Chancellor Jeremy Hunt has backed the Bank of England tackling rampant inflation – even if it means plunging the country into recession.

He delivered the tough message as he warned that getting spiralling prices under control is the only route to prosperity.

In an interview with Sky News, Mr Hunt said the “only path to sustainable growth” is to bring down the high prices behind the cost-of-living crisis.

He said prioritising measures to slow rising prices was necessary even if rate hikes damage the economy.

Asked whether he was “comfortable with the Bank of England doing whatever it takes to bring down inflation, even if that potentially would precipitate a recession”, he replied: “Yes, because in the end, inflation is a source of instability.”

Abrdn investment director Luke Hickmore believes the UK will suffer a recession later this year as consumers and households succumb to the effects of higher interest rates.

His prediction comes days after the IMF forecast that the UK will no longer suffer a recession this year.

However, some analysts are expecting three more interest rate rises this year taking the cost of borrowing to 5.5% as early as September.

Mr Hickmore said this morning: “We could see inflation stay higher for longer and the Bank of England are going to put rates up even higher than they are at the moment.

“This higher interest rate profile from the Bank of England, higher mortgage rates and still high inflation it is going to be increasingly hard to avoid a recession.

“I don’t think it will be a really hard recession but we will feel it and people’s incomes are going to come under a lot of pressure from those higher mortgage rates. 

“I think [recession] could be toward the end of this year or the beginning of next year.”

Capital Economics also thinks the efforts to quash inflation will lead to a recession in the UK. Chief UK economist Paul Dales said: “We now think that rates need to rise to 5.25pc to create the weakness to quash inflation.”

Nationwide raises mortgage rates

Britain’s biggest building society will increase some of its mortgage rates from today amid expectations the Bank of England will raise the cost of borrowing amid stubbornly higher inflation.

Nationwide said rates on new fixed deals will rise by up to 0.45 percentage points.

Other lenders, including Santander and Halifax, recently increased their rates.

According to financial data firm Moneyfacts, other lenders have also increased rates or withdrawn products from the market in response to this week’s inflation figure.

Barclays CEO CS Venkatakrishnan has estimated that payments by mortgage holders and tenants will account for 28% and 30% of their income. He said that compares to an average of 20% in previous years.

Retailers enjoy uplift

UK retailers saw sales return to growth last month as consumers remained resilient in the face of the cost of living squeeze.

Jewellers, sports retailers and department stores all reported stronger trade, according to figures from the Office for National Statistics.

Sales volumes increased by 0.5% last month, following a fall of 1.2pc in March.

Economists had only predicted an increase of 0.3pc for the month.

The rebound puts further pressure on the Bank of England to raise interest rates as it attempts to bring down inflation, currently 8.7%.