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FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

Economic Snapshot

by David Fenton, TSB’s Chief Economist

The Bank of England has just delivered the largest rate hike for three decades. Markets expect Bank Rate to rise to 4.5% next year, though the Bank of England has suggested the peak may be lower. Inflation is at a 50-year high, and the UK economy probably has one foot in a recession. More positively, the unemployment rate is very low, and the Energy Price Guarantee provides a significant degree of financial support for households and companies.

Jobs and earnings

  • The Bank of England increased the policy rate to 3.0% in November, from 2.25%. This was the biggest single-month increase since 1989. It warned that there was a "tough road" ahead.
  • Markets think Bank Rate will rise to 3.5% in December, and a peak of 4.5% in 2023. The logic is that higher interest rates will weigh on spending in the economy, by reducing borrowing and increasing saving.

Economic activity

Jobs and earnings

  • The Bank of England increased the policy rate to 3.0% in November, from 2.25%. This was the biggest single-month increase since 1989. It warned that there was a "tough road" ahead.
  • Markets think Bank Rate will rise to 3.5% in December, and a peak of 4.5% in 2023. The logic is that higher interest rates will weigh on spending in the economy, by reducing borrowing and increasing saving.

Economic activity

  • The Bank of England increased the policy rate to 3.0% in November, from 2.25%. This was the biggest single-month increase since 1989. It warned that there was a "tough road" ahead.
  • Markets think Bank Rate will rise to 3.5% in December, and a peak of 4.5% in 2023. The logic is that higher interest rates will weigh on spending in the economy, by reducing borrowing and increasing saving.