix her policy crisis
Read more »
If Liz Truss is ousted, who could replace her as prime minister?Five contenders who could succeed Truss as the Conservative party’s fifth leader since the Brexit vote in 2016
Read more »
UK Treasury chief Kwasi Kwarteng out as Prime Minister Liz Truss moves to survive market and political turmoilBritain's finance minister, Kwasi Kwarteng, resigns after Prime Minister Liz Truss asked him to stand aside ahead of an expected scrapping of parts of his economic package.
Read more »
Swedish parties agree coalition with backing of far-rightProspective prime minister, Ulf Kristersson, says three parties will cooperate with the Sweden Democrats
Read more »
Kwasi Kwarteng sacked as chancellor with Liz Truss expected to perform mini-budget U-turn – UK politics liveLiz Truss to hold press conference today as Kwasi Kwarteng set to be sacked ahead of expected mini-budget U-turn – live
Read more »