thank you. and that's bbc news at ten. there's more analysis of the day's main stories on newsnight, with kirsty wark, which isjust getting under way on bbc two. the news continues here on bbc one, as now it's time to join our colleagues across the nations and regions for the almost a year since the start of the women life freedom protests in iran, we have a special report with defiant voices inside the country as the morality police double down on the repression of women. so how should the uk calibrate relations with iran? we'll be joined by a iranian—american human rights researcher whose father was a political prisoner who died under house arrest — and the former uk ambassador to iran. also tonight, to raise or not to raise — should the bank of england hike the interest rate tomorrow, or can the economy do its own work now? two senior economists argue it out. the upcoming ruthergen and hamilton west by—election — expected to be a major snp labour battle — could be a bellwether for the general election. we're there tonight. ahead of thrice indicted former president donald trump's court appearance, just before we go on air tomorrow night, david's here with the latest developments. apart from donald trump pleading not guilty — what else can we expect from tomorrow's precedings? and welcome to summer — the sixth wettestjuly since 1838. we've been to find out how businesses and holiday makers coping in one of england's oldest resorts — bournemouth. it is starting to lash down. the wind has been fierce all day. the beachis wind has been fierce all day. the beach is deserted. normally this time of year it is full of holiday—makers but most of the people we spoke to seemed to be in good spirits and are just taking it in their stride. good evening. it is almost a year since the death of mahsa amini — arrested by the iranian revolutionary guard for allegedly not wearing the hijab properly. last year the movement for "women life freedom" exploded onto the streets of iran, and beyond, but in the country it was met with breathtaking brutality. more than 500 were blinded deliberately, thousands more arrested. but women are still defying the morality police, despite a renewed crackdown invloving mass surveillance, risking violence and incarceration. the bbc cannot operate in iran — many of our colleagues instead broadcast impartial news into the country from this very studio, which we share with bbc persian. the internet, too, is restricted, and for many it's a crime to talk to western media, but newsnight�*s emir nader and producer ali hamedani talked to people inside the country to give us this virtual tour of iran after the women life freedom protests. is this iran as you imagined it — the theocracy where women can't sing, dance or even show more than theirface and hands in public? videos that have been shared widely online, and yet these women could be arrested for what you're seeing. no—one on the street bats an eyelid. a cultural shift has taken place. cheering it's been ten months since the death of mahsa amini in police custody, arrested for improperly wearing a hijab. shouting her death led to the largest protests against the regime since the islamic revolution came to power. more than 500 protesters were killed and over 20,000 arrested. many protesters lost their eyes after being shot directly with metal pellets and rubber bullets. the women life freedom movement forced iran's morality police off the streets — until now. recent videos verified by the bbc show the return of their feared vans, male and female officers patrolling and stopping women for their headdress, suggesting the regime hasn't given up its fight. translation: hijab is not - a restriction by the government. it's by the country's laws and sharia. not following the mandatory hijab is haram by sharia, and also it is politically haram. just after persian new year this april, supreme leader ali khamenei's speech heralds their renewed campaign. a raft of new measures, the return of familiar repression but now with modern tools — a network of traffic cameras monitoring the country's streets now purposed to catch drivers violating public morality rules, including not wearing the hijab. the iranian authorities have boasted of sending out over a million of these sms texts since the start of the new campaign. offenders can lose their car or be arrested — a criminal record for not wearing a hijab. my name is shadi. i'm in my middle thirties... we met shadi online. she lives inside iran and has taken part in the anti—regime protests. she refuses to wear the hijab again. we always knew that whatever the government is always doing, if we call it a little bit of basic kind of freedom, it's something temporary, because it's islamic republic. the regime hasn't changed. it's just we are in a war between people and governments. artists and actresses who've appeared in public in recent months without the mandatory hijab have been sentenced to unusual punishments. afsaneh bayegan, a well—known actress, was targeted for these outings, given a two—year sentence and ordered to visit a psychological clinic for her "anti—family" personality. but it's notjust lone women targeted. businesses on the high street are being shuttered if they are found to employ women not wearing the hijab. the regime's supporters, including women, are emboldened again too. passers—by harassing women they see who are failing to wear the mandatory hijab. in this clip, two women wait in line at a supermarket. a man enters, attacks them by pouring a tub of yoghurt over their hair to cover it. we've managed to reach one of the establishment's foot soldiers in tehran. hamid reza ahmed abadi is a member of the revolutionary guard's paramilitary group called basij. it helps enforce rules like the hijab on the streets. he's become a prominent defender of the regime. translation: one group of these women are mentally challenged i and they must be checked in mental health clinics. but others are fooled by the international media like the bbc. they are hallucinating and it won't be difficult for us to deal with them. are you not refusing to accept the diversity of iranian society? translation: it's i a very good question. the majority of our population are muslim. once, i identified a spy filming a protest. she looked like a terrorist. i went to her and asked her to stop. she confronted me. i slapped her and grabbed her camera and squeezed the lens into her mouth. it seems like you take pride in being violent towards women? translation: in our country, - there is no such thing as opponents of islamic republic. people are born muslim, so they need to follow the rules. if anyone wants to breach the laws, the enforcement powers will intervene and arrest them. to some extent, it seems the regime is in denial about what the new generation wants and how much iranian society has changed, or perhaps returned to values that were once common before the islamic revolution. iran before the 1979 revolution, where women had relatively equal rights. this rare footage shows the first time women were given the right to vote in 1963. by the late �*70s, several women served in iran's parliament and local councils. women could request divorce, fight for child custody, and the minimum age for marriage was raised from 13 to 18. they were also free to wear whatever they like. the country became a diverse centre for regional art and culture. its liberal values were despised by the leaders who installed the islamic revolution. chanting from the very beginning, women protested the loss of their rights, here opposing the hijab just days after the 1979 revolution. since then, many iranian women have led double lives. the regime paints the hijab as a religious duty. but even inside iran, it's possible to find some voices who challenge this. i never try to convince anybody to wear hijab because i believe that, in koran, koran does not imply that wearing hijab is compulsory, as islamic republic says. the majority of people do not accept this claim. would you say that the authorities rules could actually be pushing people away from religion, away from islam? extreme policies in iran has pushed many women, many men in iran farfrom religion. uncovering hijab is a symbol for change movement. in recent days, the regime's moral authority has been rocked by a series of leaked sex tapes, including a senior and hardline official responsible for islamic guidance engaged in sex with another man. he's been suspended ahead of an investigation — a difficult position to be in for a government that criminalises homosexuality. secret lives at the top of the regime. it's 45 years since the revolution that brought the clerics to power and nearly a year since the public outburst of anger against a system that has suffocated women's rights. now, the vision of a unified iran that the regime projects has itself been revealed as an illusion. and it's not the hijab that's at stake, but rather the legitimacy of the regime itself. and now i am joined by iranian—american and human rights researcher and writer azadeh pourzand, and former uk ambassador to iran sir richard dalton. good evening to bow you. first of all, azadeh, at various times going up all, azadeh, at various times going up in iran, one or other or both your parents were in prison when you are a little girl. where you were where the difficulty of the fighter that they were engaged in? yes. where the difficulty of the fighter that they were engaged in? yes, i was aware — that they were engaged in? yes, i was aware as _ that they were engaged in? yes, i was aware as a _ that they were engaged in? yes, i was aware as a child, _ that they were engaged in? yes, i was aware as a child, because thej was aware as a child, because the fight they were fighting is something that especially as a little girl yourself experience in iran, so you don't have to belong to a family of activists to really know that this is a struggle that as a woman or as minorities or as anybody who is at odds with the policies of islamic republic would have defied stuff quite obviously you know a lot of young women, older women in iran now of young women, older women in iran no ., ., , , ., now who are defying the new rules of oppression. — now who are defying the new rules of oppression. mass _ now who are defying the new rules of oppression, mass surveillance, - now who are defying the new rules of oppression, mass surveillance, awfulj oppression, mass surveillance, awful things happen, being blinded, they are prepared to face extreme violence now. are they thinking it has to happen, that there could be a tipping point, orare they has to happen, that there could be a tipping point, or are theyjust so desperate to be heard? i tipping point, or are they 'ust so desperate to be heard?h tipping point, or are they 'ust so desperate to be heard? i think that ruestion desperate to be heard? i think that question here _ desperate to be heard? i think that question here is _ desperate to be heard? i think that question here is at _ desperate to be heard? i think that question here is at least _ desperate to be heard? i think that question here is at least for - desperate to be heard? i think that question here is at least for me, i question here is at least for me, the point is there islamic republic has left no choice for especially the young generation. it is a very sad place for a young person to want to risk their life for simple social, economic, political freedoms. to me that is just simply a summary of what they are republic has done for a 17 rather died, not to live under these circumstances. this is a disaster. i to live under these circumstances. this is a disaster.— this is a disaster. i wonder about the international _ this is a disaster. i wonder about the international community - this is a disaster. i wonder about - the international community because presumably when female diplomats from the uk and other countries visit iran, they have to put on the hijab. should they? in my opinion, no. this hijab. should they? in my opinion, no- this is — hijab. should they? in my opinion, no. this is actually _ hijab. should they? in my opinion, no. this is actually a _ hijab. should they? in my opinion, no. this is actually a discourse - no. this is actually a discourse that has been a matter of national discourse for many years for iranians. there are some outside, some foreigners who believe there needs to be some dialogue, some kind of negotiation, sure, but this is a path that has been taken year after year and we're still where we are, so at this moment i think there is a consensus among the younger generation of iranians who want freedoms that the international community should not adhere to the discriminatory rules of the islamic republic. 5ir discriminatory rules of the islamic reublic. ,, . ., ., _ republic. sir richard, you obviously know the country _ republic. sir richard, you obviously know the country very _ republic. sir richard, you obviously know the country very well, - republic. sir richard, you obviously know the country very well, you - republic. sir richard, you obviously. know the country very well, you were ambassador during some very difficult times, what should the international community, what should the uk do in response to this new crackdown, this terrible repression and finance?— and finance? first can i say that what this reimposition - and finance? first can i say that what this reimposition of - and finance? first can i say that what this reimposition of the i what this reimposition of the morality— what this reimposition of the morality police tells me is three things — morality police tells me is three things. first, the admirable bravery of those _ things. first, the admirable bravery of those continuing to raise the call for— of those continuing to raise the call for women life and freedom. secondly, — call for women life and freedom. secondly, the intensity of the challenge which the authorities perceived from this mass movement, and thirdly, _ perceived from this mass movement, and thirdly, the sense in the regime that if— and thirdly, the sense in the regime that if they— and thirdly, the sense in the regime that if they show weakness towards the demonstrations and these calls for freedom, that that would simply hasten _ for freedom, that that would simply hasten their demise or at least very much _ hasten their demise or at least very much more — hasten their demise or at least very much more serious challenge than they faced — much more serious challenge than they faced so far. but much more serious challenge than they faced so far.— they faced so far. but i think what we are hearing, _ they faced so far. but i think what we are hearing, certainly - they faced so far. but i think what we are hearing, certainly hearingl they faced so far. but i think whatl we are hearing, certainly hearing it from azadeh and from other women, that what women and some men want is disengagement. that actually the uk should be prepared to sacrifice its interests in iran and not to do business with this regime. we are doinu business with this regime. we are doing extremely _ business with this regime. we are doing extremely little _ business with this regime. we are doing extremely little business i business with this regime. we are i doing extremely little business with iran, doing extremely little business with lran, our— doing extremely little business with iran, ourtrade in goods doing extremely little business with iran, our trade in goods has collapsed _ iran, our trade in goods has collapsed and that is because of the hostility _ collapsed and that is because of the hostility expressed to us by iran and try— hostility expressed to us by iran and by us — hostility expressed to us by iran and by us to iran. the language that our ministers use is more severe than _ our ministers use is more severe than i _ our ministers use is more severe than i have — our ministers use is more severe than i have ever known it in the last 20 — than i have ever known it in the last 20 years, and as the foreign secretary— last 20 years, and as the foreign secretary said in parliament the other— secretary said in parliament the other day, — secretary said in parliament the other day, they condemn iran in every— other day, they condemn iran in every single forum in which the international community considers this crisis — international community considers this crisis. there is very little more — this crisis. there is very little more which foreign governments can do. disengagement in the sense of pulling _ do. disengagement in the sense of pulling out embassies would not help in the _ pulling out embassies would not help in the slightest. the regime knows the view_ in the slightest. the regime knows the view we take and pulling out embassies would simply deprive governments of essential eyes and ears in _ governments of essential eyes and ears in understanding the situation and taking — ears in understanding the situation and taking advantage of any openings that might arise in the future. it is much — that might arise in the future. it is much easier to break relations than _ is much easier to break relations than it— is much easier to break relations than it is— is much easier to break relations than it is to _ is much easier to break relations than it is to restore them. do you take that on _ than it is to restore them. do you take that on board, _ than it is to restore them. do you take that on board, what - than it is to restore them. do you take that on board, what you i than it is to restore them. do you i take that on board, what you think? the most important thing for me when i say disengagement, i believe the islamic republic has understood that the western world does not seem to be able to or be willing to hold this regime accountable for its atrocities. we have seen atrocities since 1979, the 80s, all the way today and they have managed to go in waves, the low and high and hoping that also this time it will be forgotten. i think international legal pathways, supported by not only western countries but other global south countries, persuaded by western countries, is the way to go. because in the current culture of absolute lack of accountability, this will simply repeat itself so it is a matter of preventative measure. if we don't want more people killed and blinded in iran, we have defined preventative ways. 5ir and blinded in iran, we have defined preventative ways.— preventative ways. sir richard, are there preventative _ preventative ways. sir richard, are there preventative measures, i preventative ways. sir richard, are| there preventative measures, ways that actually the uk could up the ante or not or is there no leverage? i think there is very little leverage. the united kingdom for one sentence _ leverage. the united kingdom for one sentence 300 iranian individuals, americans— sentence 300 iranian individuals, americans have imposed on iran the most _ americans have imposed on iran the most stringent set of economic sanctions — most stringent set of economic sanctions ever imposed on any country— sanctions ever imposed on any country and a good deal of that is shared _ country and a good deal of that is shared by— country and a good deal of that is shared by european countries and the united _ shared by european countries and the united kingdom. iran is held accountable to the degree that is possible — accountable to the degree that is possible in the international system but unfortunately, many of its human rights _ but unfortunately, many of its human rights abusers are left facing effective impunity including many in the middle east and that is a function _ the middle east and that is a function not of the lack of willingness on the part of some countries — willingness on the part of some countries to hold them accountable but of _ countries to hold them accountable but of the — countries to hold them accountable but of the weakness of international institutions for doing just that. thank— institutions for doing just that. thank you _ institutions for doing just that. thank you both very much indeed. such is the strength of donald trump's political narrative, and his grip on his base, that his poll leadership went up after the drama of his indictment late yesterday afternoon in washington. he now has a 37—point lead over the nearest republican candidate. ahead of his court appearance tomorrow trump, accused of "conspiracy to impair obstruct and defeat the federal goverment function through dishonesty fraud and deceit," has vigorously denied all charges against him, and his campaign has hit back with hyperbolic and incendiary accusations. in a statment the trump campaign said, "the lawlessness of these persecutions of president trump and his supporters are reminiscent of nazi germany in the 1930s, the former soviet union, and other authoritatian dictatorial regimes. his former vice president, and now adversary mike pence said, "anyone who put themselves above the constitution should never be president." david's here to tell us what we might expect tomorrow. at four o'clock tomorrow in washington, dc at the federal court building, which is only a few streets away from the capitol, events in and around which will form pretty much the centrepiece of the case against donald trump, the man himself will appear to answer the charges of what the americans call an arraignment. he will therefore be formally charged with those four counts that were unveiled yesterday. he will give his name and is expected, quite strongly, that he will plead not guilty. after that, the proceedings will be pretty much over, he will not be detained in custody, it is not thought he will have any sort of mugshot or fingerprints taken. but have any sort of mugshot or fingerprints taken.— have any sort of mugshot or fingerprints taken. but jack smith, the secial fingerprints taken. but jack smith, the special counsel, _ fingerprints taken. but jack smith, the special counsel, made - fingerprints taken. but jack smith, the special counsel, made it i fingerprints taken. but jack smith, the special counsel, made it clear| the special counsel, made it clear when he spoke briefly yesterday that he wants a speedy trial and what he wants and what he gets are different thins. ., , , , ., things. ultimately it is up to the 'udue who things. ultimately it is up to the judge who has _ things. ultimately it is up to the judge who has been _ things. ultimately it is up to the judge who has been identified . things. ultimately it is up to the| judge who has been identified as somebody who has been pretty tough on january somebody who has been pretty tough onjanuary six somebody who has been pretty tough on january six protesters somebody who has been pretty tough onjanuary six protesters before but stacked against that, the speedy trial is donald trump of nick roach usually congested legal diary, if you like. he is facing a trial in new york in march next year which is on the falsifying business records case, another in southern florida in may next year on the classified documents case conduct that might be another trial in... documents case conduct that might be another trial in. . ._ documents case conduct that might be another trial in. . .— another trial in... which we haven't heard about — another trial in... which we haven't heard about yet. _ another trial in... which we haven't heard about yet. we _ another trial in... which we haven't heard about yet. we are _ another trial in... which we haven't heard about yet. we are expecting | heard about yet. we are expecting charues heard about yet. we are expecting charges on — heard about yet. we are expecting charges on that _ heard about yet. we are expecting charges on that in _ heard about yet. we are expecting charges on that in a _ heard about yet. we are expecting charges on that in a few _ heard about yet. we are expecting charges on that in a few weeks i heard about yet. we are expecting charges on that in a few weeks so | charges on that in a few weeks so his legal team will say that it is impossible for him to prepare an adequate defence in those circumstances. 50 adequate defence in those circumstances.— adequate defence in those circumstances. ., circumstances. so what about the co-conspirators? _ circumstances. so what about the co-conspirators? they _ circumstances. so what about the co-conspirators? they have i circumstances. so what about the co-conspirators? they have not i circumstances. so what about the i co-conspirators? they have not been named and there _ co-conspirators? they have not been named and there are _ co-conspirators? they have not been named and there are two _ co-conspirators? they have not been named and there are two theories, . co-conspirators? they have not beenl named and there are two theories, we think they know who they are, we think they know who they are, we think they know who they are, we think they are really jolly think they know who they are, we think they are reallyjolly —— rudy giuliani and another lawyer, and they would put up a fight and may be jack smith the top one much of a fight they were complicating is and delay proceedings further so he might hold them back if at all for another time.— might hold them back if at all for another time. ., ,, , ., ., another time. thank you and we will hear from you _ another time. thank you and we will hear from you tomorrow _ another time. thank you and we will hear from you tomorrow night, i another time. thank you and we will hear from you tomorrow night, nine | hear from you tomorrow night, nine o'clock our time tomorrow night is when he goes to court. the constituency of rutherglen and hamilton west is in for which has not yet been set, but it will be one of the hardest fought and high profile contests in scotland in recent years. it's the first electoral test for humza yousef — nicola sturgeon's successor, defending what was an snp majority of 5,230 before the mp margaret ferrier was suspended from the snp and sat as an independent since 2020 after she was found guilty of breaking lockdown rules. it was once an unassailable labour stronghold and it's a crucible for the generations—old battle between labour and snp, and it could be a bell wether for the coming general election. joe's there. it is humza yousaf�*s first big electoral test since he succeeded nicola sturgeon. and since the former first minister and her husband were arrested by police and released without charge as part of an investigation into party finances. is all that affecting this campaign? for the many weeks that i have been knocking on doors here, it is not an issue that has come up very often. it has come up on a few doorsteps but not very often. it seems to be coming up in opinion polls, though, because the figures are dipping. there is no doubt about it, it has been a challenging few months. i'm not going to argue with you, joe, it has been a difficult set of circumstances that i had inherited since i became party leader i have tried to do my best to steady the ship but another issue that comes up on the doorsteps here in rutherglen and hamilton west is the cost of living crisis. the snp candidate seemed supportive of her leader. how do you rate humza yousaf�*s leadership out of ten? oh, well, i'm going to say ten, i'm going to say ten. i campaigned for humza's leadership. but it is other party leaders who are also in her sights, especially after keir starmer�*s u—turn on scrapping the two child benefit cap. these are abhorrent policies which are having a huge effect on families, children, young people, right across scotland but very much so in this constituency as well. i am a counsellor here, my casework reflects the issues that families are having with the cost of living crisis and the effect of tory austerity and tory policies, and it is, quite frankly, astonishing that labour are now so close to the tories that what choice do voters have when they are looking at their policy slates? labour's candidate argues the scottish and uk parties disagree on these policies. the scottish labour party has i a position against the two child cap and the bedroom tax. i am a scottish labour candidate and i campaigned against those i issues because we believe - they are examples of heinous policy under the conservative government. but it is awkward, mr shanks, that the leader of your party has a position on a key bit of domestic policy that you disagree with him on. i don't think it is at all. we are into the thirdl decade of devolution. the whole point of labour creating the scottish parliament back- in the 19905 was so that scotland could make different decisions. on different issues. i the scottish party has taken a veryl clear stance against the bedroom tax and against the two child cap i and that is the position i will hold and i will push my colleagues i in labour on that but the reality is that we are going - to inherit an economic mess from the conservatives. keir is right to say we cannotjust announce changes to things... i have you told keir starmer that you disagree with him on these issues? keir knows the policy - of the scottish labour party. have you told him of your concerns? i haven't spoken to him directly about it but... i but he has been to this constituency a lot and yet you have not broached this key topic with him? we haven't talked about this specifically but he has - been here campaigning. although a varied constituency, this area does include some of the most disadvantaged communities in scotland. more than a quarter of children here are living in poverty. i don't vote very much now because i'm very disappointed in all the parties. rises in utility bills and the price of groceries are being felt. half of rutherglen goes to the food bank now. i know people who go there because they need to go there. and some people are working. it's a shame. and some small businesses are struggling. we had six staff before the pandemic. and since covid we was struggling for two and a half years. now only one staff. only one person for the whole coffee shop because we struggle. at the 2019 general election, the snp won rutherglen and hamilton west with a majority of 5,230. the seat has switched between them and scottish labour over the last decade, with the scottish conservatives consistently coming in third place. it would be a massive surprise if you were to win this seat, right? it would be a huge surprise. i'm used to surprises, though. but no, i think our whole message is we are focused on the real priorities of the people across scotland. we want to focus on the domestic issues, fix the economy can tackle the health service and highlight the failure of the snp over the past few years. i think labour have taken a lot of people for granted and i think that we offer people a real change in this area so, you know, i know labour keep saying they are the fresh start, if you want a fresh start, go for a person has never been elected before in rutherglen and that's the conservatives. i've got a record of doing stuff here in glasgow. i'll roll up my sleeves and get to work straight. the scottish liberal democrats have yet to select a candidate but local campaigners are optimistic. your party is now in fifth place in the scottish parliament. it's hard to see you winning a seat like this. well, the reality is, in the last year or two we have had four spectacular by—election victories across the uk. in this particular area, we tripled our number of councillors at the last council elections last year. we are now part of the administration, we knocked out the snp in doing so. we are very, very relevant, we are very part of the solution that i think we need to have to the broken politics we have seen over the last few years. we hear endless talk of red walls and blue walls but this seat is at the centre of a yellow one. at the next general election, the snp is defending a whole host of seats in glasgow and lanarkshire and whilst labour are currently behind them in the scottish national polls, that party believes their voters are concentrated in this part of the country, therefore if they can win this constituency, others may follow. this is exactly the sort of seat that labour should be winning if they are going to build momentum. it is a marginal seat, it is a former labour heartland, this seat has changed hands before, so labour won it in 2017 before margaret ferrier took it in 2019. so i think if labour don't win in rutherglen, there will be a lot of soul—searching within the party around, are we really seeing a labour revival in scotland as a recent national polls suggest, or actually, has it gone as far as it's going to go? one, two, three... snp! scotland's politics have shifted dramatically in recent years. the result in this battleground will tell us if they are shifting again. it would be a brave, orfoolhardy, person who betted against a bank of england rate rise tomorrow of a quarter of a percent to try to give inflation another dunt on the head. but could this be it? have the majority of the conditions that drove inflation up either been tackled of have disappated? labour market shortages, supply chain blockages, and the explosion in the energy price. on the other hand, wage inflation is a long—term prospect which the bank of england feels it has to counter for longer. misery — a favourite word injournalism. and if there's one upside to all the misery of all the rain this summer, it offers journalists a handy analogy when talking about the uk economy. the interest rate — currently 5% — looks set to rise again tomorrow for the 14th time in a row. that's the bank of england waving an even bigger brolly at the dark clouds of inflation. while savers, if they're savvy, benefit from the rate rises, they stretch mortgage holders and rent payers. mortgage rates hit their highest level in 15 years last month. consumer group which has said the number of people missing payments on essential household bills is as high now as it was over the winter, with nearly 800,000 people failing to make mortgage or rent payments. today, taylor wimpey, one of the uk's biggest house—builders, said there had been an increase in buyers taking out mortgages with much longer terms to reduce their monthly payments. lenders have been offering customers mortgages up to the age of 75. meanwhile, last month, uk house prices dropped at their fastest annual rate for 1h years, according to nationwide. bad news for home sellers, although good news for first—time buyers. any more good news? any glimpse of summer peeping through the clouds? well, inflation was down last month a bit. food prices are still high, though. but that glimmer of hope that inflation is on the turn has caused some lenders to cut their mortgage rates a bit and the energy price cap has fallen more than a bit. otherwise, the economic bad news seems to be flowing across the country like the infamous jet stream responsible for upsetting our summer weather. oh, and just to add to the misery, petrol prices are up again. and now i am joined by yael selfin, chief economist at kpmg, and the chief executive of the resolution foundation, torsten bell. good evening, both of you. torsten, do you think this increase is too quick on the heels of the last one? , ithink quick on the heels of the last one? , i think at the beginning you said, the increase is nailed on and it is probing the right thing to do. the more question is what happened next, how long rates stay high for and do we see any further rises in the autumn. ~ ., , i. . ., autumn. what is your hunch on the rises in the — autumn. what is your hunch on the rises in the autumn? _ autumn. what is your hunch on the rises in the autumn? i _ autumn. what is your hunch on the rises in the autumn? i shall- autumn. what is your hunch on the | rises in the autumn? i shall preface eve hint rises in the autumn? i shall preface everything by _ rises in the autumn? i shall preface everything by saying _ rises in the autumn? i shall preface everything by saying anyone i rises in the autumn? i shall preface everything by saying anyone that i rises in the autumn? i shall preface everything by saying anyone that is| everything by saying anyone that is confident about what happens now is awful but my view is out on the balance of this probably we see only one more rise and i think we will probably see it fall faster than the markets expect into 202a. probably see it fall faster than the markets expect into 2024.- probably see it fall faster than the markets expect into 2024. yael, you were saying — markets expect into 2024. yael, you were saying the _ markets expect into 2024. yael, you were saying the reasons _ markets expect into 2024. yael, you were saying the reasons for- markets expect into 2024. yael, you were saying the reasons for the i were saying the reasons for the increases, the energy explosion, people's energy bills are coming down, the labour market is looser now, there is a lessening of the problem in the supply chain, and yet the interest rates will keep going up. the interest rates will keep going u. ., ., , the interest rates will keep going up. unfortunately inflation hasn't . one up. unfortunately inflation hasn't gone down _ up. unfortunately inflation hasn't gone down as _ up. unfortunately inflation hasn't gone down as quickly _ up. unfortunately inflation hasn't gone down as quickly and - up. unfortunately inflation hasn't i gone down as quickly and especially the core _ gone down as quickly and especially the core inflation is relatively sticky— the core inflation is relatively sticky here in the uk and therefore the bank— sticky here in the uk and therefore the bank of england will want to be cautious— the bank of england will want to be cautious and try and increase interest— cautious and try and increase interest rates now so that they are certain _ interest rates now so that they are certain that — interest rates now so that they are certain that as much as possible inflation — certain that as much as possible inflation will go down relatively quickly — inflation will go down relatively ruickl . �* ., ., inflation will go down relatively ruickl. �* ., ., , ., ., quickly. but we are in a situation now where _ quickly. but we are in a situation now where interest _ quickly. but we are in a situation now where interest rates - quickly. but we are in a situation now where interest rates are i quickly. but we are in a situation now where interest rates are at i quickly. but we are in a situation | now where interest rates are at a point where it for businesses, a big problem in this country obviously is productivity, the economy isn't growing. if you stick with higher interest rates who will be doing investing in businesses that they badly need? we investing in businesses that they badly need?— investing in businesses that they badl need? ., ., ., badly need? we have a real problem with business _ badly need? we have a real problem with business investment _ badly need? we have a real problem with business investment in - badly need? we have a real problem with business investment in the i badly need? we have a real problem with business investment in the uk. | with business investment in the uk. probably— with business investment in the uk. probably one of the main causes of the fact— probably one of the main causes of the fact that we have very weak business — the fact that we have very weak business investment is uncertainty. and that _ business investment is uncertainty. and that is — business investment is uncertainty. and that is partly because of uncertainty as to the policy of interest — uncertainty as to the policy of interest rates, but there are other things. _ interest rates, but there are other things, especially political uncertainty that is making businesses pause before they make longer— businesses pause before they make longer term business investments. i am not _ longer term business investments. i am not sure — longer term business investments. i am not sure whether the interest—rate policy itself is going to make — interest—rate policy itself is going to make such a big influence. what you do— to make such a big influence. what you do want— to make such a big influence. what you do want is a stable economy and what the _ you do want is a stable economy and what the bank of england is trying to do— what the bank of england is trying to do is— what the bank of england is trying to do is make the economy a little bit more _ to do is make the economy a little bit more stable when it comes to at least _ bit more stable when it comes to at least interest inflation.— least interest inflation. torsten, presumably _ least interest inflation. torsten, presumably the _ least interest inflation. torsten, presumably the bank _ least interest inflation. torsten, presumably the bank of - least interest inflation. torsten, presumably the bank of england least interest inflation. torsten, i presumably the bank of england could go a bit too far and end up tipping us intoa go a bit too far and end up tipping us into a technical recession in. whether or not we end up in a recession, we are definitely stagnating as an economy and the bank of england is basically saying we have two stag night is an economy. we have two stag night is an economy-— we have two stag night is an econom . �* , , economy. but it is interesting because basically _ economy. but it is interesting because basically it _ economy. but it is interesting because basically it would i economy. but it is interesting i because basically it would suggest in that the bank of england has a little bit more power than this than the treasury. it is little bit more power than this than the treasury-_ the treasury. it is definitely the bank of england _ the treasury. it is definitely the bank of england doing - the treasury. it is definitely the bank of england doing the work the treasury. it is definitely the i bank of england doing the work in bringing inflation down, it will carry on doing work over the course of the next few months, but in terms of the next few months, but in terms of what is actually happening, we know the bank of england doesn't control what ultimately matters, the productivity growth in the uk economy and a lot of that is what is leading to our learning center stagnating now and notjust for the few years but for 15 years. but it does in a sense _ few years but for 15 years. but it does in a sense impact - few years but for 15 years. but it does in a sense impact you i does in a sense impact you productivity because people cannot invest in businesses which then expand, which improve productivity. in a short term it will have some effect on business behaviour but the bank of england is actively wanting to slow down activity and i think there is too much growth in the economy even though it is basically zero. 50 economy even though it is basically zero. ., .., , economy even though it is basically zero. ., , ., _ economy even though it is basically zero. ., , ., , zero. so what could be done by way of for example _ zero. so what could be done by way of for example tax _ zero. so what could be done by way of for example tax rises, _ zero. so what could be done by way of for example tax rises, to - zero. so what could be done by way| of for example tax rises, to improve the economic situation? the underlying _ the economic situation? tue: underlying challenge the economic situation? t'ts: underlying challenge facing the economic situation? tt9: underlying challenge facing this country is that people don't invest in britain and although i think reducing uncertainty would make a big difference and obviously both main political party leaders cite they offer more stability than for example liz truss managed in the recent past, or borisjohnson probably, trying to settle down european relationship, i think the dangerfor us is that european relationship, i think the danger for us is that we think that all we need to do is provide more stability because remember business investment in britain went through the floor in 2003 in a very political stable environment so it is underlying the problems in the british can be, why don't british managers invest in the future of their businesses? 50 managers invest in the future of their businesses?— managers invest in the future of their businesses? so let's move on bravel to their businesses? so let's move on bravely to talk _ their businesses? so let's move on bravely to talk about _ their businesses? so let's move on bravely to talk about mortgages i their businesses? so let's move onl bravely to talk about mortgages and the position that people are in now, because at the moment even though you have got an interest rate that is going up, you still have mortgages sort of going down a little bit at a moment, is not likely to continue because at the moment we are in a situation where more and more people are finding that they cannot make those, the remortgaging or the mortgage payments of a new mortgage. brute remortgaging or the mortgage payments of a new mortgage. we still have a big chunk— payments of a new mortgage. we still have a big chunk of— payments of a new mortgage. we still have a big chunk of the _ payments of a new mortgage. we still have a big chunk of the people i payments of a new mortgage. we still have a big chunk of the people with i have a big chunk of the people with mortgages that have to remortgage survey— mortgages that have to remortgage survey have still got quite a few people — survey have still got quite a few people who will be affected, but what _ people who will be affected, but what will hopefully happen is when we have _ what will hopefully happen is when we have more certainty to wear that rate increase cycle ends, the mortgage rates that we have come at the market— mortgage rates that we have come at the market rates will ease a little bit as _ the market rates will ease a little bit as well, and that will help some of those _ bit as well, and that will help some of those people. so bit as well, and that will help some of those people-— of those people. so you see an increasing _ of those people. so you see an increasing divergence - of those people. so you see an increasing divergence in i of those people. so you see an increasing divergence in for. of those people. so you see an i increasing divergence in for example the interest despite what the bank of england says and what mortgage companies will do, but actually they will be much quicker to bring their mortgage rates down? the underlying thin is that mortgage rates down? the underlying thing is that the _ mortgage rates down? the underlying thing is that the british _ mortgage rates down? the underlying thing is that the british consumer i thing is that the british consumer and mortgage holder is about to get stuffed and it is about have the pain has come through and about half the pain is still coming. haifa pain has come through and about half the pain is still coming.— the pain is still coming. how long is that? about _ the pain is still coming. how long is that? about another _ the pain is still coming. how long is that? about another two i the pain is still coming. how long is that? about another two years | is that? about another two years because some — is that? about another two years because some people _ is that? about another two years i because some people remortgaged is that? about another two years - because some people remortgaged at five year mortgages, reasonably recently, so even if they have some of the pain already, when they have to remortgage it might still be at high rate, so on our modelling and have the pain is still to come and we are talking about a lot of time for some households, particularly concentrated amongst richer households, yes, because they are more likely to have mortgages but of the ones it was the most they are people with mortgages but on lower incomes and it is them who will see the really acute stress. what incomes and it is them who will see the really acute stress.— the really acute stress. what you think bank _ the really acute stress. what you think bank of— the really acute stress. what you think bank of england's - the really acute stress. what you think bank of england's primary i think bank of england's primary consume should be right? the primary concern is inflation, _ consume should be right? the primary concern is inflation, they _ consume should be right? the primary concern is inflation, they need - consume should be right? the primary concern is inflation, they need to - concern is inflation, they need to tackle inflation and get that back to where the target is. that is amended. to where the target is. that is amended-— to where the target is. that is amended. ., ~ , . amended. thank you both very much indeed. it will come as a surprise to very few that this has been the sixth wettestjuly in the uk since records began in 1836. and it's probably of little comfort that our dear green places are flourishing, when often, at this time of year, they are parched. those who made it abroad had the blessing of sun, but for many, extreme heat too — so what's it been like for the many holidaying here? yasminara khan has been to the south coast today, suitably attired. it's august and it's pouring down — a cruel, cruel summer, with july set to be the wettest since 2009 in the uk. for many parts of the country, it's wet and gray. but despite the rain, here in this holiday park in hampshire, most families are enjoying their downtime and are in good spirits. more recently, we've stayed at home more often, partly... i guess we got in the habit of it with covid and we've stuck to that. we were at the beach yesterday and it was wet. it's wet on the beach anyway. it doesn't put the kids off, anyway. there's lots of fun things to do. we went to the beach yesterday and i quite enjoyed that. and i went in the baby pool. the inside was cooler than the outside. - what's your favourite one — the outside or the inside? both: outside. since the pandemic, the british have been encouraged to holiday at home rather than abroad. and despite the wash—out weather last month, people still seemed to be choosing a staycation. we have had a lot more bookings. the last two weeks, we've had an increase of 64%. i think we've had an increase because people really enjoy a british holiday. there's so much to do for the whole family. you can bring your dogs with you, you can bring the whole extended family with you and there's no fussing around airports and extreme temperatures and wildfires. the bad weather has been caused by an unseasonable deep area of low pressure for this time of year, and the wind is strong and travelling at speed here in bournemouth. the wind is fierce, it's starting to [ash down. the beach behind me is usually packed this time of year, but it's completely deserted. but people are still out, trying to make the most of it, and most people we've spoken to are just getting on with it, despite this wash—out summer. even in the soggy weather, holiday—makers are still out and about, but it's leftjenny feeling a bit despondent. staying in a church down here on a girls�* day camp. we've got seven children, so we've got nothing

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