Britons heading into the ‘perfect storm’ after ‘awful’ BoE forecast

Britons are heading into a ‘perfect storm’ after the Bank of England was forced to raise interest rates in an attempt to prevent inflation from spiralling further out of control, according to an expert. Economics commentator Suren Thiru told GB News that consumer spending and investment are likely to plummet in the coming months as Britons try to deal with rising costs and an expected tax hike come November 17, when the Chancellor will announce the Government’s new fiscal plan. Downing Street has warned of ‘difficult choices’ ahead as the BoE predicted the worst recession in more than 100 years. Mr Thiru said: ‘Well, yes, the Bank of England issued a pretty awful forecast, really. The longest recession on record, higher unemployment, and, of course, we also saw really sharp rises in interest rates yesterday. ‘It is clearly concerning because what you are seeing at the moment is a bit of a perfect storm for consumers and businesses. ‘They are seeing interest rates rise sharply, they’re seeing the cost of their everyday shop go up, energy bills rise, and they are also expecting tax increases in the next couple of weeks. ‘That means we are going to see consumer spending start to weaken but also it means investing is likely to weaken over the coming months.’  Economics commentator Suren Thiru warned of a “perfect storm” (Image: GB NEWS ) Interest rates rose by 0.75 percent on Thursday, the highest hike in 15 years (Image: EXPRESS)Jeremy Hunt is looking at raising taxes on the sale of assets such as shares and property as he weighs up ‘difficult decisions’ to address a £50 billion black hole in the public finances.He is also considering an increase in dividend tax, a move that would come as a blow to entrepreneurs.A source close to Jeremy Hunt confirmed the tax hikes were under consideration but said no decisions had yet been taken, stressing ‘we are two weeks away’ from the highly-anticipated autumn budget.It comes as the country has been struck by more bleak economic news, with the Bank of England hiking interest rates for the eighth time in a row and the UK heading into what could prove the longest recession in at least a century.READ MORE: ‘Rate rise will hurt but at least BOE and Government fight is over’ [INSIGHT]  Jeremy Hunt is weighing up his “difficult decisions” over the next few weeks (Image: GETTY )Governor of the BoE Andrew Bailey said on Thursday night that the UK economy became ‘very unstable’ following the mini-budget announcement of £45 million in unfunded tax cuts made by Kwasi Kwarteng during Liz Truss’ time in No 10. He said: ‘We certainly reached a point where markets were very unstable, and these were core markets, this is the Government bond market, which is in many ways the most core of all.’And our worry was that when you get into that situation, this can easily spread very rapidly and then you have a huge job on your hands to get it back under control. So, we had to step in quickly and we had to step in quite decisively.’When asked if the UK was days, or even hours, away from potential total meltdown, Mr Bailey said: ‘I think at that point when we intervened, I can tell you that the messages we were getting from the markets were that it was hours.’DON’T MISS: Investors sent dire warning as BoE ‘deliberately sacrifices economy’ [REPORT] BoE chief in veiled swipe at Truss as she departs No10 [REVEAL] ‘Economic uncertainty’ as BoE places question mark over inflation rise [REPORT]  BoE governor Andrew Bailey said the UK had been “hours” from a financial collapse (Image: GETTY )Mr Hunt acknowledged the difficulties facing homeowners and businesses after the Bank put up its base rate from 2.25 percent to 3 percent on Thursday.He said there were problems affecting economies around the world, but in the UK Prime Minister Rishi Sunak would ‘fix’ the issues caused by Liz Truss and Kwasi Kwarteng in September’s ill-fated mini-budget.Downing Street also warned of ‘difficult choices’ to come on tax and spending, but pledged the Government would ensure that ‘we are acting fairly, protecting the most vulnerable and continuing to seek long-term growth’.One option on the table is an increase in the headline rate of capital gains tax – applied on profits of the sale or disposal of shares and other property, as well as changes to relief and allowances on the levy.This would tend to mean a greater burden on wealthier people, as they are more likely to own such assets.READ NEXT: Banks save a fortune…by not passing on rate risesStrength and unity vital in the tough times ahead – EXPRESS COMMENTStormy times ahead as UK faces LONGEST recession everNearly £900 annual increase in tracker mortgage costsBrits warned of ‘significant squeeze’ to pockets as recession looms