everywhere you look there is colour. and after a three—year break because of the covid—19 pandemic, there is no doubt about it, pride is back, it's loud and it is very proud. and while this is a celebration at its heart, everyone here sounding very happy, pride was started as a protest in 1972. the gay liberation front that we mentioned just before, started it all off again today, when they organise that rally 50 years ago homosexuality was still classified as a mental illness. they could have been arrested or kissing each other in the streets, which they did. although, on that day, nobody was arrested. very different atmosphere here today. many people, though, will say that the fight for equality still isn't over, notjust here in the uk but around the world. where homosexuality is still criminalised in a about 70 countries. so it is a celebration, it is a protest, it is going to go on for quite some time

here in london, finishing at around six o'clock this evening, the parade, and partying well into the night. now it's time for a look at the weather. hello. today is bringing some sunny spells, yes. but also some big shower clouds bubbling up in the sky. some of those showers will continue to be heavy and thundery. more generally cloudy and rather wet weather in the northern half of scotland and this little band of rain approaching the south—east corner, although it won't arrive across parts of kent until we get into the evening. temperatures 16—21 degrees, but we will see some showery rain into the far south—east later on. then, overnight, most places will be dry, but we will see some more showers feeding back into northern and western scotland and northern ireland on a strengthening breeze. that breeze will be a feature of the weather across the northern half of the uk during tomorrow. there will be showers around again but probably not as many as we have today. still potentially some heavy thundery ones for central and eastern parts. northern ireland, wales, south—west of england turning quite dry, i think, in most places. not too many showers by the afternoon. temperatures of 16—22. it's going to warm up in the south through the week ahead. it could get into the high 20s in places.

always a cooler with more cloud, and some rain further north. now on bbc news, talking business. hello, everybody. and welcome to talking business weekly with me, aaron heslehurst. let's go and take a look at what's on the show. walking the diplomatic tightrope, countries not imposing us—led sanctions are accused of undermining efforts to cripple the kremlin�*s war machine and stop the fighting in ukraine. china and india, they're buying record amounts of russian oil, and other nations, from mexico to south africa and the united arab emirates, are all calling for peace while maintaining business with moscow. so is there a financial consequence to not taking a side? i'm going to be discussing all of that with these two. there they are. a former uk diplomat and adviser to the prime minister and a renowned indian economist with the ear of the modi government. also on the show, global interest rates, they are on the rise

in response to rampant inflation. but is it all too little, too late in the face of soaring prices? i'm going to be speaking to a former chief economist at the us treasury to find out. wherever you arejoining me from around the world, once again a big hello and a warm welcome to the show. you know, since russia invaded ukraine, the western world, led by the us, has responded with a raft of sanctions looking to halt the kremlin war machine and stop the conflict. the war and the sanctions have had a huge impact on the global economy, with widespread inflation driven by soaring energy and food costs leading to warnings millions are at risk of hunger and unrest.

the sanctions have sought to target russia's war chest, blocking access to financial markets and targeting those close to president putin, and restricting access to international markets for goods and services. and when it comes to russia, the most important set of goods for them are from the energy sector. gas and oil. with fossil fuel money making up nearly half of moscow's federal budget last year. but the west and particularly europe's dependence on russian gas has made weaning themselves off these fossil fuels particularly difficult. to cut russian gas supplies, it is simply not possible for large parts of europe. but reducing russian oil — that's another matter. with the us banning imports, the uk phasing them out by the end of the year and the eu cutting supplies that come in by sea, but there are a number of countries that are not following these sanction regimes and taking a different stance. these include countries condemning russia's actions but not following the sanctions, like israel, mexico and the uae, the united arab emirates.

and then there are those remaining neutral, walking something of a diplomatic tightrope, like south africa, brazil and india. and those criticising sanctions, like china. and it's those last two giant economies that are helping pick up the slack in the market for russian oil as they grab the cut—price crude that's now on offer. so just how much are we talking about here? well, take a look at this. in may, china's imports of russian oil rose by 55% from a year earlier, to record levels. that equates to some 62 million barrels of oil in may, pushing saudi arabia, formerly china's biggest source of crude, to second place with some 57 million barrels. and the majority of what's left has made its way to india, not usually a big customer for russian oil. but a bargain is a bargain and india has been buying.

in some cases, at prices around $30 a barrel cheaper than brent crude. injanuary and february, india didn't import any oil from russia. not a drop. but since then, they have been hoovering it up with russia there second biggest source of oil in may. to put this in perspective, some industry experts predict that india will buy more of the kremlin�*s crude in five months this year than in the whole of last year. here's our man in mumbai, nikhil inamdar, to give us a picture from the ground. india shares deep and historic ties with russia and has taken a resolutely middle of the road position when it comes to russia's invasion of ukraine, abstaining from voting on any of the resolutions that have been moved either by the west or by russia in the united nations. but when it comes to business and trade, its stance has been very clearly dictated by economic compulsions rather than by geopolitics. new delhi's purchases of russian oil have hit record highs and indian companies have been snapping up

cheap, discounted russian oil. coal imports have also surged, and the west has said that this is undermining its sanctions on russia. but responding to the criticism, the indian foreign minister has said that india perhaps buys in an entire month what europe buys in just an afternoon as far as russian oil is concerned. and so these purchases are unlikely to seize any time soon. and it's all adding up, with one thinktank reporting that russia and almost $100 billion from fossil fuels in the first 100 days of the war. covering the estimated cost of the invasion of somewhere in the region of $876 million a day. but there are a raft of other measures the sanctions cover that are undoubtedly having an impact, working to isolate moscow. these us—led sanctions are having a transformative effect on the global economy, as some countries shift away from russia and others step into the gaps. so let's get more on all of this, because a little earlier i caught up

with the former economic adviser to the british prime minister and now the global economy director at chatham house. creon butler, a real pleasure having you on the show. thanks so much for your time. creon, can we start with this? just how much of an impact are the current western led sanctions having not only on russia but on the global economy? well, i think the first thing to say is that the west really had no choice but to implement what has turned out to be an unprecedented set of sanctions. but further to that, it's really the war that is having the impact on the global economy. now, if you look at particular areas like the rise in energy prices, which has been very sharp, that's to some extent due to the reduction in the supplies of gas to europe from russia, which is linked to sanctions. but then also, if you look at the rising food prices, that links to the mere fact that you just cannot get food out of ukraine at the present time. so i think it's the war itself —

sanctions are a factor, but it's the war itself. creon, how much of a problem are countries who don't follow the sanctions against russia to this whole process? it's clearly a factor. i mean, if you take china as an example, so china is now russia's largest importer of hydrocarbons. something like two million barrels of oil a day. on the other hands, the west is a very large market as well for the things that russia wants to sell. and china itself will be quite cautious in how far it wants to go down the road of full and total support for russia and assistance to russia. and there are a number of factors to that. one is they know, in the long term, that china and the west is very integrated and they need to maintain reasonably good relations. but secondly, also, chinese private sector companies will worry about the kind of measures that the us justice department can take. so they will also be cautious, perhaps even more cautious than the chinese government. and a number of countries

remain officially neutral. i mean, countries like the uae, united arab emirates, mexico and israel. some condemning the war but still doing business with russia outside of the sanctions. and critics will argue that they're propping up the kremlin war machine. are there economic consequences of not taking a side? i think the key thing is that if you look at the sanctions the west has imposed — i mean, they had three key elements. one is to detach russia from the international financial system. and frankly, the west itself is enormously powerful in that. there are only a limited number of truly convertible international currencies and they're all either within the g7 or countries very closely linked to the g7. so cutting russia off from those currencies, by for example freezing the russian central bank's assets, that is very powerful. even though some other countries with their own currencies may not be

taking the same kind of measures. similarly, in terms of the freezing of the assets of wealthy people who support president putin, a lot of those assets are in western countries. now, there is an extent to which they may have been able to move them to other countries previously, but again it's limited. and then, finally, in terms of restricting russian access to international markets where they want to sell and buy. i mean, just take for example the civil aircraft sector. i mean, some 70% or so of russian airline fleets, civil airline fleet is airbus and boeing, and if you can't get parts, you can't get replacement planes, you know, there really is nowhere is nowhere else to go, in the short term at least. though i think again it is a factor in weakening the effect, but the sanctions still remain very powerful. but creon, do you have sympathy for countries taking this stance? i mean, there's a world price crisis and they have a responsibility to their people to get supplies at the lowest price. yes, i do.

and in a way, and this is true also in relation to some of the advanced countries who have to deal and are dealing with the threat of cutting off gas supplies, you have to do in the very short—term what you can do, but that shouldn't become an obstacle to finding a permanent solution over the longer term. creon butler, how i've appreciated your insights and thoughts. thank your insights and thoughts. thank you forjoining me and i will talk to you soon. so, as we have been discussing, one of the biggest country is not following those us led sanctions and buying up lots of russian oil is india. to find out why, i have been speaking to the former vice chairman of the top indian government thinktank run by the prime minister. a real pleasure having you on the show. thank you for your time. having you on the show. thank you foryourtime. can having you on the show. thank you for your time. can we start with this, how has the war in ukraine affected the indian economy? the war has most importantly _ affected the indian economy? the war has most importantly caused - affected the indian economy? the war has most importantly caused a - affected the indian economy? the war has most importantly caused a lot - affected the indian economy? the war has most importantly caused a lot of i has most importantly caused a lot of uncertainty _ has most importantly caused a lot of uncertainty for the indian economy. in the _

uncertainty for the indian economy. in the sense — uncertainty for the indian economy. in the sense that the global situation becomes uncertain and it is affecting investment in the country. _ is affecting investment in the country, but also politically it is raised _ country, but also politically it is raised global oil prices, and given we import— raised global oil prices, and given we import 85% of our energy, this has a _ we import 85% of our energy, this has a big — we import 85% of our energy, this has a big impact on our country. do ou has a big impact on our country. you see the has a big impact on our country. dr? you see the us led sanctions as a worthy response to russia's aggression? we worthy response to russia's aggression?— worthy response to russia's aggression? worthy response to russia's anression? . . , aggression? we in india don't really have a direct _ aggression? we in india don't really have a direct comment _ aggression? we in india don't really have a direct comment on _ aggression? we in india don't really have a direct comment on it - aggression? we in india don't really have a direct comment on it or- have a direct comment on it or response — have a direct comment on it or response to it, but it would be best if this— response to it, but it would be best if this could — response to it, but it would be best if this could be sorted out and this conflict, _ if this could be sorted out and this conflict, this issue could be resolved _ conflict, this issue could be resolved as peacefully and quickly as possible. the fact remains that the sanctions have also caused an impact, _ the sanctions have also caused an impact, their own impact, on the global_ impact, their own impact, on the global economy. the sooner these sanctions — global economy. the sooner these sanctions are not needed, the better off we _ sanctions are not needed, the better off we witt— sanctions are not needed, the better off we will be, all of us. do sanctions are not needed, the better off we will be, all of us.— off we will be, all of us. do you think the _ off we will be, all of us. do you think the sanctions _ off we will be, all of us. do you

think the sanctions are - off we will be, all of us. do you| think the sanctions are working, though? think the sanctions are working, thou~h? , . ., think the sanctions are working, thou~h? _, ., , , think the sanctions are working, thou~h? ., , , , though? yes and no, because i see that these sanctions _ though? yes and no, because i see that these sanctions are _ though? yes and no, because i see that these sanctions are also - that these sanctions are also impacting the global economy, because — impacting the global economy, because of russia being such a large and important supplier of energy and ukraine _ and important supplier of energy and ukraine being a supplier of food and commodities, so i think overall the sanctions _ commodities, so i think overall the sanctions hopefully will help to bring _ sanctions hopefully will help to bring the conflict to an early end, but in _ bring the conflict to an early end, but in not— bring the conflict to an early end, but i'm not so sure about their impact— but i'm not so sure about their impact is— but i'm not so sure about their impact is what the us wanted the impact _ impact is what the us wanted the inrpact to— impact is what the us wanted the impact to be, and whether that inrpact — impact to be, and whether that impact has been borne out. you know that the critics — impact has been borne out. you know that the critics will _ impact has been borne out. you know that the critics will say _ impact has been borne out. you know that the critics will say that _ impact has been borne out. you know that the critics will say that by - that the critics will say that by buying all of this extra oil from russia, that fundamentally india is helping to fund the kremlin's war machine. is that right for the world's biggest democracy? there are

more matures — world's biggest democracy? there are more matures and _ world's biggest democracy? there are more matures and bigger _ world's biggest democracy? there are. more matures and bigger democracies, but i more matures and bigger democracies, but i think— more matures and bigger democracies, but i think we need to be evenhanded about— but i think we need to be evenhanded about this, _ but i think we need to be evenhanded about this, as to who is financing russia's— about this, as to who is financing russia's war machine and how is that going _ russia's war machine and how is that point} for— russia's war machine and how is that point} for us, — russia's war machine and how is that going. for us, energy is very critical— going. for us, energy is very critical as— going. for us, energy is very critical as i— going. for us, energy is very critical as i explained earlier, and the price. — critical as i explained earlier, and the price, whatever lower the price we can— the price, whatever lower the price we can obtain our oil and energy, we can carve— we can obtain our oil and energy, we can carve out— we can obtain our oil and energy, we can carve out exceptions for hungary and poland. _ can carve out exceptions for hungary and poland. i hope india's requirements can also be looked at in a similar— requirements can also be looked at in a similar light.— in a similar light. those same critics will _ in a similar light. those same critics will say _ in a similar light. those same critics will say that _ in a similar light. those same critics will say that you - in a similar light. those same critics will say that you are i critics will say that you are getting this discounted russian oil and, in effect, india is taking somewhat advantage of the war in ukraine? i somewhat advantage of the war in ukraine? ~ . , , ukraine? i think anybody in the world who _ ukraine? i think anybody in the world who can _ ukraine? i think anybody in the world who can arrange - ukraine? i think anybody in the world who can arrange for - ukraine? i think anybody in the world who can arrange for a - ukraine? i think anybody in the i world who can arrange for a lower price _ world who can arrange for a lower price and — world who can arrange for a lower price and imports at lower prices would _ price and imports at lower prices would want to do that. as an

economist, i can say that this makes a lot of— economist, i can say that this makes a lot of economic sense. i'm not sure _ a lot of economic sense. i'm not sure they— a lot of economic sense. i'm not sure they are taking advantage of it. sure they are taking advantage of it yes. _ sure they are taking advantage of it yes. we — sure they are taking advantage of it. yes, we are ensuring that our people _ it. yes, we are ensuring that our people don't have to suffer from runaway — people don't have to suffer from runaway inflation... do people don't have to suffer from runaway inflation. . ._ people don't have to suffer from runaway inflation... do you think the sanctions _ runaway inflation... do you think the sanctions regime, _ runaway inflation... do you think the sanctions regime, do - runaway inflation... do you think the sanctions regime, do you - runaway inflation... do you think. the sanctions regime, do you think there are double standards in the system? there are double standards in the s stem? ~ . ., , system? well, there are double standards all _ system? well, there are double standards all round. _ system? well, there are double standards all round. you - system? well, there are double standards all round. you have i system? well, there are double standards all round. you have a| standards all round. you have a sanctions — standards all round. you have a sanctions but then you permit multi million _ sanctions but then you permit multi million dollars worth of energy imports — million dollars worth of energy imports over two months. i know too that imports— imports over two months. i know too that imports in europe have gone up actually, _ that imports in europe have gone up actually, compared to last year. so i'm actually, compared to last year. so im not— actually, compared to last year. so i'm not sure... letsjust put it like _ i'm not sure... letsjust put it like this _ i'm not sure... letsjust put it like this. every country looks after its own _ like this. every country looks after its own national interests, and then there _ its own national interests, and then there are _ its own national interests, and then there are horses for courses and you

do whatever— there are horses for courses and you do whatever to make sure that your people _ do whatever to make sure that your people that don't suffer at the result— people that don't suffer at the result of— people that don't suffer at the result of an unnecessary conflict which _ result of an unnecessary conflict which is — result of an unnecessary conflict which is having an adverse affect on all of— which is having an adverse affect on all of us _ which is having an adverse affect on all of us. . , ., ~ which is having an adverse affect on all of us. . , . ~ ,., . all of us. india is walking somewhat of a diplomatic _ all of us. india is walking somewhat of a diplomatic tightrope, _ all of us. india is walking somewhat of a diplomatic tightrope, balancing relations with russia and countries that are imposing sanctions like the united states. do you think that position is a sustainable or eventually will india have to pick a side? �* , . ., , . side? i'm sure all our friends and allies realise _ side? i'm sure all our friends and allies realise that _ side? i'm sure all our friends and allies realise that picking - side? i'm sure all our friends and allies realise that picking a - side? i'm sure all our friends and allies realise that picking a side l allies realise that picking a side is not _ allies realise that picking a side is not the — allies realise that picking a side is not the order of the day, and if we are _ is not the order of the day, and if we are as — is not the order of the day, and if we are as good a tightrope walker as we are as good a tightrope walker as we hope _ we are as good a tightrope walker as we hope we — we are as good a tightrope walker as we hope we are, i think we would be able to— we hope we are, i think we would be able to walk— we hope we are, i think we would be able to walk the tightrope with help of the _ able to walk the tightrope with help of the friends who understand india at this— of the friends who understand india at this point of time. i think all of us _ at this point of time. i think all of us look— at this point of time. i think all of us look at each other's

interests, and it is without understanding that international relations— understanding that international relations moves forward. in a sort of messy— relations moves forward. in a sort of messy way, but nonetheless in a manner— of messy way, but nonetheless in a manner where we do the best. we don't _ manner where we do the best. we don't go _ manner where we do the best. we don't go for— manner where we do the best. we don't go for the best, but we try for the _ don't go for the best, but we try for the second best and make that work _ for the second best and make that work. �* , ., . work. and in terms of the indian economy. _ work. and in terms of the indian economy, could _ work. and in terms of the indian economy, could india _ work. and in terms of the indian economy, could india afford - work. and in terms of the indian economy, could india afford to l work. and in terms of the indian i economy, could india afford to cut ties with russia?— economy, could india afford to cut ties with russia? also, we have got as ou ties with russia? also, we have got as you know — ties with russia? also, we have got as you know very — ties with russia? also, we have got as you know very long _ ties with russia? also, we have got as you know very long standing - as you know very long standing partnership with russia. a very large _ partnership with russia. a very large extinction is imported from russia _ large extinction is imported from russia i— large extinction is imported from russia. i think cutting ties with russia — russia. i think cutting ties with russia is— russia. i think cutting ties with russia is perhaps not on the table at all— russia is perhaps not on the table at all and — russia is perhaps not on the table at all and has never been. and i don't _ at all and has never been. and i don't think— at all and has never been. and i don't think it will be. all of us have — don't think it will be. all of us have to — don't think it will be. all of us have to live with this fact that there — have to live with this fact that there are _ have to live with this fact that there are some of us who will have multiple _ there are some of us who will have multiple and different relations

with our— multiple and different relations with our friends across the geography. and i think all countries have that _ geography. and i think all countries have that to some extent. and i think— have that to some extent. and i think that — have that to some extent. and i think that is the way the world is structured — think that is the way the world is structured today. do think that is the way the world is structured today.— think that is the way the world is structured today. do you see the long-term _ structured today. do you see the long-term future _ structured today. do you see the long-term future as _ structured today. do you see the long-term future as having - structured today. do you see the long-term future as having a - structured today. do you see the | long-term future as having a new long—term future as having a new order away from you as domination of world trade, for instance to china? it is not for us. it is unacceptable to talk— it is not for us. it is unacceptable to talk about shifting leadership. no, i_ to talk about shifting leadership. no, i think the post—world war ii global— no, i think the post—world war ii global order was conceived to be made _ global order was conceived to be made on — global order was conceived to be made on rules, and i think along with the — made on rules, and i think along with the uk and europe and india, it is not _ with the uk and europe and india, it is not anyone's hegemonic stands in the world _ is not anyone's hegemonic stands in the world. we are past that. we are way past _ the world. we are past that. we are way past that. it is a multipolar

world _ way past that. it is a multipolar world and — way past that. it is a multipolar world and this is where i think information like the g20, presidency will come _ information like the g20, presidency will come to india next year, will be very— will come to india next year, will be very important. because we need to push— be very important. because we need to push for— be very important. because we need to push for this role is based order and convince all players, whether the us, _ and convince all players, whether the us, russia, china, that it is in all our— the us, russia, china, that it is in all our interests to do that, rather than _ all our interests to do that, rather than talk— all our interests to do that, rather than talk about if there is one hegemony replacing another. a real leasure hegemony replacing another. a real pleasure having _ hegemony replacing another. a real pleasure having you _ hegemony replacing another. a real pleasure having you on _ hegemony replacing another. a real pleasure having you on the - hegemony replacing another. a real pleasure having you on the show. . pleasure having you on the show. thank you for your time, i would love to check in with you soon. i love to check in with you soon. i look forward to being on with you again _ look forward to being on with you aaain. ,, . . . . look forward to being on with you aaain. ,, . . .. . ., again. since the financial crash of 2008, again. since the financial crash of 2008. the _ again. since the financial crash of 2008, the world _ again. since the financial crash of 2008, the world has _ again. since the financial crash of 2008, the world has become - again. since the financial crash of| 2008, the world has become used again. since the financial crash of- 2008, the world has become used to central banks doing all they can to stimulate economic growth by making borrowing money cheat. in fact, very cheap, with near zero interest rates. but now faced with skyrocketing prices, these same central banks are pushing up the cost of borrowing in a bid to

contain the most rapid inflation in decades. but it is a very delicate balancing act, so will this age old economic formula work in today's highly volatile world? to find out, i have been speaking to a former chief economist at the us treasury. professor michael klein, a real pleasure. thank you for your time. can we start with the basics, and perhaps for the uninitiated because occasionally you hear someone say that interest rates are the price of money. is that right, michael, or is that a flawed statement?— that a flawed statement? interest rates are the _ that a flawed statement? interest rates are the price _ that a flawed statement? interest rates are the price of _ that a flawed statement? interest rates are the price of borrowing i that a flawed statement? interest| rates are the price of borrowing it. money that you pay back in the future. the price of money is actually inflation. the inflation rate determines how much you can buy with a certain amount of money. we are in the midst of this cost of living crisis. prices forjust about anything on the up. this inflation we are seeing is higher than it has

been for decades. and we know that higher interest rates are particularly seen as a powerful tool for fighting particularly seen as a powerful tool forfighting rising prices. particularly seen as a powerful tool for fighting rising prices.— for fighting rising prices. explain that relationship. _ for fighting rising prices. explain that relationship. the _ for fighting rising prices. explain that relationship. the central. for fighting rising prices. explain i that relationship. the central banks raise interest rates and that makes things more expensive, like cars or houses, because you typically have to borrow to get a mortgage or to get a car loan. so that tamped down demand, and by tamping down demand you are tamping down price pressures. the challenge now is that a lot of the source of the inflation is on the supply side, not the demand side. central banks really have very little they can do about that. ~ ~' ., , have very little they can do about that. ~ ~ ., , . , that. we know it is a very delicate balancin: that. we know it is a very delicate balancing act. _ that. we know it is a very delicate balancing act, right? _ that. we know it is a very delicate balancing act, right? it _ that. we know it is a very delicate balancing act, right? it puts - that. we know it is a very delicate balancing act, right? it puts the i balancing act, right? it puts the pressure on the central banks, in one way to rein in their economies but without sending growth tumbling. it's a daunting challenge, right? it it's a daunting challenge, right? it is, it's very daunting. right now, i'm glad i'm not a central banker. the problem is that you have to try

to slow the economy enough to bring down the pressure on prices, but at the same time not slow it so much that you tumble into a recession. this current inflation picture is certainly forcing central banks to become more aggressive, right? we have had something like 45 countries raise rates just this year, and last month's rate rise by the american central bank, that was the third increase this year and the biggest one since 1994. in increase this year and the biggest one since 1994.— increase this year and the biggest one since 1994. in the face of very hirh one since 1994. in the face of very high inflation. _ one since 1994. in the face of very high inflation, the _ one since 1994. in the face of very high inflation, the highest - one since 1994. in the face of very high inflation, the highest we - one since 1994. in the face of very| high inflation, the highest we have seenin high inflation, the highest we have seen in quite a while, central banks are taking an aggressive stance. although, the time it took for them to take an aggressive stance, many people think that was a little bit too late. d0 people think that was a little bit too late. ,, people think that was a little bit too late. i. , . ,, too late. do you expect the us federal will _ too late. do you expect the us federal will continue _ too late. do you expect the us federal will continue raising i too late. do you expect the us i federal will continue raising rates at a rapid rate this year? thea;r federal will continue raising rates at a rapid rate this year? they have liven at a rapid rate this year? they have given indications _ at a rapid rate this year? they have given indications that _ at a rapid rate this year? they have given indications that they - at a rapid rate this year? they have given indications that they are - given indications that they are willing to do that as long as inflation stays high, and it doesn't look like inflation is going to moderate a lot. just how high could

they go? that's a good question and i think nobody really knows. a lot of this depends upon factors outside of this depends upon factors outside of the control of the central bank, or indeed any policymaker in the uk or indeed any policymaker in the uk or euro area or in the united states, because it depends upon if there are new variants of covid that make supply chain problems are severe again, what happens with the war in ukraine, what happens with the energy exports from russia, what happens with wheat exports from ukraine, so all these things are well outside the realm of central bank policy, and as a consequence you cannot really predict what is going on. as the american philosopher yogi bear has said, it is very hard to make forecasts, especially about the future. we keep heafina especially about the future. we keep hearing about _ especially about the future. we keep hearing about the _ especially about the future. we keep hearing about the worries _ especially about the future. we keep hearing about the worries or - hearing about the worries or concerns of stagflation, what is the difference between stagflation and inflation? ,, . . ,, . .

difference between stagflation and inflation? ,, . . . inflation? stack, and what that means is that _ inflation? stack, and what that means is that stagflation - inflation? stack, and what that means is that stagflation is - inflation? stack, and what that means is that stagflation is a l means is that stagflation is a combination of stagnation and inflation. this was a term that was coined in the 19705 at a time of a similar kind of supply shock. the price of oil went up very dramatically and when food prices were going up. and when something like that happens, you have pressure on prices to rise because of the supply side but the supply—side problem also causes an economy to crater in the worst case, or at least slow down. so you have a combination of unemployment and inflation, and like today those are very difficult problems to try to resolve by a central bank or indeed any kind of government authority. but if high unemployment is a part of stagnation, at the moment we don't have that. around the world, we have got the opposite. we have got labour shortages in many parts of the world. so how does that play into that picture?—

into that picture? that's right, so what that does _ into that picture? that's right, so what that does is _ into that picture? that's right, so what that does is perhaps - into that picture? that's right, so what that does is perhaps give i what that does is perhaps give central banks a little more latitude now to raise interest rates and may be that narrow path is a little bit wider because right now unemployment is quite low by historic standards. in say the united states and the uk. so maybe there is a little bit more room for central banks to tighten without causing the economy to tumble into a recession. band without causing the economy to tumble into a recession. and let me end on this. — tumble into a recession. and let me end on this, michael. _ tumble into a recession. and let me end on this, michael. if _ tumble into a recession. and let me end on this, michael. if you - tumble into a recession. and let me end on this, michael. if you could i end on this, michael. if you could stare into your crystal ball, where do you think we might be going in the next few years with interest rates, and when do you think we will see inflation numbers easing or at least returning to more manageable levels? if i least returning to more manageable levels? . . . , ., levels? if i had a good answer to that, i wouldn't _ levels? if i had a good answer to that, i wouldn't be _ levels? if i had a good answer to that, i wouldn't be speaking - levels? if i had a good answer to j that, i wouldn't be speaking with you now, iwould be that, i wouldn't be speaking with you now, i would be making that, i wouldn't be speaking with you now, iwould be making huge amounts of money. as i mentioned, i think this is a real challenge and a lot of it depends on things that are really unfair because the bill, things like what happens with the

war in ukraine, what happens with new variants of covid, so there is another famous saying around forecasting. if you are going to forecast, forecast often. so maybe we can come back to this in six months and i will tell you what i think will happen in the next month, but i don't really want to go much beyond that. but i don't really want to go much beyond that-— beyond that. professor michael klein, i beyond that. professor michael klein, twill— beyond that. professor michael klein, i will check— beyond that. professor michael klein, i will check in _ beyond that. professor michael klein, i will check in with - beyond that. professor michael klein, i will check in with you i beyond that. professor michaelj klein, i will check in with you in beyond that. professor michael i klein, i will check in with you in a few months's time.— klein, i will check in with you in a few months's time. thank you for 'oinin: few months's time. thank you for joining me- _ few months's time. thank you for joining me. you're _ few months's time. thank you for joining me. you're welcome. - few months's time. thank you for joining me. you're welcome. i - joining me. you're welcome. i enjoyed it very much. that is it from this week's show. you can get the latest updates on the war in ukraine and the impact is having on our global economy on the bbc website or the smartphone app. you can also follow me on twitter. tweet me, i will treat you back. thank you for watching, me, i will treat you back. thank you forwatching, i me, i will treat you back. thank you for watching, i will see you soon. goodbye.

hello. today is bringing some sunny spells, yes. but also some big shower clouds bubbling up in the sky. some of those showers will continue to be heavy and thundery. more generally cloudy and rather wet weather in the northern half of scotland and this little band of rain approaching the south—east corner, although it won't arrive across parts of kent until we get into the evening. temperatures 16—21 degrees, but we will see some showery rain into the far south—east later on. then, overnight, most places will be dry, but we will see some more showers feeding back into northern and western scotland and northern ireland on a strengthening breeze. that breeze will be a feature of the weather across the northern half of the uk during tomorrow. there will be showers around again but probably not as many as we have today. still potentially some heavy thundery ones for central and eastern parts. northern ireland, wales, south—west of england turning quite dry, i think, in most places. not too many showers by the afternoon. temperatures of 16—22. it's going to warm up in the south

through the week ahead. it could get into the high 205 in places. always cooler with more cloud, and some rain further north.

this is bbc news the headlines at 4pm. warnings of further disruption for air travellers this summerk, with more flights set to be cancelled in the coming weeks at heathrow — the uk's busiest airport. a vigil is held in east london, dedicated to zara aleena, who was killed as she walked home from a night out. two more britons captured by russian forces in ukraine the conservative mp, chris pincher, who is under investigation for allegedly groping two men said he is seeking "professional medical support" and hopes to return to his duties as an mp "as soon as possible". two more britons captured by russian forces in ukraine have have been charged with being mercenaries, according to russian state media. fraud is causing an ever—increasing tide of damage to people and the problem is likely to get worse, the head of a policing watchdog has warned. and more than a million people are gathering on the streets on london for pride,

as the lgbt plus community marks 50 years since the first march.