HOLD ON TO YOUR HATS! RECESSION LOOMS

As inflation heads towards a 40-year high, experts warn squeezed Britons to...

- Sarah O'Grady

SOARING inflation, rising unemployment and higher interest rates will inflict a triple whammy of pain on squeezed Britons.

The warning came as the Bank of England raised interest rates to the highest level in 13 years.

Bank governor Andrew Bailey, left, said inflation is likely to hit 10 per cent levels not seen since 1982.

And he warned that unemployment could reach 5.5 per cent.

10% Amount inflation is expected to peak at in the last quarter of this year

5.5% The level unemployment is predicted to hit by 2025

With experts signalling interest rates could more than double to 2.5 per cent by the end of the year, one said: "It's almost certain it's going to get worse before it gets better. A recession is a nailed-on certainty and it could be at least two years before the economy starts to recover." The 0.25 percentage point increase in the base interest rate took it to one per cent.

Although still historically low, it is the fourth the Bank's Monetary Policy Committee (MPC) has ordered since December and the rate is at its highest since 2009.

Two million homeowners standard variable and tracker mortgages will now be paying more every month in repayments.

The Bank admitted that the balance of risk on inflation is still that it could be even higher than anticipated, saying: “We may need to increase interest rates further in the coming months.”

And there were further warnings that the post-Covid economy was likely to "get worse before it gets better”, with a recession in the next two years.