UK Economy Shows Signs Of Slowdown As BoE Rate Hikes Mount

• Britain's economy is slowing and might be heading for a recession as it feels the impact of 14 back-to-back interest rate increases by the Bank of England to fight high inflation.
• Despite being buffeted by Brexit, the COVID-19 pandemic and last year's surge in energy prices, the British economy has defied forecasts of contraction so far this year, but signs of a slowdown are mounting, highlighting the BoE's dilemma as it continues to grapple with inflation.
• A survey published on Wednesday showed activity among businesses shrank by the most since January 2021, when Britain was still in a coronavirus lockdown.
• The housing market is weakening and the jobless rate is up, but the BoE looks set to keep on raising rates with inflation still more than three times its 2% target. Core inflation in July held close to its highest in more than 30 years.
• Most worrying for Governor Andrew Bailey and his colleagues, pay growth is at its fastest since at least 2001, raising the risk of persistently high inflation.

(Source: Reuters)