UK Central Bank Raises Rates Despite Slowing Economy, Risking Recession
• The Bank of England raised interest rates despite falling inflation and weak economic growth, risking recession and debt deflation.
• Inflation is set to drop below 2% this year due to falling commodity prices and cheaper Chinese imports.
• Money supply and credit growth have stalled, consumer spending is shrinking, and business failures are rising quickly.
• The Bank seems to underestimate incoming deflationary pressures from technology, demographics, and excess industrial capacity in China.
• Persistently high interest rates amid economic weakness could lead to a debt-deflation spiral by 2025.