Oliver Mangan: Sterling slides as economic outlook in Britain deteriorates

The Bank of England believes the UK's unemployment rate will climb from 3.6% to 5.5% over the next three years

A period of very high inflation and a marked weakening of growth, if not outright recession, lies in store for the UK economy. File photo

Last week, the Bank of England Monetary Policy Committee voted to hike rates as expected by 25 basis points to 1%. However, the meeting minutes showed deep divisions among members as a period of stagflation beckons for the British economy.

There were a number of surprises in the committee’s deliberations. Three of its nine members voted for a 50 basis point hike, which was more than expected. It also seems from the minutes that some members gave consideration to leaving rates unchanged.