The Bank of England has warned that the UK could fall into a recession in the last three months of 2022, as interest rates rise to 1.75 per cent.

Inflation is predicted to peak at 13.3 per cent in October, the highest level in 42 years.

While inflation is set to rise, the same cannot be said for household incomes, as they are expected to drop.

“Raising interest rates will certainly do something to reduce the amount of demand in the system, but it’s not really getting to the underlying problem,” economist George Buckley said.

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