Rachel Reeves' Autumn Budget has caused the economy to stagnate, with businesses reacting by upping prices and slashing jobs, the Bank of England has warned.
Bank governor Andrew Bailey has confirmed interest rates will be cut on a gradual basis as a result of fears about the impact of tax hikes and a rising minimum wage.
It comes as the bank downgraded its forecast and said it expects to see "zero growth" over the final three months on 2024, The Times reports.
The committee which sets interest rates voted to hold them at 4.75%, warning of "heightened uncertainty in the economy”.
The Bank of England also drew attention to the impact of the chancellor's announcement of increased National Insurance Contributions for employers and a rise in the national living wage.
A survey of businesses by the Bank of England produced data pointing towards firms increasing prices and cutting jobs in response to the £25billion national insurance tax rise.
FTSE 100
The UK's flagship share index, the FTSE 100, was down 122 points at 8,077 shortly after opening this morning.
Brent crude oil futures were down 0.32%, trading at $72.40 a barrel.
Companies reporting today
Carnival* | Fourth quarter results |