Moody's expects Britain to suffer a "mild recession" as rising interest rates affect household finances

[Moody's expects Britain to suffer a "mild recession" as rising interest rates affect household finances] Credit rating agency Moody's said that Britain is moving towards a "mild recession" this year. Higher-than-expected inflation and rising interest rates have affected household finances. Moody's said the rise in core inflation, which strips out food and energy, "increases the likelihood that the central bank will raise interest rates further". Moody's expects the Bank of England to raise interest rates by at least 25 basis points this year, raising the benchmark interest rate to 4.75%. In a report released on Wednesday, Moody's said the UK economy was expected to contract by 0.1 per cent in 2023 "as the impact of rising prices and tighter financing conditions continues to permeate the economy". "We expect the Bank of England's policy rate to peak at 4.75% and monetary policy will remain tight in the coming years, which will be a drag on consumption and investment," the report said. "the relatively short-term mortgage market in the UK means that about half of the outstanding mortgages are at floating rates or need to be refinanced at higher rates this year, which will reduce household disposable income."