The Bank of England has raised the base rate of interest by 0.75 percentage points to 3% – the single biggest increase in more than three decades – and said that the UK is already in recession.
The Bank warned that the UK could face a protracted contraction in the coming years, with high inflation and the unemployment rate climbing to 6.5% – the highest since the financial crisis.
The length of its forecasted recession – eight successive quarters in which gross domestic product shrinks – would make it the most protracted since comparable records began – albeit less deep than most previous downturns, including those in 2008/2009 and the 1980s.
The economy would still be well below its 2022 size at the end of 2025.
Enormous uncertainty hangs over these forecasts, however: on the one hand they are based on market expectations for interest rates that were unusually high, which makes the economic outlook seem gloomier than it might be in practice.
On the other hand, they do not incorporate any of the expected spending cuts and tax rises the Treasury is considering imposing at its autumn statement on 17 November, which would worsen the outlook.
Rates may rise further
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Andrew Bailey, the Bank governor, told a news conference: “From where we stand now, we think inflation will begin to fall back from the middle of next year, probably quite sharply.
“To make sure that happens, Bank rate may have to go up further in the coming months… but by less than currently priced in financial markets.
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“That’s important, because it means the rates on new fixed-term mortgages should not need to rise as they have done.”
Markets reacted to the gloomy update through further pressure on the pound.
It had slumped against a surging dollar earlier in the day but later fell further to $1.11 – a decline of more than two cents.
The recession forecast by the Bank is partly a consequence of higher energy prices, after the chancellor’s decision to curtail the length of the energy price guarantee (which limits the amount households can be charged per unit), and partly a consequence of the rising cost of borrowing.
According to Bank calculations, higher rates will mean the average household has a £3,000 annual increase in their mortgage costs, more than outweighing any government help with energy bills.
Biggest hike ever voted for
The Bank’s decision to lift borrowing costs by three-quarters of a percentage point is the single biggest increase since 1989, save for a brief two percentage point increase in 1992 that lasted less than 24 hours.
It is the biggest increase ever voted for by the Bank’s Monetary Policy Committee (MPC).
Seven of the nine members voted for it. One member, Swati Dhingra, voted for a 0.5 percentage point increase and another, Silvana Tenreyro, voted for a 0.25 percentage point hike.
The minutes to the MPC’s meeting inserted a note of caution to money markets which, at the time of the Bank’s forecasting round, were expecting a peak of 5.25%, saying: “The majority of the Committee judged that should the economy evolve broadly in line with the latest Monetary Policy Report projections, further increases in Bank rate might be required for a sustainable return of inflation to target, albeit to a peak lower than priced into financial markets.”
The upshot is that notwithstanding the big increase in interest rates, back to their highest level since late 2008, the Bank is implying that they may not rise quite as far as many had expected.
A man has died after suffering cardiac arrest onboard a boat attempting to reach the UK.
The vessel turned back towards Equihen beach on the French coast yesterday morning.
A nurse tried to resuscitate the man but was unsuccessful.
Image: Pic: PA
French authorities have now launched an investigation into the circumstances.
A spokesperson for Doctors Without Borders, also known as MSF, has criticised authorities on both sides of the Channel.
Jacob Burns said: “Yet again we have a tragedy in the Channel, that is the consequence of the deadly, costly and ineffective security policies implemented by the UK and France.”
Image: Pic: PA
Later on Saturday, a lifeboat carried migrants who have made the voyage into the Port of Dover.
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Photographs showed them huddled under blankets and orange life jackets on board.
“The opportunity of tomorrow and what’s on offer is the best thing in football,” the England captain said. “I think we don’t necessarily carry the weight of it and how much it means to people, but we’re aware of it because it means the same to us.”
So often they were only watching other nations making finals.
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England’s first was the men winning the 1966 World Cup.
Image: England manager Sarina Wiegman reacts to defeat against Spain at the Women’s World Cup final in 2023. Pic: Reuters
Image: Lauren James looks dejected after their World Cup defeat, but is confirmed fit for Sunday’s revenge match against Spain. Pic: Reuters
Now, in Basel, comes the chance for revenge against Spain – even though no one in the England camp is saying that, publicly at least, in Switzerland.
Especially knowing how challenging a task it is coming up again against Aitana Bonmati and Alexia Putella – the recent winners of football’s biggest individual honours.
Image: England fans celebrating after England beat Italy to reach the finals. Pic: Reuters
Image: Given England’s history against Spain, it could be a nerve-wracking time for England fans. File pic: Action Images/Reuters
But this is Spain’s first Euros final.
And there is some fear from the world champions at England’s grit and resolve to produce comebacks late in the quarter-finals and semi-finals – with 19-year-old Michelle Agyemang’s goals integral to the fightbacks.
Image: England celebrate their semi-final win against Italy to reach the finals. Pic: Reuters
Image: Michelle Agyemang has propelled England to the Euro 2025 final with two vital goals. Pic: AP
Spain captain Irene Paredes reflected yesterday on how the Lionesses can flip a result late on.
But she was also discussing how their World Cup win was tarnished by the on-pitch kiss that led to former Spanish federation president Luis Rubiales being convicted of a sexual assault on striker Jenni Hermoso.
It sparked a wider clamour in Spain for improved rights and respect for women.
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Spain’s players struggle for respect
“Since then [2023] we took big steps forward,” Paredes said.
“I think this idea is disappearing from society. I still believe we have to continue opening doors… we’re a reference for boys and girls in society, but we still have things to do.”
It is a reminder that while tonight is about collecting silverware, both England and Spain know that emerging as champions can drive further growth in women’s football back home.
Amid it all, they’ll try to savour just what reaching a final means and how rare they are – until recently for English and Spanish women.
A woman who thought she was being injected with Botox was left unable to swallow and doctors thought she had suffered a stroke – after she contracted a life-threatening illness from a potentially illegal product.
Nicola Fairley is one of dozens of people who have developed botulism linked to unlicensed anti-wrinkle injections.
She had the procedure done with her regular beautician after winning a Facebook competition for three areas of “Botox”.
Image: Nicola Fairley
“Within two or three hours my forehead and the sides of my eyes had started to freeze,” Nicola says.
“At first I thought ‘amazing’, that’s what I wanted – then it just carried on.”
Nicola was eventually sent to A&E in Durham, where she met several other patients who all had similar symptoms.
Doctors were stumped. “They thought I’d had a stroke,” she says.
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“We all had problems with our eyes, some of us with our breathing. I couldn’t swallow – they put me on nil by mouth because they were worried I would choke in the waiting room.”
Image: Doctors were worried Nicola could choke after she was injected with a suspected illegal product
It turns out all of the patients had recently had anti-wrinkle injections containing botulinum toxin.
Health officials believe they were imported, illegal products.
Botulism – the disease they caused – is so rare many doctors never see it in their entire careers.
It can cause symptoms including slurred speech and breathing problems, and can be deadly.
The disease is so unusual, and so many cases were coming in, that doctors exhausted their stocks of anti-toxin and had to ask hospitals as far away as London to get more.
The UK Health Security Agency has so far confirmed 38 cases of botulism linked to cosmetic toxin injections, but Sky News has been told of several more.
The outbreak began in the North East but cases have now been seen in the East of England and East Midlands as well.
There are only a handful of legal botulinum toxin products in the UK – of which Botox is one.
But cosmetic treatments are largely unregulated, with anyone allowed to inject products like fillers and toxins without any medical training.
Cheap, illegal products imported from overseas are easily available.
Image: Dr Steven Land
‘It’s the Wild West’
Dr Steven Land runs Novellus Aesthetics clinic in Newcastle upon Tyne. He worked for decades as an emergency medicine doctor before moving into aesthetics.
He says he has been warning health officials of an outbreak for years.
“It’s the Wild West,” Dr Land told Sky News.
“Because anyone can do this, there is a lack of knowledge around what is legal, what’s not legal, what is okay to be injected.
“These illegal toxins could have 50 units, 5,000 units or rat poison – there could be anything in there.”