Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Russian agency: Russia will conduct a nuclear test if the US does
Al-Nakhalah: We are the rightful owners, and we must fight to retrieve our rights
Al-Nakhalah: The enemy and its allies must know that we can never surrender to their terms and diktats after all the sacrifices made
Al-Nakhalah: The prisoner exchange clause can be completed in the next few days, and thus we will have pulled the [explosion] fuse and removed the enemy's justifications for aggression
Al-Nakhalah: The Resistance has expressed its willingness to negotiate on the basis that there are items that can be dealt with positively, the first of which is the prisoner exchange item
Al-Nakhalah: Trump's plan entails the Palestinian people's declaration of complete surrender to the enemy
PIJ Secretary-General, Ziyad al-Nakhalah, in an address aired on Al Mayadeen: The Resistance is engaging in a fierce negotiating battle under the so-called Trump plan
Russian Federation Council approves joint military cooperation agreement with Cuba
Al-Nunu: Today, the lists of prisoners required to be released, the agreed-upon criteria and numbers, were exchanged
Al-Nunu from Sharm el-Sheikh: Negotiations focused on mechanisms for implementing an end to the war, the withdrawal of occupation forces from the Gaza Strip, and the exchange of prisoners

Bank of England: UK might be in recession

  • By Al Mayadeen English
  • Source: Agencies
  • 23 Sep 2022 10:31
4 Min Read

UK Chancellor of the Exchequer, Kwasi Kwarteng, is expected to announce on Friday the "emergency tax-cutting mini-budget."

  • x
  • Bank of England (Photo: Tom Nicholson/Reuters)
    Bank of England (Photo: Tom Nicholson/Reuters)

The so-called emergency tax-cutting mini-budget is expected to be unveiled on Friday by the UK Chancellor of the Exchequer, Kwasi Kwarteng, outlining the main economic strategies that new Prime Minister Liz Truss's government is banking on to help businesses and individuals cope with the acute cost of living.

Andrew Bailey, the governor of the Bank of England (BoE), warned Chancellor Kwarteng ahead of Friday’s fiscal event, saying the UK economy may already be in recession and noting that the interest rates may hike even further after the tax-cutting mini-budget is revealed, according to UK media outlets.

Read: Inflation fever: UK's highest in 40 years, recession unavoidable

While interest rates were raised by 0.5 percentage points on September 22, Kwarteng is expected to unveil the government's plan on measures that should be taken to help businesses and households deal with the cost of living crisis.

The BoE also predicted the GDP to contract by 0.1% in the third quarter amid a plunge in consumer spending and slower activity in the construction and manufacturing sectors.

Furthermore, the BoE’s monetary policy committee (MPC) emphasized during its meeting that Truss’s economic strategies were full of additional inflationary pressures.

The MPC would be evaluating the impact of the government’s plan, presupposing the introduction of energy price caps and tax cuts, ahead of the committee’s coming borrowing decision in November, according to Bailey.

“All else equal ... this will add to inflationary pressures in the medium term,” Bailey warned Kwarteng about the household energy cap.

Related News

Liz Truss denies crashing UK economy

Truss admits to 'mistakes', cites unpreparedness to 'onslaught'

“Should the outlook suggest more persistent inflationary pressures, including from stronger demand, the committee will respond forcefully, as necessary,” he wrote to Kwarteng in the scheduled letter.

Along with the ongoing volatility in wholesale gas prices, there had been indications since August of “continuing strength in domestically generated inflation,” the BoE said in its release on Thursday.

The consumer prices index would peak at just below 11% this autumn rather than exceed 13%, as per the BoE; however, it added in its release:

“The labour market is tight and domestic cost and price pressures remain elevated. While the [energy bill subsidy] reduces inflation in the near term, it also means that household spending is likely to be less weak than projected in the August Report over the first two years of the forecast period.”

This comes as Kwarteng is expected to reveal the government’s major package of support planned to break the economy’s “cycle of stagnation” through infrastructure reforms and tax cuts.

Read more: UK likely heading towards a year-long recession

Kwarteng will reveal over 30 measures as part of the Treasury’s “Growth Plan” in a speech at the House of Commons, including relief for households to tackle high energy bills.

He will also announce an estimated £30 billion ($33.5 billion) worth of tax cuts, such as reversing the national insurance increase, scrapping the planned rise in corporation tax from 19% to 25%, and removing environmental charges added to energy bills. 

Other announcements will include new investment zones in England that will offer “targeted” tax cuts for local businesses, allowing firms to create new jobs and “increase productivity”. Some 100 new infrastructure projects are also to be accelerated across energy, transport, and the digital sphere to achieve a targeted economic growth rate of 2.5 percent a year.

“Growth is not as high as it needs to be, which has made it harder to pay for public services, requiring taxes to rise. This cycle of stagnation has led to the tax burden being forecast to reach the highest levels since the late 1940s. We are determined to break that cycle. We need a new approach for a new era focused on growth,” the chancellor is expected to announce, as per UK media reports. 

  • Liz Truss
  • UK inflation
  • United Kingdom
  • Recession

Most Read

Tucker Carlson speaks at a memorial for Charlie Kirk, Sunday, September 21, 2025, at State Farm Stadium in Glendale, Arizona (AP)

Tucker Carlson: Israeli officers gave orders on Iran inside Pentagon

  • Politics
  • 2 Oct 2025
A Hamas fighter in combat fatigues stands before the ceremony for the handover of Israeli captives to the Red Cross in Nuseirat, central Gaza Strip, Saturday, February 22, 2025 (AP)

Hamas responds to Trump plan, backs Gaza withdrawal, exchange

  • Politics
  • 3 Oct 2025
Mossad’s secret role in Aldo Moro’s 1978 murder revealed

Mossad’s secret role in Aldo Moro’s 1978 murder exposed

  • Politics
  • 5 Oct 2025
Al-Quds Brigades strike a command and control center north of Khan Younis, southern Gaza Strip, in an undated screengrab from the al-Quds Brigades military media

Gaza resistance announces major operations against Israeli forces

  • Politics
  • 1 Oct 2025

Coverage

All
War on Gaza

Read Next

All
Retired Israeli General Brik says Israel has reached point of no return.
Politics

Retired Israeli General Brik: 'Israel has reached point of no return'

Depleted by foreign wars, US seeks to re-arm for another confrontation
Politics

Depleted by foreign wars, US seeks to re-arm for another confrontation

Gaza’s newborns gasp for life as hospitals collapse amid Israeli war
Health

Gaza newborns gasp for life, share oxygen masks amid collapsed system

UK arms exports to 'Israel' reach record high despite ban calls
Politics

UK arms exports to 'Israel' reach record high despite ban calls

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS