UK to avoid recession but inflation falling slower than expected, says Bank of England

Andrew Bailey admits economist’s warning about becoming poorer was bad ‘choice of words’

Andrew Bailey talks to reporters on Thursday after the interest rate rise (POOL/AFP via Getty Images)

The UK will avoid a recession this year but inflation will fall slower than hoped, the Bank of England said on Thursday as it raised interest rates by 0.25 per cent to their highest level since 2008.

Its Monetary Policy Committee (MPC) voted 7-2 in favour of raising the rate to 4.5 per cent in order to fight stubbornly high inflation.

GDP is now expected to be flat over the first half of this year, growing 0.9 per cent by the middle of 2024 and 0.7 per cent by mid-2025, it predicted.