able to raise rates, because is able to raise rates, because people are staying in theirjobs. as a result, they do have some money to spendin a result, they do have some money to spend in some cases stop very difficult for a lot of people, but they are trying to target that nonessential spending, trying to dampen some of that demand on nonessential spending, and as a result, bring down, ultimately, the rate of inflation, which is at this incredible double—digit digit high. the governor of the bank of england will explain the decision and the reasons behind it and what may come welcome to the monetary report press conference and we are joined by the deputy governor for a monetary policy and the deputy governor for market strategy and resolution and the governor, andrew bailey.

welcome. let me start with the situation — welcome. let me start with the situation as we see it on the outlook_ situation as we see it on the outlook for the economy. the outlook for growth _ outlook for the economy. the outlook for growth and unemployment has improved~ — for growth and unemployment has improved. six months ago we expected a shallow_ improved. six months ago we expected a shallow but long recession. since then energy prices have fallen substantially and economic activity is holding — substantially and economic activity is holding up better—than—expected. so today— is holding up better—than—expected. so today we forecast modest but not positive _ so today we forecast modest but not positive growth and a much smaller increase _ positive growth and a much smaller increase in— positive growth and a much smaller increase in unemployment. we think inflation _ increase in unemployment. we think inflation will fall quite sharply over— inflation will fall quite sharply over the — inflation will fall quite sharply over the coming months beginning with the _ over the coming months beginning with the april number which will be released _ with the april number which will be reteased in— with the april number which will be released in two weeks. energy prices have fatten _ released in two weeks. energy prices have fallen from their peaks and that will— have fallen from their peaks and that will start to come through as lower— that will start to come through as lower inflation. food there be less sure about — lower inflation. food there be less sure about this let me be clear, inflation — sure about this let me be clear, inflation remains too high and it is ouriob_

inflation remains too high and it is ouriob get— inflation remains too high and it is ourjob get it and to have it stay there _ ourjob get it and to have it stay there this— ourjob get it and to have it stay there. this is why today we have increased — there. this is why today we have increased the bank rate by 0.25 percentage points to 4.5%. low and stable _ percentage points to 4.5%. low and stable inflation as the foundation of stable — stable inflation as the foundation of stable economy and we have to stay the _ of stable economy and we have to stay the course to make sure inflation _ stay the course to make sure inflation falls all the way back to the 2%_ inflation falls all the way back to the 2% target. in the monetary policy— the 2% target. in the monetary policy report we presented a we have revised _ policy report we presented a we have revised projections for growth in the uk _ revised projections for growth in the uk economy. in the central projection— the uk economy. in the central projection at the uk economy grows at a moderate pace over the next three _ at a moderate pace over the next three years — at a moderate pace over the next three years and a calendar year growth — three years and a calendar year growth expected to be 40% this year and three _ growth expected to be 40% this year and three quarters of percent in 2024 _ and three quarters of percent in 2024 and — and three quarters of percent in 2024 and 2025. -- the and three quarters of percent in 2024 and 2025. —— the growth outlook is less _ 2024 and 2025. —— the growth outlook is less weak— 2024 and 2025. —— the growth outlook is less weak than in the recent projections. —— the growth is

expected _ projections. —— the growth is expected this year and three quarters _ expected this year and three quarters of a percent in 2024 and 2025 _ quarters of a percent in 2024 and 2025. consumer confidence is at its highest _ 2025. consumer confidence is at its highest level for a year. households in march _ highest level for a year. households in march were more optimistic about the generat— in march were more optimistic about the general economic situation than in the _ the general economic situation than in the previous survey last september. our network of agents is reported _ september. our network of agents is reported activity has been stronger recently— reported activity has been stronger recently than contacts previously expected. above all, the improvement and outlook— expected. above all, the improvement and outlook reflects a further fall in wholesale gas prices reversing some _ in wholesale gas prices reversing some of— in wholesale gas prices reversing some of the terms of trade shock that has— some of the terms of trade shock that has been the primary cause of failing _ that has been the primary cause of failing reat— that has been the primary cause of falling real incomes. but there has also been — falling real incomes. but there has also been greater resilience in the economy— also been greater resilience in the economy than we expected. as seen in strong _ economy than we expected. as seen in strong employment numbers. fiscal policy— strong employment numbers. fiscal policy is _ strong employment numbers. fiscal policy is also expected to boost gdp to build _ policy is also expected to boost gdp to build to _ policy is also expected to boost gdp to build to a peak impact of around half a _ to build to a peak impact of around half a percent. temporary 100%

capitat— half a percent. temporary 100% capital allowances for qualifying business investment and measures aimed _ business investment and measures aimed at— business investment and measures aimed at increasing labour market participation seem to have positive effects _ participation seem to have positive effects on — participation seem to have positive effects on potential supply. the outlook — effects on potential supply. the outlook for inflation. annual consumer price inflation is come down _ consumer price inflation is come down from — consumer price inflation is come down from a peak of 11.1% in october last year— down from a peak of 11.1% in october last year but — down from a peak of 11.1% in october last year but remains very high. the latest _ last year but remains very high. the latest figure of 10.1% for march were _ latest figure of 10.1% for march were 0.8% than we expected at the time of— were 0.8% than we expected at the time of the — were 0.8% than we expected at the time of the february report. —— 0.8% higher _ time of the february report. —— 0.8% higher food— time of the february report. —— 0.8% higher. food inflation has been particularly high reaching 19.1% and this particularly high reaching19.1% and this is— particularly high reaching19.1% and this is not— particularly high reaching 19.1% and this is notjust happening here in the uk — this is notjust happening here in the uk. food inflation rates are similar— the uk. food inflation rates are similar across europe. we are acutely— similar across europe. we are acutely aware of a difficult this rising — acutely aware of a difficult this rising food prices is for people and especially— rising food prices is for people and especially those on lower incomes.

we do _ especially those on lower incomes. we do see — especially those on lower incomes. we do see food price inflation will start to _ we do see food price inflation will start to slow. global prices of wholesale agricultural commodities have come down since spring last year and — have come down since spring last year and food producer prices indices — year and food producer prices indices have eased in recent months. evidence _ indices have eased in recent months. evidence suggests food producers expect— evidence suggests food producers expect production cost a moderate. white _ expect production cost a moderate. while this— expect production cost a moderate. while this may take longer than purposely thought we expect this to feed through to consumer food inftation — feed through to consumer food inflation over the next year. we have _ inflation over the next year. we have good — inflation over the next year. we have good reasons to expect headline inftation _ have good reasons to expect headline inflation to _ have good reasons to expect headline inflation to fall sharply from april as last _ inflation to fall sharply from april as last years large energy price rises _ as last years large energy price rises start— as last years large energy price rises start to drop out of calculations. in the march release the prices — calculations. in the march release the prices of electricity and gas and other— the prices of electricity and gas and other fuels were more than 85% higher— and other fuels were more than 85% higher than— and other fuels were more than 85% higher than a and other fuels were more than 85% higherthan a year and other fuels were more than 85% higher than a year ago contributing more _ higher than a year ago contributing more than — higher than a year ago contributing more than three percentage points to headline _ more than three percentage points to headline inflation. that contribution is likely to drop significantly one percentage point

in aprit— significantly one percentage point in aprit as — significantly one percentage point in april as large increases in energy— in april as large increases in energy prices from a year ago drop out of— energy prices from a year ago drop out of the — energy prices from a year ago drop out of the end of year calculations. looking _ out of the end of year calculations. looking ahead to the end of the year the contribution should fall further _ the contribution should fall further. the level of the typical household energy bill is on the left and the _ household energy bill is on the left and the direct conservation of energy— and the direct conservation of energy to _ and the direct conservation of energy to inflation on the right. in the fourth — energy to inflation on the right. in the fourth quarter of this year if energy— the fourth quarter of this year if energy prices evolve as financial market — energy prices evolve as financial market prices now suggest we can expect— market prices now suggest we can expect the — market prices now suggest we can expect the typical household energy bill expect the typical household energy bitt to— expect the typical household energy bill to around £2100. that's still hi-h bill to around £2100. that's still high number but it is about 16% lower— high number but it is about 16% lower than the level a year before that when — lower than the level a year before that when the government energy price _ that when the government energy price guarantee was put in place. since _ price guarantee was put in place. since energy makes up around 5% of the consumer price index that fall in price _ the consumer price index that fall in price of— the consumer price index that fall in price of electricity and gas and other— in price of electricity and gas and other fuels— in price of electricity and gas and other fuels translates into a contribution to overall inflation from _ contribution to overall inflation from energy of —1 percentage point

towards _ from energy of —1 percentage point towards the end of the year indicated in the chart on the right hand _ indicated in the chart on the right hand side — indicated in the chart on the right hand side. it is not least for this recent— hand side. it is not least for this recent consumer price inflation is on course — recent consumer price inflation is on course to have the end of this year _ on course to have the end of this year. though to be very clear our target _ year. though to be very clear our target is — year. though to be very clear our target is sustainable return of inflation — target is sustainable return of inflation of 2.2% which is what we focus _ inflation of 2.2% which is what we focus on — inflation of 2.2% which is what we focus on. we also have to look carefully — focus on. we also have to look carefully at other components of the consumer— carefully at other components of the consumer price index, core inflation which _ consumer price index, core inflation which excludes energy and food prices _ which excludes energy and food prices driven by items that can have more _ prices driven by items that can have more inflationary dynamics. the upside _ more inflationary dynamics. the upside news on inflation since february— upside news on inflation since february has been predominantly to headline _ february has been predominantly to headline inflation rather than core inflation _ headline inflation rather than core inflation but we still need to work out of— inflation but we still need to work out of the — inflation but we still need to work out of the effect on persistence. core _ out of the effect on persistence. core inflation is also elevated. some — core inflation is also elevated. some of— core inflation is also elevated. some of the strength and core inflation — some of the strength and core inflation reflects the indirect effects — inflation reflects the indirect effects of higher energy prices. but it also— effects of higher energy prices. but it also reflects second—round effects — it also reflects second—round effects as external shocks we have seen interact with the state of the

domestic— seen interact with the state of the domestic economy. as headline inftation — domestic economy. as headline inflation falls the second round effects — inflation falls the second round effects are as unlikely to go away as quickly— effects are as unlikely to go away as quickly as they appeared. the mpc judges _ as quickly as they appeared. the mpc judges that is important in a cemetery in inflationary dynamics this is— cemetery in inflationary dynamics this is why— cemetery in inflationary dynamics this is why even as headline inftation _ this is why even as headline inflation comes down the mpc pays particular— inflation comes down the mpc pays particular attention to indicators of inflation persistence such as tabour— of inflation persistence such as labour market tightness and wage growth _ labour market tightness and wage growth in — labour market tightness and wage growth in services inflation. since the february report the news on these _ the february report the news on these indicators has been mixed. some _ these indicators has been mixed. some signs the labour market is listening — some signs the labour market is listening a — some signs the labour market is listening a little at a slower pace than we — listening a little at a slower pace than we expected in february but nevertheless remains tight. employment growth has been partially met ipv— employment growth has been partially met by an _ employment growth has been partially met by an increase in labour market participation especially amongst younger— participation especially amongst younger people. the number of vacancies— younger people. the number of vacancies is come down from the very hi-h vacancies is come down from the very high levels _ vacancies is come down from the very high levels as well the ratio of

vacancies— high levels as well the ratio of vacancies to unemployment has fallen as a result _ vacancies to unemployment has fallen as a result. similarlyjob tojob throws — as a result. similarlyjob tojob throws have declined a little. —— ftoors~ _ throws have declined a little. —— floors. recruitment difficulties have _ floors. recruitment difficulties have eased in recent months. employees and moving jobs less frequently and employers getting more _ frequently and employers getting more applications. nominal pay growth — more applications. nominal pay growth is — more applications. nominal pay growth is shown in chart six and that is— growth is shown in chart six and that is fallen slightly in line with the projections in february. indicators such as hmrc payroll indicator— indicators such as hmrc payroll indicator and kpmg salaries index so it could _ indicator and kpmg salaries index so it could ease later this year. meanwhile service price inflation in chart— meanwhile service price inflation in chart seven remains elevated is expected — chart seven remains elevated is expected in the february report.

this may— expected in the february report. this may reflect rebuilding of margin— this may reflect rebuilding of margin such as wage growth and effects— margin such as wage growth and effects of— margin such as wage growth and effects of higher energy and other import— effects of higher energy and other import costs. the extent to which firms _ import costs. the extent to which firms pass — import costs. the extent to which firms pass on these costs will influence _ firms pass on these costs will influence the rate at which it declined _ influence the rate at which it declined. while cpi inflation is expected to fall quite sharply as energy— expected to fall quite sharply as energy costs begin to ease albeit at a somewhat sore layback slower pace than projected in february the outlook— than projected in february the outlook for inflation is uncertain and depends on the extent of persistence and wage and price setting — persistence and wage and price setting. as shown in chart eight in the mpc_ setting. as shown in chart eight in the mpc baseline model projection conditional on market employed path bank rate _ conditional on market employed path bank rate which peaks in the fourth quarter— bank rate which peaks in the fourth quarter of— bank rate which peaks in the fourth quarter of the year an increasing degree _ quarter of the year an increasing degree of— quarter of the year an increasing degree of economic slack combined with external pressures lead inftation _ with external pressures lead inflation to fall materially below the 2% — inflation to fall materially below the 2% target in the medium term.

the committee continues tojudge the risks to _ the committee continues tojudge the risks to inflation is skewed significantly to the upside primarily reflecting the possibility of more _ primarily reflecting the possibility of more persistence in domestic wage and price _ of more persistence in domestic wage and price setting. we think the unwinding of second round effects may take — unwinding of second round effects may take longer than it did for them to emerge — may take longer than it did for them to emerge. the current circumstances are so— to emerge. the current circumstances are so unusual it is hard to be precise — are so unusual it is hard to be precise about the extent of this asymmetry so we have not made it part of— asymmetry so we have not made it part of our— asymmetry so we have not made it part of our baseline model projection. nevertheless the mpc judges _ projection. nevertheless the mpc judges relative to their baseline projection of significant declines in inflation to levels below target the remains material upside risks over the — the remains material upside risks over the medium term. reflecting thosem _ over the medium term. reflecting those... ,., ., over the medium term. reflecting those... ., . over the medium term. reflecting those... ., ~ , those... the governor andrew bailey. we are now — those... the governor andrew bailey. we are now going _ those... the governor andrew bailey. we are now going live _ those... the governor andrew bailey. we are now going live to _ those... the governor andrew bailey. we are now going live to the - those... the governor andrew bailey. we are now going live to the house i we are now going live to the house of commons where the defence secretary ben wallace is speaking.

he is giving some details about what the uk is doing in terms of military equipment is giving to ukraine. the doing in terms of military equipment is giving to ukraine.— is giving to ukraine. the hypocrisy of claiming _ is giving to ukraine. the hypocrisy of claiming victory _ is giving to ukraine. the hypocrisy of claiming victory while _ is giving to ukraine. the hypocrisy of claiming victory while waging i is giving to ukraine. the hypocrisy of claiming victory while waging a | of claiming victory while waging a war of the one choosing and the reality this is a war of president putin choosing and the uk stands for values of freedom and human rights and the protection of civilians who will stand side by side with ukraine and continue to support them in defence of the southern country stop i commend the statement to the house. ~ ., ., house. we are united in our determination _ house. we are united in our determination to _ house. we are united in our determination to help - house. we are united in our determination to help in - house. we are united in ourj determination to help in the house. we are united in our- determination to help in the defence of ukraine _ determination to help in the defence of ukraine and our shared values. i welcome _ of ukraine and our shared values. i welcome the defence secretary statement. as for statement to the house _ statement. as for statement to the house on _ statement. as for statement to the house on ukraine since january and the first— house on ukraine since january and the first announcement of new weapons — the first announcement of new weapons to ukraine since february. we welcome this vital new military

support— we welcome this vital new military support as — we welcome this vital new military support as the ukrainians prepare for their— support as the ukrainians prepare for their expected counteroffensive. speaking _ for their expected counteroffensive. speaking in the hague last week president zelensky said we are not attacking _ president zelensky said we are not attacking either putin our moscow, we are _ attacking either putin our moscow, we are fighting on a raw territory, defending — we are fighting on a raw territory, defending a villages sometimes and announcement today of uk storm shadow— announcement today of uk storm shadow missiles will strengthen ukraine's fight to repel the russian forces _ ukraine's fight to repel the russian forces and — ukraine's fight to repel the russian forces and defend against the brutal attacks _ forces and defend against the brutal attacks the defence secretary has spelt attacks the defence secretary has spett out~ — attacks the defence secretary has spelt out. —— defending our own territorv. — spelt out. —— defending our own territory, defending our villages. white _ territory, defending our villages. while other nato allies follow with similar— while other nato allies follow with similar support? it was six months a-o similar support? it was six months ago as— similar support? it was six months ago as the — similar support? it was six months ago as the defence secretary has said when— ago as the defence secretary has said when he told the souse was

open—minded to sending longer range missites _ open—minded to sending longer range missiles and three months ago and february— missiles and three months ago and february the prime minister said the uk witt— february the prime minister said the uk will be _ february the prime minister said the uk will be the first country to provide — uk will be the first country to provide ukraine with longer range missiles — provide ukraine with longer range missiles. as i asked in my urgent question— missiles. as i asked in my urgent question two weeks ago, why has this taken _ question two weeks ago, why has this taken so _ question two weeks ago, why has this taken so long? ukraine needs all military— taken so long? ukraine needs all military aid on the front line now. president — military aid on the front line now. president zelensky said last night, not everything has arrived yet. we expect _ not everything has arrived yet. we expect armoured vehicles. have all the ten _ expect armoured vehicles. have all the ten types of uk armoured vehictes — the ten types of uk armoured vehicles pledged to ukraine now been delivered _ vehicles pledged to ukraine now been delivered into ukraine? the defence secretary— delivered into ukraine? the defence secretary is right, putin proclaimed in the _ secretary is right, putin proclaimed in the victory day parade in moscow this week, _ in the victory day parade in moscow this week, here is to our victory, he said. — this week, here is to our victory, he said, when he cannot disguise and distract— he said, when he cannot disguise and distract from — he said, when he cannot disguise and distract from his failure in

ukraine _ distract from his failure in ukraine. despite this, russia is farm _ ukraine. despite this, russia is farm from — ukraine. despite this, russia is farm from a spent military force in the next _ farm from a spent military force in the next few weeks and few months will be _ the next few weeks and few months will be critical. i am really proud of british— will be critical. i am really proud of british military leadership over the last— of british military leadership over the last year on ukraine and i want in six— the last year on ukraine and i want in six months' time to be able to say the — in six months' time to be able to say the same. we want the uk momentum for ukraine to be maintained and accelerated. when will we _ maintained and accelerated. when will we see the 2023 action plan for your claim — will we see the 2023 action plan for your claim -- — will we see the 2023 action plan for your claim —— ukraine watch the defence — your claim —— ukraine watch the defence secretary promised last august? — the uk as to deliver long wage storm shadow missiles to ukraine. —— long range. back to the bank of england.

more detail on the news conference on the thinking behind the decision to raise interest rates from 4.25% to raise interest rates from 4.25% to 4.5%. they are ticking questions. i refer to a lot of the shops in my opening remarks. —— ticking questions. —— shocks. it is the test of this regime how we deal with them and how we do turn inflation back to target. i think you can look at that from two lenses, one what is causing the shock and how they and how do we deal with them in terms of inflation target? it is the intent of the regime we have sustainable inflation over the medium term. that is what we are doing, we have to adjust from

meeting to meeting as we see news and i will pick on one piece of news you mention. on food prices, there is a very big underlying shop in food —— shock in food prices going on in europe as a whole. i think the news we have had is not about persistence in the sense of long run persistence, it is the question of how over what time this shock works its way through the system. and how quickly we expect that to dissipate. i hear it's around the country since we were last year an expectation we will see a reduction in food inflation and we have already seen some of that. it is taking longer and the reasons i hearfor this are sometimes to do with the impact of

energy prices and production and hedging processes used and although commodity prices started to fall last year it has taken longer to come through. i'm happy to debate how much of that is bootable and how much emerging but those are the things we have to deal with and for devices as we see new evidence. following up on that, this is the biggest — following up on that, this is the biggest upgrade to your growth forecast, what would you say to people — forecast, what would you say to people that in the past the bank of england _ people that in the past the bank of england has been too gloomy? on the food prices, _ england has been too gloomy? on the food prices, given the work you have done _ food prices, given the work you have done on _ food prices, given the work you have done on price setting behaviour and how it _ done on price setting behaviour and how it has _ done on price setting behaviour and how it has changed, do you think supermarkets have been as quick to cut prices— supermarkets have been as quick to cut prices as — supermarkets have been as quick to cut prices as raising them? en

supermarkets have been as quick to cut prices as raising them?- cut prices as raising them? en an u ward cut prices as raising them? en an upward revision, _ cut prices as raising them? en an upward revision, if— cut prices as raising them? en an upward revision, if you _ cut prices as raising them? en an upward revision, if you look - cut prices as raising them? en an upward revision, if you look at i cut prices as raising them? en an i upward revision, if you look at what has happened, i will take you back to when we started in november, there has been a very substantial fall in energy prices and the biggest loser very substantial fall in gas prices which is fed through in gas prices which is fed through in a positive way so we take that on board and it was not anticipated. in early november we were looking at the prospect of a very difficult winter. some probability europe would experience periods where gas supply should be restricted and it all looked bleak and that was reflected in pricing and that has turned out not to be as bad as expected so that is one piece of news. second piece of news is we have at this time taken on board the measures introduced in the project has happened since february and that has happened since february and that has a positive effect on the year or

so ahead and thirdly global conditions have improved, the impact of china ending its zero covid policy has been much more muted than many people expected and fourthly the economy has turned out to be much more resilient than the expected so all of those things come together and it is appropriately revised. slightly to put a downer on its for a moment it is a very big upward revision but that level of growth is still weak, let's be honest. we have to look at change and level here. on supermarkets, i don't want to comment on sectors because we don't have what i would call consistent data. i would say in the aggregate data, and this chart

was published this morning which is when we have as well, the aggregate position for the uk as a whole which doesn't tell the same story that the similar similar chart the ecb has published for the european area so not the same picture in terms of contributions. the not the same picture in terms of contributions.— not the same picture in terms of contributions. the aggregate chart shows no increasing _ contributions. the aggregate chart shows no increasing profit - contributions. the aggregate chart shows no increasing profit share i contributions. the aggregate chartj shows no increasing profit share of national _ shows no increasing profit share of national income. on the general nature _ national income. on the general nature of— national income. on the general nature of forecast, these are conditional forecasts so when the conditions — conditional forecasts so when the conditions change the forecasts change — conditions change the forecasts change may be other forecast change for other— change may be other forecast change for other reasons for this is a big one _ for other reasons for this is a big one last — for other reasons for this is a big one. last august gas prices were close — one. last august gas prices were close to _ one. last august gas prices were close to £500 and now are 80. what that means —

close to £500 and now are 80. what that means is looking forward to household energy bills are now over 4% of— household energy bills are now over 4% of income lower projected than in the august— 4% of income lower projected than in the august forecast. partly because we assume that those prices would remain— we assume that those prices would remain a _ we assume that those prices would remain a not come down, that is a huge _ remain a not come down, that is a huge change — remain a not come down, that is a huge change in the conditioning assumption in a big boost to the economy— assumption in a big boost to the economy and i think why we have seen growth _ economy and i think why we have seen growth improved significantly in europe, — growth improved significantly in europe, continental europe as well. the timing — europe, continental europe as well. the timing of that turn here and in the euro— the timing of that turn here and in the euro area was when wholesale energy— the euro area was when wholesale energy prices started to decline and the trough — energy prices started to decline and the trough for september and october and high _ the trough for september and october and high pressure under pmi is and you did _ and high pressure under pmi is and you did not — and high pressure under pmi is and you did not see the same in the united — you did not see the same in the united states so this is a big reason — united states so this is a big reason for the change and growth both in— reason for the change and growth both in the — reason for the change and growth both in the data and in the forecast _ both in the data and in the forecast. another conditioning assumption that is different in august— assumption that is different in august and november compare to know is the market path of interest rates

is the market path of interest rates is also _ is the market path of interest rates is also lower. one should remember the conditional nature of the forecast _ the conditional nature of the forecast. if the conditional nature of the forecast. .., , the conditional nature of the forecast. , , , forecast. ifi can put some numbers to the point— forecast. ifi can put some numbers to the point by _ forecast. ifi can put some numbers to the point by andrew, _ forecast. ifi can put some numbers to the point by andrew, we - forecast. ifi can put some numbers to the point by andrew, we are - to the point by andrew, we are forecasting growth of 1/4% annual average this year, 3/4% next year. that is up from february when we had two negatives so we had moved from -1/2 this two negatives so we had moved from —1/2 this year and —1/4 of next year to two small positives and that reflects that we have consistently stressed the economy has been hit by negative shocks. what has happened to energy prices recently as a positive shock for the global and uk economies. we have also seen as forecasting unemployment staying at below 4% this year and we are

beginning to see some improvement on an activity, another negative shock we called out. it is more concentrated on students at the moment these are positive underlying developments but they are against a backdrop of still relatively weak growth compared to historically. it is that kind of context which has enabled us to rise our projections. energy prices have fallen but should inftation _ energy prices have fallen but should inflation forecast is higher. you have _ inflation forecast is higher. you have repeatedly underestimated how far growth would go and markets have been right— far growth would go and markets have been right and you have not, is that a fair— been right and you have not, is that a fair take _ been right and you have not, is that a fairtake on— been right and you have not, is that a fair take on it? been right and you have not, is that a fairtake on it? in been right and you have not, is that a fair take on it? in november you said rates— a fair take on it? in november you said rates would... and the other point _ said rates would... and the other

point 5% — said rates would... and the other point 5% at — said rates would... and the other point 5% at the end of this year and 1% point 5% at the end of this year and t% at _ point 5% at the end of this year and t% at the _ point 5% at the end of this year and 1% at the end of the two year forecast~ _ 1% at the end of the two year forecast. do we need to do more or less on— forecast. do we need to do more or less on rates? can forecast. do we need to do more or less on rates?— forecast. do we need to do more or less on rates? can i take the second ruestion less on rates? can i take the second question first? _ less on rates? can i take the second question first? i _ less on rates? can i take the second question first? i think— less on rates? can i take the second question first? i think it _ less on rates? can i take the second question first? i think it is _ less on rates? can i take the second question first? i think it is a - less on rates? can i take the second question first? i think it is a very - question first? i think it is a very important point. we have been very clear and in the guidance repeated the language we used on the committee in march that we would be guided by the evidence. i want to be very clear on this. we are not giving what i would call directional sphere on rates today as we did last time, we will be guided by the evidence. that is very important. we have repeated the point we made before that if we see further signs of greater persistence, we would have to act that goes back to what ben said. that is a conditional statement. in other words,

ben said. that is a conditional statement. in otherwords, it ben said. that is a conditional statement. in other words, it states the conditions under which we would have to act but we are not giving any statements, we are given evidence driven on this point. the news we have had on inflation, and inflation is just news we have had on inflation, and inflation isjust under news we have had on inflation, and inflation is just under 1% news we have had on inflation, and inflation isjust under 1% higher than we expected it to be in february, it's interesting that difference is not really about the persistent element of inflation so if you look at services and look at wages and remuneration they are pretty much on track and the news is mainly, certainly food inflation has been more persistent than we thought it would be and i would repeat the point made earlier. it appears to be

taking longerforfull point made earlier. it appears to be taking longer for full price pressures to work their way through the system this time as we expected but these are very unusual times. the models have to be treated with caution here because the transmission of these short of —— sort of shocks is uncertain. taste transmission of these short of -- sort of shocks is uncertain. we have a market break— sort of shocks is uncertain. we have a market break even _ sort of shocks is uncertain. we have a market break even rate _ sort of shocks is uncertain. we have a market break even rate for - sort of shocks is uncertain. we have a market break even rate for rpi - a market break even rate for rpi inflation — a market break even rate for rpi inflation which a couple of years a-o inflation which a couple of years ago was — inflation which a couple of years ago was not predicting 10%. i thought— ago was not predicting 10%. i thought you meant.... he talked about— thought you meant.... he talked about inflation. —— you talked about inflation _ about inflation. —— you talked about inflation. let's deal with the inflation _ inflation. let's deal with the inflation. we don't predict interest rates _ inflation. we don't predict interest rates so _ inflation. we don't predict interest rates so l'm — inflation. we don't predict interest rates so i'm not sure where that comes— rates so i'm not sure where that comes from _ rates so i'm not sure where that comes from but inflation, the markets _ comes from but inflation, the markets were not expected to have 10% inflation two years ago at this

point _ 10% inflation two years ago at this point i_ 10% inflation two years ago at this point. i want to mention something of context— point. i want to mention something of context to the question from eddie — of context to the question from eddie ~— of context to the question from eddie. . the rices we had last year were _ eddie. . the rices we had last year were enormous. —— ed. we eddie. . the rices we had last year were enormous. -- ed.— eddie. . the rices we had last year were enormous. -- ed. we heard from the governor — were enormous. -- ed. we heard from the governor of — were enormous. -- ed. we heard from the governor of the _ were enormous. -- ed. we heard from the governor of the bank _ were enormous. -- ed. we heard from the governor of the bank of _ were enormous. -- ed. we heard from the governor of the bank of england i the governor of the bank of england it's winning the decision to raise interest rates for the 12th time in a row to 4.5% sing inflation remains too high and they have to get it done because a low stable inflation rate is a foundation of stable economy and they have to stay the course until it falls back to 2%_ we have been getting political reaction and the shadow chancellor rachel reeves has been saying she is very critical of this interest rates rise stop critical of this interest rates rise sto ; ., ._ , critical of this interest rates rise sto_ ., ., , , ., critical of this interest rates rise sto_ ., , ., ., ., stop today will be a day of great anxiety for _ stop today will be a day of great anxiety for many _ stop today will be a day of great anxiety for many families - stop today will be a day of great anxiety for many families and i anxiety for many families and businesses around the country who face the 12th increase in interest

rates and just a matter of months. that means higher mortgage costs and already people have paid £1 billion more in mortgage repayments compare to where they would have been six months ago. to where they would have been six months ago-— months ago. this is something affectina months ago. this is something affecting the — months ago. this is something affecting the whole _ months ago. this is something affecting the whole world - months ago. this is something affecting the whole world and l months ago. this is something - affecting the whole world and europe thatis affecting the whole world and europe that is what the bank of england said and you try to pin it all on the government, these would have happened anyway. the the government, these would have happened anyway-— the government, these would have happened anyway. the uk is forecast to have the weakest _ happened anyway. the uk is forecast to have the weakest growth - happened anyway. the uk is forecast to have the weakest growth and - to have the weakest growth and highest inflation in the g7 this year so of course that our global factors involved that the fact here in britain we have been uniquely exposed to the prices.— in britain we have been uniquely exposed to the prices. rachel reeves talkin: to exposed to the prices. rachel reeves talking to our — exposed to the prices. rachel reeves talking to our economics _ exposed to the prices. rachel reeves talking to our economics editor. - exposed to the prices. rachel reeves talking to our economics editor. at i talking to our economics editor. at two o'clock this afternoon on the bbc news website a cost of living expert will answer your questions about interest rates so do get in touch and share with us how you are being affected and you can e—mail.

you can get in touch via whatsapp. for the 12th time in a row. rates go up by 0.25% to 4.5% in an attempt to slow price rises. the bank's governor gave this assessment. energy prices have fallen from their peaks and that will now start to come through as lower inflation. food price inflation should ease too, though we can be less sure about this on timing. we'll be looking at what the rate rise means for homeowners, savers and businesses. also this lunchtime: after months of customer complaints and cancelled trains, transpennine express is to be nationalised. stephen tompkinson is found not guilty after a man claimed he was punched outside the actor's home.