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♪ >> hello. this is the context. >> shows that if the government and the bank of england are prepared to take difficult decisions, we can win the battle against inflation, but prices are still rising too fast. christian: -- >> to are some big challenges out there. we need to stabilize the economy . whether it is energy, food, mortgage or rent, they are going through the roof. wages are not keeping pace with that. >> prices have gone up considerably. they're leveling but will we have a decrease? christian: good evening.

brighter news for the british economy. inflation fell more than expected last month what will that mean for the reddish economy and our mortgages, which are getting ever or expensive? also, the owner of tartar confirms it will build its battery plant in the u.k. but in return for some government handouts. the government's critics say that is no substitute for proper industrial strategy it and the heatwave in europe intensified. this is the new normal, warns the world health organization. it might taste ghastly, but that medicine does appear to be working. inflation down today. the headline figure fell in june from 7.9, down from 8.7 in may,

driven by a 2% drop in food and fuel prices. inflation is falling but that does not mean that prices are falling, just rising less quickly. and for interest rates? the bank rate stands at 5%. it may not have to go much further. the bank is still likely to raise rates in august another .5%. markets work expecting rates to peak early lot - next year at 6.25 percent. that has now been revised to 5.75%. jeremy hunter and rachel reeves have been responding. >> kit is welcome news that inflation is fallen. -- it is welcome news that inflation has fallen. it shows that if the government and the bank of england are prepared to take difficult decisions, we can winhe battle against inflation, but prices

are rising too fast. there is a long way to go. if we look at inflation at 2% in the u.s., 5.5% in the euro zone, you can seat that we can bring down inflation. that is what this government is determined to do. >> the government needs to do its part to deal with some of the reasons why inflation is higher in britain than in similar countries. numbers today have confirmed that food price inflation is probably the most -- is still going up by more than 17%. we need to boost our own domestic economic security. we need to help bring down gas and electricity bills, and we need to secure jobs of the future. countries around the world are making those investments. we need to see more of it in the u.k. christian: with us tonight is all over degroot group,

professor of liverpool. ide me context. yes, inflation is falling, but prices are still going up, just not as quickly, correct? >> correct. the headline inflation number that has been reported is telling you the change in prices over the last year. once those headline numbers come down relative to june last year, but that still means prices on the whole are rising and faster than the bank of england would like. christian: although that adline inflation figure is coming down, your own cost of living could be going up, depending on what you spend money on. >> the inflation data is measuring a representative basket of things consumers buy.

every household is going to be dierent in terms of what they spend money on. people on lower incomes spd a large portion of income on food. food inflation has been a big component in the inflation index, in terms of pushing up on price rises. people who spend a lot of money on food are going to be expressing a higher inflation rate than others. christian: have you seen any evidence today that prices have fallen, compared to the previous month? >> if you look at the breakdown across different components of the index, on the good side, they have fallen by a small amount, month to month, but the real rise in prices is still on the services side. christian: the government's

target is to cut headline inflation to 5.4% by the end of the year. are we ahead of that curve? >> i am not a forecaster. i do not have a forecast of where it is going to go. the general view amongst professional forecasters is that it is touching go. -- touch and go. it will be there or there about. christian: it has been stubbornly high. this time it is below the forecast, which is why we are defining it as good news. i want to know what that will mean for the bank of england's monetary policy committee when they meet in august. do they take that on board? might they change the interest -- how much they push interest rates up? >> the bank of england has a

mandate to get inflation back to the 2% target. when they make their interest rate decisions every meeting, they are thinking about the future path of inflation and how quickly it will come down. they have an internal forecast. the extent to which this is a surprise on the downside will affect their decision-making. for the last three or four months, the surprises been on the upside. inflation has been stronger-than-expected. this time inflation has been lower than expected. you can imagine that by giving them economists would update their understanding of the inflation dynamics. it would probably put downward pressure on where we think interest rates are going to go. christian: what would that mean two people sitting at home, who in the coming weeks or months

may be looki to change their mortgage? a lot of fixed rates are about to end. martin lewis said today there is a chance, no promises, the new fixed rate mortgages may ease a little. do you think they will? >> two things. one, this is just one month data. we want to be careful about over interpreting one data point. we want to see where inflation is going to go. core inflation numbers are still strong, suggesting there is a lot of inflation pressure in the economy. wage growth numbers arst -- are still high, suggesting tightness in the labor market. these are concerns for the bank of england and how they set interest rates. but coming to the point about banks, when they are setting these mortgage rates, they are

setting that five-year fixed term rate based on their expectation oerf e interest rates are going too over the next five years. to the extent that this fall and inflation means that interest rates are going to be a bit lower the next couple of years, you would hope to see that reflected in the mortgage rates. but this is one month of data. normally, banks do not change our mortgage deals as quickly as that. it will be a bit of time before you start to see them make adjustments. christian: the jury is out for perhaps hope for those about to renegotiate mortgages. more good news for the government -- the owners of tartar have confirmed plans to build their flagship battery plant in the u.k., expected to bring u.k. jobs and more in the wider supply chain.

the u.k. has set off competition from spain but at a considerable price. the government is providing subsidies worth hundreds of millions of pounds. peerage rishi sunak. >> this is a fantastic a vote of confidence in the u.k., one of the largest ever investments. it is getting us ready for the future and the transition to electric vehicles. it is billions of pounds of investment and thousands of jobs. christian: james foley is senior communications manager and spokesperson for the society of motor manufacturers and traders. good to see you. that is typically account for more than half the value of an electric car. how important is this deal? >> it is a shot in the arm for the u.k. there is a global transition with markets around the world all making the shift toward electrification.

we are seeing considerable investment in overseas markets in the u.s., china, europe. anchoring battery production in the u.k. is incredibly important. it gives us an opportunity to continue building on the foundations we have in the u.k. for electric vehicle production. we already have an excellent supply chain. this is a real opportunity for the industry to continue to grow and see those opportunities. christian: on that supply chain, 4000 jobs at the plant that many being created in the local economy. when foreign direct investment is looking at a place to go and set up a factory, do they look at that supply chain? does it bring further investment if you have that expertise there? >> it is a contributing factor. it is helpful that the u.k. has an upstanding global reputation.

for electric vehicles, we already make almost every component you need to produce one. we also have a highly skilled labor force and outstanding relationships with academia and r&d. that is an vital -- vital to promoting investment. we want to make sure we have that progress over the next few years. christian: in a lot of comments about the subsidy package. 500 million pounds invested by the government, to mix of cash, energy subsidies, road improvents and research is that the model? see scenario down the line were similar deals may be done? >> ultimately, it is about building on what that announcement means for today. it is about ensuring that th u.k. remains globally competitive. there are markets that are making big investments,

subsidizing industries. it is important that we stay competitive, continue to attract investment. we are fundamentally a strong automotive producer. it is vital to make sure investors see that opportunity and continue to invest in the u.k. christian: andyalmer, former executive at nissan, said, great, but it is piecemeal. when the u.k. really needs is an industrial strategy -- what the u.k. really needs is an industrial strategy. but the prime minister does not think a strategy like that is necessary. >> we have called for a green transformation strategy that creates that attractive package, turbochargers production. that wider strategy is important, something we have called for previously. we are grateful for this new investment.

it is important. it is essential that we build on that. christian: 500 million is a lot of taxpayer money, but if it will bring in 4 million to the wider economy, that is money well spent -- 4 billion, that is money well spent. >> ends this is an opportunity to anchor further production within the u.k. we are already seeing other companies make big commitments to the u.k. for instance, electric and production will be taking place in northwest other manufacturers are investing in factories in the northeast. there is a real opportunity to build not just on the jobs that currently depend on that for production, but also the totals. 800,000 jobs currently are in u.k. automotive.

it is important to invest in skills and make sure this growth helps generate wealth across the u.k. christian: probably the biggest investment since the 1980's. thank you. around the world, this is bbc news. let's take a look at some of the other stories making headlines. rishi sunak has apologized for the historical treatment of lgbtq veterans who were sacked or forced out of the military. the prime minister called the ban and appalling failure of the british state. it was illegal to be gay in the british military until this -- u ntil 2000. susan hall amy oriole candidate for london. she secured 57% of the vote. she will now facing man who has been in the job since 2016. over 100 former print mcdonald's

employees have contacted the bbc amidst allegations into harassment. they say they were forced to kiss and be growth at u.k. restaurants. mcdonald's says it will investigate. you are live with bbc news. an extreme heat wave is continuing to be felt across large parts of the northern hemisphere. warnings from the world health organization that high temperatures arts training health care systems. while fires are burning across wreath -- greece, this is from outside athens. force and homes are being destroyed. a new heatwave and tinderbox conditions across the country. the situation is global, as you

will see from this map. these are the warning signs. temperatures above 30 degrees in china. beijing has registered four weeks of highs above 35 degrees celsius. phoenix, arizona, highs of at least 43 degrees for 19 consecutive days. the mediterranean basin is on high alert with temperatures above 40 degrees for several days, meaning risks to everyone's health. asaday mashiri is in greece. >> i am west of athens. local residents pointed us here. they said follow the road and you will find a facility that is completely burned down. the owner says that there were dogs held in the basement to safety is the fires began.

there is smoke coming up. there were deer that apparently hopped across the fence because the fire started approaching. here, the fire extended across 8 kilometers. it seems like devastation like this is happening across the area but also across mainland greece. another issue we are hearing from several local residents, including the owner of this facility, is it they feel like fire fighters did not get here soon enough. if they had responded in time, perhaps sces like this would not have happened. christian: with temperatures soaring in so many sittings -- cities around europe, some have introduced chief heat officers. kathy mcleod is based in washington. what is a director of resilience? >> the resilience center is

focused on protecting people and communities from impacts of climate change like extreme heat. the cheeky officer wakes up every day -- chief heat officer wakes up every day dedicated to protecting vulnerable people from heat. this is so unexpected. we are not ready. christian: why? are cities not doing enough to heat-proof themselves? >> the acceleration of heat from climate change plus el niño means that the risk and the impact is moving more quickly than our perception of our own risk. we did not expect it. buildings are not built for these temperatures. our clothes are not for these temperatures. there are lots of things we can do. that is partly what a chief heat officer does, but we have to

start investing in these solutions. the biggest thing we need to do is make people aware. we do not have the awareness we need to take action to protect ourselves. christian: 20 say some things we are still learning? i read an interesting piece in one of the american papers about what is going on underground in chicago with metro lines, basements. are we leaving a world wind we leaving a whirlwind we do not fully understand? >> yes. when you think about all the investments with made -- we have made in infrastructure, they have not been the heat risk informed. the materials we have used to build cities, bridges, roads, airports, they were built without the idea of how hot it is our airports are going to be shutting down because airplanes cannot fly past 38 degrees.

our smart phones will shut down at 35 degrees. we have got some big things coming, but there are solutions. but this risk is invisible. when you have a hurricane, you have got trees blowing, cars going down the street. fire catches your attention. but this risk is silent and invisible. it needs extra pr and extra branding for us to act quickly to save ourselves. christian: i suppose the most visible example of that was that building that collapsed in miami. it was not a flood, not the sea that advanced on the building, but coastal topography was changing and the building just fell over. >> yes. there was also saltwater intrusion that had an

interaction with the building. it does beg the question of should we assess what we have? we know that the cos of heat are growing, especially around a worker productivity. we have determined that just to the u.s. economy alone in 2020, it cost $100 billion in worker productivity losses. at night, when we are not cool enough, our brains do not rest. we wake up tired and make mistakes at work. that costs money. we have got to think about this systemically but also protecting and helping people who are most at risk. he does not hit people equally -- heat does not hit people equally. it has a disproportionate impact on older people are more pregnant women on the kids, entities of color. christian: kathy, good to talk

to you. the russian president is facing an arrest warrant from the international criminal court. he will not attend next month's summit in johannesburg. it would have put south africa under an obligation to arrest him, a move that would likely lead to war. none of the countries are taking a position on this work. they are still doing business with the kremlin. the washington post has an investigation on the flow of banned hardware and electronics into russia in support of the war. particular, companies are dealing in russian goods, much of which are flownn. what surprised you most about what you discovered? >> how little we knew about

this. for the last year and a half, we have been trying to help ukrainians with weapons but also help russia stash -- stop pressureet from getting things they could use for the work. russia has been trying to find so many ways aroundhose distractions. most recently, using central asian countries, former soviet states. they had historical ties to russia. we have seen numerous companies ring up in the last year and a half -- ring up last year and a half to help russia get the things it needs -- drums, electronics, rifle scopes, coming in through the central asian countries, through the back door into russia. christian: kurgistan is an ally

of the u.s. but it is dealing with russia. who takes precedence? >> that is the question. we have sent all kinds of diplomatic allegations to convince them it is there interest to work with western countries and not russia. but there are historical and economic ties. russia has a lot of money to throw around to get the things it needs. it has been an irresistible lure for some of these companies to do business with russia and maybe take the consequences. christian: we are out of time. please read jamie's article. it is in the washington post, fascinating read on trying to crack down on those goods that have been smuggled in. we will take a short break and talk to miles taylorbout his book on his life inside the white house. do stay with us. ♪

narrator: funding for this presentation of this program is provided by... narrator: financial services firm, raymond james. narrator: funding was also provided by, the freen foundation. and by judy and peter blum kovler foundation; pursuing solutions for america's neglected needs. ♪ ♪

♪ ♪ narrator: funding for this presentation of this program is provided by... woman: architect. bee keeper. mentor. a raymond james financial advisor tailors advice to help you live your life. life well planned. narrator: funding was also provided by, the freeman foundation. and by jy and peter blum kovler foundation; pursuing solutions for america's neglected needs. announcer: and now, "bbc news".