This led to a panic in the markets and the British pound fell by 2% against the US dollar.
Most likely, this is not only the fault of the pessimistic reports of the Bank of England, but also a mistake interest rate hike It was announced the day before yesterday by its American counterpart.
In an earlier analysis, they shared expectations that inflation would be 8% by the end of the year, but it has now been revised to 10%.
In the Declaration From the central bank we can read that the British economy has taken a lot of hits.
In particular, if the recent movements continue, as the central forecast assumes, the extremely high prices of global energy and tradable goods, of which the UK is a net importer, will necessarily have a greater impact on the real income of most UK households.
This is something monetary policy cannot prevent.
The chart below shows how the Bank of England deals with quantitative easing, they flooded the market with lots and lots of cheap money.