Jeremy Hunt backs interest rate hikes even if they cause recession; UK retail sales jump – as it happened

Chancellor says only path to sustainable growth" is to bring down high prices behind cost of living crisis, as mortgage rates climb

• Full story: Hunt will back more interest rate rises even if it pushes UK to recession
• UK homeowners and first-time buyers warned to brace for 5%-plus mortgage rates

Rising interest rates could easily scupper the recovery in UK retail spending, which we saw in April (see opening post).

AJ Bell investment director Russ Mould explains:

In the UK's domestic economy retail sales held up better than feared but the continuing ructions in the bond market raise the spectre of punishing rate increases following the unexpectedly sticky inflation numbers earlier this week.

Chancellor Jeremy Hunt is on record as saying the pain of recession would be worth it to help bring down the rate of inflation.

Nobody is planning a recession, or wanting a recession, but we have to have regard to the long-term future of the country.

To have inflation at 8% is not good for people long-term.

We've got to get on top of inflation, and get some stability.

It's bad for the economy, bad for business, bad for everyone.