British private-sector economic activity fell at its fastest rate in two years in January, a survey showed on Tuesday, as businesses blamed higher Bank of England interest rates, strikes and weak consumer demand for the slowdown.
The Bank of England will lift the Bank Rate by 50 basis points on Feb.
The Bank of England must decide next week how much higher it will raise borrowing costs as it tries to bear down on Britain's double-digit inflation rate without adding too much stress to an economy already close to recession.
Bank of England Governor Andrew Bailey questioned the need for a digital pound on Monday just as euro zone finance ministers backed further preparatory work on a digital euro.
Bank of England Chief Economist Huw Pill said on Monday that Britain is at risk of persistent inflationary pressure from a tight labour market, even if natural gas prices stabilise or fall, implying further rate rises may be needed.
The Bank of England raised its key interest rate by half a percentage point on Thursday and indicated that more hikes were likely, despite a looming recession, as it tries to bring down inflation that hit a 41-year high in October.
A ninth interest rate hike in a row by the Bank of England looks to be a foregone conclusion on Thursday and investors will be looking for clues on how many more will be needed with the economy sliding into recession but inflation still above 10%.
Investment funds and other non-bank financial institutions face their first 'stress test' next year to apply lessons from the near-meltdown in Britain's pension fund sector, the Bank of England (BoE) said on Tuesday.
The Bank of England warned on Tuesday about "significant pressure" on households and businesses due to higher inflation and borrowing costs, but said they were more resilient than before the global financial crisis.
The Bank of England will test so-called shadow banking institutions such as pension funds, that played a key role in recent UK bond market chaos, it said Tuesday.
The Bank of England will add another 50 basis points to Bank Rate next week and take borrowing costs to 3.50%, despite the economy falling into recession, as it battles inflation running at more than five times its target, a Reuters poll found.
The Bank of England looks set to raise interest rates to 3.5% or more next week, but policymakers appear increasingly split on how much tightening is needed to tame double-digit inflation as the economy heads into recession.
The Bank of England will press on with interest rate rises to battle inflation even though Britain is heading into a long albeit shallow recession, with consumers facing an extended cost of living crisis, a Reuters poll of economists found.
British employers cut their hiring of permanent staff via recruitment firms for the first time in nearly two years in October as the country's political upheaval added to concerns about the economy, a survey showed on Thursday.
Improving transparency of 'non-banks' such as pension funds is a first step in applying lessons from turmoil in Britain's government bond market, Bank of England executive director Sarah Breeden said on Monday.
The Bank of England raised interest rates by the most since 1989 on Thursday but it also warned that Britain faced a long recession and told investors borrowing costs were likely to go up by less than they expect.
The move would mirror aggressive rate-tightening by central banks worldwide as economies battle the highest prices in decades.
The Bank of England will pass a major milestone on Tuesday when it holds a first auction to sell some of the 875 billion pounds ($1.01 trillion) of government bonds it bought during successive quantitative easing (QE) programmes from 2009-2021.
The Bank of England looks set to raise borrowing costs by the most since 1989 next week even as it prepares for a recession that could be deepened by spending cuts under new Prime Minister Rishi Sunak.
Turmoil in global sovereign bond markets is set to persist for another six months to a year as central banks carry on raising interest rates to bring down inflation, according to a Reuters poll of market strategists.
Bank of England Deputy Governor Ben Broadbent told investors on Thursday that the big increases in interest rates they had priced in on the back of Prime Minister Liz Truss's fiscal plans would deliver a "pretty material" hit to the economy.
British banks are bracing for a potential tax hit to their profits as the government scrambles to plug an estimated 40 billion pound ($45 billion) hole in its finances.
