Interest Rate Rise – The Economic Outlook for the UK

Posted on

Interest Rate Rise – The Economic Outlook for the UK

Much like other parts of the world, the economic outlook for the UK isn’t great. Following a botched Brexit, the cost of living, interest rates and world events cripple the average citizen. At the same time, the Bank of England is stemming the threat of inflation with more interest.

Increased Expenses

In today’s Queen’s Speech for the opening of parliament, legislation for the cost of living is expected. However, it isn’t yet confirmed, while many Britons get on with a severely reduced quality of life. Recent increases mean people have much less money, which now goes towards utilities, council tax and increased rent for a monthly deficit. And it’s like this for millions of people in the UK. Recently, gas and electricity prices leapt by 60% following OFGEM’s energy price cap increase so suppliers could stay in business through a steady rise in wholesale prices.

Current Interest Rates

But if the cost of living crisis isn’t enough to rub dirt in the face for most, interest rates are set to rise again. Bank of England Governor Andrew Bailey had this to say: “some degree of further tightening of monetary policy might still be appropriate in the coming months” after raising rates from 0.75% to 1% last week. According to financial analysts, interest rates are set to rise between 1% and 2% by the end of the year and as much as 3% into 2023 and 2024. Rising rates are, of course, in response to inflation, which isn’t being helped by current world events.

Putin’s War

One of the most destructive current events is the war in Ukraine. Europe hasn’t seen anything like this since World War II. The Russian dictator, Vladimir Putin, is waging an unjust and illegal war on innocent civilians. However, what is clear is the impact the war is having on international finance and the economy. Ukraine alone has requested $1.4 billion in finance from the IMF. With global commodities like wheat and oil at a 14-year high on the CME market.

Heading Into Recession

Recession is a word that all but the most unscrupulous short-sellers like to hear. Yet it remains a constant threat to global and national economic markets. Due to current events and the largest UK cost of living increase since the ’50s, some accountancy forecasters predict a recession is imminent, with Summer 2022 tipped as the starting point. Additionally, consumer spending is down, causing an impact on retail sales, as the country still isn’t fully recovered from COVID-19. Therefore, recession is a real threat when you also consider current global supply chain issues.

A Broken Economy

The phrase “Broken Britain” once referred to the state of society. Still, the term has come to extend right across the national zeitgeist. World events aside, the news is filled with daily segments on “Partygate” and now “Beergate” as UK parliamentarians, high ranking MPs and leaders scramble to fix shattered reputations. The UK economy is broken right across the board. Brexit alone has reduced the average income by up to 1.3%, with staffing shortages of over 200,000 as EU nationals went home, and insolvency rates are double that of last year.


The UK is at the precipice of economic disaster. Interest rates are steadily rising to curb inflation. And the cost of living crisis squeezes income like never before. All the while, Russia’s war in Ukraine increases the once stable prices of essential worldwide commodities.

Latest News

Keep up to date with all of our latest news below.

Age is Just a Number – A Number of Business Benefits!

When it comes down to your recruitment needs or targeting a high-position candidate within your company, many will favour a younger and more dynamic person to join the team for the main reasons of interest in future growth with the company and having more energy and eagerness to over-perform. No doubt these are solid reasons

Inspired Workplaces: How Your Business Can Stand Apart

Nowhere else within your business does the heart of culture beat louder than in your office space. It is the space for collaboration in meetings and group tasks, allows for enhanced relationship building across the business and is key towards in-house training and development. However, across the UK there are increasing numbers of professionals that

Employee Disengagement

Addressing Employee Disengagement

You may have heard of the term ‘quiet quitting’ around the financial industry over the last year. In workplace terms, it relates to those occasions when employees do the bare minimum in meeting job requirements and check out mentally. You may recognise this behaviour before hearing this term and identify it with what it truly

View All News