The Bank of England has today confirmed that the UK has entered a recession, which started earlier this year, and is expected to continue into next year.
The Bank of England releases an inflation report, four times yearly, and in the latest report they confirmed that the economic landscape had altered dramatically in the latter half of 2008 and they expect a reduction in inflation over the next two years. The bank believes that inflation could fall as low as 1% ( the target for the bank is 2%).
If inflation continues to fall to below target levels, it is expected that the bank will reduce interest rates further in order to generate some activity in the economy. This will come as good news to people struggling with secured debt and unsecured debt repayments.
