don't forget it is only the bank of england doing this. nk has never done it before but at the same time, the fed is not doing active sales it is letting government bonds roll up its balance sheet. the bank of england will have to play it very carefully in terms of how it does it but once we get more information today it should set the conditions for the monetary policy committee to vote on qt. and we're expecting sales to start from the september meeting. francine: how will governor bailey respond to these political pressures on the bank of england? lizzy: francine, the old lady at thread the needle street has become an unlikely star in the conservative party leadership drama. liz truss, the next front runner, has been skating on the boe's record fighting inflation and has said she would review the banks mandate. i would point out that the former boe governor mark carney also suggested reviewing the mandate so perhaps it is not that radical. but if it comes up in the press conference or the interviews, i expect that andrew bailey will cont

cable, how do you get an fx trader to go head-to-head with the bank of england? tell us the currency is not in crisis. ubs trash their outlook. there is more activity in china. dani: some of the volatility, it is a stark contrast to what is happening in the equity market. local equities on track for the third weekly advance in a row. that is a recovery from the bear market lows. i wanted to flag the ftse 100 futures, weaker. they were weaker yesterday with the boe decision. s&p 500 futures responding calmly to this report that democrats are considering adding a stock buyback tax. perhaps that is more of a bargaining chip. nasdaq futures up. up 20% from last month's bottom. manus: we have had a riproaring rally. hsbc saying cache me up, baby. let's talk to reporters around the world. lizzy burden is at the bank of england yesterday to pass on commentary from the boe. the latest on the swiss bonds. dani: we have juliette saly from singapore on the market reaction in asia to break down the u.s. jobs report. manus: the bank of england says u.k. will have a retracted r

, but the rest of central banks around the world will have to do with it, is the bank of england more honest than others? seema: yes, and it would be great if other central banks would be so honest. we rarely see other central banks explicitly forecast recession the way the bank of england has. we have to be realistic. the u.k. economy is really facing a significant dilemma, there is high inflation and they have to raise rates and that means recession is coming. the fiscal policy question is good. the bank of england does not want to incorporate that in their forecasts and it will get very messy so we have to wait to see how that comes out. francine: the markets were pretty sanguine about what we heard yesterday, was it because we were expecting 50 basis points and so they didn't really pay attention to what kind of recession we see? seema: the market was expecting 50 basis points. the market i think has been anticipating a u.k. recession. so this didn't really come as a surprise. the surprise was that the event of a lid was so explicit. we can all see that the rate are happening. i t

the bank of expect in the coming months? tue: bank of england expect in the coming months? reacting to the lies we have seen in inflation, and as the governor described to us earlier today, a key driver of headline inflation has been energy prices. we have seen that in the prices. we have seen that in the price of petrol at the pump, in terms of higher utility prices, but of course energy goes into pretty much everything else that we buy. so we are now starting to see a more broad—based rise in prices. but what the government also explained earlier today is this rise in energy prices is coming from geopolitical shocks, associated with russia's invasion of ukraine. and there's very little of the bank of england can do about the direct impact of that shock. what it can do, however, is be very focused at preventing these price rises that we have seen from becoming recurring. in governor bailey's words, getting embedded into the uk economy. it's for that reason that the bank of england has acted today, as it has done fairly consistently since the end of last year. 50 consistentl

i have not seen this in my time of bank of england watching. : when you talk about the balance of risk, how do you respond to the wage spiral? that you are starting to see in a real way. how does the bank get ahead of that to curtail that even if you it requires downturns? david: we have been talking about wage spirals. we have seen some attempt to keep up nominal wage growth. we have seen big falls in real wages. the idea of a wage spiral in the u.k. and united states -- we see public-sector workers saying we need to maintain our living standards. the chance of any of this is driven by workers demanding higher wage increases. i see none of that in the united states, none of that in europe, the u.k. we are talking about 13% inflation and workers asking for 4% pay raises. none of this is driven by wages. i think that argument is nonsense. lisa: a lot of people are saying the bank of england is frontloading rate hikes. pausing the rate hikes later this year and then cutting next year. there seems to be this belief with the fed, significant rate hi

the bank of _ bank of england combined. yeah. the bank of england _ bank of england combined. yeah. i think - bank of england combined. yeah. the bank of england i think are i the bank of england i think are tasked mainly with trying to keep inflation under control, but when these kind of costs aren't really dependent on demand, you know, this is simply the price spikes we are seeing in global oil prices and gas prices, so there is very little actually that they can do, and yes, more targeted help from government is going to be absolutely essential, because we can't have this in a large number of households suffering so much. ,., ., ., number of households suffering so much. ., ., ~ ., so much. good to talk to you, have a good — so much. good to talk to you, have a good day, _ so much. good to talk to you, have a good day, thank- so much. good to talk to you, have a good day, thank you i so much. good to talk to you, | have a good day, thank you for getting up so early. stay with us. so much more to come. demand for holidays surges around the world as tourists make the most of the li

lisa: taking a step back, the bank of england is uniquely positioned in a moment of pain, or central s are having to raise rates at the fastest pace in decades, and a state of canonic weakness. the bank of england faces more than the federal reserve and is potentially at the epicenter. how do they message what they are going for, at a time when the economy is already weakening so substantially that you are seeing this translate into real-time data? >> that is absolutely right. it is an extremely difficult decision. i think it will have to convey that dilemma between the fact that inflation has been rising very quickly, very, very high. this is even compared to other advanced economies, where inflation is also high. there is pretty strong wage great -- wage growth in the u.k. there is concern that could lead to significant persistence in inflation. the same time, real weakness in the economy, real signs with the higher energy prices, the effects of that coming to weigh on spending. that is really dragging on the economy. there is a great risk we are falling into recession. we are predi

the bank of england will have to raise rates aggressively. e market is penciling and 50 basis points tomorrow. how much more do you think is to come? aneeka: if we are looking at inflation hitting levels of 18%, that is something that is definitely not priced in at this point. it is 50-50 right now the number of forecasters saying we could see a rate hike because if you look at the committee, it was 63 or 50 basis point rate hike at the last meeting, so this meeting, the chances are a lot higher for a 50 basis point rate hike, but going forward, we expect to see the bank of england because at 25, and then do another rate hike of 25 basis points and then pause, but given the upcoming conservative board, it will be interesting to see if we see the labor market tightening further alongside the candidate that actually wins in the conservative party, and we might have to see bank of england continuing to look at the rate hikes. kailey: let's pick up on the point of fiscal policy, it seems they are gaining in the role to be the next prime minister,

what should be bank of england be doing? ithihk be bank of england be doing? e government who has more levers. in that short—term, this won't help inflation but certainly will help the impact of inflation, you've got to put money in people's pockets in order to offset the huge increase in bills. i want the government to put a tougher windfall tax on excess profits being announced by energy companies and then use that to soften the blow on households on low and middle incomes. in addition to providing additional support particularly on families at the sharp end and in the longer term we absolutely need to talk about reform and that's about reducing the energy we use and also fundamentally changing the nature of the market. there is stuff the government can do in the short term and there is a lot of talk about what is driving inflation, we are seeing huge profits at the top, wages increase at the top and not at the bottom and there are things the government could be doing the regulation in order to impact that in that short term. less for the bank of england to d

and with the bank of england explicitly try to _ with the bank of england explicitly try to do _ withes inflation but, already the level that _ generates inflation but, already the level that interest rates are at isn't, — level that interest rates are at isn't, it— level that interest rates are at isn't, it is— level that interest rates are at isn't, it is a— level that interest rates are at isn't, it is a very fine balancing act that— isn't, it is a very fine balancing act that they are going for. but they're — act that they are going for. but they're forecasting that interest rates _ they're forecasting that interest rates are — they're forecasting that interest rates are probably going to go up to 3% that _ rates are probably going to go up to 3% that might be viewed as neutral level and _ 3% that might be viewed as neutral level and stimulating the economy but it's_ level and stimulating the economy but it's also not dampening demand by much _ but it's also not dampening demand by much more but even on that assumption of 3%, people will find it difficult, — assumption of 3%, peop

of the bank i to predict. we are expecting to hear from the governor of the bank of i from the governor of the bank of england, car so much, energy for the house, you can use that so much, there are limits to that.— limits to that. there are limits, and it is very — limits to that. there are limits, and it is very difficult. - limits to that. there are limits, and it is very difficult. we i limits to that. there are limits, and it is very difficult. we are l limits to that. there are limits, | and it is very difficult. we are in and it is very difficult. we are in a difficult period, and we may be entering into a more difficult and challenging period for families and individuals as well. all i can say from a financial advice perspective is, even if you are doing as much as you can, take advice. review your outgoings, make sure that the outgoings, make sure that the outgoings are absolutely essential, there is lots of information out there is lots of information out there on the internet, information on our website, and there are lots of avenues out there that can offer families advice on how to budget, and i t

england. good morning. the governor of the bankgland has defended the decision to raise interest rates, saying there's a "real risk" of soaring prices becoming "embedded". yesterday, the bank warned the uk will fall into recession as it raised interest rates by the largest amount in 27 years. the uk economy is forecast to shrink in the last three months of this year, as the bank predicts a recession that will last well into next year. the bank says that sharp increases in energy prices will push inflation to more than 13% — a 42 year high — and that the value of people's incomes is falling. one of the ways it can try to control inflation is to raise interest rates. this makes borrowing money more expensive which means we are less likely to spend — bringing prices down. that's the bank's justification for raising interest rates from 1.25% to 1.75% — the biggest rise since 1995. the governor of the bank of england, andrew bailey, told the today programme why raising interest rates was a necessary step. we expect inflation to come bac

_ to respect bank of england independence. wing giveaway which i think threatens to increase inflation and a key point to remember, those taxes that lose proposes to cut, the biggest beneficiaries will be energy companies. she will cut the rate of corporation tax, i don't think that's our priority. i support business but the priority must be focusing on inflation and helping families struggling with the cost of energy bills, and i think that is where the country is. haifa energy bills, and i think that is where the country is.— energy bills, and i think that is where the country is. how do you focus on inflation? _ where the country is. how do you focus on inflation? that - where the country is. how do you focus on inflation? that is - where the country is. how do you focus on inflation? that is the i where the country is. how do you j focus on inflation? that is the job of the bank of england. there were questions around why it didn't raise interest rates sooner to get a grip on that. ~ ., ., ., on that. without getting too te

>> well, supposed to pick up on the bank of england. e forecasts they pulled out are utter rubbish because they have no facility to factor in what government policy is going to be which all of a sudden is very symmetry and don't think there will be any recession in the k. and certainly not this year and all the forecasts they're putting out there are basically useless. which is about inflation. and i actually think the chances of gas and oil prices are more likely to the downside we're seeing. europe has been a real problem, however, which they can't get out of and it's incredibly poor news there and last time we spoke on the radio, we asked our economist if there was any good news at all and she said there aren't any fires. then five minutes later you hear of the volcano in iceland? i don't see much help economywise. kailey: you listed fiscal policy and the lead for the race might want to cut taxes and the b.o.e. will have to be more aggressive even if you don't think a recent session a imminent now, could they hike enough it's a forego

today at six: a bleak warning from the bank of england which predicts a uk economic recession at the end of this year — which will last all the way through 2023. soaring domestic energy prices have triggered another warning from the bank — of inflation rising to around 13%. many of inflation rising to around 13%. mortgage holders the many mortgage holders will be hit by the bank raising interest rates by 0.5% in an effort to counteract rising prices. if we don't act, inflation will become more embedded, it will get worse and we will have to raise interest rates by more. and we have to act to stop that. it's really, really hard at the moment, because the rent has gone up, all the bills have gone up. it's just really difficult. and all the food prices, the fuel prices. we'll be asking when we might hope for better economic news — and what the two people vying to become prime minister might do to help. also on the programme... china releases images of the country's launch of ballistic missiles into waters around taiwan, in response to a senior us democrat visiting the island nation yeste

a warning today from the bank of england. it raised interest rates by the most since 1995 and said the u.k. is heading for more than a year of recession. policy makers say recession will begin in the fourth quarter and predict inflation may peak at 13.3%. china has begun military drills around taiwan in response to nancy pelosi's visit. taiwan is downplaying the effects of the drills on shipping and airplane routes. in russia, a prosecutor has asked for a 9.5-year sentence for brittney griner. closing statements are being made today. she admitted to having cannabis oil in her luggage. there have been talks about a prisoner slot. investment banking bonuses on wall street are likely to plunge this year. incentive pay for those underwriting debt and equity could plunge 45%. those advising on mergers and acquisition could see bonuses fall by one fourth. shares of alibaba are rising in premarket trade. the chinese e-commerce giant posted revenue that was better than expected. the cloud in media sales missed estimates, while sales a

bank of england expected to announce its biggest rate hike in years. fed officials keep up tough talk of fighting inflation. let's bring you bank numbers. 1.9 8 billion, way ahead of the 1.6 expected. way ahead of estimates. you are looking at left density -- at lufthansa, looking to ramp up and meet revenge tourism. it will remain high for the rest of the year. they see a full year above half a billion euros. 585 million euros. clearly positive. stock is down nearly 15%. let me give you a snapshot. to date drop. nasdaq is down most percent -- almost 3%. they talk about risk, perhaps they stepped into early. -- they stepped in too early. equity trading does not reflect headwinds in the world. let's look across assets. oil at a six-month low last night. some of the biggest moves in these markets. globally, up 10% since june. waiting for a rate hike of 50% -- 50 basis points. a meager add of oil by opec-plus. we talk about that in a moment. table, ubs -- cable, ubs. let's get the latest on taiwan, dubai, and the opec-plus update. let's get to politics. na

they— problems —— the bank of england. they will— problems —— the bank of england.evening in the latest _ to do about it this evening in the latest televised event of the campaign, live interviews and questions from party members on sky news at _ questions from party members on sky news at hpn. —— at eight o'clock. thank— news at hpn. —— at eight o'clock. thank you. — news at hpn. —— at eight o'clock. thank you, jonathan blake. 0fgem has announced that changes to the energy price cap will be made every three months, rather than the current six. the energy regulator says the move will allow prices to reflect changes to wholesale gas and electricity costs more quickly and accurately. 0ur consumer affairs correspondent, colletta smith, joins us. why have they done it? it is worth saying the price cap is the maximum amount a supplier can charge for the basic rate, standard variable tally. a lot more households have been moved onto that rate —— standard variable tariff. just over three quarters are now paying this rate that is controlled by the regulator. today what they

what does that mean for the bank of england? y: the government is walking this tightrope of helping people through the cost-of-living crisis without contributing to it self. the bank of england went -- because of recession risk in the u.k. you have danny blanchflower saying that the u.k. is already in a recession. bloomberg economics' base case is 70 split with economist going to 25 basis points. we could see a quarter-point hike. if the bank of england went into a tightening cycle before the fed and the ecb, so it is passed to right now. people are participating in the workforce more because of the cost-of-living crisis. it could come down to how the governor votes and whether the committee follows. francine: the trillion dollar question is when you see the rays, does that push it toward the losses and how do the market start pricing it? lizzy: liz truss has a 90% chance of being the next prime minister, so it is almost certain. overnight, you had rishi sunak briefing and saying there will be an income tax cut, 20% on the basic

bank of - news. just how bad is it? yes, it's| pretty rare for the bank of england to pre—emptively predict a recession in years gone by uctant to say the word recession, but today, andrew bailey and his team predicted a full fat recession lasting 15 months. similar in length to the great financial crisis, the last recession. not as deep as the period when we nearly lost half the banking system. more similar to 1990 style recession. the difference being you have this recession at the same time as inflation reaching 12 or i3%, at exactly the same time, and that is deeply problematic for policymakers because some of the tools that you would use typically when you get a recession, well, they can't use them. they say they won't use them, because they would exacerbate the inflation problem. what you typically get in this situation, which the nerds call stagflation, stagnation and inflation at the same time, is a bit of what you got today, the central bank hits the inflation by raising interest rates but that means it's up to economy and avoid the recession getting too bad. the bank is effectively saying that for the governme

there are two things, tension with the bank of england is no bad thing, you could argue. . yes, there has obviously been a geopolitical shock this year, but energy prices were predicted to go up energy prices were predicted to go up a year ago, inflation was predicted to go up off the back of covid and off the back of a decade of easy money. the covid and off the back of a decade of easy money-— of easy money. the fed in united states faces _ of easy money. the fed in united states faces the _ of easy money. the fed in united states faces the same _ of easy money. the fed in united l states faces the same accusations? absolutely and that has been one of the criticisms, central banks across the criticisms, central banks across the world have been... after the financial crash they were printing money and printing money and unlike what was predicted by monetarist, it didn't increase inflation. they thought we were in a period of endless low inflation never mind how much money they printed. a lot of people said, you have got to be kidding me? now suddenly we are seeing it is n

the bank of england can either not raising interest rates and see the bank value of the pound declinen raise interest rates in an attempt to try and mitigate, take the edge of that effect. i see. thank you for the explanation. and one other key point that i think people will look at, and i know the bank of england is independent and has its own reason to tackle inflation but it seems to many households lack the authorities are pulling in opposite directions. the bank is raising interest rates. it puts financial pressure on households, makes their borrowing more expensive. doesn't that just negates borrowing more expensive. doesn't thatjust negates the effect of the support the government is giving to households in the form of that £400 payment to help with energy bills? it is wiping it out, isn't it? to energy bills? it is wiping it out, isn't it?— out, isn't it? to a certain extent— out, isn't it? to a certain extent but _ out, isn't it? to a certain extent but if _ out, isn't it? to a certain extent but if you - out, isn't it? to a certain extent but if you look - out, isn't it? to

of the bank what is the story about? tie: governor of the bank of what is the story about? ii9 governor of the bank of england would appear, liz truss or rishi sunak, effectively use saying to them, get your tanks off my lawn, particularly with threats of greater government intervention and the banks decision making, officially, he sang in the actions would damage the uk's competitiveness, especially of westminster were able to overturn those regulatory decisions but it seems he is especially upset with liz truss and it will be interesting to see if the front minister and where things go from here. irate to see if the front minister and where things go from here. we will end with another _ where things go from here. we will end with another financial - where things go from here. we will end with another financial times i end with another financial times story and about sanctions, making a limited impact on russian oil production this is an interesting angle because they're talking about how, there have been sanctions on russia after the invasion of ukraine but actually, russia has re—routed its oil to places

his puts more pressure on consumers and the bank of england. germany may not have enough gas to get through the winter. -- out of the u.s. and europe. european stocks, you can see them on the higher side. the data is a little bit unrelenting in asia. it is speculation the fed and other central banks will do a little more, especially in china , to shore up its economy. the picture shows the ibex opening up and we see opec+ and look at commodities with gas and oil currently 1.6% higher. apologies. it is all the commodities commotion that is making me lose my voice. when you look at brent crude, it is below 90. currently at 93.0 two, and you look at gold spots. the asset check as always, we look at treasuries to see what part of the yield curve a lot of investors want to invest in. the 10 year at 2.831. this is something we saw yesterday, not to the same extent, but europe is moving to the upside and some pressure on the s&p futures. we had some gains in technology yesterday. let's get over to mark cudmore. you are looking at the rally in the s&p.

we saw the bank of england predict - for uk households. we saw the bank of england predict this . edict this and they are trying to increase interest rates to try and stifle the inflation is that what we will see more of you think? more hikes in interest rates from the bank of england? more hikes but we have had quite a few already. the base rate has risen to 1.75% so the b of e is probably nearing the end of thatjourney is a balancing act here. raise interest rates to try and bring down the rate of inflation but as you do so you slow the economy as well. of course, the bank of england told us a couple of weeks ago they are forecasting a recession to last the best part of two years. you could be careful not to raise rates too much and exacerbate the economic risks in order to bring down inflation. but we do expect a few more rate rises, three more specifically in september, novemberand september, november and december. september, november and december-— september, november and december. ~ , ., ., december. when we see inflation eaked, december. when we see inflation peaked. do _ de

bank of _ discussing today? well, certainly, the bank of england _ discussing today? g today? well, certainly, the bank of england in their - the bank of england in their forecast to paint a pretty bleak picture of the uk economy over the next year or so and i think most economists would agree with that. i think we are going through a period, particularly as costs start to ramp up particularly as costs start to ramp u p after particularly as costs start to ramp up after the next energy price cap increase, that consumer spending and people's real incomes is going to be impacted next year and that is going to impact the wider economy and unfortunately that means the market going into recession. find going into recession. and fundamentally, _ going into recession. and fundamentally, driven, . going into recession. and fundamentally, driven, if we had to pick one single part of the problem, is it energy bills? that pick one single part of the problem, is it energy bills?— is it energy bills? that is by far the biggest _ is it energy bills? that is by far the biggest contrib

so, i think it's not very comfortable to be in the bank of england — comfortable to be in the bank ofn the bank of england at the moment. one of the more _ england at the moment. one of the more difficult aspects is to explain why it _ more difficult aspects is to explain why it seems to be hitting britain much _ why it seems to be hitting britain much worse than the rest of the world _ much worse than the rest of the world because although we have similar— world because although we have similar policies to put other parts of europe, — similar policies to put other parts of europe, the bank are addicts we have _ of europe, the bank are addicts we have will— of europe, the bank are addicts we have will experience a worse recession. —— the bank's prediction. indeed _ recession. —— the bank's prediction. indeed 0t— recession. —— the bank's prediction. indeed. of course, there's other announcements today that the price cap, 0ctoberseems announcements today that the price cap, 0ctober seems to be the month not to get out of bed. let's hope it's a mild winter. 0n the right side of the finan

kailey: how online are your forecasts we what the bank of england is saying? is 3% inflation realistic? liz: the bank of england has put in a big increase for energy prices in october. we don't know yet what prices will do. it is possible we get another increase on top of that now in january. in which case, as the bank of england alluded to, inflation could go even higher than that 13% which is i watering and a much higher cost than what was forecasted six months ago. our forecast, we have got to peak at --. the risk is very high here. guy: given the nature of that inflation, is -- going to do anything when tightened and more broadly with what is happening with commodities? liz: this is the question we have been wrestling with. if you have inflation which is so much driven i energy, food, the boe cannot get gas through the pipelines. you cannot get delivery drivers to deliver things around the u.k.. what the boe is looking at and seeing what they can deal with, the labor market and the supply demand prices there, that is what they are worried about. we are worr

well targeting inflation is the job of the bank of england, that is the uk central bank. the bank of . their target is 296, so inflation is five _ central bank. their target is 296, so inflation is five times _ central bank. their target is 296, so inflation is five times that, - central bank. their target is 296, so inflation is five times that, and - central bank. their target is 296, so inflation is five times that, and so l inflation is five times that, and so they have got the problem of bringing it back down, and the main way they can do that is interest rates, so they have increased interest rates to 1.75%, and the aim of that is making borrowing less attractive, and saving more attractive, and saving more attractive, in order to reduce demand in the economy. but the problem is, is more of a sup ploy side issue which means it is things like rises food prices from abroad thatis like rises food prices from abroad that is causing this inflation so it is a very difficult task for the bank of england.— is a very difficult task for the bank of england. there is some evidence that _ b

bank to the financial times. they go to the itank of _ to the financial times. they go to the bank of englandland saying not to interfere with city regulations, what is the story about?

nor did the bank of england u—turn, going ahead with the half—point rise in interest rates. said the bank was minded to impose the largest single hike in a quarter of a century. here to discuss all that are marc roche, an economist and journalist who was born in belgium, and writes from here for the french news magazine, le point. isabel hilton, who's been a foreign correspondent and broadcaster — she founded china dialogue, an independent organisation concerned with the environmental challenges facing that country. and with us in spirit, if not in person — because a family member has covid — yasmin alibhai—brown. she was forced to flee her native uganda by idi amin — the 50th anniversary of the expulsion of asian ugandans has been marked this week. yasmin is now a british newspaper columnist. welcomed all of you, yasmin, it's lovely to see you and i hope yourfamily member gets better. let's begin with china and the nancy pelosi visit. i'd say she's the first lady becausejill biden is the first lady and, harris is the second lady. nancy pelosi is next in line and an importan

for bank of england, saying a little earlier to bloomberg the bank of england should now cut interest rates. his remarks in strong contrast rising sharply in order to deal with this inflationary surge with 40 year highs in the u.k.. he spoke to lizzy burden and stephen carol. >> looked for rate cuts in the last meeting. the arguments to stop there very powerful. not least because the bank is forecasted a long recession and their actually forecasting deflation as well. this is a temporary phenomenon. >> lizzie joins us now on sat. interesting listening to what he had to say. he's concerned as a result of which policy needs to turn rapidly. yet we had an inflation print that is i watering. double digits. people are now actively talking about 100 basis point hikes here in the u.k.. you describe 50 basis point hike , where does that leave 100 basis points. >> people are talking about 100 basis points. i think it might be person. >> the debate is starting and moves out from there. >> it's a real minority call. his view is inflation will get so high it will tame itself. our response was wha

so the bank of england was forecasting this recession, a long recession as result of the hike. sonali: how much of a pickle is the bank of england in even the most recent data? >> it's just difficult to understate it. really we can all be left to the bank of england to sort this out. when you ask former monetary policy committee members they say fiscal policy, you've got boris johnson's replacement not expected to be announced till september the fifth. when you look at the candidates running to replace him, liz truss is sticking to tax cuts she's proposed. rishi sunak said he's knocking a freeze energy bills which the labour party is proposing. instead he would give targeted support to the poorest households. but really this is a moment that he could pivot and reframe the debate. energy is at the heart of the cost-of-living crisis. and here he has something to say. liz truss may be winning the debate it comes to tax cuts among the tory base they are trying to appeal to. but he might be able to make some headwind if he focuses on energy. guy: whoever succeeds in this race, how to

skylar: capitulation from the bank of japan is much larger in terms of, people are expecting more hedges from the bank of englandthe more you frontload, you can push it further out. when the yield goes higher, it won't be significant. when you see capitulation from the bank of japan, the markets have been completely one-way, and they have been saying time and time again that the bank of japan has kept their yields target. historically, when you see capitulation in the yield curve target, yields shoot sharply higher. i think the repercussions of that because of the volatility is much bigger than if you saw jumbo rate hike from the bank of england. manus: good sport, with the two tail risks. skylar montgomery koning, my guess this morning, senior global macro strategist at ts lombard. coming up, summers strikes. more on the story right here. lizzy burden from london hq and dubai. this is bloomberg. ♪ manus: it's daybreak europe from dubai and london. louis vuitton's epee disruption after its pilots -- lufthansa may face disruption after pilots voted for strike. a wage deal could unleash another wave of cancellatio

bank is running out of credit. it is not just andrew bailey's personal reputation that is at stake, it is the credibility of the bank of englandit is going to be a harder job to control inflation expectations bless people believe the bank can do its job. this is why officials have come out in defense of the boe, in order to prevent the current inflation surge, that there would have been a war in ukraine and that there would have been an increase to double digits, so yes it very difficult time for the bank of england. andrew bailey is not the first boe governor to come at loggerheads with politicians from the conservative party. now you have the same thing again. tom: looking to change that inflation mandate. are you worried about the credibility of the bank of england at this point? the pressure on the central bank? >> the u.k. is in a pretty tricky spot. you have the labor market extremely tight, which you can trace all the way back to brexit. where you could see stagflationary issues manifesting. we see that front and center. do you just not touch it? i think there are interesting i think for european assets more broadly, th

the bank of england said it is facin: recession? — recession? the bank of england said it is facing a significant _ recession? the bank of england said it is facing a significant recession - it is facing a significant recession and one it predicted would last more than a year, all the way through next year, so that distinction has been there from the start between rishi sunak and liz truss, but it has absolutely become i think central given now the sort of framework we had from the bank of england last week, they are laying out its vision of what is going to happen. it out its vision of what is going to ha en. , , ., ~ out its vision of what is going to hauen. ,, ,�* out its vision of what is going to hauen. , , , �* . happen. it is bleak, isn't it, what the are happen. it is bleak, isn't it, what they are warning? _ happen. it is bleak, isn't it, what they are warning? yes, - happen. it is bleak, isn't it, what| they are warning? yes, recession happen. it is bleak, isn't it, what- they are warning? yes, recession and also inflation

a uk recession lasting until the end of next year — the grim forecast from the bank of england — as itounces the biggest interest rate increase, for nearly 30 years. and the indian adaptation of the hollywood classic forrest gump is released next week — we talk to the bollywood superstar aamir khan. it kind of feels like a dream now because it's been such a journey and we've come to the end, it's about to release any kind of feels unreal. it's six in the morning in singapore, and seven am in tokyo where japan is demanding an immediate end to china's military exercises around taiwan after five chinese missiles landed in the country's exclusive economic zone. beijing you'll remember is conducting live firing exercises in the sea around taiwan for the next several days, in response to a recent visit there by the senior us politician, nancy pelosi. tokyo has lodged a strong diplomatic protest — and the white house has also condemned china's actions. the us national security spokesman, john kirby said beijing had no reason to react aggressively to the visit of speaker pelosi to taiwan. with

the governor of the bank of england has defended the decision to raise interest rates, saying there isrisk of soaring prices becoming embedded. the bank has forecast the uk economy will fall into recession in the last three months of this year and that it will last well into next year. it also anticipates a further climb in inflation to more than 13%, the highest for more than a0 years. it is because of that the bank has set interest rates at 1.5%, the increase of 0.5 percentage point was the biggest hike for 20 years. our... reports that the hope is that it being more difficult to spend money will make it less likely... in times. jane runs the shores community centre, where every day she tries to help people struggling to feed themselves. in withernsea on the yorkshire coast, jayne nendick runs the shores community centre, where every day she tries to help people struggling to feed themselves. can i sort a food parcel, please? the community centre gave out 200 food parcels this month, double what they gave out this time last year, and the community pantry sells surplus stock from supe

inflation is very close to double digits and the bank of england is keen to get that back down closerntral banks around the world like the federal reserve in the and the bank of canada, they are raising rates more aggressively. the fed has raised rates twice in a row, the bank of canada by 100 basis points. perhaps it's looking at its counterparts overseas and thinking let's be aggressive and get inflation under control. ~ , ., , aggressive and get inflation under control. , ., , , control. why does raising interest rates help cut _ control. why does raising interest rates help cut inflation? - control. why does raising interest rates help cut inflation? inflationl rates help cut inflation? inflation is the reduction _ rates help cut inflation? inflation is the reduction in _ rates help cut inflation? inflation is the reduction in the _ is the reduction in the affordability of goods and services, its overheating, its when prices start to rise uncontrollably. what we're seeing is that it starts to take some of that heat out of the by making mortgages more expensive and by making saving

the governor of the bank of england has defended the decision to raise interest rates, saying there isrisk of soaring prices becoming embedded. the bank has forecast that the uk economy will fall into recession in the last three months of this year — and that it will last well into next year. it also anticipates a further climb in inflation — to more than 13%, the highest for more than a0 years. it's because of that, that the bank set interest rates at 1.75% — the increase of half a percentage point was the biggest rate hike for 27 years. as our economics correspondent andy verity reports, the hope is that making it more expensive for us to borrow money will make us less likely to spend. even during hard times. in withernsea on the yorkshire coast, jayne nendick runs the shores community centre, where every day she tries to help people struggling to feed themselves. can i sort a food parcel, please? the community centre gave out 200 food parcels this month, double what they gave out this time last year, and the community pantry sells surplus stock from supermarkets at cheap prices to w

now that could mean that the bank of england ends up that the bank of england ends up cutting interesting them to do. that is difficult for the bank of england because every august, in fact every quarter, they bring out new economic forecasts. and of course the forecasts. and of course the forecasts that will be published this week will be based on how fiscal policy is now, and yet that could change quite a lot potentially from september, where the new prime minister is installed. so again, we could see lots of changes to the bank of england forecasts and therefore an impact on how much further interest rates could go up. find interest rates could go up. and tax policy _ interest rates could go up. and tax policy is — interest rates could go up. and tax policy is the _ interest rates could go up. and tax policy is the main - interest rates could go up. and tax policy is the main battle ground in this race to become the next prime minister, and there is a lot of discussion about the impact it will have on the uk economy, because it can't be overstated how critical it is to get that rate,

the governor of the bank of england has been speaking earlier at the bank of england press conferencever 13% in q for this year and remain and to remain at very elevated levels throughout much of 2023. the bulk of that further increase reflects higher wholesale prices feeding through to retail energy prices, with a further large rise in the off gem price gap projected in october. i should stress that our forecasts and projections take into account the new method announced by of gem this morning. so, you can see in the next chart, the direct impact of energy prices on cpi inflation in our recent forecasts, and the extent of the latest upward revisions. you will see the green line. i will come back to the dashed green line later because that shows an alternative projection which uses their full futures curve rather than the fixing of the line. but you can see obviously there are clearly what has gone on in recent forecasts, and i would emphasise also, i use the word direct impact of energy. of course it is not the total impact of energy. this is the direct impact of energy. now, this ri

seen 50 basis points from the bank of england in september. been more hawkish calls recently. yesterday, the former boe center at said rates could hit 6%. we've also seen expectations of the bank of england overtaking the fed and the next three years, that they foot back after that because of the recession risk in the u.k.. ivan sans mliv, 100 -- i even saw on mliv, the fact they were even discussing is insignificant. francine: after beating expectations the supporters of the outlook for european corporate earnings could be rocky. joining us now is tim craighead from bloomberg intelligence. what -- looking at the charts, is it going to be worse or better? tim: it's a shameless plug. we didn't have our reading list to show how graphic art researches. we put charts. one of these dynamics is the issue you've been talking about. high inflation is not going away. we are going to stay at sustained high levels for structural reasons. what does that mean? interest rates are going to stay relatively elevated as well. from that perspective, we seen a dyn

shery: the bank of england now carrying out its biggest rate hike in 27 years. 50 basis points. the boe warning that it is headed for more of a -- more than a year of recession. banks are in a precarious situation right now. today we are expecting a rate decision from the rbis. haidi: the question over the u.s. recession continues to loom over markets. the payrolls number will fill in part of that puzzle. look at this chart that shows what we are seeing when it comes to u.s. recession. the curve inversion, the age-old indicator. we will see if that changes with the neighbor market numbers. shery: surprisingly, the markets seem to be less concerned about recession then they were in june. you have an interesting dichotomy perhaps because we have seen a strong u.s. labor market. investors are focused on friday jobs numbers. what that might mean for aggressive fed rate hikes. kathleen hays is here with more on this. we have heard plenty of fed speak already and the cleveland fed president adding to it. >> she is making it very clear. let's start with the job market because it seems s

reserves got the operation of kidnapping infested. venezuelan gold deposited in the vaults of the bank of england by the central bank of venezuela is shameless and outrageous for the entire venezuelan community. for all the people of venezuela and the whole world must know that there is no legal security in london, nor in the bank of england. that at any moment any country or central bank in the world can be rob davidson, international reserves. we spoke to daniel saw professor of latin american and caribbean studies at the city university of new york, who told us that the case, high court decision will home ordinary venezuelans. this is, make you neo colonial aggression against that as well or against any country that they can control. who are the courts of england in the bank of england to determine what to do with all $2000000000.00 the vendors willing gold. this belongs to the everyday people of venezuela. that could be used for the 30000000 people of that country in the form of scholarships, investments in education, investments, and much needed infrastructure. but this is part of the allow

that group who advises the bank of england. t is i particularly the rate of increase, as well. historically we have seen interest rates higher than that but the rate at which they are going up and the potential for them to go even further when people have been planning on these low interest rates and getting used to that is really where a lot of the problem is and where a lot of the problem is and where a lot of the problem is and where a lot of people will look at this and think, this is absolutely terrible news for me. i think what he was saying this morning, it is widely predicted that interest rates will hit 3% by the end of next spring, perhaps, that is what a lot of experts are saying. in theory, that can help to address the sort of domestic reasons why inflation is happening but what the bank of england can't really do is to address the reasons why energy prices are going up, which is a huge driver of inflation, as well. that is completely out of their control and those high costs mean the bank is warning of a recession b