Bank of England: Five things we now know about the UK economy

The outlook for the UK's system is looking reasonably bleak.

Here are 5 things we learned from the cardinal slope astir the aboriginal of the economy.

The UK is facing its longest recession connected record, with the Bank of England informing the state faces a "very challenging" two-year slump.

When a state is successful recession, it's a motion that its system is doing badly. A recession is erstwhile a country's system shrinks for 2 three-month periods successful a row.

This has been forecast successful the UK for immoderate clip owed to the prices of goods specified arsenic food, substance and vigor soaring, which is down to respective factors, including the warfare successful Ukraine.

Previously, the Bank had expected the UK to autumn into recession astatine the extremity of this twelvemonth and said it would past for each of adjacent year.

But present it thinks the system already entered a recession this summer, and predicts it volition proceed adjacent twelvemonth and into the archetypal fractional of 2024.

Typically erstwhile a state is successful recession, companies marque little wealth and the fig of radical unemployed rises.

Graduates and schoolhouse leavers besides find it harder to get their archetypal job.

The unemployment complaint successful the UK is acceptable to emergence importantly implicit the adjacent 2 years to 6.4%, the Bank predicts.

Currently, the jobless complaint is astatine 3.5%, its lowest level since 1974, acknowledgment to a jobs roar arsenic the system started to retrieve from the pandemic.

Many homeowners volition astir apt look higher owe repayments successful the adjacent 2 years, the Bank said.

Mortgage rates person been rising and those connected fixed-rate deals, which marque up astir 80% of mortgages, volition look an summation successful repayments erstwhile their hole comes to an end.

Annual payments could soar by £3,000 successful immoderate cases, according to the Bank.

But with the latest hike successful involvement rates from the cardinal slope wide expected, galore lenders "priced in" the emergence by raising their owe rates successful advance.

According to Simon Gammon, managing spouse astatine owe advisers Knight Frank Finance, astir lenders are offering fixed rates of betwixt 5.5% and 6%, truthful helium says further rises would travel arsenic a surprise.

Those connected tracker oregon adaptable complaint mortgages volition spot their monthly payments spell up with immoderate aboriginal complaint rises from the Bank of England.

The ostentation complaint is simply a measurement of the summation successful the terms of thing implicit time.

For example, if a loaf of breadstuff costs £1 and it goes up to £1.05 a twelvemonth later, past breadstuff ostentation is 5%.

Inflation deed 10.1% successful September, is expected to highest astatine 11% this winter, earlier falling adjacent year.

The Bank's people is to support ostentation astatine 2%.

The Bank of England puts up involvement rates to effort to power inflation. The thought is that radical volition beryllium discouraged from borrowing and successful crook person little wealth to spend, starring to prices rising much slowly.

With ostentation expected to autumn adjacent year, the Bank does not expect involvement rates to emergence by arsenic overmuch arsenic predicted.

November's involvement complaint emergence takes the existent complaint to 3%.

Further rises are connected the mode - truthful borrowing connected recognition cards, loans and mortgages volition inactive get much costly - but they won't deed the 5.25% that fiscal markets had predicted.

Analysts present deliberation they could highest astatine astir 4.75% adjacent year.