The markets are predicting that UK interest rates could touch 6% in the summer of next year. The new budget changes have rocked the markets. The largest banks in the UK are have some major crisis to deal with as inflation is surging to 17%. This new scenario is due to an annual exercise to identify potential weaknesses in the banking system in order to prevent the country from falling into a risk in the financial system.
The Bank of England has put out a list of potential scenarios for the year:
GDP falling by 5%
Inflation rising too 17% then falling to 11% over three years
House prices plunging to 31%
Unemployment doubling up to 8.5%
Interest rates peaking to 6%