Bank of England hikes interest rates to 1.75%, biggest rise in 27 years

The UK inflation was 9.4% in June, with the British central bank projecting it to hit over 13% before the end of 2022.

«Inflationary pressures in the UK and the rest of Europe have intensified significantly since the May monetary policy report,» the bank said, adding it largely reflects a near doubling in wholesale gas prices since May due Russia’s curb of gas supplies to Europe.

The gross domestic product growth in the UK is slowing, the Bank of England said, and rising gas prices has caused «another significant deterioration in the outlook for activity in the country.»

The bank expected the UK to enter a recession from the fourth quarter of 2022.

«Real household post-tax income is projected to fall sharply in 2022 and 2023, while consumption growth turns negative,» it underlined, adding domestic inflationary pressures are projected to remain strong over the first half of the forecast period.