"Dark days ahead" warns Sussex finance expert as the UK could enter a recession this year
The Bank of England has raised interest rates to their highest levels since 2009
A Sussex-based financial expert has warned people are in for a real shock if the UK enters a recession later this year.
The Bank of England has suggested that could be the case, with the rising cost of living likely to reduce household spending across the country.
Yesterday the UK's central bank raised interest rates to 1%, the highest level since 2009.
In its first forecast since the Russian invasion of Ukraine, the Bank said it now expected the energy price crunch to leave a lasting scar, pushing up unemployment and contributing to weak or negative growth throughout 2023.
Karl Hopper-Young from Sussex Independent Financial Advisers said: "I was around in the very early 90s when interest rates rose to 15%, house prices fell by almost half, people having to give the keys back because they couldn't afford to meet their mortgage payments. It was a very, very dark time.
"When you start to up interest rates, you end up losing more and more disposable income…It will feel very expensive to live, it’s feeling like that now! Look at tradesman's costs, the cost of products and services, even you know things like white plastic chairs and tables for the garden. They were £50 five years ago, now they are £200 for a set, it's just so far away from where it used to be.
"So I think there's going to be a lot of very unhappy people who are going to need some proper advice and guidance and will have to manage their expenditure and it really is going to be that simple. If people don't run their money more efficiently, they're going to be in so much trouble. And once you're in trouble, it's incredibly difficult to get out."