Displaying items by tag: Economic Outlook

The Bank of England has raised interest rates to 1.75%, the biggest rise in 25 years, as it predicts an even higher peak in inflation of 13%. It fears inflationary pressures are becoming ‘more persistent and broadening’. Many companies have been successfully raising prices which will push up consumer costs in the shops. The latest rise in gas prices has led to another significant deterioration in the financial outlook as the UK is now projected to enter recession. The bank has forecast that the UK economy will start shrinking in the fourth quarter of this year, and then keep contracting through next year. That would be the longest recession since after the 2008 financial crisis. The bank also points to the UK’s ‘tight’ labour market - a signal that it is worried about a wage-price spiral, as workers seek pay rises to help with the worst cost of living crisis in decades.

Ghana has previously refused to seek help from the International Monetary Fund (IMF) to support its crippled economy. However, they will now be making a U-turn and asking the IMF to rescue them from poverty inflicted by the pandemic and inflation. Sierra Leone has launched a redenominated currency to strengthen its value. However, critics and the opposi¬tion say the redenomination of the leone is confusing and adds no value. Uganda opposition figure Besigye was released on bail after being detained in the capital Kampala for two weeks for leading protests against sky-rocketing consumer prices. See The pandemic and the Russia-Ukraine war could leave a lasting financial impression for a decade. 30 million Africans experienced extreme poverty in 2021 and 22 million jobs were lost in the same year due to the pandemic. The trend is expected to continue until 2023. The economic disruptions from the Ukraine war could push a further 1.8 million Africans into extreme poverty this year.