the government s finance chief chancellor of the exchequerjeremy hunt says bailing out struggling borrowers only risks stoking inflation further no matter what the pressure from left, right or centre, we won t be pushed off course. because if we re going to help families, if we re going to relieve the pressure on people with mortgages, on businesses, we need to squeeze every last drop of high inflation out of the economy. and if you look at what s happening in other countries, we know that there is enormous pressure for families with mortgages and it s a really big dealfor family finances but the one thing that would not help those families is to step in with short term support that meant that inflation stayed higherfor longer support that meant that inflation stayed higher for longer and as mortgage rates stayed higherfor longer. paul dales, chief uk economist at the economic consultancy capital economics.
combine that with sluggish growth and you get this toxic cocktail, stagflation.- cocktail, stagflation. thank ou cocktail, stagflation. thank you very cocktail, stagflation. thank you very much. cocktail, stagflation. thank you very much. i cocktail, stagflation. thank you very much. i will- cocktail, stagflation. thank you very much. i will speak cocktail, stagflation. thank. you very much. i will speak to you very much. i will speak to you later want the numbers are out. tom stevenson from fidelity. joining me now is george buckley, chief uk & euro area economist at nomura. how do you think the inflation figure will look? we how do you think the inflation figure will look? figure will look? we think it will fall modestly figure will look? we think it will fall modestly from - figure will look? we think it will fall modestly from 8.7 will fall modestly from 8.7 down to 8.4, so it is still very high. i think what the bank of england will be really interested in, because of co
8% to 4.75, and eventually, to five .25. i think that they will probably do a 0.5 increase to 5%. tomorrow. and i think that it may have to go above 5.25% in order to solve the inflation problem in the uk. the knock on effect for households, most obviously, comes to higher mortgage rates which have already soared above 6% in the last few weeks. this suggests that that 6% rate is not going to disappear anytime soon, it is something households are going to have to get used to. more is something households are going to have to get used to. have to get used to. more pain on the way for have to get used to. more pain on the way for those have to get used to. more pain on the way for those with have to get used to. more pain on | the way for those with mortgages, right now. really good to have you ever is, that was the chief uk economist at capital economics. it was not that long ago that we were talking about rates peaking at 5.5%. that seems like a distant memory. let s talk about m
as you can see here, the rate of inflation in the uk has remained stubbornly high over the last few months adding pressure on the bank of england to raise interest rates again when it meets tomorrow. they re likely to be concerned that core inflation which excludes volatile food and energy prices actually rose hitting 7.1%. that s the highest rate since march 1992. bear in mind, the bank of england s target for inflation is 2% and its been falling in other countries. here s the uk finance ministerjeremy hunt. we don t have the clip at the moment. yael selfin is chief uk economist at the business consultancy kpmg and joins us from london. we heard from jeremy hunt earlier
more with paul dales, chief uk economist at capital economics. art janet yellen s words of reassurance enough or will the fed have to hold back on raising rates and risk being accused of ignoring inflation? it’s and risk being accused of ignoring inflation? , . ., , and risk being accused of ignoring inflation? , . ., , inflation? it s a really tricky situation inflation? it s a really tricky situation which inflation? it s a really tricky situation which i inflation? it s a really tricky situation which i think - inflation? it s a really tricky situation which i think in . inflation? it s a really tricky| situation which i think in my inflation? it s a really tricky - situation which i think in my view, usually leads to compromises. if the banking system hadn t been vulnerable over the last few weeks, then i suspect the federal reserve would be complicating interest rates by 50 basic points. i think the copper might is to raise interest rates by 25 basis points or 0.25% and