UK Inflation to Fall, Recession Likely, Interest Rates Unchanged

UK inflation is expected to fall in line with the rest of the world, driven by a drop in energy bills. The Bank of England predicts a sharp decline in the inflation rate to below 5% in October, bridging the gap between the UK and the US and the eurozone. The UK is likely in a recession due to rising interest rates and unemployment, with a 52% chance of a mild recession in the second half of the year. The Bank of England has decided to keep interest rates unchanged, stating that monetary policy will need to remain tight for an extended period. The UK unemployment measure has been changed, raising concerns for policy makers at the Bank of England. The Bank of England is expected to hold off on further rate increases. The UK economy is experiencing sluggish growth and weakening employment.