Interest rates rise again but Bank of England hints at a brighter future

The Bank of England’s task has been made more difficult by the various shocks that have dented the economy’s supply potential. Photograph: Neil Hall/EPA

It is going to be bad but not as bad as previously feared. Interest rates may be near their peak. Inflation will be close to zero in a couple of years. Recent shocks have damaged the economy’s supply potential. Those were the main messages from the Bank of England as it raised interest rates for a 10th successive time.

Threadneedle Street is still expecting a recession but a mild one by UK standards, and less severe than it was predicting in the immediate aftermath of Liz Truss’s brief period as prime minister.