The UK is set to fall into recession between October and December, the Bank of England has warned.
It said it expects the recession to last until the end of 2023, which would be the longest since the 2008 financial crisis.
“Inflationary pressures in the United Kingdom and the rest of Europe have intensified significantly since the May Monetary Policy (MPC) Report and the MPC’s previous meeting,” the Bank of England said.
It said that pressure “largely reflects a near doubling in wholesale gas prices since May, owing to Russia’s restriction of gas supplies to Europe and the risk of further curbs”.
The bank warned that typical annual household fuel bills could increase from under 2,000 pounds to around 3,500 pounds, which would be three times higher than a year earlier.
To curb the increase in prices, the Bank of England has hiked interest rates from 1.25 percent to 1.75 percent as it warned inflation could reach 13 percent this winter.