that the uk will get through it because of low unemployment. the guardian also goes with economic news and calls from labour for the government to announce new help for households struggling with the cost of living. the i has worked out that the economic squeeze will shrink household incomes by £1200 this year, but says there are no plans for tax cuts to help ease the pain. the mail says the forecasts add up to the biggest fall in real—terms pay since records began in 1990. so, let's begin. really only one story in town. the bank of england warns of household pain and recession this year as rates hit 1% comes that they have gone with the interest rate rise to 1%, the highest level of course since 2009. but i suppose we should not forget it is historically very low but nonetheless grim economic news. . �* , ., ., , ., news. yeah, it's grim and what you have seen — news. yeah, it's grim and what you have seen universally _ news. yeah, it's grim and what you have seen universally across - news. yeah, it's grim and what you have seen universally across the i have seen universally across the papers tonight is that all of them are running with this warning from the bank of england that will probably hear of recession by the end of the year and inflation hitting a a0 year high and driven by rising energy prices. i suppose the backdrop to all of this is does this mean you will see the government rushed through a general election if you're before we get even more bad economic news. interestingly i think one of the other papers this evening the telegraph has painted this backdrop of grim economic news against people going to the pulse but there is no real way of spinning this. interestingly the back of england says there is only so much we can do and this really is piling pressure on the chancellor now to say what will you do to step in, what emergency measures we bring in an even the prime minister says we have got to do more. so not a pretty picture but honestly you have to have sermons about the, was too black to white moments over the past two or three years with the pandemic at the ward ukraine but very difficult, very tricky and really hard for people because people are going to see their incomes fall. let's come onto the politics in a minute but let's look at the bank of england for a minute if you don't mind and the state of the economy because i suppose the big question for the bank of england is how difficult it is going to be to eradicate inflation. they have raised interest rates we might not see the impact of that for a year or 18 months or two years?— see the impact of that for a year or 18 months or two years? know, and so there is the — 18 months or two years? know, and so there is the immediate _ 18 months or two years? know, and so there is the immediate impact - 18 months or two years? know, and so there is the immediate impact one - there is the immediate impact one will feel from the rise in interest rates but there are some really quite grim warnings about the rest of the year as well which relate to partly the energy price cap being lifted by up to his much is a0% at the end of october and also inflation and the bank of england governor quoted on all the front pages saying he is worried the cost of living and inflation could rise by the 10% also by the end of the year as well and that's obviously has the markets jittering. year as well and that's obviously has the marketsjittering. warnings of a slow down and unemployment could hit as high as 5.5% with zero economic growth next year, so it's a really quite grim picture notjust now when people are already feeling the effects the war in ukraine and the effects the war in ukraine and the spiralling price of energy but really this is not a look at the problem it's going away anytime soon and in fact i think what andrew bailey did today is say this is going to get quite a lot worse, particularly for those who were on the lowest incomes and who have little to no savings in their accounts. little to no savings in their accounte— little to no savings in their accounts. �*, ., ., ., ~ ., accounts. let's move on to the metro and they have — accounts. let's move on to the metro and they have gone _ accounts. let's move on to the metro and they have gone with _ accounts. let's move on to the metro and they have gone with a _ accounts. let's move on to the metro and they have gone with a headline . and they have gone with a headline about inflation to top 10% and as i was saying i think the big question for the bank is how difficult it is to bring it down and everyone seems to have a different answer to that, don't they? this to have a different answer to that, don't they?— don't they? as you are saying actually interest _ don't they? as you are saying actually interest rates - don't they? as you are saying actually interest rates have i don't they? as you are saying i actually interest rates have been don't they? as you are saying - actually interest rates have been at actually interest rates have been at a historic low for a long time, so we are not in actually use to inflation hitting the reset was the last time they said was in 1982 under margaret thatcher, was difficult with any measures as you were just discussing, they will be a time lag in terms of what's going on. and this backdrop of a war between russia and ukraine which is driven by energy prices which also shows no sign of abating. so what we are seeing is more paint before we get out of this, a lot more pain coming. so it's hard to see where the sunny upland tsar and people are going to have to tighten their belts and i think what the past two or three years have shown is the importance we will putting money away and setting for these black swan moments. because obviously there is a huge savings gap in the economy at the moment which is being cited that people are saying they don't have anything in reserves they will be in real trouble. don't have anything in reserves they will be in realtrouble._ will be in realtrouble. looking at this metro _ will be in realtrouble. looking at this metro story, _ will be in realtrouble. looking at this metro story, as _ will be in realtrouble. looking at this metro story, as you - will be in realtrouble. looking at this metro story, as you guys - will be in realtrouble. looking at. this metro story, as you guys have been mentioning, the governor andrew bailey predicting energy bills rising another a0% in october and disposable income falling 1.75%. he really did not have any good news to deliver at all, did he? unfortunately not and it's a sort of match _ unfortunately not and it's a sort of match between the papers to try to pick out _ match between the papers to try to pick out the absolute worst they can io pick out the absolute worst they can go back_ pick out the absolute worst they can go back t0~ — pick out the absolute worst they can go back to. and as bad as that 20 or 30 or 40 _ go back to. and as bad as that 20 or 30 or 40 or— go back to. and as bad as that 20 or 30 or 40 or 50 years or since records — 30 or 40 or 50 years or since records began so unfortunately there is no good _ records began so unfortunately there is no good news. and like i say the problem _ is no good news. and like i say the problem is — is no good news. and like i say the problem is twofold, one there is no good _ problem is twofold, one there is no good news — problem is twofold, one there is no good news now and that we also be prepared the fact there will be little _ prepared the fact there will be little good news to come and that is really where the government has to step in_ really where the government has to step in because then the question is will there _ step in because then the question is will there be any kind a political solution — will there be any kind a political solution to this? and i suspect that next week when we get the queen's speech will be quite a lot of pressure _ speech will be quite a lot of pressure on the chancellor and the prime _ pressure on the chancellor and the prime minister to make sure there is not really— prime minister to make sure there is not really a _ prime minister to make sure there is not really a goal for people told to wait for _ not really a goal for people told to wait for another four or five or six months _ wait for another four or five or six months until october that people like a _ months until october that people like a pensioner who we heard about who was— like a pensioner who we heard about who was right and rented a bus that could not— who was right and rented a bus that could not afford to pay her bills and just told her around the bus for the four— and just told her around the bus for the four of— and just told her around the bus for the four of five or six months and i was linked — the four of five or six months and i was linked we are in the summers in the government is expecting a little bit of— the government is expecting a little bit of a _ the government is expecting a little bit of a reprieve in terms of energy bills will— bit of a reprieve in terms of energy bills will he — bit of a reprieve in terms of energy bills will be but will actually pay, but people again are going to be very conscious of the fact that they will have _ very conscious of the fact that they will have to save so they are not going _ will have to save so they are not going to — will have to save so they are not going to spend as much as they might be in the _ going to spend as much as they might be in the spring and summer because they are conscious that come october time is _ they are conscious that come october time is when the problems were really— time is when the problems were really hit — time is when the problems were really hit even harder.— time is when the problems were really hit even harder. let's seven to the politics _ really hit even harder. let's seven to the politics a _ really hit even harder. let's seven to the politics a little _ really hit even harder. let's seven to the politics a little bit - really hit even harder. let's seven to the politics a little bit more - to the politics a little bit more and turn to the daily telegraph, bank wars a recession and highest inflation in a0 years as you say quite rightly and also for the papers are competing to focus on the worst numbers. but let's talk a little bit more about the politics now because the dili telegraph as you make this point rather the beginning links the bleak economic forecast with the fact that it has come on the day that voters go to the polls in the local elections with a picture of borisjohnson with his dog voting. so what do you think the political ramifications of all this grim economic news are going to be in terms of the local elections? do you predict big losses for the tories? �* ., , ., . ., tories? i'm not sure how much of this will feed — tories? i'm not sure how much of this will feed into _ tories? i'm not sure how much of this will feed into local _ tories? i'm not sure how much of this will feed into local elections. this will feed into local elections but certainly think it will be a huge sort of i suppose thing hanging over the government about whether to go for a general election early. you mentioned — go for a general election early. you mentioned that _ go for a general election early. you mentioned that earlier. do you know something we don't?— something we don't? there's been a lot of talk they _ something we don't? there's been a lot of talk they have _ something we don't? there's been a lot of talk they have been _ something we don't? there's been a lot of talk they have been gearing i lot of talk they have been gearing up for going early and if you think things will go from bad to worse, you might have a general election before there is a recession or before there is a recession or before perhaps people really feel all the pain and there is a lot of talk the government is trying to get match fit for this but also if you look at the labour party, part of their surge in the polls is been due to a tory collapse rather than labour revival so the jury is still out and we will get a better picture about whether keir starmer is been cutting through because he is not to do that so far. labour still have a little rebuilding to do, they are not quite there yet. and... giles, i don't know— not quite there yet. and... giles, i don't know if— not quite there yet. and... giles, i don't know if you _ not quite there yet. and... giles, i don't know if you can _ not quite there yet. and... giles, i don't know if you can hear- not quite there yet. and... giles, i don't know if you can hear me - not quite there yet. and... giles, i don't know if you can hear me but| not quite there yet. and... giles, i | don't know if you can hear me but i would just interrupt you because you are breaking up. so i think we will have a chat with aubrey and while we are doing that try and reconnect to are doing that try and reconnect to a bit of a better line with you so sorry to interrupt what we got the gist of what you rose and i suppose aubrey i need to ask you what is yoursense, do aubrey i need to ask you what is your sense, do you think we are going to have an early election? giles is not wrong. you might think that it's _ giles is not wrong. you might think that it's completely mad and fanciful— that it's completely mad and fanciful and it might be, but there is the _ fanciful and it might be, but there is the possibility of that because as he _ is the possibility of that because as he was— is the possibility of that because as he was alluding to come of the government might fear that things can only— government might fear that things can only get worse. so to miss: if rain and _ can only get worse. so to miss: if rain and it's— can only get worse. so to miss: if rain and it's best to go early because _ rain and it's best to go early because you sort of go before people are really— because you sort of go before people are really feeling the full effects of this— are really feeling the full effects of this recession and goodness hose how long _ of this recession and goodness hose how long it— of this recession and goodness hose how long it might last. i think be quite _ how long it might last. i think be quite interesting is what exactly particular pressure is applied to the government with some of the conservative mps i've talked to today— conservative mps i've talked to today are — conservative mps i've talked to today are already lining up to figure — today are already lining up to figure out what they want to say and are already — figure out what they want to say and are already planning to pin the blame — are already planning to pin the blame on _ are already planning to pin the blame on the losses we might see overnight— blame on the losses we might see overnight for the conservatives on the cost _ overnight for the conservatives on the cost issue and the fact that the chancellor— the cost issue and the fact that the chancellor has provided some support in the _ chancellor has provided some support in the spring cement but they feel not enough. and i think we will be here and _ not enough. and i think we will be here and probably of the next 24 hours _ here and probably of the next 24 hours is — here and probably of the next 24 hours is more calls for the council tax rebates to be increased and more calls for— tax rebates to be increased and more calls for the _ tax rebates to be increased and more calls for the warm homes allowance also to— calls for the warm homes allowance also to he _ calls for the warm homes allowance also to be increased. and really i think for— also to be increased. and really i think for a — also to be increased. and really i think for a tory and peaceably coming — think for a tory and peaceably coming out and saying we don't really— coming out and saying we don't really think this is sustainable to wait until— really think this is sustainable to wait until the autumn as the prime minister has slightly alluded to in recent— minister has slightly alluded to in recent days. but until we get any kind of— recent days. but until we get any kind of concrete commitments from him, _ kind of concrete commitments from him. it's_ kind of concrete commitments from him. it's no— kind of concrete commitments from him, it's no use to anybody. i rdrill him, it's no use to anybody. i will sta with him, it's no use to anybody. i will stay with you _ him, it's no use to anybody. i will stay with you because _ him, it's no use to anybody. i will stay with you because we - him, it's no use to anybody. i will stay with you because we still- stay with you because we still have... giles, can you hear me? let's press on and in terms of the telegraph i thought was interesting the telegraph obviously, i conservative supporting paper, saying the conservatives are concerned that voters lukewarm reaction to financial assistant in the chancellor spring cement has harmed the party at the polls and i'm quoting with faith in the government likely to fall further as the crisis worsens. how much of a danger to you think this cost—of—living crisis is for the tories and has it really rather not party gate into the background? i think it's a huge danger for them in think it's a huge dangerfor them in one of the accusations that often has potency from labour is the tories are out of touch. cost—of—living crisis plays into that so they will be really mindful that so they will be really mindful that it that so they will be really mindful thatitis that so they will be really mindful that it is territory which plays quite well for labour. it's a clear dividing line and we know that ultimately one of the key drivers that people vote is how much money they have got in their pocket, so really dangerous and really dangerous because a misstep by the government, the perceptions it they are out of touch and don't care can really hurt them and hurt them badly. hard to say what it will override party gate was certainly on the same level.— the same level. let's turn to your -a er, the same level. let's turn to your paper. the _ the same level. let's turn to your paper, the guardian _ the same level. let's turn to your paper, the guardian here - the same level. let's turn to your paper, the guardian here with - the same level. let's turn to your| paper, the guardian here with the subheading government urged to announce more help for struggling households of both of you have already touched on this already. i supposed to talk about the local elections and we are expecting the results to start coming in in the early hours of the morning. how bad or good depending on which way you want to look at it do you think it is going to be for the conservatives and picking up on giles this point what do you think of how well keir starmer has been managing to cut through? starmer has been managing to cut throu~h? , ., , , ., ., through? obviously we are not actually far— through? obviously we are not actually far away _ through? obviously we are not actually far away from - through? obviously we are not actually far away from finding l through? obviously we are not i actually far away from finding out what _ actually far away from finding out what the — actually far away from finding out what the results will be but i noticed — what the results will be but i noticed the telegraph was framing this obviously as the conservatives being _ this obviously as the conservatives being braced for heavy election losses— being braced for heavy election losses so— being braced for heavy election losses so certainly a lot of briefing _ losses so certainly a lot of briefing and can everything in expectation and i supposed i talked to a conservative pier and alleged expert— to a conservative pier and alleged expert who said i cannot recall the lesson i_ expert who said i cannot recall the lesson i have seen such a wide spectrum _ lesson i have seen such a wide spectrum of the conservative briefing — spectrum of the conservative briefing they will lose as many and at lahour— briefing they will lose as many and at labour briefing that they will only get— at labour briefing that they will only get a small amount. so it's anyhody's — only get a small amount. so it's anybody's asked if he will be fall in that— anybody's asked if he will be fall in that but in terms of where i think— in that but in terms of where i think we — in that but in terms of where i think we will sort of move in the following months, the labour party has done _ following months, the labour party has done quite a lot to regain its standing — has done quite a lot to regain its standing in — has done quite a lot to regain its standing in terms of trying to compete _ standing in terms of trying to compete with the conservatives as being _ compete with the conservatives as being the — compete with the conservatives as being the party that is more competent at handling the economy and that— competent at handling the economy and that is— competent at handling the economy and that is something the conservative have held the lead on for years _ conservative have held the lead on for years and years and years. the fact that _ for years and years and years. the fact that they have lost it or are losing their grip on it, we are not sure— losing their grip on it, we are not sure how— losing their grip on it, we are not sure how long that will last, that is quite — sure how long that will last, that is quite dangerous for them because then they— is quite dangerous for them because then they become more easily outplayed by labour and people look at the _ outplayed by labour and people look at the arguments from the wreck about— at the arguments from the wreck about a _ at the arguments from the wreck about a windfall tax on aussie oil and gas — about a windfall tax on aussie oil and gas companies and notice the massive _ and gas companies and notice the massive profits being made by companies that were announced yesterday and another one today and ask why _ yesterday and another one today and ask why is _ yesterday and another one today and ask why is government not pursuing that policy? the government obviously has its answer, but i'm not convinced that people actually think it's — not convinced that people actually think it's the right one. interesting in the guardian, it does state calls were growing yesterday for the government to announce a windfall tax on oil and gas companies to help struggling households in the government has maintained that it would be unwise to tax these companies because the money is needed for investment in green energy and renewables. do you think we might see a u—turn, though? potentially you could see public sentiment shifting. there is this horrible dilemma for the government because obviously you are facing these times where there is expectation that government should step in and obviously they have stepped in during the pandemic and they have stepped in and listen to some of the energy crisis and the expectation that should step in again but obviously they have got to actually get money coming into the exchequer, so very difficult dilemma. but what he is in this government if they do change tack quite regularly so you might do something again after this windfall tax and you can imagine the public will be quite so pathetic to going

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