The Bank of England sent a stark warning that Britain risks a double-whammy of a recession and inflation above 10% as it raised interest rates on Thursday to their highest since 2009, hiking by quarter of a percentage point to 1%, Reuters reported. The pound fell by more than a cent against the U.S. dollar to hit its lowest level since mid-2020, below $1.24, as the gloominess of the BoE's new forecasts for the world's fifth-largest economy caught investors by surprise. They also trimmed bets on the central bank hiking rates aggressively this year.

Britain banned all service sector exports to Russia on Wednesday and imposed sanctions on 63 individuals and organisations, its latest wave of measures to increase pressure on Moscow to reverse course and pull back from Ukraine, Reuters reported. Prime Minister Boris Johnson has been a leading supporter of Ukraine since Russia invaded on Feb. 24, framing London's sanctions against Moscow as a way of punishing President Vladimir Putin over a war the Russian leader describes as a "special operation" to denazify its neighbour.

Inflation was already on the rise in Britain and elsewhere before Russia’s invasion of Ukraine, triggered by rising natural gas prices and supply-chain shortages after pandemic lockdowns. The war has abruptly pushed the price of oil and gas even higher, the New York Times reported. Now consumer prices in Britain are rising at their fastest rate in 30 years, and wages are failing to keep up, putting a squeeze on household incomes not seen since records began in 1956.

The number of people going financially insolvent across England and Wales jumped to the highest level in more than three years in the first quarter of this year, the Independent reported. There were 32,305 personal insolvencies between January and March, according to the Insolvency Service, marking the highest total since the final quarter of 2018 when 33,768 cases were recorded. Personal insolvencies were up by 17% in the first quarter of this year compared with the previous three months.

Britain has delayed imposing its full post-Brexit import controls on goods from the European Union until the end of next year, saying retailers were facing too many other cost pressures and it did not want to add more fuel to inflation, Reuters reported. Britain left the EU's single market in January 2021 and has delayed implementation of its full post-Brexit border controls on several occasions due to worries about port disruption and now the risk of adding to a cost-of-living crisis.

Brexit-related trade barriers have driven a 6% increase in U.K. food prices, adding to a squeeze on consumer spending power, according to a new report, Bloomberg News reported. Inflation for food products Britain tends to import from the European Union, like fresh pork, tomatoes and jam, was more pronounced than things like tuna and exotic fruits that come from other nations, according to the London School of Economics’ Centre for Economic Performance. The study covered two years to the end of 2021 and attempted to strip out the effect of the pandemic.

British finance minister Rishi Sunak spoke about the importance of government actions not fuelling rising inflation during a meeting of senior ministers on Tuesday, a spokesman for Prime Minister Boris Johnson said, Reuters reported. The spokesman said that during a cabinet discussion on the pressure on household budgets due to the rising cost of living, Sunak outlined the package of support already in place, including towards helping people with energy bills.

The U.K. seized 2 million pounds ($2.61 million) from a London-based fintech firm, saying that the funds were linked to a $150 million U.S. wire fraud conspiracy, Bloomberg News reported. QPay Europe Ltd., which offers due diligence and underwriting services, agreed to forfeit the money following court proceedings, the Financial Conduct Authority said in a statement Thursday. The funds were routed repeatedly through different accounts in several countries without appearing to have any legitimate purpose, the FCA said.

Bank of England policy maker Catherine Mann said she’s considering whether interest rates need to rise by more than a quarter point next month, reigniting the debate about a quicker pace of tightening for monetary policy, Bloomberg News reported. Money markets cranked up BOE tightening wagers after the remarks, betting on at least one half-point hike by August. Yields on U.K. two-year government bonds -- which are the most sensitive to monetary policy -- surged by as much as 16 basis points to 1.72%, the highest since 2009.