UK recession incoming, but markets buoyed by China rumours

• Incoming recession and pressure on real incomes likely to cost most households £800 a year
• Markets gain confidence as rumours swirl China could relax Covid rules
• Starbucks beats expectations as customers spend big on expensive drinks
• Brent crude erases recent losses on tighter supply outlook

Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown:

“Britain is bracing for the longest recession since the 1920s, the Bank of England warned yesterday after announcing the largest interest rate hike in 30 years. Latest predictions are that the incoming big squeeze on real incomes is going to cost the majority of households £800 a year. The poorest 10% of these households are expected to be hit harder, because they spend a higher proportion of their monthly budget on utilities and food, where prices have been accelerating faster than other areas.