that is why the mpc has voted to increase the bank rate by 0.25% today.rates since the start of the cycle, it is restricted in our view. the evidence is now the that it in our view. the evidence is now the thatitis in our view. the evidence is now the that it is having an impact. to return inflation target, policy needs to continue to be restrictive and today we have taken the decision thatis and today we have taken the decision that is consistent with that which will help to return inflation to its target. i�*m not going tojudge will help to return inflation to its target. i�*m not going to judge what the path of rates will be, not last because as report indicates, more than one half made deliver inflation targets full stop we have ta ken than one half made deliver inflation targets full stop we have taken the decision today and we will go on judging what is most appropriate based on the evidence that we will see. the mpc will continue to monitor closely indications of inflationary pressures, including the tightness of labour market conditions and the be

that would be enough to change the forecast of the mpc, and show recession.think the committee will aim off that, because they were forecasting recession that in november, then took it back later and they probably wouldn't want to put it back in. i am the forecast, maybe we want to see recession. with rates as high as 5.75, that's probably what will happen. it won't be deep recession by historical standards. we're looking at a 1% fall in gdp but that's probably what needs to happen. lizzy: imagine the headlines tomorrow, a difficult message to communicate, but not by you. really great to have you previewing that decision. don't miss our coverage of the bank of england's policy decision at mid-day u.k. time. we have the press conference 30 minutes later. we will also bring you an interview with governor andrew bailey, at 4:00 p.m. u.k. time. the u.s. orders some government employees to leave niger following the coup in the country. a conversation with niger's ambassador to the u.s. next. ♪ lizzy: welcome back to "bloomberg daybreak: europe". u.s. state departm

some of us outside the mpc the mpc, they were mpc were on the mpc, they were saying, oh, don't worry will be transitory . and like me transitory. and people like me who are issuing these warnings that were clear in the financial markets, if you know to how read, graphs were kind of read, the graphs were kind of shunned pushed one side. shunned and pushed to one side. i i hope, hope, hope that the mpc learns a lesson here and starts to acknowledge the mistakes that it's made and starts to get people onto the mpc who aren't just the usual well, behave nice. treasury appoints did suspects from the same kind of magic circle. we've got a lot of really smart outsiders in this country. we need to start using them so we stop making mistakes. >> liam there'll be people at home watching and listening to this, talking about this, hearing us talking about this, hearing us talking about this being good news, who'll be scratching heads thinking, scratching their heads thinking, yes, right yes, it's moving in the right direction, but goods and services, i'm paying services, the things i'm paying fo

that was the major take away from the mpc yesterday.ists, this feeds into an all-encompassing inflation story, it becomes a demand pull and push as well. that's where you have to get worried, don't you? radhika: you rightly mentioned, the seasonality is quite high in the july-september quarter. food tends to go up, especially vegetables because it is the peak of the monsoon period. and once supplies come in from the next harvest, prices correct quite sharply. they want to look through this, they don't want to overreact. inflation is still moderate. by keeping on pause, by sounding hawkish and keeping a stance underscoring -- they are focused more. at this point, i don't see any risks but they prefer to err on the side of caution and stand holder longer than the market pricing. haslinda: when you take a look at india's recovery story, do you get a sense that it still requires monetary policy support given that fiscal support is contracting? radhika: growth is on a strong path. when you see the high-frequency numbers, numbers are looking

reporter, peter earlier, but in the editorial today, they say, the question to be considered by the mpcnk's reputation has been so shredded by its failure to control inflation, then it will overcompensate, to underpin its own readability, that is the worry. actually, around the slowing of manufacturing and all of that think, we had this report a little earlier on this week, that was saying that rates of contraction in factory output, new orders and employment, all accelerated in july. output, new orders and employment, all accelerated injuly. but british manufacturing output contracted at the fastest rate in seven months. the report said cash—strapped contribute different companies were cutting down on purchases and running down their stocks to save on money. the consumers are no longer in the buying mood, it would seem. let us know... if you are a manufacturer, if you work in that kind of wild, small, medium businesses, we would love to speak to you this morning, between now and 11am. this is so multifaceted. we bring in a jeremy from south east sussex. that is very precise, isn't it!

if you look at the services inflation which is better than the generated inflation for the mpc placingore weight on, that is running well above where they thought it would be. there is still pressure for them to do more the third reason is an argument of front loading do we think the bank of england can get away with one more 25-basis point hike? probably not the market is pricing in a rate close to 5.75 if you think there is more in the pipeline, there is an argument to front load it. that is one of the arguments that governor bailey put forward at the conference. argue view is that on balance, though it is a close call, 50 prevails >> very clear. thank you for clarifying the three points let me p ut the dovish stance o it city analysts are saying given how much titghtening has come through, is there a risk of overtightening from the glbank england? it will take a couple of months or a year for the existing interest-rate hikes to make it to the broader economy and we are activity to slow down. >> that is true. the risk of overtightening increases. the bank of england needs to see more

bank of america came out and said also their thought process on mpc marathon it's gone too far too fastwe can see that pull back into range we'll be back into the stock. >> back to jenny because you bought more sovereign health care it's a reit. >> we had cash slashing around and we had sovereign and they haven't done that well for clients almost underweight, we bump the positions up sabra owns skilled nursing facilities and behavioral hospitals, $1.20 dividend, finally returning to earnings stability between the pandemic and this has been a messy five years for them after seeing them in june and listening to the earnings call, we look at this, hey, this is a business that really has transparency and stability i want that 10% yield. i know they're paying it i know they're committed to it they earn $1.33 this year. they have 4% earnings growth. they're committed to it. it's a nice, stable place to hide out in this funky market. >> do you have any b&g in the brown pantry >> b&g pickles? >> crisco. >> cherry peppers. why should it? >> relish? >> yeah. no relish. pickles. >> b&g has a 6.25%

of course members of the mpc are aware of this.the real pain of the rates on the household side is amongst less than half of the population in terms of the pastor. but we are also seeing it through the credit channel elsewhere. but i think it is the timing of the fiscal and monetary, it is just not sophisticated enough in terms of the timeline on a monthly basis to call impact on inflation and on inflation expectations. alix: i would love to have more -- have no mortgage. 28 more years. we have been talking about the ditch rating downgrade for the u.s., what its implications are, what europe can take away from it, what the signal is to the u.k. what is your take? janet: it's obviously not the first time we have seen a credit downgrade. obviously this is only one of the three majors that have done it in the case of the u.s. and inevitably generates some headlines. it can also cause some market for -- some market volatility. when we think of the market impact it is really the factors that have driven this downgrade. it is uncertainty

ramsden, who's another senior member of the mpc . they held a member of the mpc.2:00. and in that press conference they said governor bailey said policy does need to remain in restrictive. that means he can't see interest rates falling any time soon. but he added the path to lower inflation is now more assured . inflation is now more assured. however, later in the press conference, the governor did indicate that it may be that interest rates stay relatively high. that is above 5. wait for it for the next 2 to 3 years. is now . that may be posturing. it for the next 2 to 3 years. is now. that may be posturing. he may be saying to financial markets, keep buying the pound because that keeps inflation low, because it keeps our exports more competitive and our imports cheaper. or it may be that he's signalling there's a lot more pain to come . look, it lot more pain to come. look, it could have been a lot worse today for mortgage holders. we could have seen a 50 basis point rise, half , could have seen a 50 basis point rise, half, and we just saw rise, a half, and we j

members of the mpc were split three different ways. there are nine members on the mpc.t to hike, eight wanted to hike, two wanted to go 50 and the rest wanted 25. lisa a.: i want to understand why. why some of them wanted to stay, why some wanted to raise 50. is an idea of theory? or is this an idea on the sustainability of rates at a certain level? that will increasingly become the question. is it because they believe rates are sufficiently restrictive or do they think they need to go more or less based on inflation? it is a subtle difference but it matters. jonathan: you mentioned the mortgage market. if you take the effective rate it is close to 3%. that is going to climb higher as those fixed rate mortgages -- and they have to go back to the bank and get a new mortgage. when you refinance you are not getting a percent, you're getting close to 6%. lisa a.: this is where tom said some really profound things. if we talk about a fed that does not cut rates, if a bank of england that does not cut rates, that is what people are not prepared for. jonathan: to get some answ

gary: i think obviously the mpc will be a problem. it is not as sticky as the core inflation.is a message of jackson hole is as central bankers, we are still data watchers. we don't have a strong fundamental story about where we are taking the monetary policy. it will be about each data point in our assessment of that. that is why we are all data watchers. every number that comes out could have potentially powerful impact on markets. haslinda: what does it mean for yields? 2-year yields are still above percent. do you see 10 year yields getting to five? gary: there is a risk. i'm not saying it is a central case but the direction of travel is still for higher yields. everyone has tried -- markets have said that we have peaked we are coming back down and inflation will not be a perennial problem. unfortunately, the data continues to jump over that sentiment and says no, inflation is still higher. core inflation is still sticky bond yields are still going higher. 5% for me is to possible. rishaad: got an inflection point do think now where yields, the two-year up over 5% on the y

as you saw from our last mpc, we changed the language on policy statement.ure a smooth take off and we feel we have done that. consistent with that was wanting to normalize rates in a measured fashion. we took out that to indicate we are at an inflection point and getting closer now to where we want to be so the objective is now shifting boards towards getting the landing right, sticking the landing. for that what we would like to see as an outcome is for growth to stay in the 3% to 4% range which is what we see as our long-term potential growth rate and also to get inflation in the target rate of 1% 3%. on the inflation front we are fairly comfortable we will get there. the latest out-earn's came out soft. the headline was 0.4%. we feel it will come back into range because there is still upside risk to inflation in thailand, impacts from el niÑo. so we expect inflation to come back into the 1% to 3% range sustainably. growth has disappointed. the latest second-quarter gdp number came out softer than expected at 1.8%. so we will be revising our headline fore

so i want to see the mpc, the monetary policy committee, become more free thinking and more willing totion is coming. get these interest rate rises now, when i was writing that, i was pilloried by the bank of england and the whole economics establishment. we people that kind we need people saying that kind of who are willing of thing early who are willing to consensus and take to break with consensus and take intellectual risks based on sound research . that hasn't been sound research. that hasn't been happening . happening. >> you talk a lot of sense at times. >> liam halligan you do just at times, yeah, just at time. >> i mean, not always. not always. good to see you. thank you. >> pleasure. nice to see you guys. >> now, do you stay with us. there's lots more to come, including gate with ellie including cake gate with ellie phillips. is . gb news. welcome back. the time is 921 now. we all love cake . but now. we all love cake. but coronation street star catherine tyldesley may have taken the biscuit on this one because the actress has hit back at a local bakery owner who refused to m

and the next mpc meeting, what's that?tary policy committee of the bank of england that decides interest on interest rates. that will be on thursday, the 21st. thursday, september the 21st. and despite my advice and and despite my advice bev and andrew, i we're going to andrew, i think we're going to see rate hike, we see another rate hike, but we might see another big fall in inflation. >> we've seen food prices >> we've seen that food prices are down last, we are coming down at last, we might see another in might see another fall in inflation, but don't inflation, but i don't personally those nine personally think those nine economists bank of economists on the bank of england's including the england's mpc, including the governor, andrew bailey i don't think they've got the kind of intellectual grit and determined action to say, hold on, guys , action to say, hold on, guys, let's just hold interest rates, let's just hold interest rates, let's allow impact of these let's allow the impact of these interest to feed through

when the mpc makes its next announcement on the 21st of september.because eventually a saver, because eventually those high street banks, they will pass and they are passing some of those interest rate rises on. so you get a bit more return on your spare cash. having said that, for many hard pressed households, mortgage rates have been rising. but because interest rates should soon peak , we are already seeing soon peak, we are already seeing some lower mortgage rates much to the relief of many home owners. we must stick to our plan, says the government . plan, says the government. they're hoping inflation comes down even more. will it come down even more. will it come down enough to meet rishi sunak's targets of around 5% by the end of the year? we will soon see for now, at least, the cost of living crisis . it's not cost of living crisis. it's not yet over, but there could be light at the end of the tunnel . light at the end of the tunnel. >> well, liam halligan, thank you so much for bringing us that detailed overview of the meaning behind that he

so the mpc members should not compound their early errors by driving the uk into a recession with whatod >> okay. thank you, liam. good to see you. you've been getting in touch at home. this message says my husband and i are both in our 60 as we both work manual jobs and we're both self—employed. we don't get houday self—employed. we don't get holiday sick we don't holiday or sick pay. we don't receive penny in benefits, nor receive a penny in benefits, nor do receive pension. do we receive a pension. a friend not at all friend who does not work at all receives £2,500 a month in benefits . if work is short for benefits. if work is short for us, we have to consider what we eat. we rarely holiday and said friend goes out regularly , friend goes out regularly, spends a fortune on groceries and cigarettes. something seems wrong me that we can't get wrong to me that we can't get any they pull in any help while they pull in £55,000 a year. >> and earlier we talked >> yeah, and earlier we talked about cost of about the soaring cost of branded 130% in some branded products. 130% in some of the

but i tell the economists on the mpc to focus instead on producer price inflation. price inflation is now actually negative minus two point 9% in june and minus three point 9% in june and minus three point 3% in july. yes, that's right . the inputs that firms use right. the inputs that firms use , the price of those are actually falling. so surely those cost reductions should at some stage be passed on to us. so what will the bank of england do when it meets again on the 21st of september? we've had all those interest rate rises since we came out of covid lockdown for 18 of them in a row. we're now at 5.25. it strikes me that this reduction in inflation isn't enough to stop the monetary policy committee from raising rates again later this month . these rate rises, they're month. these rate rises, they're good news for savers. if you've got some cash stashed in a bank, eventually the high street banks can and will pass on those rate rises to you. and it may be, even though the bank of england has got to raise interest rates again, that the mortgage companies start lo

so mpc members, monetary policy committee members, cool your boots , hold fire. let's see your boots, hold fire. let's see what happens with the 13 interest rate rises that are already in the system. because when you raise interest rates, real people suffer . real people suffer. >> oh, nine months ago, when the bank of england raised rates by just nought .25% in the federal reserve in the states, was raising by nought point five. when think that filtered when do you think that filtered through? is that one of the reasons why british inflation is now higher than american inflation? >> there are lots of reasons. british inflation is now higher than inflation. the than american inflation. the main money is main reason for my money is energy prices. we have a system in the uk that i've been at pains to explain here on gb news in tiny little timeslots so people actually get it where the price of electricity is determined by the marginal price of wholesale gas because we have so many gas fired power stations backing up the renewables that just sit there idle. but they

but those economists on the mpc one handed, two handed or whatever they are in napoleonic terms, they> well, on that cheery bit of news, liam halligan, thank you very much for bringing us the very much for bringing us the very latest there and making sense incredibly complex sense of an incredibly complex economic picture and staying with economics because how long do you work for yourself and how long are you in reality working for the government? >> well, today is known as cost of government day 60% of the way through the year , corresponding through the year, corresponding to the 60% of national income spent by the state. >> yes, the adam smith institute has worked out that this year the average british taxpayer has worked for 227 days to pay for their share of taxes and government spending. and that is the latest year on record . even the latest year on record. even when factoring in the years of pandemic spending . pandemic spending. >> well, to tell us more is the co—founder and president of the adam smith institute. madsen pirie. good afternoon to you. thanks for talking to us

get another interest rate rise when the monetary policy committee, the monetary policy committee, the mpc september the 21st, a thursday as ever. so i do think that we're getting to the end of these interest rate rises, but i think there's going to be at least one more right now. >> zoopla has estimated that if interest were to fall interest rates were to fall below 5, would improve below 5, that would improve affordability, stimulate the market, because i mean, we're looking at, i think, two year deals at the moment, about 6.73, which is pretty chunky, which is pretty chunky. and of course, you look at the south you know, you look at the south of the country as well, it's the chunk need for the deposit chunk you need for the deposit that can't afford. that people can't afford. although it's interesting, zoopla strong wage zoopla is saying strong wage growth is supporting some affordable 80. >> it is supporting some affordability . 80 as house affordability. 80 and as house pnces affordability. 80 and as house prices fall, what we call the affordable multiple, that's the average house pri

but i tell the economists on the mpc to focus instead on producer price inflation. make the goods and services that they then sell to us. producer price inflation is now actually negative minus . now actually negative minus. 2.9% in june and minus 3.3% in july. yes, that's right . the july. yes, that's right. the inputs that firms use , the price inputs that firms use, the price of those are actually falling . of those are actually falling. so surely those costs reductions should at some stage be passed onto us. so will the bank of england do when it meets again on the 21st of september? we've had all those interest rate rises since we came out of covid lockdown , 14 of them in a row. lockdown, 14 of them in a row. we're now at 5.25. it strikes me that this reduction in inflation isn't enough to stop the monetary policy committee from raising rates again later this month . these rate rises, they're month. these rate rises, they're good news for savers. if you've got some cash stashed in a bank, eventually only the high street banks can and will pass on those rate ri

patrick when the mpc, the monetary policy committee, meets again in september, it's now more likely tot rates again because growth isn't as bad . it because growth isn't as bad. it can say, oh, the economy can take it, we can merely put up interest rates again, try and salvage our battered credibility given that we let inflation get out of control. so that's the kind of bad news in the in the good news, the other thing i would say is that reiterating this energy point and your net zero point in the us , you and i zero point in the us, you and i went through these numbers last week. in the us, the average household energy cost per unit is 18 what we call cent euros per kilowatt hour. so it's 18 right in spain it's 22. in france it's 29. in the uk it's 45, right? that's how expensive our household energy and that has knock on effects for business, corporate energy bills as well . we have really high as well. we have really high energy bills in this country and now i bring it full circle, even though we have about 40% of our electricity is renewables on a good day, why? i'll say this agai

i disagree with that, but i'm not on the mpc.etary policy committee who do want interest rates to go up, they will look at last growth numbers, at last week's growth numbers, which . we're not at last week's growth numbers, which .we're not in which weren't bad. we're not in recession. they'll say the economy can take pain. economy can take more pain. we're going carry on raising we're going to carry on raising interest squeeze interest rates to squeeze inflation out of the system, not least because these wage least because these this wage growth high. as we growth is pretty high. as we say, the highest in nominal terms since 2001. and the first increase in real wages above inflation since november 2021. so good news if you've got yourself a decent pay rise, particularly if it's ahead of inflation, but an awful lot of gb news viewers and listeners that won't apply to them and this will be seen as bad news because they will be exposed to higher interest rates on mortgages or any other personal loan. >> yeah, exactly. and think >>