The UK economy is showing signs of slowing following 14 interest rate hikes by the Bank of England (BoE) in an effort to fight inflation. A survey published on Wednesday showed that activity among businesses dropped by its largest margin since January 2021, when the nation remained in lockdown as a result of the coronavirus pandemic.
Joblessness across Britain is on the rise while the housing market continues to dwindle. Still, the BoE remains determined to keep raising rates in an effort to suppress inflation. In addition to edging close to its highest level in 30 years, core inflation is more than three times higher than the central bank’s 2% target.
British inflation has managed to fall significantly over the last year, declining from 11% in October to just under 7% in July. The country is also beating back expectations that it will experience a recession in 2023, also reducing bets that a recession may start at the end of the year. Still, the UK remains the only Group of Seven (G7) economy that hasn’t bounced back to its pre-pandemic size.