Tightening the Bank of England’s monetary policy, coupled with an increase in the key rate to 6% per annum, will have negative consequences for the UK economy. We are talking about the risk of recession and mass layoffs of employees of businesses and companies in the Kingdom, informs Bloomberg cites relevant estimates from industry participants.
According to economists, a scenario where the interest rate rises to 6% per annum is now quite possible. In this scenario, British households will experience an increase in financial burden on the backdrop of rising costs of mortgage loans. Small firms, whose budgets are already facing a rapid increase in credit defaults, could be another victim.
“If interest rates hit the 6% level that financial markets say is likely, the UK economy will face a sharp recession and an avalanche of job losses. Household budgets are once again under increasing pressure from rising mortgage costs <...> The rapid increase in corporate bankruptcies means that firms, especially the smaller ones that make up the bulk of the workforce, are struggling to cope with high borrowing costs.
May 27, The Independent newspaper reports the results of a study by analysts at the London School of Economics (LSE). reportedAfter Britain left the European Union (EU), food prices in the kingdom approached an all-time high. The cost increased by 25% on average in the crisis environment. At the same time, the total loss from bureaucratic restrictions amounted to £6.95 billion.
Source: Gazeta
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