UK economy at risk of recession amidst rising interest rates
UK economy faces recession risk: Higher interest rates and falling consumer spending have caused a significant drop in demand for goods and services in August, raising concerns of a recession.
The S&P Global/CIPS UK Purchasing Managers' Index (PMI) fell to 47.9, indicating contraction. While it shows the Bank of England's anti-inflation efforts are working, the cost could be a recession.
Inflation reached 6.8% in July, far above the Bank's 2% target. As interest rates rise to combat this, they could hinder economic growth, causing reduced spending and job cuts. Both manufacturing and services sectors declined in August, and businesses face recruitment challenges and rising wages.
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