as someone who has sat on the monetary policy committee, when the members of the bank hear that, what the problem is we have not heard from the monetary policy committee, they have been silent. but the technical term is a risk premium. what's happened, truss and the government have basically made it much more risky to invest in the uk. so the cost of borrowing for the uk has risen. chris giles in the financial times called it a moron premium. so predictable, so explicable, so unnecessary. so what you have here, everyone in the country is made poorer by the actions of liz truss with this mini budget. first, they didn't need to do the mini budget and i still haven't heard the reason for the rush. why have you got to rush in and do that? members of the monetary policy committee will say, you've made the situation an awful lot worse. the imf said, you can't have the treasury fighting with the bank of england, which is what has happened. i wrote columns saying, markets don't like clueless amateurs. and that's what we've got. i suppose she would say she was well aware with the cost of livin

to professor of economics david blanchflower, who formerly sat on the bank of england's monetary policy committeeake of the speed with which the mini budget has been undone?— with which the mini budget has been undone? well, i thought it was auoin been undone? well, i thought it was going to _ been undone? well, i thought it was going to be _ been undone? well, i thought it was going to be a _ been undone? well, i thought it was going to be a disaster- been undone? well, i thought it was going to be a disaster in - was going to be a disaster in july and august, and i wrote columns saying that liz truss had to go from mrs it's stupid to mrs sensible very quickly otherwise the bond and foreign exchange markets would crash. i said that the adviser would tell her what was wrong on the first day, but they fired the adviser and went ahead with the plan for an unfunded tax cut that the amount of borrowing could not be sustained. i said the only choice they had was to ditch the whole thing and that is essentially what has happened. the markets crashed, the pension funds were about to fail, mortgage price

one of the consequences would be the monetary policy committee could take account of the obr forecastnovember monetary policy decision meeting. but kwarteng in an interview yesterday afternoon said it is going to be november 23 after all, not throwing the bone to markets. then in the evening last month, officials were saying he wants it to be brought forward but he wants to announce it in comments officially after parliament is brought back from recess. so, very confusing, and it is leading people in the conference hall to question privately whether these are communications failures. or whether it is a failure of the people behind it. tom: difficult for the markets to comprehend and get there heads around as we look to get more clarity from the leadership. lizzy burden in birmingham, looking ahead to that speech from these u.k. prime minister. francine: tesco shares are trading higher after the british supermarket beat estimates. the company determined not to lose its reputation for value despite food inflation. charles, you always make us smarter on what supermarkets are doing, what

earlier, ispoke to the economist david blanchflower who formerly sat on the bank of england's monetary policy committeeng to be very tough and he had the benefit of experience that he was the chancellor and he did very well with the furlough schemes and he did oppose what liz truss was going to do, so he has all of that going, and the market knows him. i think he is in for deep trouble and the politics is being driven by the economics. the economics, markets are sitting on a knife edge, and what it seems is all the things that the new chancellor, i assume hunt, will do, is overtaken by the fact the evidence seems to be that the uk already is in recession. we had data today on the pmi, purchasing manager indices, the services and manufacturing says uk in recession. retail sales falling, output falling, so the problem is if he says we're gonna do spending cuts and raise interest rates, actually, in a recession, you do the opposite. you raise spending and cut interest rates. so he has a real dilemma if he thinks he is gonna be able to go in there and say, lots of spending cuts are coming, unfortunately, t

david blanchflower formerly sat on the bank of england's monetary policy committee, and is currentlyssor of economics at dartmouth college in new hampshire. i asked him if this latest news about borisjohnson pulling out of the leadership race might calm the markets. maybe but probably not. we saw a rise in the pound up to about $1.11; and now it has fallen back to, lost, looked about five minutes ago, it had fallen back to 13.25. i think what we are going to see here is extensions of what we have already seen. maybe we are going to see unity in the tory party but i suspect not. markets are sitting on knife edges not knowing is coming. are the tory party going to fight like rats in a sack going forward? who is the new chancellor going to be? are we're going to see attempts to have big spending cuts and what in the end are the people going to say? that seems to be pretty important. they are headed to a really tough winter struggling to pay their bills and here we have the second prime minister in what, 47 days, but nobody is elected. so i think the markets are sitting on a knife edge,

david blanchflower formerly sat on the bank of england's monetary policy committee, and is currentlymain about what he will be like and do because we haven't heard much from him in the last few days. a lot of change since we did hear about his policy ideas when he was competing against liz truss for the leadership. he talked today about profound economic challenge, that it'll be a tough period.— challenge, that it'll be a tough period. what are you exoecting? _ tough period. what are you expecting? it's _ tough period. what are you expecting? it's going - tough period. what are you expecting? it's going to - tough period. what are you expecting? it's going to be | expecting? it's going to be very tough and he had the benefit of experience that he was the chancellor and he did very well with the furlough schemes and he did oppose what liz truss was going to do so he has all about going and the market knows him. i think he is into deep trouble and the politics has been driven by the economics. the economics, markets are sitting on a knife edge, and what it seems is all the things that

it's taken as an absolute truth, although monetary policy committee, people that i've met over the years they, they get angry when you suggest that they're not independent. because if they really go by the fiscal rules and all of that mantra, that mainstream media goes on about, they have to raise interest rates which really protect the pound at the expense of those who have mortgages and the export of british goods abroad. so it's really a political decision making game right now, and who knows, perhaps a britain will be saying to the united states, come on, you've got to help us with our gail traits because they have been going up to 7 percent. there are talks, talks about the bond prices, which suggest solving credit default is doing issue why of on price is increasing so much they need help. know, just for me on m f, joe biden. actually before i let you go, one last question before, before i do that, you go trust the prime minister. she's only been in the job as well, hardly a handful of weeks. and yet when she 1st arrived, but you media was calling her the new margaret stature, whic

which means the monetary policy committee meeting cannot take an account the obr assessment in the monetaryolicy decision. it is extremely confusing. -- chairman this morning, even he was celebrating, thinking it had been brought forward. take a listen to him, he was saying it is going to be a bumpy road ahead. >> under account given economic circumstances, undoubtedly, it is going to be a bumpy road. i think we need to not put the cart before the horse. settle things down now. >> a bumpy road ahead, a conservative mp, mel stride. liz truss has had to do this massive u-turn on the top -- of income tax. we are hearing from colleagues from the darkest corners of the conference hall in birmingham, even some of liz truss'own cabinet members -- she can get through her premiership without being pushed around and without being made to compromise on her economic policy. what might be next apart from benefits would be the cap on bonuses and planning reform, she is going to have a difficult time getting her economic decisions through. guy: great stuff, great reporting. the whole team in birmingham do

korea government, talking, having a news conference at talking about multiple members of his monetary policy committee5%. that has made suggestion --, suggesting growth will be slower than the expect. it may be raining prices and by sacrificing the economy. a bit of a broader markets. you can see what is going on. this one reversal that has taken place now, isn't great results for them. yvonne: not quite. we saw strain on the back of the 50 basis point hike. we have a race that already, due to the dollar strength we have seen across the board. between 58 and 75, they leaned towards 50, due to a share of rate loans as well. very much watching ho -- household markets, debt the likes. certainly a lot of questions about what november brings. rishaad: this is one economy which is seriously leveraged up. let's get our global politics editor, kathleen hays. it looks like they're pivoting back to the outside rate increases to defend the currency. let's not forget this causes pain in itself. >> it certainly does. inflation is running high. it is not surprising they may have decided to do this. joining me is th

secondly, it will come before the monetary policy committee, when they will be putting up committee, mortgage holders up and down the country. the opposition labour leader, sir keir starmer, also welcomed the announcment. but he was still critical of the government�*s mini—budget. i'm pleased that they've brought forward — i'm pleased that they've brought forward this date to begin the process, _ forward this date to begin the process, but what i want to see and what _ process, but what i want to see and what i _ process, but what i want to see and what i would do now is reverse that kamikaze _ what i would do now is reverse that kamikaze mini budget. that's got to be reversed. we need a windfall tax on the _ be reversed. we need a windfall tax on the oil_ be reversed. we need a windfall tax on the oil and gas companies to help pay for— on the oil and gas companies to help pay for the _ on the oil and gas companies to help pay for the energy price freeze, and what that _ pay for the energy price freeze, and what that will do, most important of all, what that will do, most important o

the next meeting of the bank of england's monetary policy committee — that's the group that decides onrket. and it's worth saying, even for people who don't own a house and aren't looking to buy, the picture isn't especially rosy, with more demand from tenants, at the same time as fewer properties are becoming available to rent. that means rental prices are expected to go up in the coming months. let's speak now to simon rubinsohn, chief economist at the royal institute for chartered surveyors. to make more sense of that information, simon, thank you and good morning. isuppose information, simon, thank you and good morning. i suppose the question we have been talking about, what —— to what extent the mini budget has impacted the general economy, to what extent has it had an impact on the housing market in the few weeks since it has been delivered and on mortgages and interest rates? weill. mortgages and interest rates? well, i think our mortgages and interest rates? well, i think your introduction _ mortgages and interest rates? vii i think your introduction summed it up i think your i

let's talk to martin weale — a former member of the bank of england's monetary policy committee — andat king's college london. thank you very much forjoining us today. i want you to talk to our viewers first of all, because people are trying to make sense of all of this news today, they may be wondering what it means for them. their mortgages, the pensions etc. what would you say? i their mortgages, the pensions etc. what would you say?— their mortgages, the pensions etc. what would you say? i think we have to distinguish — what would you say? i think we have to distinguish mortgages _ what would you say? i think we have to distinguish mortgages from - to distinguish mortgages from pensions. as i understand it, the problem the pensions fund had, the pensions funds have had as they have had cash call on contracts they had taken out to protect themselves, should interest rates have fallen further. that does not affect their ability to pay pensions but does mean they need to cash in the short term, because interest rates have actually risen. in the longer term, higher interest rates make

to why inflation might otherwise go and provided it is before november the 3rd when the monetary policy committeed perhaps have an impact on that committee of making them feel they do not have to be quite as aggressive in those interest rate increases as would otherwise be the case, which could help millions of people with mortgages.— people with mortgages. these misste -s people with mortgages. these missteps have _ people with mortgages. these missteps have been _ people with mortgages. these - missteps have been self-inflicted, missteps have been self—inflicted, though, which must be a cause of huge frustration to yourself and many colleagues?— huge frustration to yourself and many colleagues? there have clearly been misjudgments _ many colleagues? there have clearly been misjudgments amid _ many colleagues? there have clearly been misjudgments amid steps, - many colleagues? there have clearly been misjudgments amid steps, for. been misjudgments amid steps, for example i have been urging the obr forecast to be brought forward for a number of weeks now and pushing very hard on that. to some deg

tighter monetary conditions, and they will have to be decisions made in the run to the next monetary policy committeee rates, that will give them appropriate room to manoeuvre to try and bring inflation down to levels consistent with price stability. it is all a bit of the mess at the moment, but the bank is doing the best they can under very difficult circumstances. can doing the best they can under very difficult circumstances.— difficult circumstances. can i ask ou a difficult circumstances. can i ask you a timetable _ difficult circumstances. can i ask you a timetable question? i difficult circumstances. can i ask you a timetable question? this i difficult circumstances. can i ask- you a timetable question? this bond buying scheme by even giving lynn is set to end on friday. is there anxiety about what might happen after that? .. , ., , anxiety about what might happen afterthat? , ., , , after that? exactly. that is why the re -o after that? exactly. that is why the repo facility — after that? exactly. that is why the repo facility was — after that? exactly. that is why the repo facility was intr

it is also timed to come ahead of when the monetary policy committee will decide on how much interesthat the content of that statement might perhaps study some nerves and we may get a smaller increase. the content of kwasi kwarteng�*s plan will be absolutely crucial but the mere announcement of bringing it forward and giving people a hint, an attempt to balance the books over time, tissue and demonstrate how public expenditure will be brought under control, despite the tax cuts, that not been enough to put perhaps the economic ship back on an even keel. kwasi kwarten: ship back on an even keel. kwasi kwarteng will — ship back on an even keel. kwasi kwarteng will take _ ship back on an even keel. kwasi kwarteng will take questions - ship back on an even keel. kwasil kwarteng will take questions from mps today for the first time. what sort of reception as he likely to receive and what does he need to say? i receive and what does he need to sa ? ~ , receive and what does he need to sa ? ~' , ., u, say? i thinking needs to calm nerves, especially _ say? i thinking needs to calm nerves, es

it's not for the government to say what the bank of england does one monetary policy committee makesear, for them to feel that the inflationary pressures would be lower and they would not have to make as high an increase as perhaps some people are predicting. and thinking about the concerns of our constituents' mortgages is top of my mind. the chancellor has _ mortgages is top of my mind. inez chancellor has pledged mortgages is top of my mind. i“i;e: chancellor has pledged a mortgages is top of my mind. i“i9: chancellor has pledged a new mortgages is top of my mind. ii9 chancellor has pledged a new wave of austerity, with public spending cuts, squeezing services that have already been cut to the bone over the past 12 years. this is without a mandate, and this round of austerity is a political choice, not economic necessity. instead of cutting our services, the government could raise taxes on the super—rich. if the chancellor believes in his approach, why doesn't he put it to the people and call for a general election? with the greatest of respect to the honourable lady, i did not pl

wales in cardiff, david joins us, dartmouth professor of economics, former bank of england monetary policy committeeember. i guess i want to avoid the politics. within the chaos of london, the commonwealth outcome for the people of the united kingdom, whether labor, tory, tory government, will england be poor and 12 months? david: i think so. there is a risk premium that has happened since the terrible budget. the financial chaos is what has driven the politics. you saw a budget that did not work out with the funding was. they find the secretary of the treasury, they said more tax cuts are coming and that markets did not like it. we saw the pension funds collapsing. mortgages not being able to price products. that kind of chaos has caused the politics. i think it has caused the economics and it has caused people to be poor. -- poorer. they said it is not looking good on the downside and maybe the bank will not be able to raise rates as much as markets are thinking. this is apoplectic. i've never seen anything happen so quickly. the economists said they did not think liz truss had the shelflife life

government was not talking to the bank of england and it looks like the bank of england monetary policy committeecement to. whether in the dark? i... i haven't spoken - about an announcement to. whether in the dark? i... i haven't spoken to i the dark? i... i haven't spoken to them but — the dark? i... i haven't spoken to them but i _ the dark? i... i haven't spoken to them but i do _ the dark? i... i haven't spoken to them but i do not _ the dark? i. .. i haven't spoken to them but i do not think— the dark? i... i haven't spoken to them but i do not think they i the dark? i... i haven't spoken to| them but i do not think they knew what the government was going to do. in every budget announcement and every statement may i would always make sure the governor of the bank of england. they are at it again today, trying to trash the bank of england, along with having excluded the office of budget response this is undermining state government credibility and the unfortunate side effect are the direct effect is that because what is going on just now, interest rates will be higher than they would otherwi

dartmouth college and a former external member of the bank of england's interest rate—setting monetary policy committeeas we clean the air, which is said. we have had to return back to make further market interventions, including keeping most of us up for the whole of last night to do a further intervention. and for us, that was because it became clear that we as the bank of england — i know not all central banks are like this — have never bought index—linked gilts in our monetary operations. but we realised for financial stability purposes, we have to do it. and we've announced that we will be out by the end of this week. we think rebalancing must be done, and my message to all the funds and all the firms involved in managing those funds — you got three days left, you've got to get this done. because again, part of the essence of the financial stability intervention is that it's clearly temporary. so why is it temporary was next summer saying today, if the painter stood behind it, that wouldn't be the panic. i stood behind it, that wouldn't be the anic. . ., ., the panic. i agree with that, and i saw

bank— reassurance popular the next meeting of the bank of england's monetary policy— of the bank of england's monetary policy committee — november. their decision is likely to have a further impact on the housing — to have a further impact on the housing market and it is worth saying that even for people who don't _ saying that even for people who don't own — saying that even for people who don't own a property or are not looking _ don't own a property or are not looking to — don't own a property or are not looking to buy one at the moment, there _ looking to buy one at the moment, there is— looking to buy one at the moment, there is a _ looking to buy one at the moment, there is a lot of demand in the rental— there is a lot of demand in the rental market as well at the moment is the _ rental market as well at the moment is the rental prices are also expected to go up. not a particularly rosy picture. the landlords — particularly rosy picture. the landlords have _ particularly rosy picture. the landlords have mortgages and they are changing they will pass on the costs, as well as the energy costs, to the renters. than

it is also a decision that has to be taken in the first week of november by the monetary policy committeean kennedy has been talking to voters in the tory—held seat of winchester. home to 130,000 people and plenty of strong views on the chancellor�*s tax decision this morning. we came across cassie, an independent business owner, aaron, who�*s on universal credit, and deborah, who�*s a pensioner. cassie white owns the projects, which is part cafe, part antique shop and part giftware. she says the government should never have considered cutting the 45p tax rate as it�*s simply unfair on lower earners. it�*s a bit of a joke, maybe, in my opinion, but i don�*t think it actually has a huge effect on me and my business and what i do. it�*s definitely going to cause our new prime minister some problems and possibly some trust in her may be difficult. aaron wiffen is on universal credit. he�*s been a conservative voter but he believes today�*s u—turn is politically damaging, especially for the chancellor. i think it's damaged them quite a lot. i think, really i think the chancellor should go bec

secondly it will come before the monetary policy committee meeting on the 3rd of november when they willnnouncements are made and the markets take a dim view of the plan. i think the moving parts are threefold. first, the markets will make an assessment of what the chancellor comes forward with in terms of his fiscal rules because we do not know exactly what they are going to be. secondly, they will look at the assumption that the government has given the obr in order to run the figures through its model. and tell us whether or not those rules are likely to be met. and if those assumptions are deemed to be undeliverable or unrealistic, that will be something that the markets will worry about. thirdly, the government is really out of step with where the obr will end up on this issue of growth. the government believes it can get medium—term growth up to 2.5%. i doubt the obr will agree with that. will there be temptation on the chancellor to say ok well, that is fine what obr believes, but this is what we believe and here is how were going to do it. if there is a deviation from the view of

to why inflation might go and provided it is before the 3rd of november which is when the monetary policy committeehey cannot find enough savings in government, realistically, they will have to revisit other tax pledges because they may not be affordable. that was the view of mel stride. let's speak to lord pickles — eric pickles — conservative peer and former chairman of the conservative party. thank you forjoining us. before the 45p tax u—turn you said if liz truss you turned on it she would be dead in the water without a paddle. she did it, and now there has been a change on what we were being told was absolutely a fixed position which was the announcement of how to deal with debts on the 23rd of november, also coming forward. how do you feel about those u—turns in quick succession? do you feel about those u-turns in quick succession?— do you feel about those u-turns in quick succession? let's hope that i am wron: quick succession? let's hope that i am wrong and _ quick succession? let's hope that i am wrong and let's _ quick succession? let's hope that i am wrong and let's hope _ quick successi

it�*s also timed to come ahead of when the bank of england�*s monetary policy committee will decide on nerves and we may get a smaller increase than otherwise would have been the case. so the content of kwasi kwarteng�*s economic plan is going to be absolutely crucial but the mere announcement of bringing it forward and giving people a hint that, if you like, an attempt to balance the books over time, to show, to demonstrate how public expenditure will be brought under control, despite the tax cuts, that has not been enough to put perhaps the economic ship back on an even keel. iain, kwasi kwarteng will be taking questions from mps today for the first time since he announced his so—called mini—budget. what sort of reception is he likely to receive and what does he need to say? i think he needs to calm nerves, especially on his own side of the house of commons. already, we have heard there from pat mcfadden, the shadow treasury minister, rachel reeves, the shadow chancellor, has also been commenting this morning and clearly what labour are pushing for is for a reversal of not so mini—bu

mark carney as undercutting economic institutions and jonathan haskell, a member of the monetary policy committeehave repeatedly said, in this - except they are right? as i havej repeatedly said, in this session, the obr will have a fully forecasted and scored response to the medium—term fiscal plan in less than three weeks. medium-term fiscal plan in less than three weeke— three weeks. question it, mr speaker- _ three weeks. question it, mr speaker. thank _ three weeks. question it, mr speaker. thank you, - three weeks. question it, mr speaker. thank you, mr- three weeks. question it, mr- speaker. thank you, mr speaker. at the 2021 spending _ speaker. thank you, mr speaker. at the 2021 spending review, _ speaker. thank you, mr speaker. at the 2021 spending review, the - the 2021 spending review, the government announce an increase in public expenditure on r and d to £20 billion per year by 2024—25 including funding for association to eu programmes. the including funding for association to eu programma— including funding for association to eu programmes. the chancellor and his team for — eu progr

jerry of the monetary policy committee was saying just because gilt yields have moved. economic crisis at the moment.i i, i, , i, moment. is that how you see it? in a sense that — moment. is that how you see it? in a sense that this _ moment. is that how you see it? in a sense that this has _ moment. is that how you see it? in a sense that this has been _ moment. is that how you see it? in a sense that this has been a _ moment. is that how you see it? in a sense that this has been a long i moment. is that how you see it? in a sense that this has been a long time | sense that this has been a long time coming. the british economy has been weak for a long coming. the british economy has been weakfor a long time. celerity coming. the british economy has been weak for a long time. celerity is added to this. very low investment, high date, notjust the government but in the private sector as well. very big current account deficit. we are very dependent on imports for essentials from the rest of the world. all of these fundamentals look bad, and what we have got with the mini b

earlier i spoke to to martin weale — a former member of the bank of england's monetary policy committeeeople. i think we have to distinguish mortgages from pensions. as i understand it, the problem the pensions fund had, the pensions funds have had is they have had cash call on contracts they had taken out to protect themselves, should interest rates have fallen further. that does not affect their ability to pay pensions but does mean they need cash in the short term, because interest rates have actually risen. in the longer term, higher interest rates make things easier for pension funds because they reduce the cost of providing future pensions. i think with mortgages, it is a different matter. there, the increases in interest rates we've been seeing in the market for government debt are likely to feed through to fixed term mortgages and of course they have been feeding through already, mortgage offers have been, mortgage schemes have been withdrawn and replaced by new ones at higher interest rates. that gives our reviewers a sense of the direction of travel on all of this. what do you

next week we are expecting the monetary policy committee of the bank of england to meet on november theontext to the rate rise we are expecting. it might be tempting for rishi sunak, a former chancellor himself, to take a little bit longer, particularly given that the financial markets seem to have settled down since liz truss announced she was going. looks like another — truss announced she was going. looks like another busy _ truss announced she was going. looks like another busy week _ truss announced she was going. looks like another busy week next _ truss announced she was going. looks like another busy week next week as well. thank you both. let's turn our attentions to europe and the football last night. john is here. hold the front page! erling haaland did not score! what has gone wrong?! well, city were already through. perhaps he only saves the goals for when it matters. it certainly mattered for chelsea last night. he is a goal machine. if he doesn't score he is not happy. he was substituted at half—time, which is astonishing. but chelsea are through, so they are looking good

from a bank of england perspective, the financial policy committee, financial stability, is actually completely consistent with the monastery -- monetaryolicy's perspective. it may not look like it. the issue is that you have the bank of england in aggregate looking at the economy, seeing inflation hi, saying we need to curb demand in order to bring inflation back down again, and therefore at the same time, you've got on the fiscal side of things fiscal stimulus, and you can understand why fiscal stimulus was introduced. you can understand both perspectives. on one side, you have the agency trying to support nominal demand and on the others, trying to reduce nominal demand. you have seen similar policies being introduced in europe and that will put more pressure on the ecb to follow that path sending rates even higher. the bigger picture is that alignment or misalignment. yvonne: i guess i got your take in terms of allocation when it comes to u.k. assets and does it spill over to anything beyond u.k., do you think? >> the spillover point is where governments, central banks, and other regions are going to be looking at the situation in

rate or a peak rate for monetary policy or is that something you are frequently updating your thinking? we know in the sep, chair powell spoke at jackson hole and said the committee is forecasting such and such an interest rate a year or so from now. if you can say a little more about how you can set a terminal rate and update a terminal rate or is that the wrong way to think about this? ms. cook: it's a good question. over time, we will leave the appropriate rate. that will be the terminal rate by observing how the economy responds to monetary policies. thus far, the fomc during my time, we have moved quickly to raise rates more quickly than we have in decades. i think high inflation has required front loading and it's required to short-circuit the potential psychology that can take hold and lead to inflation expectations. going forward as i mentioned in my speech, as we continue to continue to tighten policy, it will become appropriate to slow the pace of increases and assess the effects on the economy and inflation. mr. posen: so far in your remarks and our conversation, you have been focused on the interest rate instrument. the fed has had through over the la