Standard & Poor’s, the credit rating agency, said this week that a bad Brexit would plunge the UK into recession lasting up to 15 months

Interest rates may rise in the event of a disorderly Brexit despite the economic shock it would cause, the Bank of England has warned.

The damage to the supply side of the economy as borders close, supply chains collapse and production costs soar could be worse than the hit to consumer spending through job losses, reduced access to credit and weaker wages. The imbalance, combined with a likely sterling crash and higher import tariffs, could drive up inflation and force the Bank to raise rates.

The warning came as the Bank left the base rate unchanged at 0.75 per cent this month but signalled that there would be at least one quarter-point increase in each of the coming three years. Its new forecasts also suggested