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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.

“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.

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Lionesses praised after winning Women’s Euros – with bus parade confirmed this week

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Lionesses praised after winning Women's Euros - with bus parade confirmed this week

England fans across the country have heaped praise on the team after winning Euro 2025, with a bus parade celebration set for Tuesday.

Sarina Wiegman’s Lionesses took home their second Euros trophy in consecutive tournaments after beating Spain 3-1 on penalties in the final.

Chloe Kelly scored the winning spot-kick following two huge saves from goalkeeper Hannah Hampton, after Alessia Russo scored an equaliser to send the game to a shootout.

As it happened: England beat Spain on penalties to retain title

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England fans celebrate across the UK

After England win, it was announced that an open-top bus parade will be held in London on Tuesday along The Mall, which will start at 12.10pm.

The celebrations will culminate in a stage ceremony at the Queen Victoria Memorial in front of Buckingham Palace at approximately 12.30pm

Fans can attend for free, and Sky News will broadcast it live.

‘You’ve made the nation proud’ – Starmer

Prime Minister Sir Keir Starmer was among the millions congratulating the Lionesses, posting on social media to praise the champions

“What a team. What a game. What drama,” he said.

“You dug deep when it mattered most and you’ve made the nation proud. History makers.”

The roof almost came off the Manchester clubhouse where Ella Toone started her journey


Greg Milam

Greg Milam

Chief North of England correspondent

@GregMilamSky

Nowhere was the roar for the Lionesses louder than in the Astley and Tyldesley Miners Welfare club on the outskirts of Manchester.

The club where a five-year-old Ella Toone started her journey to England stardom, like so many places across the country, hosted nail-biting, table-thumping and, ultimately, deafening watch parties.

The roof almost came off the clubhouse when Chloe Kelly’s winning penalty went in.

Red bucket hats emblazoned with Toone’s now-famous ‘Buzzing My Head Off’ catchphrase were thrown in the air.

“Absolutely ecstatic,” said Lorraine Warwick-Ellis, who runs the pathway development for women and girls at the club.

“I was very nervous, very worried about penalties but we did it in the end.”

The success of the Lionesses has driven a huge boom in the popularity of women’s and girls football in recent years. She hopes this win will have a similar effect.

“I hope it cements the girls who are already here, keeps them engaged, and I hope it brings more girls down who want to be footballers and see that it’s open for everybody.”

It had been a pretty sombre watch for much of the game after Spain took the lead – but it erupted into life after Alessia Russo’s equaliser.

The shootout was the usual emotional rollercoaster but young fans seem to have greater faith in the Lionesses.

Among the jubilant teenagers celebrating in the clubhouse were two who have followed Toone’s path to academies at professional clubs.

“It’s unbelievable, they’re amazing, Chloe Kelly, I just don’t know what to say about her,” said Natasha Greenhouse. “We knew if it went to penalties that they’d do it.”

Tamsin Gallagher said: “They’ve done it the hard way all the way through the Euros but we all believed in them. Come on England.”

The party in Manchester and around the country and only just begun.

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‘I am so incredibly proud’

Prince William and Princess Charlotte, who were in attendance at St Jakob-Park in Basel, added on social media: “What a game!

“Lionesses, you are the champions of Europe and we couldn’t be prouder of the whole team. Enjoy this moment England.”

King hails Lionesses… and calls for World Cup

In a post on the official Royal Family account on X, King Charles also sent his “most heartfelt congratulations on winning the Euros 2025” to the Lionesses.

“For more years than I care to remember, England fans have sung that famous chant ‘football’s coming home’,” he said.

“As you return home with the trophy you won at Wembley three years ago, it is a source of great pride that, through sporting skill and awesome teamwork, the Lionesses have made those words ring true.

“For this, you have my whole family’s warmest appreciation and admiration. More than that, though, you have shown through your example over past weeks that there are no setbacks so tough that defeat cannot be transformed into victory, even as the final whistle looms.”

The monarch ended his statement by saying “the next task is to bring home the World Cup in 2027 if you possibly can!”

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Culture Secretary Lisa Nandy added: “What an absolutely extraordinary achievement by our Lionesses – once again they have made history and united the country with pride and joy.”

Reform UK’s Nigel Farage said “well done” to the team and “what an absolutely fantastic watch,” while Conservative leader Kemi Badenoch said: “What an achievement. What a team!”

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Man suffers cardiac arrest onboard boat trying to reach UK

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Man suffers cardiac arrest onboard boat trying to reach UK

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.

Pic: PA
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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.”

Pic: PA
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.

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Protesters clash over asylum hotels

Provisional statistics from the Home Office suggest almost 24,000 people have arrived on small boats in the UK so far this year.

Towns and cities across the UK have seen protests in recent days, primarily outside hotels believed to be housing asylum seekers.

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Women’s Euros final: The Lionesses face Spain tonight – and they’re seeking revenge

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Women's Euros final: The Lionesses face Spain tonight - and they're seeking revenge

Here the Lionesses are again. Another final. Another showdown with Spain.

All of a sudden, what was once so anticipated and longed for can start to seem expected rather than extraordinary.

What happened to the great underachievers of world football? They are now consistently among the final two going for glory.

England wins
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At Euro 2022, the Lionesses ended England’s 56-year wait for a major trophy by beating Germany 2-1 after extra time. Pic: Reuters

No one is taking that for granted.

Especially not Leah Williamson, with the chance to retain the European Championship trophy lifted three years ago at Wembley.

“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.

England v Spain: All you need to know

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Lionesses ‘know what win would mean to nation’

Then, with the rebirth of women’s football after bans and neglect, it was the Lionesses’ turn to make it to the finals – in 1984 and 2009.

And the Three Lions had to wait until 2021 to make it to a final, losing to Italy on penalties at Wembley.

It kickstarted an incredible run of five successive years of finals for England senior teams – with another men’s Euros final defeat in 2024.

The Lionesses have led the way, bringing football home by defeating Germany in the Euro 2022 final at Wembley.

They just missed out on going one better when reaching a first Women’s World Cup final a year later.

Soccer Football - FIFA Women's World Cup Australia and New Zealand 2023 - Final - Spain v England - Stadium Australia, Sydney, Australia - August 20, 2023 England manager Sarina Wiegman reacts REUTERS/Carl Recine
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England manager Sarina Wiegman reacts to defeat against Spain at the Women’s World Cup final in 2023. Pic: Reuters

Soccer Football - FIFA Women's World Cup Australia and New Zealand 2023 - Final - Spain v England - Stadium Australia, Sydney, Australia - August 20, 2023 England's Lauren James looks dejected after losing the world cup final REUTERS/Amanda Perobelli
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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.

England fans celebrate after England beat Italy at Women's Euro 2025. Pic: Reuters
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England fans celebrating after England beat Italy to reach the finals. Pic: Reuters

Soccer Football - FIFA Women’s World Cup Australia and New Zealand 2023 - Final - Fans in Manchester watch Spain v England - Piccadilly Gardens, Manchester, Britain - August 20, 2023 England fans watch the match Action Images via Reuters/Jason Cairnduff
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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.

England celebrate after defeating Italy in the Women's Euro 2025 semi-final. Pic: Reuters
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England celebrate their semi-final win against Italy to reach the finals. Pic: Reuters

Michelle Agyemang celebrates scoring her side's opening goal.
Pic: AP
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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.

Read more from Sky News:
Lionesses’ help grassroots football
Sarina Wiegman on the Euros final
Listen: Why Lucy Bronze is ‘golden girl’

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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.

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