UK in recession and further interest rate hikes probable, Bank warns Kwarteng

Threadneedle Street makes clear on eve of tax-cutting mini-budget that plans risk triggering more rate rises

The Bank of England has warned Kwasi Kwarteng the economy is in recession and it will most probably need to push interest rates higher after Friday's tax-cutting mini-budget.

On the eve of a major package of support from the chancellor designed to break what he called the economy's cycle of stagnation", Threadneedle Street said the UK economy was heading for a second consecutive quarter of falling output, with gross domestic product set to shrink 0.1% in the three months to September.