we can confirm that that question, we can confirm that exactly what has just happened. the bank of england, your crystal ball was right, 5.25%. the bank has raised those rates. can you explain to us why they do this? the raised those rates. can you explain to us why they do this?— to us why they do this? the idea is when inflation _ to us why they do this? the idea is when inflation is _ to us why they do this? the idea is when inflation is due _ to us why they do this? the idea is when inflation is due to _ to us why they do this? the idea is when inflation is due to an - when inflation is due to an overheating of the economy, too much demand, when interest rates increase you come down the credit channel and extend the banks, the monetary system extends less credit to the economy and that reduces the demand and should reduce price pressures. remember the bank of england has this mandate of keeping inflation around or below 2% and so that's why banks basically increase interest rates to calm down a credit channel and demand falls.— and demand falls. others criticise theirs, economists _ and demand falls. others criticise theirs, economists saying - and demand falls. others criticise theirs, economists saying they i theirs, economists saying they should have waited for previous rate rises to take effect before taking

action like this.— action like this. yes, it's very difficult for _ action like this. yes, it's very difficult for this _ action like this. yes, it's very difficult for this situation - action like this. yes, it's very difficult for this situation is l action like this. yes, it's very i difficult for this situation is very special because the transmission of monetary policy is very slow. mostly because they are fixed interest rate mortgages for example but also because people have a lot of excess savings from covid because they were transferred to people to go through the pandemic, also to calm down the energy crisis, so this time it's different. i don't like this phrase but i would say this is why there is a dogmatic divide between those who say don't wait for a policy mistake, don't hide too much, because things can be strong and we can go into recession and others say inflation is far too high and this is the cost of living crisis to the middle income people so we need to increase interest rates to get inflation back into the 2%. that's why it's a very heated political debate. remember, the uk group called for a general election and don't want to have a recession before the general election because it can polarise

society. election because it can polarise socie . ., �* election because it can polarise socie . ,, ., , ., society. you're speaking to us from munich. society. you're speaking to us from munich- can _ society. you're speaking to us from munich- can you — society. you're speaking to us from munich. can you explain _ society. you're speaking to us from munich. can you explain how- society. you're speaking to us from munich. can you explain how much| society. you're speaking to us from i munich. can you explain how much on what is happening with inflation globally is because of international elements and here in the uk how much of it will be domestic? in elements and here in the uk how much of it will be domestic?— of it will be domestic? in the us, for example. _ of it will be domestic? in the us, for example, we _ of it will be domestic? in the us, for example, we say _ of it will be domestic? in the us, for example, we say that - of it will be domestic? in the us, for example, we say that one - of it will be domestic? in the us, . for example, we say that one surges related to disruptions, the reopening post covid and two thirds are more domestic because there was massive stimuli into the economy to protect income and divide a 2009 crisis. in europe, it's the reverse, two thirds imported, a wore two hours away from us, and that's created a major energy shock and disruption. one surges i would say overheated demands. in the uk, it's 50-50. the uk overheated demands. in the uk, it's 50—50. the uk has somehow imported inflation due to brexit but also due to the trade friction and the energy shock which has been very strong on

the uk family economies and also overheated demand, the fact income has been protected and somehow a lot of people are consuming savings in the service sector, hospitality, leisure, restaurants, hotels and this is why the central bank has a role. it won't help with the price of gasoline at the pump but it could help with the demand for inflation. stay with us because we're talking a lot about what the impact is going to be for people who have mortgages particularly, and we get more not in a moment but what about this decision by the bank of england and how it's going to affect businesses here the uk? let's bring in our business reporter david waddell. what would be the main impact for businesses?— what would be the main impact for businesses? _ ., , ., , ., businesses? lucy, would you repeat the question. _ businesses? lucy, would you repeat the question, please? _ businesses? lucy, would you repeat the question, please? the - businesses? lucy, would you repeat the question, please? the rate - businesses? lucy, would you repeat the question, please? the rate rise| the question, please? the rate rise we 'ust the question, please? the rate rise we just seen. _ the question, please? the rate rise we just seen, david, _ the question, please? the rate rise we just seen, david, and _ the question, please? the rate rise wejust seen, david, and how- the question, please? the rate rise wejust seen, david, and how it- the question, please? the rate risej wejust seen, david, and how it will affect businesses.—

affect businesses. yes, we've been heafina affect businesses. yes, we've been hearin: a affect businesses. yes, we've been hearing a lot _ affect businesses. yes, we've been hearing a lot about _ affect businesses. yes, we've been hearing a lot about mortgage - affect businesses. yes, we've been l hearing a lot about mortgage holders and homeowners and renters and the impact on businesses is significant because the increase in interest rates often means that businesses will pay more on their debt, some businesses i may be in need of loans and can't get them because of new lending criteria or the fact that simply the debt they would like to take on is unaffordable. so that's the challenge. there is another challenge that's more indirect and thatis challenge that's more indirect and that is that as the economy more constricted, as consumers and other businesses are able to spend less, then those businesses that serve consumers directly or is that businesses which are also suffering the challenges the economy faces, they are taking less money. demand on the economy fails and as that happens, so too businesses suffer so that the impact on businesses from rising interest rates. a lot of this is actually intended that the

economy suffers the cost of rising interest rates and that supposed to manage inflation.— manage inflation. david, thanks so much. good to have you with us as we talk live about the bank of england raising interest rates. wejust live about the bank of england raising interest rates. we just head it's 5.25%. straight to the bank of england. our economics editor, faisal islam, is there. take you through what we have heard and what this will mean for people here in the uk.— here in the uk. yes, it's as exnected — here in the uk. yes, it's as exnected in _ here in the uk. yes, it's as expected in the _ here in the uk. yes, it's as expected in the markets, l here in the uk. yes, it's as| expected in the markets, so here in the uk. yes, it's as - expected in the markets, so fair that rises in interest rates are here at the bank of england, 5.25%. the 14 consecutive rise taking us back up to a 15 year high, around the time of the great financial crisis. the point of this, we got the message through from the bank of

england governor, andrew bailey, saying inflation is falling which is good news, and that's why we have raised rates to 5.25% but they need to make sure it falls away back to the 2% target. what we are seeing here is something more than just the deeds, which is the further rise in interest rates, lots of interesting words in the bank of england. we haven't heard these words before. they say that they will keep the bank rate at a sufficiently restrictive level for sufficiently long to keep inflation down. they haven't said that before. there is a clear indication i think of two things, firstly, any assumption out there in the market or in particular amongst households in the uk that as inflation has gone up interest rates have gone up and therefore the reverse must be true, they are trying to sort of nip that in the bud and it could well be that inflation, interest rates above 5% stay there now for the next year or so into 2025, new language from the

bank, trying to guide people. but also it implicitly suggests we are quite close to the peak in interest rates. some in the markets in the last month or so thought they would go above 6%. that seems to be an indication in the words from the bank of england but that's not going to happen. if everything remains equal. there was a debate on the bank of england committee, a split three ways are six members of the 9—member committee voted for this quarter point rise, another two said it should have been half a percentage point and one said no. that reflects the notion that we are at eight tricky moment, judgments are quite fine right now. up until this point it was obvious that interest rates were too low, emergency post—financial crisis, post—pandemic levels, and we need to get back to normal at around 5%. now thejudgment is more get back to normal at around 5%. now the judgment is more fine tuned. we got to wait for the impact of rate rises have already had to come

across the economy. there are many fixed—rate mortgages in the uk that mean that that pathway is a little bit more silted up than it has been in the past. they got the pain from rate rises, the slowing of the economy may take a little bit longer, so we wait for that impact but also that key message as i said from the bank, don't expect these rates at this level to come down sharply over the next couple of years. they've also released their forecast for the economy and while we have near—term good news that the uk has avoided a recession and is likely to avoid one this year, they've downgraded their forecasts for 2024 and 2025 quite sharply although don't they predict we will be in a recession the shadow of that risk will remain into 2025, as the impact of these higher rates affect the whole economy. we are already seeing impacts on the housing market, impact in terms of rising levels of insolvencies, so there is pain in the economy which is part of

the point of this moves to drain spending powerfor the the point of this moves to drain spending power for the economy and they say it's because they want inflation rates to come down to 2% and remain sustainable. they say things are starting to work and more medicine is required but we may be able to leave it at these sorts of levels for a year or so to come. given that not all economists even agree they should have been a rate rise at all, how delicate is that balancing act?— rise at all, how delicate is that balancing act? yes, you're right, the peeple _ balancing act? yes, you're right, the peeple at — balancing act? yes, you're right, the people at the _ balancing act? yes, you're right, the people at the bank— balancing act? yes, you're right, the people at the bank of- balancing act? yes, you're right, l the people at the bank of england balancing act? yes, you're right, - the people at the bank of england on that committee didn't agree, one member thought they shouldn't have been a rate rise, so as i said, to move from around 0% a year and have to historically normal levels of around 5%, that was may be the easy part in terms of the shift in interest rates. the fine tuning of where you go from now is why you've got this nuanced and subtle message, new language from the bank of england about rates staying where

they are for some time to come and notjust coming straight back down again once inflation falls back sustainably to target. that is an attempt i think at a meeting this nuanced moment of sending a message that yes, they want to bear down on inflationary pressures and some of those pressures have crystallised, but on the other hand, you know, interest rates may well have picked as well. they don't want to unduly put stress on the economy even as it slows, so they're trying to manoeuvre the economy into a soft landing whilst bringing inflation down where it was, ii%, to its target of 2%, and then crucially making it stay at 2% for some time to come. making it stay at 296 for some time to come. ., «a making it stay at 296 for some time to come. . ~', ,., . making it stay at 296 for some time to come. . ,., . ., ., making it stay at 296 for some time to come. . . ., ., . to come. thanks so much for that. we had some reaction _ to come. thanks so much for that. we had some reaction from _ to come. thanks so much for that. we had some reaction from jeremy - to come. thanks so much for that. we had some reaction from jeremy hunt, | had some reaction from jeremy hunt, the chancellor, who says if we stick to the plan the bank forecast for inflation will be below 3% in a

year's time and that's without the economy falling into recession but it doesn't mean to say it easy for families who are facing higher mortgage bills and will continue to do what we can to help households and that's very much the thrust as well from the labour party, the opposition, the shadow chancellor rachel reeves saying this latest rise will be incredibly worrying for households across britain already struggling to make ends meet. the tory mortgage bombshell is hitting families hard but a typical mortgage holder is now paying next £220 a month when they go to remortgage and responsibility for this crisis lies at the door of the conservatives who have crashed the economy. lets talk more about this. let's talk to sally mitchell — a business manager & senior mortgage broker at the mortgage mum. we are getting some political reaction already, sally, but can you take a slew for someone who has a mortgage in this country, what today means? ~ �* , ., mortgage in this country, what today means? ~ �*, ., .,,

mortgage in this country, what today means? ~ �*, ., mortgage in this country, what today means? �*, ., means? well, it's not as bad as was otentiall means? well, it's not as bad as was potentially predicted _ means? well, it's not as bad as was potentially predicted by _ means? well, it's not as bad as was potentially predicted by some. - means? well, it's not as bad as was potentially predicted by some. i'm l potentially predicted by some. i'm not surprised it went up a little bit, not .25 base points. i think staying level at 5% is not going to happen. foranybody staying level at 5% is not going to happen. for anybody on a tracker mortgage or a variable rate mortgage, this is going to hit them really quickly and quite hard. they will see their payments go up pretty much immediately. for anyone on a fixed rate, it doesn't make much difference until it's time to remortgage. unfortunately, we have still got about 1.5 million people coming up to the end of their fixed rates and they fixed that those lovely low levels, covid rates, so we will see the pain being drawn out over the next 18 months or so and we haven't even seen half of the people who will be affected coming forward. it's going to be an interesting 18 months. let's hope that this is

nearly the peak. aha, months. let's hope that this is nearly the peak.— months. let's hope that this is nearly the peak. a lot of people of course don't _ nearly the peak. a lot of people of course don't have _ nearly the peak. a lot of people of course don't have mortgages. - nearly the peak. a lot of people of| course don't have mortgages. they rent their properties. what does it mean for them? {131 rent their properties. what does it mean for them?— rent their properties. what does it mean for them? of course the buy to let market has _ mean for them? of course the buy to let market has been _ mean for them? of course the buy to let market has been just _ mean for them? of course the buy to let market has been just as _ mean for them? of course the buy to let market has been just as much - let market has been just as much affected as a residential so there are landlords out there who are facing much, much higher mortgage payments per month and they are in the business of making money. it's an investment. so we are finding tenants are having those costs passed on to them which is putting extra pressure on their household income obviously and it's also discouraging people from getting into the buy to let market and a lot of landlords are finding that they are having to sell, because itjust doesn't make sense. that means that there is less stock, that means that rent prices increase, so it's a vicious, vicious circle really. thanks so much. let's return to ludovic now. we've got the usa with

the highest rates in 22 years, the ecb also had a record high with their rates but what sally has just said, there is hope here we are coming to the end of this. is that the feeling globally, as well? definitely, i think the worst is behind us when it comes to the tightening, but the problem is the embedded tightening, so i think we haven't seen the effects of it, very abrupt, very strong and, to be fair, quite surprising in a way after years of very low interest rates including through the pandemic so we haven't seen the full impact on the uk to british households. of course it is a question of those exiting their fixed it is a question of those exiting theirfixed mortgage rates and entering more variable rates or what, so this could cost more for an average families imagine the cost of real disposable incomes for families. one point also is the bankruptcy situation. the uk is now at the top of bankruptcy situations,

we expect more than 6000 in the uk, reminding us of 2009. these are places where there is going to be lots of monitoring crucially over the next month in the uk, in europe, in the usa, because these are the numbers that matter to understand what this is doing to the real economy and real people. great to net our economy and real people. great to get your thoughts. _ economy and real people. great to get your thoughts. we _ economy and real people. great to get your thoughts. we are - economy and real people. great to get your thoughts. we are just - get your thoughts. we are just digesting and analysing what this rate rise means bank of england raising interest rates to 5.25%. more coverage on the story throughout the day here on bbc news. welcome to this special edition of your questions answered. we are going to be looking at what the rise in interest rates means. just to

recap for you, the bank of england has raised rates from 5% up to 5.25%. the last time rates were at 5.25%. the last time rates were at 5.25% was april 2008. to help us talk through some of what's going on, i have got a panel with me to answer some of your questions. susie laws is with me, a chartered financial planner and also a property expert and co—founder of the digital platform bricks with tips. great to have you both. we also bejoined by what tips. great to have you both. we also be joined by what correspondent david who will talk us through some of the extra tips that you can use to save money in this time. right, so why don't we get started? we've got lots of questions from our viewers. we'll begin with paul

robinson's question, who says can you explain how food prices will fall because my mortgage payments go up? he's not seeing it all adds up. i don't know if you'd like to with that one? how are food prices falling when mortgage payments are going up? it’s falling when mortgage payments are oiiin u? �*, ., ., falling when mortgage payments are oin u? ., , ., falling when mortgage payments are oiiin u? �*, ., ., , ., ., going up? it's a valid question for the everyday _ going up? it's a valid question for the everyday person _ going up? it's a valid question for the everyday person to _ going up? it's a valid question for| the everyday person to understand because you think might interest rates mortgage payments coming up, how does that link to food? there isn't a direct relationship, but interest rates are being increased to keep the rate of inflation and at the moment rate inflation is really, really high which means the prices of goods and services are increasing really quickly. now, what happens when interest rates go up is that the cost of mortgages, car finance, business loans can all go up, and what tends to happen is that people are more prudent when it comes to decisions like buying a new car, home, and businesses are more prudent and may think twice about taking out a business loan for expansion. what that does is it

takes a lot of money out of the economy and reduces spending and that does actually bring down the rate at which goods and services, the prices, are increasing. food obviously _ the prices, are increasing. food obviously comes _ the prices, are increasing. food obviously comes within - the prices, are increasing. food obviously comes within that. i the prices, are increasing. food obviously comes within that. thank you. that's a great way to explain why the bank is hoping that what they are doing will actually see prices fall. during this period of inflation. this next one is for you, susie. this question came in from michael webber. can you advise when will the banks pass on the interest rates to customers who have mortgages and also customers who have savings accounts, please? this is an interesting question because those two groups are affected quite differently, aren't they? the? those two groups are affected quite differently, aren't they?— differently, aren't they? they are indeed and _ differently, aren't they? they are indeed and it's _ differently, aren't they? they are indeed and it's a _ differently, aren't they? they are indeed and it's a hot _ differently, aren't they? they are indeed and it's a hot topic - differently, aren't they? they are indeed and it's a hot topic at - differently, aren't they? they are indeed and it's a hot topic at the | indeed and it's a hot topic at the moment — indeed and it's a hot topic at the moment. we tend to see that the banks— moment. we tend to see that the banks are — moment. we tend to see that the banks are very, very quick to pass on the _ banks are very, very quick to pass on the increases from mortgage rates to people _ on the increases from mortgage rates to people on tracker deals on standard _ to people on tracker deals on

standard variable deals, but what we tend to _ standard variable deals, but what we tend to see _ standard variable deals, but what we tend to see is a little more inept and i'm — tend to see is a little more inept and i'm passing on increases to savings — and i'm passing on increases to savings rates and this is currently a focus _ savings rates and this is currently a focus of— savings rates and this is currently a focus of government. they are calling _ a focus of government. they are calling on— a focus of government. they are calling on the heads of the banks to explain _ calling on the heads of the banks to explain to— calling on the heads of the banks to explain to them exactly why they are not doing _ explain to them exactly why they are not doing more for savers at the current— not doing more for savers at the current time and there will be political— current time and there will be political pressure for the banks to be seen _ political pressure for the banks to be seen to— political pressure for the banks to be seen to be fair to both parties. what _ be seen to be fair to both parties. what sorts— be seen to be fair to both parties. what sorts of reasons of banks been giving, though, for not passing on these rates to customers who are saving? these rates to customers who are savin ? ~ , these rates to customers who are savini ? ~ , ., these rates to customers who are savini? , ., .,, saving? well, number of factors. one of those things _ saving? well, number of factors. one of those things as _ saving? well, number of factors. one of those things as accuracy. _ saving? well, number of factors. one of those things as accuracy. they - of those things as accuracy. they very much— of those things as accuracy. they very much rely on not checking the rates _ very much rely on not checking the rates their— very much rely on not checking the rates their accounts are on and the banks— rates their accounts are on and the banks offer— rates their accounts are on and the banks offer rates with better savings _ banks offer rates with better savings rates and it's up to the individuals— savings rates and it's up to the individuals to look at what rates are available to them, so they do very much— are available to them, so they do very much rely on people not checking _ very much rely on people not checking and they assume getting the best rates— checking and they assume getting the best rates but often they're not. that's _ best rates but often they're not. that's the — best rates but often they're not. that's the real point for people to check _ that's the real point for people to check. , ., ., that's the real point for people to check. ,., ., ., . �* that's the real point for people to check. ., . ~ , ., check. good advice there. a question here from brian _ check. good advice there. a question here from brian who _ check. good advice there. a question here from brian who says _ check. good advice there. a question here from brian who says when -

check. good advice there. a question here from brian who says when other banks going to raise interest rates for savers in line with numerous increases announced for borrowers? it's a question along similar lines. there was some discussion about whether the rise could be good news for instance for those who are on the cusp of retirement, who might get a better annuity rate? yes. the cusp of retirement, who might get a better annuity rate? yes, so, when it comes _ get a better annuity rate? yes, so, when it comes to _ get a better annuity rate? yes, so, when it comes to the _ get a better annuity rate? yes, so, when it comes to the savings - get a better annuity rate? yes, so, when it comes to the savings rates| when it comes to the savings rates in particular, like wejust discussed, the banks are relying on people to check on what people are experiencing is that because the base rate has been so low for such a long period of time, there's been a lack of competition so people haven't shopped around for interest rates in so many years and that lack of competition doesn't really encourage the banks to increase their rates because people aren't leaving banks, not shopping around for their deals. regarding the annuity rates, there could be light at the end of the tunnel especially for people closer to retirement that

can be good for them hopefully if they increase. i can be good for them hopefully if they increase.— can be good for them hopefully if they increase. i will come to david in a moment _ they increase. i will come to david in a moment but _ they increase. i will come to david in a moment but susie, _ they increase. i will come to david in a moment but susie, if - they increase. i will come to david in a moment but susie, if i - they increase. i will come to david in a moment but susie, if i could l in a moment but susie, if i could just get you to weigh in on this because this interest rate doesn't just affect people but affects the government and have the government borrows? it government and have the government borrows? ., , ., ., borrows? it does, so about one iuarter borrows? it does, so about one quarter of— borrows? it does, so about one quarter of government - borrows? it does, so about one quarter of government debt - borrows? it does, so about one quarter of government debt at| borrows? it does, so about one i quarter of government debt at the moment— quarter of government debt at the moment is— quarter of government debt at the moment is on index linked bases, effectively — moment is on index linked bases, effectively meaning the cost they have to _ effectively meaning the cost they have to pay and that goes up in line with what's— have to pay and that goes up in line with what's happening and that's quite _ with what's happening and that's quite high. i believe it's one of the highest in the western economy, so it will— the highest in the western economy, so it will impact them going forward _ so it will impact them going forward. it's notjust people on the street _ forward. it's notjust people on the street. however, idon't forward. it's notjust people on the street. however, i don't think too street. however, idon't think too many— street. however, i don't think too many people will have much sympathy in the _ many people will have much sympathy in the government direction and is more _ in the government direction and is more people who are struggling day to day, _ more people who are struggling day to day, families.— to day, families. you're quite riiht. i to day, families. you're quite right. i think— to day, families. you're quite right. i think focuses - to day, families. you're quite i right. i think focuses deservedly to day, families. you're quite - right. i think focuses deservedly on people struggling day to day. david, maybe you can help us with that, and a correspondent in the newsroom. i understand you've got some tips on how to save money, especially now as

the cost of living is going up, prices going up?— the cost of living is going up, prices going up? yeah, these are some tips — prices going up? yeah, these are some tips a _ prices going up? yeah, these are some tips a lot _ prices going up? yeah, these are some tips a lot of— prices going up? yeah, these are some tips a lot of us _ prices going up? yeah, these are some tips a lot of us are - prices going up? yeah, these are some tips a lot of us are going i prices going up? yeah, these are some tips a lot of us are going to have _ some tips a lot of us are going to have to _ some tips a lot of us are going to have to think— some tips a lot of us are going to have to think through. _ some tips a lot of us are going to have to think through. my- some tips a lot of us are going to have to think through. my own i have to think through. my own personal— have to think through. my own personal mortgage _ have to think through. my own personal mortgage went - have to think through. my own personal mortgage went up i have to think through. my own personal mortgage went up byj have to think through. my own - personal mortgage went up by £300 a few months— personal mortgage went up by £300 a few months ago— personal mortgage went up by £300 a few months ago and _ personal mortgage went up by £300 a few months ago and we _ personal mortgage went up by £300 a few months ago and we managed - personal mortgage went up by £300 a few months ago and we managed to i few months ago and we managed to secure _ few months ago and we managed to secure a _ few months ago and we managed to secure a five — few months ago and we managed to secure a five year _ few months ago and we managed to secure a five year fixed _ few months ago and we managed to secure a five year fixed on _ few months ago and we managed to secure a five year fixed on having i secure a five year fixed on having come _ secure a five year fixed on having come off— secure a five year fixed on having come off a — secure a five year fixed on having come off a previous _ secure a five year fixed on having come off a previous five - secure a five year fixed on having come off a previous five year - secure a five year fixed on having come off a previous five year fix, | come off a previous five year fix, so a _ come off a previous five year fix, so a lot _ come off a previous five year fix, so a lot of— come off a previous five year fix, so a lot of us— come off a previous five year fix, so a lot of us understand - come off a previous five year fix, so a lot of us understand the - so a lot of us understand the challenges _ so a lot of us understand the challenges of— so a lot of us understand the challenges of having - so a lot of us understand the challenges of having to - so a lot of us understand the challenges of having to pay i so a lot of us understand the j challenges of having to pay a mortgage _ challenges of having to pay a mortgage than _ challenges of having to pay a mortgage than we _ challenges of having to pay a mortgage than we have - challenges of having to pay a mortgage than we have in i challenges of having to pay a i mortgage than we have in the challenges of having to pay a - mortgage than we have in the past. let's _ mortgage than we have in the past. let's have _ mortgage than we have in the past. let's have a — mortgage than we have in the past. let's have a look— mortgage than we have in the past. let's have a look at _ mortgage than we have in the past. let's have a look at this _ mortgage than we have in the past. let's have a look at this graph - let's have a look at this graph because — let's have a look at this graph because it _ let's have a look at this graph because it shows _ let's have a look at this graph because it shows what, - let's have a look at this graph because it shows what, for. let's have a look at this graph - because it shows what, for example, depending _ because it shows what, for example, depending on— because it shows what, for example, depending on how— because it shows what, for example, depending on how much _ because it shows what, for example, depending on how much money- because it shows what, for example, depending on how much money we l because it shows what, for example, i depending on how much money we have on your— depending on how much money we have on your mortgage — depending on how much money we have on your mortgage you _ depending on how much money we have on your mortgage you can _ depending on how much money we have on your mortgage you can see _ depending on how much money we have on your mortgage you can see on - depending on how much money we have on your mortgage you can see on the i on your mortgage you can see on the left a _ on your mortgage you can see on the left a figure _ on your mortgage you can see on the left a figure of— on your mortgage you can see on the left a figure of £100,000, _ on your mortgage you can see on the left a figure of £100,000, the - left a figure of £100,000, the second — left a figure of £100,000, the second figure _ left a figure of £100,000, the second figure down, _ left a figure of £100,000, the second figure down, let's- left a figure of £100,000, the| second figure down, let's focus left a figure of £100,000, the - second figure down, let's focus on that, _ second figure down, let's focus on that, this — second figure down, let's focus on that, this would _ second figure down, let's focus on that, this would be _ second figure down, let's focus on that, this would be a _ second figure down, let's focus on that, this would be a typical- that, this would be a typical mortgage _ that, this would be a typical mortgage for _ that, this would be a typical mortgage for many - that, this would be a typical mortgage for many people. that, this would be a typical- mortgage for many people across the country _ mortgage for many people across the country. they — mortgage for many people across the country they might _ mortgage for many people across the country. they might have _ mortgage for many people across the country. they might have a _ mortgage for many people across the country. they might have a house - country. they might have a house valued _ country. they might have a house valued more _ country. they might have a house valued more than _ country. they might have a house valued more than that, _ country. they might have a house valued more than that, but - country. they might have a house valued more than that, but their. valued more than that, but their actual— valued more than that, but their actual debt _ valued more than that, but their actual debt might— valued more than that, but their actual debt might be _ valued more than that, but their| actual debt might be somewhere valued more than that, but their. actual debt might be somewhere in the region— actual debt might be somewhere in the region of— actual debt might be somewhere in the region of £200,000. _ actual debt might be somewhere in the region of £200,000. until- the region of £200,000. until recently — the region of £200,000. until recently. they— the region of £200,000. until recently, they may _ the region of £200,000. until recently, they may have - the region of £200,000. until recently, they may have beenl the region of £200,000. until- recently, they may have been paying some _ recently, they may have been paying some in _ recently, they may have been paying some in the — recently, they may have been paying some in the region _ recently, they may have been paying some in the region of— recently, they may have been paying some in the region of 2% _ recently, they may have been paying some in the region of 2% on- recently, they may have been paying some in the region of 2% on that - some in the region of 2% on that loan _ some in the region of 2% on that loan if— some in the region of 2% on that loan ifthey— some in the region of 2% on that loan. if they were _ some in the region of 2% on that loan. if they were taking - some in the region of 2% on that loan. if they were taking out - some in the region of 2% on that loan. if they were taking out a i some in the region of 2% on that i

loan. if they were taking out a new mortgage — loan. if they were taking out a new mortgage now. _ loan. if they were taking out a new mortgage now. in— loan. if they were taking out a new mortgage now, in recent _ loan. if they were taking out a new mortgage now, in recent times, i loan. if they were taking out a new i mortgage now, in recent times, they might— mortgage now, in recent times, they might now— mortgage now, in recent times, they might now he — mortgage now, in recent times, they might now be paying _ mortgage now, in recent times, they might now be paying 6%, _ mortgage now, in recent times, they might now be paying 6%, so - mortgage now, in recent times, they might now be paying 6%, so the - might now be paying 6%, so the difference — might now be paying 6%, so the difference we _ might now be paying 6%, so the difference we have _ might now be paying 6%, so the difference we have calculated i difference we have calculated between _ difference we have calculated between paying _ difference we have calculated between paying 2% _ difference we have calculated between paying 2% and - difference we have calculated between paying 2% and 6% i difference we have calculatedl between paying 2% and 6% on difference we have calculated i between paying 2% and 6% on a difference we have calculated - between paying 2% and 6% on a 35 year mortgage, _ between paying 2% and 6% on a 35 year mortgage, along _ between paying 2% and 6% on a 35 year mortgage, along mortgage i between paying 2% and 6% on a 35 - year mortgage, along mortgage term, but the _ year mortgage, along mortgage term, but the difference _ year mortgage, along mortgage term, but the difference between _ year mortgage, along mortgage term, but the difference between 2% - year mortgage, along mortgage term, but the difference between 2% and - year mortgage, along mortgage term, but the difference between 2% and 6% on the _ but the difference between 2% and 6% on the right-hand _ but the difference between 2% and 6% on the right—hand side, _ but the difference between 2% and 6% on the right—hand side, second - but the difference between 2% and 6% on the right—hand side, second lying l on the right—hand side, second lying down, _ on the right—hand side, second lying down, £477 — on the right—hand side, second lying down, £477 more _ on the right—hand side, second lying down, £477 more every— on the right—hand side, second lying down, £477 more every month. - on the right—hand side, second lying i down, £477 more every month. that's towards _ down, £477 more every month. that's towards £6,000 — down, £477 more every month. that's towards £6,000 a _ down, £477 more every month. that's towards £6,000 a year. _ down, £477 more every month. that's towards £6,000 a year. that's - down, £477 more every month. that's towards £6,000 a year. that's the - towards £6,000 a year. that's the kind of— towards £6,000 a year. that's the kind of money— towards £6,000 a year. that's the kind of money that _ towards £6,000 a year. that's the kind of money that people - towards £6,000 a year. that's the kind of money that people on- towards £6,000 a year. that's the kind of money that people on a - kind of money that people on a £200.000 _ kind of money that people on a £200,000 loan _ kind of money that people on a £200,000 loan for— kind of money that people on a £200,000 loan for 35- kind of money that people on a £200,000 loan for 35 years i kind of money that people on a . £200,000 loan for 35 years would e>

in their mortgage costs, but that has now changed. _ in their mortgage costs, but that has now changed. people - in their mortgage costs, but that has now changed. people wouldl in their mortgage costs, but that - has now changed. people would now expect _ has now changed. people would now expect a _ has now changed. people would now expect a pain — has now changed. people would now expect a pain in— has now changed. people would now expect a pain in some _ has now changed. people would now expect a pain in some cases - has now changed. people would now expect a pain in some cases a - has now changed. people would now expect a pain in some cases a lot- expect a pain in some cases a lot more _ expect a pain in some cases a lot more on — expect a pain in some cases a lot more on their— expect a pain in some cases a lot more on their mortgage - expect a pain in some cases a lot more on their mortgage and - expect a pain in some cases a lotj more on their mortgage and they would _ more on their mortgage and they would have — more on their mortgage and they would have done _ more on their mortgage and they would have done by— more on their mortgage and they would have done by keeping - more on their mortgage and they i would have done by keeping savings so for— would have done by keeping savings so for those — would have done by keeping savings so for those people _ would have done by keeping savings so for those people who _ would have done by keeping savings so for those people who had - would have done by keeping savingsl so for those people who had savings, the advice _ so for those people who had savings, the advice broadly _ so for those people who had savings, the advice broadly is _ so for those people who had savings, the advice broadly is unless - so for those people who had savings, the advice broadly is unless you - the advice broadly is unless you need _ the advice broadly is unless you need those _ the advice broadly is unless you need those savings _ the advice broadly is unless you need those savings sometime l the advice broadly is unless you - need those savings sometime soon, overpay— need those savings sometime soon, overpay your — need those savings sometime soon, overpay your mortgage _ need those savings sometime soon, overpay your mortgage. the - need those savings sometime soon, overpay your mortgage. the second | overpay your mortgage. the second tip here _ overpay your mortgage. the second tip here is— overpay your mortgage. the second tip here is a — overpay your mortgage. the second tip here is a switch— overpay your mortgage. the second tip here is a switch perhaps - overpay your mortgage. the second tip here is a switch perhaps if- tip here is a switch perhaps if times— tip here is a switch perhaps if times are _ tip here is a switch perhaps if times are tough _ tip here is a switch perhaps if times are tough to _ tip here is a switch perhaps if times are tough to an - tip here is a switch perhaps if| times are tough to an interest tip here is a switch perhaps if- times are tough to an interest only mortgage — times are tough to an interest only mortgage because _ times are tough to an interest only mortgage because they _ times are tough to an interest only mortgage because they you're - times are tough to an interest only mortgage because they you're notl mortgage because they you're not making _ mortgage because they you're not making those _ mortgage because they you're not making those capital— mortgage because they you're not making those capital payments. i mortgage because they you're not i making those capital payments. the risk of _ making those capital payments. the risk of that — making those capital payments. the risk of that of— making those capital payments. the risk of that of course _ making those capital payments. the risk of that of course is _ making those capital payments. the risk of that of course is that - making those capital payments. the risk of that of course is that if - risk of that of course is that if you are — risk of that of course is that if you are not _ risk of that of course is that if you are not paying _ risk of that of course is that if you are not paying back- risk of that of course is that if you are not paying back thenl risk of that of course is that if. you are not paying back then you still have — you are not paying back then you still have to _ you are not paying back then you still have to pay _ you are not paying back then you still have to pay back— you are not paying back then you still have to pay back at - you are not paying back then you still have to pay back at some i still have to pay back at some point — still have to pay back at some point we _ still have to pay back at some point. i've been— still have to pay back at some point. i've been asked - still have to pay back at some point. i've been asked to - still have to pay back at some l point. i've been asked to leave still have to pay back at some i point. i've been asked to leave it there _ point. i've been asked to leave it there. ., ,, , ., point. i've been asked to leave it there. ., «i , ., , there. ok, david, thank you very much. there. ok, david, thank you very much- some _ there. ok, david, thank you very much. some really _ there. ok, david, thank you very much. some really good - there. ok, david, thank you very much. some really good tips - there. ok, david, thank you very i much. some really good tips there and some good advice. it's shocking how much mortgage payments can actually rise by based on these interest rates. let's go back to our questions on this one here from mick phillips. he is asking when interest rates are increased, to curb spending, and subsequent inflation, only the world of finance prospers.

why don't we raise tax rates instead and then everyone can benefit later? susie, i will come to you for this. i suppose really at the heart of this is asking why is this the only tool that the bank seems to have? it seems to him to be a rather blunt tool. �* ., a, «i ., tool. don't forget the bank of eniland tool. don't forget the bank of england is — tool. don't forget the bank of england is in _ tool. don't forget the bank of england is in charge - tool. don't forget the bank of england is in charge of - tool. don't forget the bank of i england is in charge of monetary policy— england is in charge of monetary policy so — england is in charge of monetary policy so interest rates, fiscal policy — policy so interest rates, fiscal policy around taxation, that's in the hands — policy around taxation, that's in the hands of the government so they are two— the hands of the government so they are two separate entities trying to manage _ are two separate entities trying to manage this. the problem with increasing taxation is that what then— increasing taxation is that what then happens to the tax revenue, if then happens to the tax revenue, if the government put that back into the government put that back into the economy by spending, infrastructure projects, benefits, the nhs, — infrastructure projects, benefits, the nhs, and people on the street and expect them to do that without money, _ and expect them to do that without money, that can have further inflationary impact, and on cause inflation — inflationary impact, and on cause inflation to — inflationary impact, and on cause inflation to worsen, so the goal around — inflation to worsen, so the goal around increasing interest rates is

obviously— around increasing interest rates is obviously looking to tighten individual spending as opposed to government spending. but the idea then is— government spending. but the idea then is that it hopefully slows down then is that it hopefully slows down the rate _ then is that it hopefully slows down the rate of— then is that it hopefully slows down the rate of increase is around what we are _ the rate of increase is around what we are seeing with goods and services _ we are seeing with goods and services. . , ., ., services. ok, a question from debbie in north london. _ services. ok, a question from debbie in north london. high _ services. ok, a question from debbie in north london. high interest, i services. ok, a question from debbie in north london. high interest, no i in north london. high interest, no spare income and apparently we are told there is too much money in the economy. i love the way they face this question. who are these people who have got too much money? i guess it's 'ust who have got too much money? i guess it's just testament _ who have got too much money? i guess it's just testament to _ who have got too much money? i guess it's just testament to how _ who have got too much money? i guess it's just testament to how slow - it's just testament to how slow things can move in the economy. what we are seeing at the moment is that the rates of inflation are kind of due to pent up demand we saw during the pandemic so if i give you an example, during the pandemic we saw house prices shoot up in 2021 and we saw some really, really crazy numbers especially around house prices, but that goes for all goods and services. what we are experiencing right now is the

government trying to steer that and get that back into control. it's not something that will happen overnight and, as we saw, this is the 14th increase in the base rate and even while we are increasing it, the inflation, we are still only starting this inflation cooled down recently which is why it seems we have got a 25% base point increase, rather than 50 basis point increase, so to answer that question, it is something that's going to take some time until we see the results, but it does not like we're heading in the right direction.— it does not like we're heading in the right direction. that's a really iood one the right direction. that's a really good one to _ the right direction. that's a really good one to end _ the right direction. that's a really good one to end on _ the right direction. that's a really good one to end on because i i the right direction. that's a really i good one to end on because i think when we say the bank of england is raising interest rates because they want people to stop spending money, and also talking about a cost of living crisis, that can be rather confusing. but the other question people have is how high will interest rates go? susie, are we at the end of these rises? at the

beginning?— the end of these rises? at the beiiinnin ? .,, , ., ., beginning? hopefully not at the beiiinnin beginning? hopefully not at the beginning but— beginning? hopefully not at the beginning but definitely - beginning? hopefully not at the beginning but definitely not i beginning? hopefully not at the beginning but definitely not at l beginning? hopefully not at the i beginning but definitely not at the end i don't think. realistically, i think— end i don't think. realistically, i think we — end i don't think. realistically, i think we are expecting interest rates _ think we are expecting interest rates to— think we are expecting interest rates to continue rising towards the end of— rates to continue rising towards the end of this — rates to continue rising towards the end of this year. obviously we don't expect— end of this year. obviously we don't expect inflation to come down further— expect inflation to come down further than the 0.5% and we saw early— further than the 0.5% and we saw early in— further than the 0.5% and we saw early in the — further than the 0.5% and we saw early in the ablest likely able to continue — early in the ablest likely able to continue going up and then they may look to— continue going up and then they may look to come down next year but i don't _ look to come down next year but i don't see — look to come down next year but i don't see them ever going back to the levels — don't see them ever going back to the levels we had historically in the levels we had historically in the last— the levels we had historically in the last 15 years. we've had 15 years — the last 15 years. we've had 15 years of— the last 15 years. we've had 15 years of 1% or lower interest rates and years of1% or lower interest rates and that's— years of 1% or lower interest rates and that's not a world we are going to go— and that's not a world we are going to go back— and that's not a world we are going to go back to any time soon. all riiht, to go back to any time soon. right, thank to go back to any time soon. jillii. right, thank you very much to of you. and thank you all so to david, our correspondent for his very helpful tips.

this is bbc news. let's bring you a line of breaking news. the uk retailer wilko is continuing discussions with companies with the aim of completing a transaction which preserves the business. that is news coming in there that wilko is continuing to engage in discussions where parties who may be interested in completing a transaction that could help save and preserve the business. we will bring you more on that as soon as we have any details. we will go to our correspondent in the newsroom as soon as we have more on that. let's bring you back up to date with what we are discussing today and of course, we are expecting to hear from the bank of england, we are

expecting a statement to come from there. this of course after the news today that the bank of england has increased its interest rates. consumer price inflation fell further injune. that is what we expected to see. it's good news. inflation will continue to fall over the coming months, that reflects the fact that much policy is restricted. ourjob is to make sure that inflation falls all the way back to the 2% target and says low. today we have increased to 5.25%. low and stable inflation is this foundation of a stable economy. high inflation has the least well off the most. the

projection that we present