Jeremy Hunt is reportedly going to introduce a new capital allowances regime for businesses in the Budget next week.

The move is aimed at offsetting the impact of the rise in corporation tax from 19pc to 25pc, and the end of the £25bn "super-deduction" tax break for investment, according to the Financial Times.

5 things to start your day 

1)  TikTok meets GCHQ to soothe security concerns | Chinese app launches charm offensive aimed at preventing a crackdown in Britain

2) UK facing biggest mortgage payment crunch in developed world, warns Fitch | Ratings agency predicts that rising rates will leave 135,000 households in arrears

3) Pound slumps as Fed chief warns of higher interest rates | Powell sticks to strong messaging: ‘We will stay the course until the job is done’

4) Bank of England admits Brexit makes City easier to regulate | Threadneedle Street says leaving EU has been good for competition and flexibility

5) British operator ‘extremely disappointed’ as French rival wins HMRC post-Brexit border contract | Blow for supporters of domestic procurement as Sodexo awarded key border contract

What happened overnight 

Asian shares were mostly lower as investors fretted that the Federal Reserve might raise interest rates faster if pressure stays high on inflation.

Australia's S&P/ASX 200 slipped nearly 1pc to 7,291.90. South Korea's Kospi dropped 1.4pc to 2,429.83.

Chinese shares sank after officials in Beijing announced plans for a regulatory shakeup. Hong Kong's Hang Seng tumbled 2.5pc to 20,021.10, while the Shanghai Composite shed 0.5pc to 3,269.33.

However, Japan's shares closed higher for a fourth straight day, supported by a weaker yen.

The benchmark Nikkei 225 index climbed 0.5pc to end at 28,444.19, while the broader Topix index rose 0.3pc to 2,051.21.

Wall Street stocks tumbled yesterday. The Dow Jones Industrial Average closed 1.7pc lower at 32,856.46. The broad-based S&P 500 dropped 1.5pc to 3,986.37, while the tech-rich Nasdaq Composite finished down 1.3pc at 11,530.33.

The bond market doubled down on the likelihood of a US recession. The yield on the two-year Treasury surged to its highest level since 2007 at 5.02pc, while the benchmark 10-year Treasury remain just under 4pc.

The gap between the two notes exceeded a percentage point for the first time since 1982, deepening the closely watched inverted yield curve.