Thursday evening UK news briefing: Bank of England warns of year-long recession

Recovery from Covid was always going to lead to economic disruption and the Ukraine war has added an energy price spike. 

Yet could the Bank of England have handled the shocks better? 

Tory leadership frontrunner Liz Truss has pledged to “look again” at the Bank’s mandate “to make sure it is tough enough on inflation”. 

There was evidence of the impact of soaring prices on the wider economy today as it emerged Britain’s builders are the most downbeat since the start of the pandemic as recession fears dragged the sector into its first slowdown for 18 months. 

Andrew Lilico suggests it is time to revoke the Bank’s independence.

Tax cuts warning

Ms Truss has promised during the campaign that she would reverse the 1.25 percentage point rise in National Insurance which came into force at the start of this tax year in a bid to help families immediately with the rising cost of living. 

The chances of that happening look increasingly likely given the poll results in the Foreign Secretary’s favour and today the Telegraph has been told that figures in her leadership campaign are privately attempting to convince MPs who have endorsed her rival Rishi Sunak to switch sides

Yet the Foreign Secretary’s strategy of cutting taxes has received opposition from the boss of high street retailer Next. 

Lord Wolfson has warned tax cuts will not solve the challenges facing the British economy. 

Read what each candidate’s cuts will save you as they prepare to do battle in a televised leadership debate on Sky later.

How to get a pay rise

Retirees are on track to receive consecutive 10pc state pension increases as high inflation is now forecast to remain in double-digits for most of next year. 

With a 15 month recession predicted by the Bank of England, is there anything workers can do to protect their wealth? 

Switching to the best savings rates, investing in companies that can prosper as the cost of borrowing rises, and locking in cheap mortgage rates while they last could have a big impact. 

Read the ways to make money as interest rates rise

Despite soaring energy bills and sky-high rents, wage growth has failed to keep pace. 

Yet with vast levels of job vacancies, we are living in a red-hot recruitment market. Read how to secure a 100pc pay rise.

Comment and analysis

Around the world: Missiles fired into Taiwan’s waters

The Chinese army launched multiple ballistic missiles into waters around Taiwan today as China’s largest ever military drills encircling the island began. The Taiwanese defence ministry confirmed that 11 missiles had been fired, nearly double the number that were fired in July 1995 during the Third Taiwan Strait Crisis. In response, Taiwan activated “relevant defence systems”, a senior military official said at a briefing. Japan said that five ballistic missiles fired by China also appeared to have landed in its exclusive economic zone, in the first such incident. Watch videos of the rockets being fired and a map showing where they landed.

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