ECONOMISTS have warned that the UK faces a “very real risk” of recession due to higher interest rates - despite inflation slowing to its lowest…
ECONOMISTS have warned that the UK faces a “very real risk” of recession due to higher interest rates - despite inflation slowing to its lowest level in 17 months.
The IPPR think tank raised concerns after the latest inflation data that further hikes could force theGeorge Bibb, head of the IPPR’s centre for economic justice, said: “It’s good news that headline inflation is lower, especially with energy bills coming down, but there is a very real risk that a recession may soon overtake price rises as the main economic concern.
“We must stick to our plan to halve inflation this year and get it back to the 2% target as soon as possible,” he added.Prime Minister Rishi Sunak pledged at the start of the year to cut inflation in half, from a level of 10.7%, by the end of 2023. “Core inflation was unchanged in July, with the falling cost of goods offset by higher service prices.”
Food inflation slowed down markedly but remains at historically high levels, while wages were still 0.6% lower once inflation was taken into account.James Smith, research director at the Resolution Foundation, said: “Inflation has fallen rapidly over the past six months, but the UK still has the highest rate in the G7 and the Bank faces a daunting task in further taming price pressures.
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