Bank of England: Higher water and energy bills to push up inflation

Published On Feb 5, 2025, 7:08 PM

The Bank of England has announced that higher water and energy bills will drive inflation up sharply later this year, disappointing expectations that it would fall back to the target of 2%. Consequently, the Bank has cut interest rates from 4.75% to 4.5%. Despite these cuts, the Bank downgraded its economic growth outlook and predicts a sluggish economy, although it believes a recession will be narrowly avoided. The Bank anticipates inflation will rise to 3.7% before gradually decreasing, but it will not meet the 2% target until late 2027.