The Bank of England has warned the economy will be on the brink of recession in an election year and signalled it intends to keep interest rates high for an extended period to tackle stubborn inflationary pressures.
After holding rates unchanged at 5.25% for a second consecutive time – the highest level since the 2008 financial crisis – Threadneedle Street said the risks from war in the Middle East and domestic inflationary pressures would force it to keep borrowing costs high despite a worsening outlook for growth.
