The issue is not only about rising gas prices. The rates of petrol and diesel are also touching the sky, due to which there has been a big increase in the prices of food items. Inflation is already going on and the recent hike in gas price has added fuel to this fire.
Bank Of England Governor Andrew Bailey (Photo-AFP)
The Bank of England has issued a big warning. This bank has said that this year the United Kingdom (UK) recession and is unlikely to recover until 2023. Inflation is said to be the real reason for the recession. The Bank of England has increased interest rates from 1.25 percent to 1.75 percent to bridge inflation. The increase in interest rates further strengthens the fear of recession. According to the Bank of England, it will be the longest period of recession for the UK, which can go till the end of the year 2023. Until the country recovers from the economic crisis, the effect of recession can continue. However, a good sign is that this time the crisis will not be as dire as the previous recession.
The Bank of England believes that the economic crisis will start in the next three months, which can continue till the end of 2023. The recession of 2008 also did not last as long as it is being told this time. However, the situation will not worsen like last time. A big role in this is being told of the Russo-Ukraine war. Gas prices in the UK continue to rise as the supply of gas across the region has been disrupted due to the war. Due to this inflation is increasing which is pushing the entire economy into recession.
People looting in buying gas, oil
The people of the UK are currently spending the most to meet their energy needs. There is a steady increase in gas based expenses. According to one estimate, every UK family is spending around £300 per month. Compared to a year ago, right now people have to spend 3 times more on necessities like gas. This will lead to more inflation in the future. Inflation in the UK is expected to reach 13%, which is a record for the last 42 years. By the end of this year, the UK inflation rate could reach 13%.
what is the reason of recession
There is a big jump in electricity and gas bills due to the Russo-Ukraine war. People’s income has decreased, due to which the UK economy is shrinking. In the Russo-Ukraine War, almost all European countries have unitedly helped Ukraine and rallied against Russia. In this outrage, Russia has greatly reduced the gas supply of European countries. If the situation does not improve further, the gas supply may be stopped. Due to supply disruption, there is a continuous increase in the wholesale price. The general public has to bear the brunt of the increase in the cost of gas or oil because the gas companies are compensating it from the people.
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It’s not just about gas. The rates of petrol and diesel are also touching the sky, due to which there has been a big increase in the prices of food items. Inflation is already going on and the recent hike in gas price has added fuel to this fire. The Bank of England believes that in the coming times, along with the UK, the rest of the European countries may also face a serious crisis. Recently, the Bank of England has raised interest rates for the sixth time in a row, which shows that there is tremendous pressure to control inflation. Loans are becoming expensive due to rising interest rates, due to which people are hesitant to take loans. Due to this the spending power of the people is getting reduced. And this is also the reason for the recession.