UK Interest Rates have risen to 4%
This morning, the Bank of England has announced that they will be raising the UK’s interest rates to 4%, Tommaso Aquilante, Associate Director of Economic Research at Dun and Bradstreet said: “As anticipated, interest rates have continued to rise. With financial conditions already tight and wage growth remaining lower than inflation, both business and consumers will continue to feel the pinch of reduced purchasing power. Food and energy prices remain the main drivers behind high inflation which, though decelerating December, remains historically high.
“While the significant drop in January Eurozone inflation and the bloc avoiding recession in 2022 are reasons to be less pessimistic about the future, the battle against inflation is not over. Instead, it will be crucially determined by the persistence of core inflation, which remains well above target in Europe and in the UK. Importantly, insolvency risk in the UK is rising: according to the Insolvency Service, in 2022, insolvencies have been 57% higher than 2021, and are currently well above pre-pandemic levels. In short, businesses and consumers will need to carefully consider their finances over the coming months, and identify weak spots to ensure they can withstand against a period of economic slowdown.”