rates to a 15 year high at 4.5% as it continues its fight against high inflation. and donald trump calls for republicans to let the us default on its debt rather than give way on biden s spending plans. hello. a warm welcome to the programme. this is world business report, i m ben thompson and we are going to start in the uk where the bank of england has raised interest rates for a 12th consecutive month. all of that as it tries to fight high inflation. uk interest rates were raised by 0.25%, while the bank said inflation would fall sharply in april but not as far or as fast as it previously thought. last month inflation slowed to 10.1% but that figure is still way above the bank of england s target. remember that target is 2%. let s speak to victorias, head of investment at interactive investor. lovely to see you. let s talk about what we have heard. first the interest rate itself because the interesting stuff is what the bank told us about what might happen next. a widely
interactive investor. lovely to see you. let s talk about what we have heard. first the interest rate itself because the interesting stuff is what the bank told us about what might happen next. a widely tipped, rates went up, they did, to tackle inflation. . , ., inflation. that s right, we saw a uuarter inflation. that s right, we saw a quarter point inflation. that s right, we saw a quarter point move inflation. that s right, we saw a quarter point move widely - inflation. that s right, we saw a - quarter point move widely expected to 4.5% and it does look as though they could be further interest rate hikes on the cards in the next few months. goldman sachs is predicting that uk interest rates could rise to 5% by august. clearly inflation, as you mentioned, is sharply above target, and unlike other countries like the us, all countries in europe, it hasn t come down. in the us inflation is now at 5%, that s less than half where we are, so that suggests that more monetary policy
interesting is that lasting for much longer. what is so interesting is that none lasting for much longer. what is so interesting is that none of - lasting for much longer. what is so interesting is that none of this - lasting for much longer. what is so interesting is that none of this is i interesting is that none of this is really following the textbook in the uk because the job really following the textbook in the uk because thejob market really following the textbook in the uk because the job market is still pretty strong, inflation is still really high, interest rates are going up, and we know that these decisions take time to filter through to the real economy. but it is not really happening in the way many policymakers might expect. i don t envy the task facing the bank of england because it is trying to control inflation which has largely been driven by factors outside of its controlled by things that have happened overseas like problems with the global supply chain, post p
would shop, c4 sharply in april probably because some of those factors drop out of the figures, but they also said it is not as far or as fast as they previously thought. inflation is really sticky in the uk. inflation is really sticky in the uk. they said inflation would drop sharply. uk. they said inflation would dmp sharply- drop sharply. that s because of second-round drop sharply. that s because of second-round effects drop sharply. that s because of second-round effects where . second round effects where businesses, for example, faced with higher costs. they need to do something about that in order to preserve their profitability they might change that into higher prices so we see high prices on supermarket shelves, shops, bars and restaurants, and similarly we have a major labour shortage in the uk so that means workers can bid for higher wages and we have seen quite significant wage growth in the uk. again, that can add to price pressures for businesses and in turn
rates to a 15 year high at 4.5% as it continues its fight against high inflation. and donald trump calls for republicans to let the us default on its debt rather than give way on biden s spending plans. hello. a warm welcome to the programme. this is world business report, i m ben thompson and we are going to start in the uk where the bank of england has raised interest rates for a 12th consecutive month. all of that as it tries to fight high inflation. uk interest rates were raised by 0.25%, while the bank said inflation would fall sharply in april but not as far or as fast as it previously thought. last month inflation slowed to 10.1% but that figure is still way above the bank of england s target. remember that target is 2%. let s speak to victorias, head of investment at