Brits are currently being plagued by higher than ever prices when paying at forecourts, supermarkets, and energy bills – and experts are now forecasting a further economic challenge later in the year. Consumer Prices Index (CPI) inflation is currently running at seven percent, according to the Office for National Statistics (ONS), up from 6.2 percent in February.
This is higher than the 6.7 percent that analysts had expected.
The Bank of England responded by only gradually raising the interest rate to quell the rapid rise.
The Bank’s Monetary Policy Committee, led by Andrew Bailey, has raised interest rates three times to take the base rate from 0.1 percent in December to 0.75 percent.
Analysts expect another three increases to take the rate to 1.5 percent in August – but it’s still a way off inflation that is climbing at a considerably faster rate.
READ MORE: Inflation hits fresh 30-year high of 7% – further blow for pensioners
What is a recession?
A recession means there is no economic growth in an economy – in fact, in a recession the economy shrinks.
When the economy grows, a country’s citizens, on average, get slightly richer as the value of the goods and services it produces – its Gross Domestic Product (GDP) – increases.
The constant rise in costs across almost all areas is pushing a considerable number of UK households to the brink – and a recession will only add further misery.
A recession is in place if there are two periods of GDP drops – so in the immediate term, a recession is unlikely.
But experts believe a recession could be on the cards later in the year.
Managing director of Clearly PR Paul Mackenzie-Cummins told Express.co.uk: “I believe many commentators will be prone to arguing against the notion of an impending recession, but all the signs we have seen in recent weeks point to one looming by the end of this year at the latest.
“However, I doubt it will be the same as the doom and gloom we experienced in 2008.
“There is still plenty more potential growth within the economy in the pipeline over the coming months.
“This, I believe won’t prevent us from sliding into recession but it will likely enable it to be short-lived with an almost immediate bounce back shortly thereafter.”
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