There was a major development in the UK today that could potentially have significant economic implications for Barbados.
Britain’s Central Bank, the Bank of England, has made its biggest increase to interest rates in 27 years in a bid to smother soaring inflation and warned the country faces a long recession ahead.
The Bank of England predicts that inflation will reach more than 13 percent in the final three months of 2022, its highest level for 42 years.
Reeling from a surge in energy prices caused by Russia’s invasion of Ukraine, the UK Central Bank’s Monetary Policy raised its key interest rate to 1.75 percent.
The UK development is particularly significant since a large percentage of Barbados’ tourists come from the UK.
Pro-Vice Chancellor and Professor of Finance at the University of the West Indies, Dr. Justin Robinson, believes this development adds to the head wins already confronting the Barbados economy as it tries to recover from the impacts of the covid-19 pandemic.
Professor Robinson fears the UK could be driven deep into recession by the measures and that those initiatives may fail to have the desired effect since the Ukraine war is a key part of the cause of the problem.