if you are a mpc member, you want to say i want to talk about this.an persuade me to vote for a 100 basis point rise. a week is a long time in the economics of pandemonium. lisa: we just have one minute. but your perspective going forward on the potential for some kind of politicization of this bank of england, when if they were to raise by 100 basis points, could really torpedo households, mortgage rates tied to that. david: the big story, over the last two days, we have seen all these mortgage lenders in the u.k. backing off, taking out their products in the market because they cannot price mortgages because of the chaos. if you are in a position, where you as chancellor have ended up closing markets, -- the rising interest rates will kill the housing market. the u.k. was probably already in recession. it has been driven into recession by this utterly incompetent set of moves by the chancellor. i'm not sure anything that they can do. but it is not clear to me. if he resides, what will they do? tom: we didn't have you ought to talk about the bank of

the market dust of the market policy committee should have done but said this is not a meeting of the mpcinancial policy meeting, i really don't others stand. we've seen pandemonium. alix: economic pandemonium. danny on bloomberg surveillance. let's get to the market reaction. macro strategist a fixed income team over at goldman sachs. what was your big takeaway, what did you think of today and the price action. >> that was needed to address the market volatility in the issues in the industry. but that measure from the bank of england is targeted and it's temporary even though it is open ended. so there is more volatility in u.k. and fixed income markets. the key constant for us off last week's fiscal announcement is that it reinforces upward inflation pressures, not just from fiscal stimulus and support it in pies but also from important inflation within the currency since then. guy: the next meeting for the bank of england beginning of november, what would be a reasonable expectation at this point in terms of rate hikes the need to be delivered at this point. >> that is a great question

the mpc will not hesitate to change its rates by as much as needed to the 2% target sustainably in theterm. i spoke to a market analyst about her assessment of the situation. >> certainly, there has been real nervousness across financial markets because of this worry, because these tax policies, it means they are inflationary, will push up demand in the economy. that will force the bank of england to increase interest rates much more sharply. that is causing real jitters across the housing market in particular. housebuilding shares have fallen back. there are real worries about the number of mortgage holrs who are on two-your fixed deals that will run out next year. actually, they took those mortgages out when rates were at 0.1%. they are forecast to shoot up to close to 6%. you can see how pnful that could be. it could be that some of those people, around one in five, may be refused fresh mortgages at those lower rates. they would have to pay more anyway because they do not meet affordability criteria. that has caused a real worry as far as the housing market is concerned. fears it co

is imogen bachra from natwest, dan mikulskis from lcp, and andrew sentance, former bank of england mpcber. we will stick with the uk as the government seeks to rebuild its pet ability as its mini-budget causes backlash. this is bloomberg. ♪ dani: welcome back to the open, almost 50 minutes into the european trading day. the steepest losses coming from the ftse 100, equities down more than 2.2%. homebuilders under immense pressure with expectations of higher rates from the boe. barratt is down 11%, taylor wimpey is down. we continue to see the fallout from the boe that might be forced to stamp down on inflation by hiking interest rates. gilts resuming their selloff, the belly of the curve under pressure, five and 10-year looking at about a 15 basis rise from yesterday's level. friday's mini-budget and its fallout has rocked investor confidence in the new u.k. government. u.k. prime minister liz truss now faces jittery markets. more, we are joined by bloomberg's philip aldrich. we have got the tory party which is supposedly the party of sound money, is credibility gone now? >> it's certa

statement from the boe saying they are waiting to see what things look like by the time we have our next mpceeting next month. lale: if you are trying to understand how markets react, there needs to be credibility forming. yesterday you so markets were under pressure, so they weren't convinced, of course. we are looking for a major rate hike from the bank of england, given the fact that the pound is under severe pressure. i need to hear personally from bailey a whatever it takes type of communication that will tell me they are really on top of this situation. we do think they will deliver a major rate hike before november. dani: i've heard the argument that the boe should not do that because it kind notes a -- connotes that they are coming from a place of weakness. lale: to me, i don't think the rate hike is a problem. i think the magnitude of the rate hike is going to be important. it needs to be such that it does not communicate to the market that they are losing control and therefore they have to do this. aggressive tightening might cause recession as well. that's a worry we are seeing in

this question has only been asked by mpc starting last october but again, the biggest pure crime, a advantage question again largest gap for either party since this question first asked in 1993. so, if the economy dominates the issues between now and november, the republicans have a decided advantage on it. it looks like the economy will be the dominant issue. >> john: okay when things republicans have not had so far, the democrats whacking them on abortion january the 6th during the summer months. the republicans didn't have much to answer with. is this commitment to america the unified message that they need to take and write over the next several weeks? >> i think it is because if your aunt talking about something, people are turning about what the other side's talking about. you are right. the republicans have been behind the eight ball. and even if they want to talk about inflation from august 8th for about the next four or five weeks, the political discussion dominated by the former presidents documents that mar-a-lago and the fbi raid retrieval. so that is now starting to diminish. the

the mpc will not hesitate to change interest rates by as much as needed to return inflation to the 2%medium term. downing street has said it won't comment on the fall in the pound saying it's a matter for the �*independent bank of england'. the chancellor kwasi kwarteng isn't commenting either. have a listen. chancellor, what are you going to do about the turmoil in the markets this morning, sir? i'm not going to make any comment now. what about the city? what conversation are you having with the bank of england, sir? the opposition labour party says the government has spooked markets with what it says is a reckless gamble on tax cuts paid for by increased borrowing. the shadow chancellor rachel reeves has been speaking at the party's conference in liverpool — here's a bit of what she said. on friday, the chancellor had an opportunity to set out a serious response to the cost of living crisis and he failed. why should my constituents in leeds west, why should people in merseyside pay for tax cuts for those who were already the wealthiest? it's not what anyone voted for, it is putting

have you read the mpc member danny, who is saying when will the prime minister become mrs sensible andme true.— to my favourite fact his prediction has come true. what has happened at the heart of — has come true. what has happened at the heart of this _ has come true. what has happened at the heart of this issue _ has come true. what has happened at the heart of this issue of _ has come true. what has happened at the heart of this issue of whether - the heart of this issue of whether the heart of this issue of whether the government's economic programme here is— the government's economic programme here is credible or not, that life the forecasting from the office for budget— the forecasting from the office for budget responsibility and now i argue _ budget responsibility and now i argue for sometime before friday's statement — argue for sometime before friday's statement and indeed had correspondence with the chancellor and correspondence with the office for budget responsibility argue that there should be that forecast because _ there should be that forecast because that would have t

as the mpc has made a clear, it will make a full assessment in its next scheduled meeting goes on tod low against the dollar is as the markets reacted to the biggest tax cut in half a century. many have you have been getting in touch to find out how it might impact on you, first, let�*s look at some of the most important question is being searched online at the moment. why is the pound falling and what happens when sterling falls, what does a weaker pound mean, and why is it so weak? and what does parity mean? let�*s talk to some guess who might help with all of that. patrick reid from the adamis principle specialises in currencies. tom selby is a finance expert at the accountants aj bell. and we�*rejoined by our economics corresondent, darshini david. explain why the pound is falling and what we mean by a weaker pound as opposed to a currency that we would describe as strong? the opposed to a currency that we would describe as strong?— describe as strong? the pound is callin: for describe as strong? the pound is calling for a _ describe as strong? the pound is calling for a number—

from what we have heard from mpc member so far, they have been more concerned about that, about the likelyd impact on inflation. i think it just adds to the case for the bank to continue hiking aggressively now. jonathon: have you ever seen a fiscal package gets a large? >> i can't remember, but it really is large. we are looking at about 6% of the gpi, if that is correct. what we have got to remember is that the u.k. has actually done at relatively little so far, compared to the likes of france, greece, or we have seen bigger support and price caps already. we really were waiting for something to come through. it is good news for the economy and for households that the real worries look like they're going to be targeted. it will be by funding, rather than by a windfall tax dollar, as other economies and policies have been proposed. jonathon: we could see one of two things happen, or maybe both. high yields or a weaker currency. yesterday, sterling broke down to levels we have not seen since the middle of the 1980's, 1985. 11406. remember when we look at sterling, you start to worry. is th

the other point is that we just have jaw-boning on interest rates a that point the mpc says that theysitate to change interest rates as much as needed to return inflation to the 2% target sustainably in the medium turn that's fast fating because we ontario had a 50-points basis move by the central bank it was not the 50 percentage points anticipated many would say it would be tone-deaf if we didn't get 75 basis points we importantly had the intervention on the interest rate out of cycles some of that's possibly why we're not seeing as much impact on the pound. becky, back to you >> karen, thank you very much. this is a pretty significant move here. >> is it good for us it makes the dollar potentially stronger they're blinking a little bit. >> they're blinking in a big way. >> we were hoping yesterday some of the comments from charlie evans where he said i hope we can avoid a hard landing still meant that maybe the fed doesn't necessarily need to go three or four more 75 basis points, but they -- already? they're already not going to -- >> look at the moves this is done to restore orde