Tory leadership rivals Rishi Sunak and Liz Truss have set out competing plans to deal with the economic recession forecast by the Bank of England in their latest TV clash.

Mr Sunak said Ms Truss's "unfunded" tax cuts would pour "fuel on the fire" of inflation.

But Ms Truss said a recession was "not inevitable" if "bold" action was taken.

Mr Sunak, who has trailed Ms Truss in recent polls, has repeatedly said he would prioritise bringing inflation down before cutting taxes if he became prime minister.

Ms Truss reiterated her pledge to immediately reverse April's increase in National Insurance and cut other taxes, which she claimed would stimulate economic growth and prevent a recession.

While the governor of the Bank of England gave a sombre press conference, the candidates to be the next prime minister were preparing for their next turn in a TV studio.

Liz Truss claimed the tax levels Rishi Sunak advocates will lead to recession, not growth; Rishi Sunak claimed Liz Truss' plan to cut taxes will exacerbate inflation and prolong economic pain.

She told Ms Truss that what former Tory prime minister Margaret Thatcher "believed in was sound money", adding "this is not sound economics".

"Plenty of people who have sat around the cabinet table also support me," Mr Sunak said, highlighting Deputy Prime Minister Dominic Raab as one of his supporters?

On whether there was nothing he could do about a recession, Mr Sunak said: "Of course, there is, of course."?

He said Ms Truss was wrong to suggest the tax burden was causing the recession, pointing instead to inflation.

"The two continuity candidates have no answers to sky-high inflation, rocketing energy bills and the lengthy recession the Bank of England has warned is on the horizon," he said