joumanna has been at the bank of england all morning. jo joumanna, it will be a busy day and a surprise >> reporter: to your point, arabile, the market was split for 25 or 50 the bank of england did surprise hawkish then with 50 basis points we see a different picture today from june with the inflation data which is surprising to the downside before june, you had two consecutive inflation prints really surprising on the upside coming in much hotter than anticipated. since then, we have seen moderation go. the headline rate is 7.9%. core inflation is still sitting at 6.9%. this is above where it needs to be to be consistent. in order for the bank of england to put pressure on, they have to go larger with a 50-basis point hike i would add to that the bank of england will release the updated inflation and growth forecast. let's keep an eye on those of the analysts are talking about the balance sheet as well. the bank of england has been ahead of the curve in terms of reducing the size the balance sheet. they have 80 pounds of reduction from

— the announcement will be from the bank of england? let me take out my c stal bank of england? ngland? let me take out my crystal ball- i — bank of england? let me take out my crystal ball. i think— bank of england? let me take out my crystal ball. i think the _ bank of england? let me take out my crystal ball. i think the markets - crystal ball. i think the markets are expecting a hike which is still quite an aggressive hike when you look at what the other central banks of the world are doing. a week ago everybody was expecting double bass because the transmission of monetary policy has been slow so i can the expectation is to be 25% point height which means we will be at a 15 year record for the bank of england interest rates. can you exlain england interest rates. can you explain to _ england interest rates. can you explain to our— england interest rates. can you explain to our viewers - england interest rates. can you explain to our viewers why - england interest rates. can you i explain to our viewers why banks increase rates? before you answer that question, we can confirm

weill certainly for policymakers at the bank of england.— certainly for policymakers at the bank of england will have to leave _ bank of england. neil shearing, will have to leave it _ bank of england. neil shearing, will have to leave it there. _ bank of england. neil shearing, will have to leave it there. thank - bank of england. neil shearing, will have to leave it there. thank you i have to leave it there. thank you very much for that. staying with inflation, a year ago today, president biden signed the inflation reduction act into us law. but america 5 first serious attempt to tackle the climate crisis has ruffled feathers, as it includes protectionist measures that might hurt europe 5 green industry. our nabc michelle fleury has more. the name inflation reduction act is confusing, since most experts agree it has done little to lower inflationary pressures. so why is it called that? well, let's just say it fit the politics of the day. when it was signed into law a year ago today, prices were rising at their fastest pace in a0 years. but if it doesn't bring down inflation, then what exa

i do not think the bank of england should — picture? ank of england should put _ picture? i do not think the bank of england should put too _ picture? i do not think the bank of england should put too much - picture? i do not think the bank of. england should put too much weight on those figures, they have timely and relevant data available. producing prices, giving more clues to what the direction in which inflation is going to end. those numbers are more timely available and that is what the bank of england will likely focus on.— will likely focus on. thank you so much. to asia now — and one of china's biggest property developers — country garden group — has warned it faces losses of up to $7.6 billion for the first half of this year. it's the latest sign of the serious problems facing the world's number—2 economy. katie silver is in singapore and is following the story. we asked her if this is part of a far wider problem in china's real estate market. this might feel like deja vu, if country garden collapses... the company held by chi

let's fold the bank of england and all of this. anne julius, a former member of the bank of england monetary policy committee. nice to see you in person. what did you make of today? what did we learn? deanne: the big change is there were subtle hints the monetary policy committee considers the current stance restrictive and it has not said it is going to pause or stop but it is beginning to use that terminology. i think that is important because that is a good way to guide the market without using so-called forward guidance. kailey: if you had to put some forward guidance on this, how much further do you think they can or should go? deanne: nice to see you, kailey. i think somewhere near six. it is interesting the bank of england monetary was conditioned on the markets forecast of future interest rates. the market forecast peak set just below six. that is a clue that might be as high as they go. maybe not quite that high. guy: is there a risk they go lower than that? we get one more hike? is there risk we raise to 550? deanne: there

are bank of england officials have mentionedl be around the corner. are bank of. ised in terms of the wage price spiral. that has an impact on inflation, and it is unions that push the pay rises. i think we do need that plan from the government, because people are looking down at the moment and are paying the price for the inflation because they did not get enough protection from when that was imported from abroad. but, also, working people are paying the price of the recession, which could be around the corner. stare of the recession, which could be around the corner.— around the corner. are bank of encland around the corner. are bank of england officials _ around the corner. are bank of england officials have - around the corner. are bank of l england officials have mentioned around the corner. are bank of - england officials have mentioned how pay rises have continued to be stronger and have crystallised in terms of the wage price spiral. that has an impact on inflation, and it is unions that push the pay rises. had aiming —— we are in the longest pay freeze in

it is definitely the bank of england _ the treasury. the course of the next few months, but in terms of the next few months, but in terms of what is actually happening, we know the bank of england doesn't control what ultimately matters, the productivity growth in the uk economy and a lot of that is what is leading to our learning center stagnating now and notjust for the few years but for 15 years. but it does in a sense _ few years but for 15 years. but it does in a sense impact - few years but for 15 years. but it does in a sense impact you i does in a sense impact you productivity because people cannot invest in businesses which then expand, which improve productivity. in a short term it will have some effect on business behaviour but the bank of england is actively wanting to slow down activity and i think there is too much growth in the economy even though it is basically zero. 50 economy even though it is basically zero. ., .., , economy even though it is basically zero. ., , ., _ economy even though it is basically zero. ., , .,

why would the bank of england do this? the behind this. why would the bank of england do this?hy would the bank of england do this? the truth is the uk still has an inflation _ england do this? the truth is the uk still has an inflation problem, - england do this? the truth is the uk still has an inflation problem, yes, | still has an inflation problem, yes, it is true that the overall rate of inflation has come down from 11% at the end of last year to the latest ofjust below the end of last year to the latest of just below 8%, the end of last year to the latest ofjust below 8%, if the end of last year to the latest of just below 8%, if you the end of last year to the latest ofjust below 8%, if you look beneath that and look at the drivers of inflation such as wage growth, wage growth is accelerating too close to 7% and unless the bank of england reduces that rate of wage growth, inflation is never going to fully return to the 2% target and stay there. that means the bank has to raise interest rates to take a bit more money out of the pockets of people to convince businesses no

don't forget the bank of england is — tool. don't forget the bank of england is in _ tool. 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 s

the bank of england, by growth. of england, by the way, in that building behind me, were predicting uk me, they were predicting the uk would go into recession. it hasn't it's been pretty hasn't yet. it's been pretty resilient . our economy was still resilient. our economy was still attracting a lot of inward investment in this country. consumer despite consumer sentiment, despite being by all those being battered by all those interest rate rises, is pretty resilient in this country, as is business investment . but having business investment. but having said that, this quarter point rise will also attract criticism because it's the 14th rise in a row . some people were calling row. some people were calling for interest rates to be held, including myself. i've been saying that since march or april . given that the rises in interest rates that we've already have work with long and variable lags , it takes a long variable lags, it takes a long time for monetary policy. interest rate rises to feed through, not to mortgage

england? from the bank of england? out this an >> well, we talked about this an hour i don't think the hour ago. i don't think the problem that the bank of england's but england's independent, but i think independent bank think an independent bank of england know, it england will, you know, if it went politicians hands, went back in politicians hands, you'd massive rate cuts went back in politicians hands, you'd of massive rate cuts went back in politicians hands, you'd of an assive rate cuts went back in politicians hands, you'd of an electionte cuts went back in politicians hands, you'd of an election that ts went back in politicians hands, you'd of an election that would ahead of an election that would store up inflation in the future. for the problem is, the bank england isn't bank of england isn't independent more independent enough. we need more free the bank of free thinkers on the bank of england. to rid of england. we need to get rid of this of cognitive of this sort of cognitive of intellectual sclerosis and w

of england have got the same agenda. the bank of england have got the sanle agenda. the bank of englanduldn't agenda. the bank of england have got the sani wouldn't mind genda. the bank of england have got the sani wouldn't mind seeing >> i wouldn't mind seeing them brought but not this government control, but not this government control. happy control. i would only be happy once managerial types like once the managerial types like rishi sunak, like jeremy hunt were out in favour of were cleared out in favour of someone like danny kruger as the treasurer and then treasurer instead. and then we might responsible might get some responsible fiscal well, i'm a big fiscal policy. well, i'm a big fan of danny kruger. >> i like him very much indeed. but the polls suggest, but if as the polls suggest, labour gets in in the next election, whether that is end of 24 looking like it might 24 or even looking like it might even go into 25, think we even go into 25, i think we heard this week would it be in safe hands with keir starmer ? safe hands with keir starmer? >> close. i mean, >> no, not even

it has turned so fast and - the bank of england has only got one rate, the bank of england has only roperties, that will cover— to sell the two properties, that will cover me _ to sell the two properties, that will cover me for— to sell the two properties, that will cover me for another - to sell the two properties, that will cover me for another yearl to sell the two properties, that. will cover me for another year or so, the — will cover me for another year or so, the tenants _ will cover me for another year or so, the tenants will _ will cover me for another year or so, the tenants will be _ will cover me for another year or so, the tenants will be safe, - will cover me for another year or so, the tenants will be safe, the| so, the tenants will be safe, the rest of— so, the tenants will be safe, the rest of them, _ so, the tenants will be safe, the rest of them, they— so, the tenants will be safe, the rest of them, they can - so, the tenants will be safe, the rest of them, they can carry- rest of them, they can carry on working. it _ rest of them, they can carry on working, it wil

after the bank of england. sed the bank of england increased the interest again, i'm the interest rate again, i'm going bring you a brand new going to bring you a brand new interview with the chancellor, jeremy hunt . that's coming very jeremy hunt. that's coming very soon. it's a fascinating watch. let me tell you, look , stay let me tell you, look, stay tuned for the jeremy hunt show and the terrorist who murdered tory mps sir david amess has been given £100,000 of your money in legal aid. add him to the list, shall we? we've got the list, shall we? we've got the rochdale grooming gang people, the rotherham grooming gang people. when you add it all up, amount of complete and up, the amount of complete and utter rhiannon jones utter devastating rhiannon jones that are paying for so that you and i are paying for so they their day court they can have their day in court . shocking total . well, it's a shocking total patrick christys on gb news. this is britain's channel the terrorist who murdered tory mp sir david

so a reminder the bank of england decision is in 50 minutes' time.e here on bbc news and you can also follow it on the live page on the bbc news website or app. staying in the uk, the environmental group greenpeace says protesters have climbed on to the roof of prime minister rishi sunak�*s yorkshire home. activists blanketed the building in black fabric. the protest was aimed at mr sunak�*s announcement earlier this week backing more licences for oil and gas drilling in the north sea. the prime minister's office says police are at the scene. let's go to westminster. 0ur political correspondent jonathan blake is there for us now. jonathan, just bring it up to date with what we know so far.- jonathan, just bring it up to date with what we know so far. well, a cou - le with what we know so far. well, a coule of with what we know so far. well, a couple of hours _ with what we know so far. well, a couple of hours ago _ with what we know so far. well, a couple of hours ago now- with what we know so far. well, a i couple of hours ago now greenpeace posted

bank of england, a of course broadbent, governor of the bank of england, a of course used broadbent,or of the bank of england, a of course used t0)adbent, governor of the bank of england, a of course used to worknt, governor of the bank of england, a of course used to work for who of course used to work for goldman sachs, it seems be, goldman sachs, it seems to be, you compulsory you know, obviously compulsory that you have to work for goldman sachs to be as big cheese as deputy governor of the bank of england, probably being lined up to be the next governor. he acknowledged in a press press press conference in the press conference that money tree conference today that money tree policy takes 18 months to two years actually have an years to actually have an effect. so raising interest rates now, that's not of course, it has an immediate effect. if you're on a variable rate mortgage and it's a painful effect. but he's he's admitting that this monetary policy works with long and variable lags. i feel strongly and a lot of people now agree with me. i've been saying it for months that pe

bank of england, a of course broadbent, governor of the bank of england, a of course used broadbent,or of the bank of england, a of course used t0)adbent, governor of the bank of england, a of course used to worknt, governor of the bank of england, a of course used to work for who of course used to work for goldman sachs, it seems be, goldman sachs, it seems to be, you compulsory you know, obviously compulsory that you have to work for goldman sachs to be as big cheese as deputy governor of the bank of england, probably being lined up to be the next governor. he acknowledged in a press press press conference in the press conference that money tree conference today that money tree policy takes 18 months to two years actually have an years to actually have an effect. so raising interest rates now, that's not of course, it has an immediate effect. if you're on a variable rate mortgage and it's a painful effect. but he's he's admitting that this monetary policy works with long and variable lags. i feel strongly and a lot of people now agree with me. i've been saying it for months that pe

a downward trend in food, prices, energy prices, but is it going to be enough to get to the bank of england's target? >> reporter: yeah, possibly not. i think really the critical element to note here is that the underlying cost pressures are -- price pressures, that is, those that would probably worry the bank of england the most. we talk about services inflation, which went up from 7.2% to 7.4%. that figure will probably stick out today for the bank of england because they will see that things are actually a little bit more difficult than they anticipated. you can also take a look at the overall core cpi inflation, that is the one we hoped would also fall off. it strips away food and energy, and those are what actually soared, 7.9% to 6.8%. so, that strips itself out completely, and you still have core cpi sitting at 6.9%, clearly, there is still a lot of pressure in the inflation print. plus, that is seen in the way gross numbers which we saw at 7.8%. still higher than inflation for the first time in over six months, plus higher than it has been since the numbers have come out in 2001 think

credit rating >>> we're an hour away from the latest interest rate decision from the bank of england are split on how much of a hike the central bank will announce. >>> plus, ab-inbev reporting a drop in profits since the b backlash against bud light it is thursday, august 3rd, 2023 and "squawk box" begins right now. >>> good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick and andrew ross sorkin with jon fortt. joe is off today let's look at what is happening with the u.s. equities at this hour you will see red arrows again this morning this follows on yesterday's red arrows dow futures off 62 s&p futures down 10. the nasdaq down 42 stocks pulled back yesterday following the fitch downgrade of the u.s. debt. dow down 348 points. that is 1% s&p down 1.4%. in fact,

the bank of england governor andrew bailey says it is too soon to declare victory and the battle against inflation. your daily note says you are too distracted by treasuries to care about the bank of england. i am personally offended. surprisingly the pound came back to flat. explain. >> speaking for the market, we are distracted by the treasury market during bailey's testimony. interesting that the pound got back flat given the fact a smaller than expect hike led to the terminal rate expectation priced into the market fell slightly. normally when you get that dynamic, you see the currency weaken. it is perhaps due to positioning. sterling did and the session higher. we did not get an announcement on qt, expect to hear more about that from bailey at the september meeting. that was the market worry to add to this treasury steepening move. i am distracted by the treasury market. it is nice to see yields rallying, hopefully we get a breather. lizzy: if qt is going like clockwork, why speed it up? let's look at what we have, at 7:00 a.m. german factory orders for june, they are on a monthly

it is 25 from the bank of england. looking at the moveon sterling. ker off the back of this. going through this decision outside the bank of england is lizzy burden. what jumps out to you? lizzy: this is what markets and economists had expected. there were doubts about 50 but after the cooler than expected june inflation print, they thought it would be 25. this is going to invite criticism over the bank's reaction function. in this decision and the last decision they are just reacting to what happened. they are focused on the rearview mirror rather than the road ahead given you have a two-year lag and policy. -- in policy. the last time you had a three way vote split -- which is what bloomberg anticipated -- was december. megan green is replacing the arched of of course. jonathan: it is something that tom talks about the dissent and lack thereof. you have a three-way split on the ble. lisa a.: you feel the angst that nobody knows where inflation is going and how the bank of england has a projection of cpi ending this year at 3.9% and then getting belo

the roblem does the bank of england do? tue: problem here does the bank of england do? em here is a does the bank of england do? tt2 problem here is a lot of these global condiments, bank of englund, the ecb, the doj, they are not on the ecb, the doj, they are not on the same page of federal reserve and this is what's getting a little bit tricky when you look at the economics of the world right now, simply that the federal reserve has historically been known as banker to the rest of the world, the federal reserve slows down and perhaps the bank of england and the ecb will as well. that's not going to be the case this time, i think the bank of england is such a great example because as you pointed out the inflation story is much worse in england and in the rest of the uk, as it is compared to the us or even the rest of the continental europe, that's going to be an issue when it comes to whether or not the bank of england, andrew bailey at the helm of it can really follow the lead that jay powell is setting. whatever ha--ens that jay powell is setting. whatever ha ens in t

the bank england isjust one of many central banks around the world — raising interest rates to curb rising five advanced economies since the start of the year. as you can see there's a downward trend, especially in the us. but in the uk, inflation is still atjust under 8% which is four times the bank's target of 2%. that international comparison was underlined by the opposition labour party in the uk. here's the shadow chancellor — rachel reeves. the government need to take responsibility for the fact that

is independent, that the bank of england is indeproblem, that the bank of england is indeproblem and it's been absolutely taken treasury and bank taken over by treasury and bank of england groupthink . look, i of england groupthink. look, i think we need a lot more free thinkers, a lot more highly qualified economists who don't ascribe to this view that low taxes are always bad, that don't ascribe to this view that we, you know, we shouldn't care about the amount of money that we create and quantitative easing was always a good thing. i think we need more independent, out—of—the—box thinkers in the bank of england's monetary policy committee as they were in the late 90s early by the late 90s and early 2000. by the way , in fairness, under a labour way, in fairness, under a labour government, when the people appointed to the mpc were much more diverse range of views, there was much more cognitive diversity. so i want to see the mpc, the monetary policy committee, become more free thinking and more willing to break with treasury orthodoxy. had that been the case, i would say what p

it's bank of england day. the bank is expected to hike by a quarter-point today to 5.25%, as well as its latest forecast for the u.k. economy. silvana has been replaced. you have hot wage growth. the headline inflation number is almost four times the bank of england's target. 50 basis still very much on the table. valerie: market pricing is in the middle, 35 basis points for today. that was price for the previous meeting when they surprised with 50. it's funny, we look at e.m. economies who have maybe not been punished for definition is lately. -- dovishness lately, but developed market economies like japan have been punished for dovishness. the risk is if they don't hike by 50, the currency weakens. maybe they hike by 25, but then signal an increase in the pace of qt. lizzy: lots of speculation about that. the lacquered in the central bank conga line has become the leader. it forecast a similar move at its next meeting. did the real have that's like you were warning about yesterday? valerie: it hasn't yet. the

you know, above 7% is running too fast for the bank of england. it's not consistent with the inflation target. it would need to fall back to somewhere between 3 and 3.5% for the bank of england to feel comfortable that they're on track for 2% inflation. and we're nowhere near that yet. and how much of a hot wage print would you need to see jamie to change your outlook for peak rates? i think you currently see 5.75%, right? yeah. so we're expecting to hike in the next couple of meetings. i mean, i think it's unlikely that, you know, the risks to that view are probably skewed slightly to the downside anyway. um, so we would take a very big surprise to change the outlook. we're actually expecting wage growth to come in a little bit faster than the bank of england was expecting anyway. um, but there is a lot of time between now and november. so i think, you know, we're not going to see a pause in september. they're going to hike again. the real question now is what happens in november? and we have got quite a few prints between now and then. and also,

yes, the bank of england - it's gone too far. thanks for having i me. done that is because inflation in the uk is still very high. so headline inflation is close to 8% and core inflation, if you strip out the volatile elements of food and energy, isjust under 7%. the bank's target is 2% and it needs to get inflation back to target and that's why it needed to raise rates today. is it the right thing to do? well, i think, you know, there is some debate over the policy mistakes that are possible on both sides. is it the right thing to do? we think it's the right thing to do? we think it's the right thing to do because in order to get inflation back to target, we need a couple of more rate hikes are going to be necessary. inflation is proving to be sticky around the world, notjust in the uk. be sticky around the world, not 'ust in the uk. �* . be sticky around the world, not 'ust in the uk. �*, ., ~ ., , in the uk. let's talk a little bit about inflation, _ in the uk. let's talk a little bit about inflation, inflation - in the uk. let's talk a little bit abo

still quite far off the bank of england's target, though.s everything going to plan or as we had expected? 50. to plan or as we had expected? so, toda 's to plan or as we had expected? so, today's data — to plan or as we had expected? srr, today's data are to plan or as we had expected? s57, today's data are not to plan or as we had expected? s513, today's data are not a to plan or as we had expected? sr3, today's data are not a surprise. it is encouraging, as you say, that headline inflation is coming down. no doubt uk consumers will be relieved to see that energy prices and food price inflation is beginning to cool. but, that said, core inflation, that is a measure of inflation that gives us perhaps a better read on domestic inflationary pressures, that is not really showing any signs of coming off and so that means that, while encouraging in this data, we are not quite there yet in terms of seeing inflation really dropping off in a sustainable way. find inflation really dropping off in a sustainable way.— inflation really dropping off in a

when it comes to interest rates, the bank of england - time? interest rates, the bank of england want| time? when it comes to interest i rates, the bank of england want to see wage pressures easing before they pause interest rate rises and that record wage growth is not easing that aspect but there is good news and early estimates we are having in the data about your payroll data, forjuly, that suggests there was another pull—back in pay growth. the bank will also look at the number of vacancies which has gone down, the number of people classed as economically inactive, essentially not in work and not looking for a job, that has also gone down with older workers returning to the workforce. but there is a record number of people who cannot work because of long—term sickness so is a mixed picture when it comes to the labour market and when you look at interest rates, this is one set of figures they are going to be looking at. we have inflation numbers tomorrow and then another set of inflation numbers and wage data before we get the next bank of

we start here in the uk — where the cost of borrowing is on the rise again the bank of england is widelyxpected to raise interest rates by at least 0.25% as it battles to bring inflation under control. it would be the 14th rate rise in a row, piling yet more pressure on many households and businesses. the bank's main interest rate is already at 5% — the highest in around 15 years. inflation is beginning to ease, but consumer prices are still rising at almost 8% a year — that's four times the bank's target. so it has a tricky balancing act to perform — reining in inflation without strangling the economy — as our economics editor faisal islam explains. there's been a couple of things that have gone in the bank's favour over the past month. we've seen sterling rise — that will help temper the price pressures from imports. we've also seen other pressures in the markets where they've been raising some questions about the bank of england's credibility, as in mortgage rates going up without decisions being made — that has all calmed down, too. and the public�*s expectations of where inflation i

look, i get wage growth is very positive for for the consumers here in the uk, but for the bank of england it's a big negative. and it's because, lizzie, it feeds directly into core inflation, which is one thing that the bank of england is really yet to see much progress on. yes, it's ticked down, but it's still on a six handle. and as you mentioned, expected to hit 6.8 today. that is still too hot. but that wage growth, that wage inflation really will keep that core services component of inflation stickier for longer. that is the main risk that markets are worried about that pushed that terminal terminal rate for the bank of england close to 6% yesterday. core inflation danger still close to 7%. let's talk about these fomc minutes as well. traders have been betting that the fed will keep rates higher for longer. which members commentary are you most interested in then? look, the minutes are kept quite vague over who says what, but we'll be looking for any hints about growing optimism that a soft landing is there and available for the fed to hit later this year. we've seen some members be

because the bank of england, that's the only thing it has in its arsenal to bring down inflation, andtion.— down inflation. that's right, but what we can _ down inflation. that's right, but what we can see _ down inflation. that's right, but what we can see is _ down inflation. that's right, but what we can see is the - down inflation. that's right, but. what we can see is the increasing interest rates don't have the effect we need it to have on bringing down inflation. ~ , , ., inflation. well it is bringing down inflation. well it is bringing down inflation. i think _ inflation. well it is bringing down inflation. i think the _ inflation. well it is bringing down inflation. i think the government| inflation. i think the government have other _ inflation. i think the government have other levers _ inflation. i think the government have other levers in _ inflation. i think the government have other levers in their- inflation. i think the government have other levers in their pocket j have other levers in their pocket they could be using to bring down inflation. one of the things we've

it raises the question of whether the bank of england can pause here. the bank's pricing significantly more work for the bank to do that here. is the bank of england prepared to do it? alix: if you are data dependent but the data is good, how does that work? governor andrew bailey spoke to francine lacqua earlier this month. bailey: it is the last mile where policy is doing the work. it will have to remain restrictive to have this effect of urging inflation down, particularly next year. guy: governor bailey talking to francine. the word restrictive is what triggered the notion of the bank was almost done. the data does not point us in this direction. we will adapt the question from the last hour and continue in this hour. as a pause possible given the data? joining us to discuss this, bloomberg economy senior reporter kristine aquino. bloomberg markets managing editor. philip, let me start with you. you cover this touring day in and day out. has been a growing expectation the ink is near the end. the last mile. does the data support the idea we are in th

the bank of england raises interest rates to the bank of england raises interest rates tu ' the bank rs in an _ rates to 5.2596, the highest for 15 years in an attempt _ rates to 5.2596, the highest for 15 years in an attempt to _ rates to 5.2596, the highest for 15 years in an attempt to curb - years in an attempt to curb inflation. security tightened in washington ahead of donald trumpmy court appearance in a few hours. he'll be formally charged with plotting to overturn the election of the 2020 presidential election. five people are arrested after greenpeace activists climbed onto the roof of prime minister rishi sunak�*s house in yorkshire. and freddy mercury fans are in full rhapsody mode as a new exhibition promises a kind of magic. sport now — and for a full round up, from the bbc sport centre, over to marc edwards. the women's world cup has lost another heavyweight. after brazil and canada, now germany have failed to reach the knockout stage for the first time in what's being descirbed as the biggest shock the tournament's ever seen. the second—ranked team in the world couldn'

the bank of england's target is 2. by bank of england's target is 2. 7, may, 7.9, june 6.8. july so we're still well over three times the bank of england's 2% target. this is a feather in the cap for the prime minister and the chancellor. they will be crowing. they'll be talking about light at the end of the tunnel. they'll be talking. we're sticking to our plan, etcetera, be etcetera, etcetera. they'll be thinking isn't hurting, it thinking if it isn't hurting, it isn't but won't isn't working. but they won't actually though some actually say that, though some people in the city of london will say that and all say, will say that and we'll all say, oh god, you're outrageous. oh my god, you're outrageous. i don't think everybody to don't think everybody wants to see not go up. a see interest rates. not go up. a lot of our gb news listeners and viewers savers and they will viewers are savers and they will want higher interest rates . but want higher interest rates. but a lot of young families, a lot of mortgage holders, a lot of businesses with debt , 75%

the risk is if you overreact now you end up with a recession next year, and that is what the bank of englandvoid. is what the bank of england are trying to avoid-— trying to avoid. what impact do ou think trying to avoid. what impact do you think things _ trying to avoid. what impact do you think things like _ trying to avoid. what impact do you think things like the - you think things like the strikes will have, there is still a rail dispute going on and nurses and junior doctors and nurses and junior doctors and teachers? do these pump impact this as well? i and teachers? do these pump impact this as well?— and teachers? do these pump impact this as well? i think we -a a impact this as well? i think we pay a little _ impact this as well? i think we pay a little much _ impact this as well? i think we pay a little much to _ impact this as well? i think we pay a little much to attention l pay a little much to attention to this wage risk, we think about wage risk when patient expectations are very high and they are not stopping it is not as if consumers and businesses expected to rise higher a

these figures put bank of england rates the highest in 20 years and the expectations that the centralank will hike rates in each of the next three meetings if you remember at the last meeting, the bank of england governor did not want to say where they were moving next. they were data dependent and rates were in restrictive territory. the world is saying you have to move more into restrictive territory after the wage growth today. the pound as we spoke is nine basis points firmer. how are the banks reacting we are trading more negative barclays down 1.1% hsbc is down as well with lloyds down as well the rising interest rates combined with the lower growth outlook is not a great mix for many of the sectors. meanwhile, uk grocery inflation is for a fifth straight month reaching 12.77%. that is according to market research kantar which said the second sharpest fall since 2008. still sitting at 12% we have come in from the highs at one point to price inflation close to 20% this is the reaction from the retailers. mark & spencer's all an of these names are trading under water. >>> coming u

it's still way above the bank of england's target of 2%, and significantly higher than the rate thatwn to. it said when inflation was up to 10% it was going to halve it by the end of this year so it's still got a long way to go before it meets that target of around 5%. one of the big falls was in gas and electricity prices. they came down. a lot of businesses of course are locked into longer term deals, that means they don't see the benefit of that straightaway and so they don't have that benefit to pass on in the price they charge customers right away. let's speak to mark tait, who is one of the wholesalers here. mark, what's your sense of price rises easing, is that reflected in your business? yes, absolutely. we have seen the peak, now it's on a downward spiral. certain items of fruit and vegetables and salads as well are easing back because of the weather out in europe, 30 odd degrees, all the fruit is coming on, ripening. so that's coming in our markets. supermarket demand isn't that good because everybody is on holiday. so therefore there is a lot more produce at a much cheaper

the bank england isjust one of many central banks around the world — raising interest rates to curb risings. here's the rate of inflation in five advanced economies since the start of the year. as you can see there's a downward trend, especially in the us. but in the uk, inflation is still atjust under 8% which is four times the bank's target of 2%. that international comparison was underlined by the opposition labour party in the uk. here's the shadow chancellor — rachel reeves. the government need to take responsibility for the fact that inflation in the uk is much higher than it is in comparable countries. in the us, it is 3%. in the eurozone it is 5.3%. and yet, here in britain, inflation remains stubbornly at 7.9% because of a decade or more of mismanagement by the conservative party. let's talk to our work and money reporter peter ruddick. what does this mean for people with mortgages? it what does this mean for people with mortua . es? . , what does this mean for people with mortua . es? ., , , what does this mean for people with mortauaes? , , . mortgages? it was widely expected bu

the bank of england has not suggested one.he fed says they will pretty much escape one, too does this mean we will avoid it completely things are softening and we have seen a possible softening with the jobs numbers later today >> a recession is in a lot of people's base forecasts. i'm not an economist i'll not say what the forecast for the economy will look like the market is getting comfortable with the fact that it is unlikely to be a deep recession. you might have a couple of quarters of slightly negative growth, especially with inflation at these levels. i don't think that will cause a lot of panic for anyone. >> okay. >> thank you for being with us always great to have you on. >>> commerzbank shares slide we will have an interview with the cfo bettina orlopp after this break ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? ev

_ from the bank of england. was this drop expected? yes, _ from the bank of england. ns, economists - drop expected? yes, this was in line with expectations, economists were | with expectations, economists were pencilling a figure of 6.8%. the surprise came from the core inflation figure which strips out some of the more volatile elements, like food, energy and alcohol and tobacco. that came in slightly above expectations. again, underscoring the fact that inflation is here for longer and that we still have got quite a way in order to get back down to a normal level for prices that are sustainable in terms of living standards and can help to ease the broader cost of living crisis. ~ . . ease the broader cost of living crisis. ~ . , ,, , ., ., crisis. what is keeping inflation so hi . h crisis. what is keeping inflation so hirh and crisis. what is keeping inflation so high and so _ crisis. what is keeping inflation so high and so far— crisis. what is keeping inflation so high and so far off _ crisis. what is keeping inflation so high and so far off the _ crisis. what is

the top story from the newsroom tonight is that the bank of england has raised its interest rate for th time in a row. it's increasing from 5 to 5.25. that's the highest base rate since 2008. the bank saying that it expects inflation to be halved by the end of the year. and the chancellor jeremy hunt, telling gb news the government's plan is working . well. the bank plan is working. well. the bank of england forecast today say that we will avoid recession and in a year's time we'll get inflation down to about 3, 2.8, i think is the number. >> so although it's very tough when interest rates go up for families or for businesses that have got loans , what those have got loans, what those forecasts are saying today is that if we stick to the plan, it is working and we will end up with a soft landing and we can avoid a recession . avoid a recession. >> well, the shadow chancellor rachel reeves, says the government needs to take action. a family that's looking to remortgage their property is going to be paying , remortgage their property is going to be paying, on remortgage their property i

rest of this year and one of the other things that is quite nice to see here in terms of the bank of englandt, the filthiness of it is starting to cool as well, so that should bring down some of the wage pressures. obviously not great for households, but from the bank of england's determination in this fight, that battle seems to be being one as well. it is fight, that battle seems to be being one as well-— one as well. it is not 'ust the uk facin: one as well. it is not 'ust the uk facing these h one as well. it is not 'ust the uk facing these sorts _ one as well. it is not 'ust the uk facing these sorts of- one as well. it is notjust the uk facing these sorts of problems, | facing these sorts of problems, france and germany seem pretty lacklustre growth as well, so it is easy to point the finger at things like brexit at times like this, but france and germany also facing their own set of challenges? yes. france and germany also facing their own set of challenges?— own set of challenges? yes, there is a rlobal own set of challenges? yes, there is a global slowdown _ own set of challenges? y

. -- in the bank of england numbers. the consensus is deeper dropped into negative territory because weight -- rate hikes are weighing on housing market. the bank of england has said only a third of rate hikes have passed through. at 3:00 p.m. we get chicago fed president austan goolsbee speaking again. yesterday he said data is showing sewer u.s. inflation which is fabulous news but he has not made up his mind yet whether that warrants a pause at the fed's next meeting. maybe the data at 3:00 p.m. will help him. you're going to get u.s. jolts data and ism manufacturing numbers. our economists reckon you will see excess labor demand continuing to decline in june and manufacturing rebounding in july. val, talk us to how that data will lead into the fed thinking. valerie: the ism will be important, the manufacturing components. the pmi's already showed a surprise strengths and manufacturing. the market is going to be looking very closely at the ism numbers. i was surprised that goolsby yesterday said that consensus is still

the bank of england's governor says he supports calls to ensure interest rate rises are passed on to vers. speaking to the i newspaper, andrew bailey said a failure by banks to do so raised a question about fairness to customers. the comments come as the financial conduct authority warns it will take action against banks and building societies that are unable to justify offering low savings rates . yesterday, the central rates. yesterday, the central bank raised interest rates to 5.25. that's the 14th rise in a row . well, donald trump has row. well, donald trump has described claims that he plotted to overturn the 2020 us election as an act of desperation by president biden last night, prosecutors warned a judge that mr trump may be seeking to use evidence to target witnesses after he posted a message to social media that said, if you go after me , i'm coming after go after me, i'm coming after you. speaking at a republican eventin you. speaking at a republican event in alabama , the former us event in alabama, the former us president described the allegations as fake and said he was

so who actually makes appoints the governor the bank of england? governor of the bank of england?l, the government and the treasury. appoints treasury. who appoints the people to be on people who are going to be on that committee? be the that committee? that will be the treasury the government and treasury and the government and the people bank of the people inside the bank of england approved by the england are approved by the treasury government. but treasury of the government. but apart that, it's completely apart from that, it's completely independent. apart from that, it's completely independtools. it comes the right tools. so it comes back to the treasury and say, how do we with this type of how do we deal with this type of inflation? goes back to inflation? and that goes back to that so actually external that point. so actually external inflation and domestic confidence. primary inflation and domestic confid of :e. primary inflation and domestic confid of the primary inflation and domestic confid of the uk primary inflation and domestic confid of the uk economy? primary inf

the bank of england came in too late.f answers to when it comes to mortgage rates and interest rates. they came in too late. what we need to do is to bring down interest rates , down interest rates, particularly mortgages, which will help the housing problem down here. >> do you think the bank of england will do that and if so, how quickly do you think they'll do that? >> e“- do that? >> they're going to >> my fear is they're going to put the bank rate again this put up the bank rate again this month and it may take may month and it may take the may increase it another two months. they need to look at what the americans are doing. they increased it and increase and increased it and increase it and increased it and increase it and increase it there. their inflation rate is falling. what needs to happen now is need needs to happen now is they need to follow that to help householders and, you know, the pubuc householders and, you know, the public generally and businesses by reducing the interest rates . by reducing the inter

bank of england clearly front and center, but we continue with earnings. is going to be interesting. rolls-royce is worth watching out for as well. mw, we have had the pre-release. then we get to what i think is the big macro event tomorrow, but who knows, the bank of england. is it 25 or is it 50? alix: let's stick to that. also does the boe talk about increasing the pace of bond sales? janet henry is economist over at hsbc and she joins us now. tomorrow, what do you think? 25, 50? janet: we are forecasting 50. the market is firmly on the fence, and at the moment that seems like a pretty good place to be. it is not going to be a surprise to anyone whether it is 25 or 50. guy: what is going to be the signal that comes with that? what are we going to have to look out for tomorrow? what are you going to be looking out for? janet: everyone got terribly excited by the last inflation release, the fact that for the first time in five months you can inflation finally surprised on the downside. but core inflation is still at 6.9%. and we know that the economy is q

on the other hand, headline inflation, 7.9%, still four times the bank of england's 2% target.n you strip out energy and food, which can be equally volatile core inflation, they are still not falling by enough, wage growth remains quite high as well, and then there are wage comparisons, and in there are wage comparisons, and in the euro and in the us, lower than in the uk set lower there than in the uk. they are still considering with the interest heights... you asked about the impact on mortgage holders, you have a standard variable rates, they are very used to this now, after 30 interest rate hikes —— interest rate hikes, their monthly cost will go up straightaway, but the key now is that 800,000 people who have got a fixed—rate deal, many of those young families, who flopped onto the housing ladder, maybe a couple of years ago, and with pretty low interest rates, those fixed deals coming in in the second half of the year, they are likely to face a big jump year, they are likely to face a big jump in their costs. of course, it is notjust mortgage holders come in as renters wh