The UK faces a one in three chance of going into a recession over the next two years, according to a report by investment bank Lehman Brothers.

The report warns that rising mortgage rates will cut the amount of money consumers spend, which could have a detrimental impact on consumer-facing businesses and company spending.

It also predicts that house prices will fall by 8% by the end of next year. "Given the importance of housing wealth for consumer spending, this points to an economic slowdown that could last some time," the report said.

A recession is defined as two consecutive quarters when the economy shrinks.