Toxic..

 

Welcome to Britain, May 2022 – and one of the most toxic and dangerous economic moments.

 The Bank of England forecast inflation exceeding 10% and predicted negligible growth for the next two years, toppling into months of recession, accompanied by the savage squeeze on living standards. 

 This is serious enough, but less remarked and of as much importance is the 10% devaluation of sterling over the past three months.

This is a reaction to the economic trap Britain is in, intensified by the implosion of our EU trade post Brexit and the Brexit-induced fall-away in inward investment.

At the moment, it hopes that interest rates will peak at a manageable 2.5% before inflation starts to fall back to 2% in 2025. But that depends on an end to sterling’s decline. If the Bank has to reassure the financial markets about its determination to contain inflation and staunch the pound’s continuing weakness, interest rates could yet climb higher.

Welcome to America. Just a tought.