history from the bank of england. is this because they want to end bond purchasing friday? or could it be they think the market can handle this with three days ago? >> i think it is the latter. i don't think they are reading the market right because yields have surged the past week alone. the 30 year, the key metric to be watching, it is not too far away from the peak we saw before the boe unveiled their action. if the 30-year trends back about these levels and the boe ends purchases friday, and we have two more weeks before the meeting. it is setting the market up for yet more volatility, which is not something the central bank would wish to have. tom: visit your analysis they can hold the line and really pull back on friday, or are bond vigilantes going to force their hand ultimately? ven: i think the market has the upper hand. it is for the boe to propose what it wants and for the markets to dispose what the boe says. it is for traders to decide whether the boe's actions are sufficient. if the lbi community finds t

i think the bank of england _ of england move. i think the bank of england are guilty of delaying and stepping in and putting up interest rates _ stepping in and putting up interest rates in _ stepping in and putting up interest rates. in terms of what happened with happened last friday with the bank of— with happened last friday with the bank of england intervention, they not only— bank of england intervention, they not only did absolutely the right thing. _ not only did absolutely the right thing. i— not only did absolutely the right thing, i think the explanation today is absolutely spot on. i don't think that is_ is absolutely spot on. i don't think that is alarmist, i think it is factually— that is alarmist, i think it is factually accurate. rememberthis, factually accurate. remember this, once it _ factually accurate. rememberthis, once it started it was a self—fulfilling prophecy. pension funds_ self—fulfilling prophecy. pension funds have to keep so much liquidity. _ funds have to keep so much liquidity, they h

give me a sense of how long the bank of england can continue to| the bank of england can continue to intervene in this way? has it got unlimited reserves to buy what it needs to? ~ a ., unlimited reserves to buy what it needs to? ~ ,, ., ., needs to? well, the bank of england ultimately if — needs to? well, the bank of england ultimately if it _ needs to? well, the bank of england ultimately if it needs _ needs to? well, the bank of england ultimately if it needs to _ needs to? well, the bank of england ultimately if it needs to come - needs to? well, the bank of england ultimately if it needs to come is - ultimately if it needs to come is capable of creating money, that is what central banks do. the problem is that if you do that, and if you are doing it in order to stabilise a situation greeted by a government which is effectively spending more thanit which is effectively spending more than it can afford, you can run into all sorts of problems, not least inflation, which is already at a high level, starting to run out of control, to the bank of england is in charge of keeping thi

the bank of england, like many central banks, it has a mandate of christ ability. but it also has to prepare for the financial stability —— financial stability. it has to basically navigate these two objectives, but it has multiple instruments. it can still think about the course for monetary policy, which has to be tightening, that it can address localised market dysfunctions like we have seen in the uk market by either purchasing guilds or putting in place some staining facility to provide liquidity against the guild collateral, various ways in which they can do that. it is about the appropriate response was to have the monetary policy objectives and tools and the financial civility objectives and tools. that is in theory, in practice, it is located, it is a difficult position to be in. it requires indicating clearly and effectively about what you're trying to accomplish and how you are trained to accomplish it. i think the bank of england have been doing these things the last few weeks. that was from the imf. with me now is jagjit chadha, director of the nat

has the bank of england done enough? >> probably. pension funds over the last little while have been selling assets in order to raise cash to support their ldi programs. it's not absolutely certain that there's not more to go, but an awful lot has already been done. things should be reasonably stable next week. that's not to say we won't see some upward pressure on bond yields, but i would be surprised if we saw the sorts of moves that we saw a couple weeks ago. other thing worth noting in relation to that is the one thing that didn't happen it was perhaps odd to weeks ago is the traditional asset managers whether in the u.k. or overseas or hedge funds and the like, they didn't start coming in to the bond market to bite gilts. if gilts on monday tuesday or wednesday happen to hit 6% then my guess with the they would be big buyers knowing that if they have to come at the bank of england would ultimately intervene. >> that means that if things get dicey, you expect the boe to come back. do you feel there is a more targeted operation th

i think it comes from bank of england sources — it comes from bank of england sources. must be quite worrying you would _ sources. must be quite worrying you would think— sources. must be quite worrying you would think for the markets and for the government. there is also more criticism _ the government. there is also more criticism from the imf saying the uhfuhded — criticism from the imf saying the unfunded tax cuts are going to make the inflation situation worse. so there _ the inflation situation worse. so there is— the inflation situation worse. so there is nothing good in this for there is nothing good in this for the government. and it keeps the pressure — the government. and it keeps the pressure on the chancellor and the prime _ pressure on the chancellor and the prime minister. 1 pressure on the chancellor and the prime minister.— prime minister. i wonder what you both think of _ prime minister. i wonder what you both think of andrew _ prime minister. i wonder what you both think of andrew bailey's - both think of andrew bailey's decision to interven

if the bank of england has to extend _ time. if the bank of england has to extend it _ time. if the bank of england has to extend it doesn't - time. if the bank of england | has to extend it doesn't look good on the bank of england governor who has adamantly said this week in washington, dc he will not do that? it is encouraging - will not do that? it is encouraging the - will not do that? it is i encouraging the private will not do that? it 3 encouraging the private sector to —— to get back to order, they don't affect the solvency of the pension funds but it does affect fluidity, you have a vast amount of transactions going short. and he is trying to put that through quickly if it does succeed in the timeframe of a week or two doesn't matter, what matters is that present —— pension funds get into the position they want to and markets become stable, going forward. to the us now, where there looks like no end to the strong dollar that's putting so much pressure on currencies around the world, not least the uk pound. minutes from last month's meeting of the us federal r

-- the bank of england is -- depending on the central bank and doing things for them -- and straight down on them as well. i think the bank of england can probably intervene in the right way and do things easily then would be the case if greece had a difficulty. ♪ >> let's move to ukraine which endured a third day of russian missile strikes. dass is -- it's exhalation -- mass in -- cruelty on the war we will get moren the attack shortly. but let's look at the diplomatic developments in 50 western countries having a meeting at the headquarters of nato defensive alliance in brussels. they have pledged to continue sending ella terry hardware to ukraine for as long as it takes let's hear a little from secretary of state. >> ukrainian forces have used -- use weapons that -- helped ukrainian forces seized the initiative during counteroffensive. so we will continue to -- help ukraine in the current fight. i commend the contact group members who have moved heaven and earth to get weapons and equipment into the hands of the ukrainian forces. >> we also heard from germany. >> germany has del

the primary concern for _ bank of england. the primary concern for the _ bank of england. the primary concern for the uk _ bank of england. the primary concern for the uk right - bank of england. the primary concern for the uk right nowl bank of england. the primary. concern for the uk right now is battling the cost—of—living crisis and the bank of england's mandate is by stability, so i think on the one hand they are due to increased interest rates. on the other hand they are somewhat engaging in easier monetary policy by providing a backstop as a purchaser of bonds, so it is a bit of a contradictory mandate which i think the bank is trying to resolve by concluding the first programme by buying bonds before it can continue with the interest rate hike pass, in order to bring prices under control. ,., , , order to bring prices under control. , , ., control. the pound is up a little hour _ control. the pound is up a little hour against - control. the pound is up a little hour against that - control. the pound is up a| little hour against that fall, straight after andrew

the bank of england and treasury. how dangerous is this game? does it push away credibility for all u.k. institutions? how long does it take to get investors back? myles: i think it is a dangerous game. they are almost having a public spat about who is responsible for volatility in the largest market in u.k. debt, the gilt market. it doesn't give confidence how it is going to be resolved. it appears each one is trying to put pressure on the other two pole a rabbit out of the hat. i think the genie has come out of the bottle a little bit, we saw with the institute of fiscal studies but the savings the u.k. government needs to make his in the order of 60 billion. what's happened is higher interest rates and slower economic growth has created a fiscal hole, now a simple u -turn is not enough to put them back where they started. that reflects issues of credibility with economic management. so it is more complicated. they haven't really been doing a good job. yesterday we saw the largest purchase we have had in their progr

there is a limit to what the bank of england can do. in crises like this over the past ten years we have seen the way the bank has stepped in to help governments that is borrowing a lot of money. the bank won't do that this time. it is up to the government to find a solution. thanks very much. we can stay with the state of the economy in the uk now. the unemployment rate has fallen to its lowest level in almost half a century — falling to 3.5% over the summer. but the rate of economic inactivity, which measures the proportion of people aged between 16 and 64 not looking for work, increased to nearly 22% in thejune to august period. our business editor simonjack reports. the good news is that the unemployment rate is at a 50 year low. the bad news is that means workers are harder to find, which is holding back companies like this bristol based waste management company. recruitment difficulties are making it harder to take on extra work, and it really limits our ability to grow, which we definitely want to grow. we have so much potentia

we will see what the bank of england are forced to do today. dani: i want to see what the auction looks like. will it be a big one, will risks still be embedded in the system? more to come. this is bloomberg. ♪ hi, i'm jason and i've lost 202 pounds on golo. so the first time i ever seen a golo advertisement, i said, "yeah, whatever. there's no way this works like this." and threw it to the side. a couple weeks later, i seen it again after getting not so pleasant news from my physician. i was 424 pounds, and my doctor was recommending weight loss surgery. to avoid the surgery, i had to make a change. so i decided to go with golo and it's changed my life. when i first started golo and taking release, my cravings, they went away. and i was so surprised. you feel that your body is working and functioning the way it should be and you feel energized. golo has improved my life in so many ways. i'm able to stand and actually make dinner. i'm able to clean my house. i'm able to do just simple tasks that a lot of people call simple, but when you're ex

bank of england. for a little bit of context, we look at the fact that this government has only been in power for less than a month, and yet this crisis has hit. and then i also look back to when i first arrived here in britain in 2008 — the pound was nearly $2, two to one, and it was obviously extremely painful for those of us being paid in dollars to pay our rent and buy groceries. to think of it in that period of time, dropping down to near parity is really quite astonishing, and so there has been that feeling of watching the bottom falling out from beneath us. just a couple of quick things that really struck me about this. one is that this country has clutched to the pound as being so much part of its identity, to the extent that when we were part of the eu, britain was exempt from using the euro because it claimed the superiority of the pound. watching that fall through is obviously going to have a psychological effect. and then the second thing that has been remarkable to me about this week is

. >>> let's talk about the messaging from fwthe bank of england. you just heard joumanna's report here she mentioned the bank of england is implying these emergency measures are temporary. we had some of these measures put in place in the u.s. and other places around the world back in 2011 and they became kind of permanent. what exactly is the market read on whether or not the volatility is going to cause the bank of england to keep its intervention program longer than expected >> hi, dom good to be with you. the road to hell is paved with good intentions. we're looking at a system with a larger disease, which is financial instability globally coming about by an incredible velocity in rate hikes across the board, especially driven by the fed. look, we came out of a system where we just doubled debt to gdp in the united states since 2008, yet we now find the ten-year yield at levels of 2008, and the velocity of that move is simply not sustainable without breaking something we went from free money to now restricted policy, and we see what happens in

coming up, the bank of england governor will be speaking on saturday. he spoke a couple of days ago and said you have three days. you get more fed speak through the week, bullard and then evans. oldman on tuesday. plus a rate decision, eurozone cpi on wednesday and jobless claims on thursday. let's end with a rapidfire. it is november 75 basis point hike the last 75 of this cycle? yes or no? priya: yes. james: nope. george: yes. jonathan: next question, peak fed funds, pick a number but i will offer two options. four or five. james: five. george: four. priya: five. jonathan: does qt make it to 2023? it is a yes or no. george: it's a great question be a yes, we think it does. priya: it does but not all year because the fed will be using in 2023. james: yes, just. jonathan: thank you. what a week for us all. from new york city, for real yield, same time, same place, different person week. this was "bloomberg real yield." this is bloomberg. ♪ at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial

this bank of england letter, talk us through that.— bank of england letter, talk us through that. this is the bank of encland through that. this is the bank of england explaining _ through that. this is the bank of england explaining its _ through that. this is the bank of england explaining its reasoningj through that. this is the bank of. england explaining its reasoning for what happened last week. in the wake of the mini budget, which wasn't all that mini, essentially the uk's financial credibility was trashed on the international markets which made uk debt far less attractive than it had been, which meant people were trying to off—load it and sell it quickly, which could potentially have put uk pension funds at risk. not to be alarmist because i know digby will gets upset about that, but it could have triggered a new financial crisis. if you have these financial crisis. if you have these financial institutions trying to

bank of england have two core — the bank of england. bank of england have two core roles. _ the bank of england. bank of england have two core roles. the _ the bank of england. bank of england have two core roles. the first - the bank of england. bank of england have two core roles. the first disc- have two core roles. the first disc financial stability in the second is price stability, inflation. their message both in public and private is that theirjob on financial stability is nearly done. they've done what is needed to make sure pension funds have the space to get themselves sorted. on price stability, they been clear that in november when they next make an interest rate decision that will be a significant move and that will come after the government's economic plan. markets are pricing both of those things in. the key moments for the markets will be on monday morning i think rather than tomorrow to pension funds and financial institutions feel the action has been enough or are there still problems? and then keeping an eye on the po

that is what the bank of england did. they will do whatever it takes and put a floor under the market as the conversations are unfolding with the pension fund, you are saying how can we get money to where it needs to be quicker? you have massive hundreds of pounds going on. you have corporate discussions saying we've got balance sheet can we put money to the pension fund can we land it can we get term liquidity funding going through? the challenge was a race against time in the past week. >> callum, incredible. the market eating itself last week it makes it easy for us to understand the pain felt in the pension funds. the bank of england will agree to the funds until next week >> the pension funds have gone from critical to stable. they are still in icu. they are still on ventilation. that is where we are right now next two weeks are particular. first off, it is repair and it is really get the money to where it needs to be quickly and not leaving that until the last minute. not leaving that until the 14th of october pensi

the bank's _ of england. we heard this from the imf. the bank's focus _ of england. we heard this from the imf. the bank's focus is _ of england. we heard this from the imf. the bank's focus is to - of england. we heard this from the imf. the bank's focus is to get - imf. the bank's focus is to get inflation down and the government have said, we are supporting people with their energy bills but that is quite inflationary and on top of that they want to introduce tax cuts again to boost growth, and again, that something quite inflationary as well. they are working, it doesn't feel like they are working in tandem rather than opposite directions and it's a hard place to be at the moment. there is growing pressure for the government to say something before the 315t of october because markets are just not really happy. for the latest information on the economy and politics, go to the bbc news website or the bbc news app. a nurse accused of murdering babies on a neonatal ward tried four times to kill a premature baby girl before succeeding, a court has heard. lucy letby is

getting the bank of england's attention today. you look from september 23, this line goes sharply upward. that is a sign of people losing confidence in this market, try to sell the bonds as quickly as they can. on the 28th, the bank of england feels it has to intervene to bring order to the market. that works for a while, but over october, this line starts heading back up again, a sign that fear is heading back in the market, where the bank of england has had to intervene once more. lewis: this comes as the finance minister kwasi kwarteng has been asking questions in the house of commons, and some of them were certainly tough. this from the shadow chancellor. >> this is a british crisis made in downing street. no other government is sabotaging their own country economic credibility as this government is. mr. speaker, can i ask, are the chancellor and the prime minister the last people left on earth who actually think their plan is working? lewis: the chancellor defended his actions, and he referred to a new report from the interna

the bank of england and treasury and less of a tug-of-war. but as you mentioned, the boe is still considering the delay to quantitative timing. but without the sugar rush, the recession risks are heightened. even though he nuked most of truss-onomics, he still has to pay what is called the more on risk premium for all that liz truss managed to do in three weeks. it means higher borrowing costs, our economists reckon to the tune of 10 billion pounds per year through 2025. one guest on bloomberg tv defined this as on steroids. in a sense he has to be, he has to be more fiscally disciplined to compensate and that means spending cuts. the labour party has already seized on the idea of austerity 2.0, and the appointment of rupert harrison to the council of economic advisers is a bit of a risk. respected as he is in markets, welcome as it is that truss is listening to economic orthodoxy so much, because he is a link back to osborne. he was osborne's right-hand man through austerity and unions are already threatening a winter of strikes. tom: manus

come under control and a lot of it is not within the bank of england's gift. perhaps it is not too far away before the inflation delta starts moving in a more favorable direction. francine: thank you so much. coming up, we will have a full round of markets and why it is getting harder to justify the fed's independence. we will discuss that next. this is bloomberg. ♪ tom: welcome back to the open. gains of 0.5%. the futures stateside .2 further gains. 1.4% on the s&p. the boe will push out its plans to start qt. a little movement in the gilts space. let's get back to the fed. it says it is getting harder to justify the independence of the fed. controversial comments. he said an independent federal -- joining us now or staying with us is ben gutteridge from invesco asset management. fred independence, he was out early and outfront criticizing the fed for not addressing the inflation challenges. is this a challenge to independence? ben: i would not question his opinion so relative to my own but i think the fed's independence is secure and i think there is a lot

this will be done in coordination with what central banks, bank of england is trying to implement. to what the bank of england has been trying to do, it's been trying to do its job, maintain price stability as it should as an independent central bank, and at the same time, addressing financial stability issues. we are trying to address this localized market dysfunction, and at the same time, fiscal policy moving in a direction that is more consistent with what the bank of england needs to do. dani: how much does it need to move from where it currently is? we saw them back off of the 45% tax bracket, no longer doing that. but we have the institute for fiscal studies saying that kwasi kwarteng need to find 50 billion pounds in savings to shore up confidence, which means slashing public spending. is that enough to give you comfort, do you need to see a full u-turn of policies from this u.k. government? pierre-olivier: too early to say because we have not seen the details of what is in the u.k. plan. they will announce later this month. the general point from our perspective is, of cou

of england being clear that it will not -- which could bring gilt buyers back would be the bank of england being clear that it will not have that pending sale over the markets. francine: do you think the boe should hold off? lord hammond: given the political uncertainty around, it would be a sensible thing for the bank of england to announce that it is postponing for the time being the commencement of the process of gilt sales for an indefinite period until conditions have stabilized. tom: before we let you go, have you had any conversations with the current chancellor or his economic advisory team? lord hammond: i am not going to comment on any conversations i might have had with people in the government. any such conversations would be private. francine: very diplomatic. former u.k. chancellor philip hammond, thank you for your time. we will have a lot of analysis here from westminster. later in the program, we will look at the runners and riders of the race for the next prime minister and whether boris johnson could make a comeback. this is bloomberg. ♪ tom: welcome back to the open.

this is tricky for the bank of england. because they decide on the wednesday, so three days afterwards. they are talking. they have the bank of england and treasury that get on the phone and talk to each other. area yes, the circumstances that they are happening are worrying. having to talk that much suggest something is not quite right. let's not forget history. i think the current prime minister and chancellor have more credibility. the market is looking very carefully at this pair and needs some strong signals on which direction we're going to go in. francine: do they need to work together? the fact that they spoke on the phone yesterday? how promising is that? not aggressive enough, an interest rate hike. a timid hike. they don't know what is coming up p. >> that is the central role. in a situation where it didn't know what is coming down the pipeline, it can't come up with policy decisions. it does leave the market in a difficult place. who does it pay attention to? how do you value u.k. assets when you don't know what

former member of the bank of england's monetary policy, and now... the business secretary jacob rees—mogg has defended the government's handling of the economy — saying it had no choice but to act and try to get it growing. the ons recently updated earlier figures in the year to show that the economy had grown rather than shrunk. so figures on the day they're announced of economic growth or otherwise can't be entirely relied on. they're highly subject to change. but if they can be relied on, then clearly it was right of the chancellor to provide a modest fiscal stimulus to try and ensure that we don't have a shrinking economy. so i think this ties in with what the chancellor's doing and moving away from the highest tax rates in 70 years, moving away from the risk outlined by the governor of the bank of england early in the summer of five quarters of recession. i think he used the word armageddon. but moving away from that is something that the government has to try and work on. we couldn't simply have sat back and allowed economic circumstances t

remarkable language from the bank of england. >> absolutely. in and of itself, that is quite worrying, the fact that they are referring to what they are seeing in markets is a firesale. that is partly probably why we are not necessarily seeing the intended effect of the boe's measures in the market. they do continue to selloff. recent action prompted by yesterday selloff in index link to gifts specifically. quite a large proportion of holdings by a lot of pension funds. the fact that we are seeing the selling off as well, clearly worrying the boe as they decided to step in with more measures. it will be interesting to see how far the boe is willing to go in terms of its support for bond markets and whether this does factor into their longer-term policy trajectory when it comes to the process of quantitative tightening or rolling those previous bond purchase off their balance sheets. francine: we will talk about the bank of england, but do you think there is a willingness for central banks to do more or does this just hang in itself? >> there is

bank of england is independent. greece was very much depending on the european central bank doing things, the imf was bearing down on them as well. the bank of england can do things a lot more easily than the case if greece went into difficulty again. let's move to ukraine, which has endured a third day of russian missile strikes. it's an escalation which us defence secretary lloyd austin says lays bare the "malice and cruelty" of the war. we'll be getting more details on those attacks shortly. but first, let's look at the diplomatic developments today. the defence secretaries of over 50 western countries have been meeting at the headquarters of the nato defensive alliance in brussels. they've pledged to continue sending military hardware to ukraine "for as long as it takes" — a message echoed by the g7 group of powerful countries. let's hear from secretary austin. ukraine cosmic forces have used systems like himars to change the dynamics of the wer that putin started and that has helped ukrainian forces seize the

the bank of england? mr speaker, the action we have taken has meant that families in scotland and across the uk are not facing gargantuan energy bills. and what the honourable gentleman and his friends in scotland could do to help us out is build a nuclear power station that will give us the energy security, help us get more gas out of the north sea to help deliver a more secure energy future for all of our people. if more secure energy future for all of our people-— our people. if she wants to ask us questions. _ our people. if she wants to ask us questions. we _ our people. if she wants to ask us questions, we can _ our people. if she wants to ask us questions, we can swap _ our people. if she wants to ask us questions, we can swap places. i our people. if she wants to ask us i questions, we can swap places. the reality— questions, we can swap places. the reality is— questions, we can swap places. the reality is that the prime minister is ignoring — reality is that the prime minister is ignoring

i have grave doubts about the bank of england policy. they are raising rates -- that's not what they should be doing. someone made a point that they should be the market maker of last resort not the buyer of last resort and i think that's right. i think many of the problems are self-inflicted. the pension industry loading up on derivatives to enhance yields then when the market moves a lot, suddenly it comes to a standstill. i don't think the bank of england should be the buyer of last resort. in the u.k., it's a foregone conclusion it's going to be a deep recession. kriti: thank you as always for your time and insight. we are getting headlines from neel kashkari speaking at a forum on food prices saying inflation is too high. we will bring you those headlines as they come forward. for now, a turbulent week ahead as the bank of england bond by plan is set to end. this is bloomberg. ♪ guy: the market bracing for a turbulent week when the bank of england this time next week exits the bond buying it is been doing not every day but some da

lizzy burden joins us from outside the bank of england. what was the turning point then from this government? lizzy: markets priced in a you turn yesterday, the pound and gilts rose on reports we would see a you turn on the corporation tax freeze. and actually reports are that liz truss and kwasi kwarteng will raise the corporation tax perhaps not as much as boris johnson had plans to, from 19% to 25% but this was a key plank of trust in onyx -- trussonomics as part of her efforts to boost growth. you have kwarteng coming back, it smacks of one the greek finance minister had to return from the g20 in 2011 to deal with the sovereign debt crisis. the question now is, will truss survive? the times reporting that the tory party could change its rules and she could be replaced by rishi sunak and anymore not -- penny mordaunt who ran against her for the leadership. but whoever replaces her would have a massively diluted mandate. there would be huge pressure to call a snap general election and by the polls it looks like labour would win that. fra

that means the bank of england on the back of the u-turn we have seen, but the bank of england would need to do in the immediate future is less than what was feared. all of that perfectly makes sense. that said, we need more details for the market to stabilize at these levels. guy: do you think the bank of england can conduct qt in this environment? >> i think it is up to the markets. it is still up for debate. conditions from a week ago to now have improved. there is a fairly complex arithmetic to deal with. we are not in clear waters yet. that just means we need more details to come on the fiscal front and to be focused on what the bank of england would say in the next meeting. alix: especially when there were problems before this. you mentioned the bank of england. how much do you think they will be able to hike? many were looking at 100 basis points. do you think they can hike less? what do you foresee? >> our economists expect 75 basis points. alix: do you think that is priced inappropriately -- in appropriately? >> i think it is much closer to being priced in at this point. guy

of the -- the bank of england task. this is interesting this morning, what does this all mean? >> i think the bond vigilantes are back. we have seen that in the last few months in the u.k.. it's a very different environment and this goes to a rudder point. you had this -- broader point. you can afford to be a little complacent. in this environment, investors will pay attention to the fiscal situation and start to think about having a country where you have to worry about funding, what did those funding needs look like? it's a long time since we've had those issues in developed markets and the u.s. still benefits from the fact that you have the reserve currency, this is the safe haven asset for investors so we haven't always had the same level in terms of our fiscal stance. jonathan: do you think we might? >> that's a good question, i've been waiting for that for a long time. it doesn't seem to be what's driving markets these days. you had some pretty aggressive fiscal action over the last few years and rates have backed

is it actually the bank of england's actually the bank of england�*s problem to solve? isn�*t it the fact that the government has got to demonstrate the public finances are in a sustainable position and until they do, this market volatility is going to continue, isn�*t it? ultimately, yes, that is the line that the bank of england seem to have taken by saying its intervention as a temporary measure intervention as a temporary measure in order to intervention as a temporary measure in orderto maintain intervention as a temporary measure in order to maintain a certain element of stability but its statement today that there is a material risk to financial stability, that is a very powerful statement. it is kind of a warning to the government which, we have seen warnings from various quarters, the institute of fiscal for example, saying the government will have to raise a great deal of money if it is to achieve its target of balancing the budget in the medium—term. what we are seeing here is kind of a warning to the government which has to come out with its figures at

bank of england had to say to us and others late yesterday. we will tell you what you need to know, and there. hello. a chilly start again on wednesday morning across parts of east anglia and southeast england. the rest of the uk will be milder, cloudier, breezier, and you may be seeing some rain around. in fact, a damp start across much of scotland and northern ireland courtesy of this weather front, and that will take some outbreaks of rain into much of wales and parts of england during the day. it'll be very patchy and showery in nature. now, temperatures first thing, quite a contrast — from the 11 in belfast, in glasgow, to the coldest parts of eastern and southeast england that won't be too far away from freezing. more cloud here compared with tuesday, but likely to stay dry until after dark. the rain, early on in northern ireland, clearing by lunchtime, taking till the afternoon before it pulls away from southeast scotland. sunny spells following behind into scotland and northern ireland, but for much of england and wales it'll be clou

we saw from the governor of the bank of england that he - of the bank of england that he thought they would have to go further, so you think the bank of england might reverse that now? i think they will have to raise them a little bit, but no where near as aggressively as i financial markets are expected at the moment. the fact we are going to see tax rises rather than tax cuts will slow the economy further, it is already probably going to fall into recession over the next few months, so although interest rates will rise in november, i don't think they will increase as aggressively as anyone predicted recently.— we can speak now to katy balls, deputy political editor of the spectator. what a morning, what a weekend, hour ljy what a morning, what a weekend, hour by hour things are shifting, what are you hearing from your sources in westminster? aha, are you hearing from your sources in westminster?— westminster? a lot of uncertainty which seems _ westminster? a lot of uncertainty which seems to _ westminster? a lot of uncertainty which seems to be _ westminster? a lot of uncertaint

t has from the bank of england? i was listenint from the bank of england? i was listening to _ from the bank of england? i was listening to alex's _ from the bank of england? i was listening to alex's comments. i from the bank of england? t —" listening to alex's comments. they are correct. what is happening if we take a step back is if... is a global interest rates are going up. the bank of england started doing interventions last december. and as they have gone up there have been fewer buyers and people don't know where that will end and what the final landing prices will be. that tied in with perhaps what was delivered in the mini budget statement has led to further volatility and higher yields of where the guilt market is. the guilt market is effectively where his majesty government gets to fund themselves. you are right that there is lots of voluntarily going around and the bank of england actively engaging the market to support the prices of government bonds. t0 engaging the market to support the prices of government bonds. to be clear, prices of go

was before the bank of england intervened. and while it is undeniably true that interest rates have gone up around the world, it is also undeniable that the mini budget and those questions around how the books are going to balance did spook the markets big time, and they are right back in the questioning, nervous, unsettled place they were before. what will be their response to the statement from the prime minister we have had about no cuts in public spending, what is your view on how the government will balance the books? that is baffling in a way, because as things stand, he has a £60 million a year hole in public finances. how is he going to feel that? how is he going to fill that? one answer is to reverse some of the tax cuts they announced on the 23rd of september. that would be politically difficult. the other one is to have massive swingeing spending cuts. there may be a bit of sleight of hand here. they might be saying, we are spending this money on capping energy bills, and maybe they are factoring that in to the ove

this dilemma is with the bank of england _ outlook? this dilemma is with the bank of england moved i outlook? this dilemma is with i the bank of england moved more slowly than market is expected last time around, if the bank of england terrified in the long—term damage of inflation and may view an economic slowdown has the short—term pain with paying for the long—term going of bringing inflation back, the government probably wants some growth out there and may view a recession is a bigger danger than bashan because inflation means unemployment, voters will be unhappy about inflation but were unhappy they lose their jobs, so you have a tension between the two, bank of england more worried about inflation, government more worried about recession another reason why the pound is under pressure because you have this divergences between the two leading institutions that control the economy. minister yesterday _ control the economy. minister yesterday interviewed - control the economy. minister yesterday interviewed by i control the eco

>> markets uprising 96 basis points of rate increase november 3, the bank of england have already been hawkish in the past few days. and the bank of ireland governor has said they will raise rates as needed. the inflation print we got this morning, retail price inflation which is the measure of inflation -- has already gone up 12%. the boe does not have time on its hands, it needs to raise rates, the sooner the better, the interest rates and the u.k. benchmark are not in neutral territory yet. the bank of england -- before the economy starts showing pressures, and therefore the back will raise rates 100 basis points on november 3. francine: they are pretty decisive on going ahead with qt a couple of days before the november meeting, how much will that change financial conditions? how much effectively is a tightening the economy? ven: at the pace they are going, i don't think it will be too much for markets. previous estimates are that team lead to increases for the entire year four quarters will be roughly equivalent to one hike of 25 basis points, so i don't think markets will -- back

the former bank of england. _ job. the former bank of england, talking - job. the former bank of england, talking to - job. the former bank of england, talking to the | job. the former bank of- england, talking to the bbc the level of austerity will be much worse than the post— financial crisis of 2008, what are you expecting in that fiscal event, what will the detail be when we do get it? i what will the detail be when we do aet it? ., , . do get it? i would expect measures _ do get it? i would expect measures enacted - do get it? i would expect measures enacted by - do get it? i would expect measures enacted by the chancellor have taken place but beyond that this fiscal hole has opened up which reflects the state of the economy, in terms of scale, the numbers bandied around our 30 to a0 billion, that is a lot of potentially extra revenue that needs to be raised or spending that needs to be cut, there are a lot of moving parts to that number, one helpful thing with hunt and rishi sunak in place and those u—turn measures have seen the cost of government bor

of the bank of england. the express says king charles iii will have a parred—down coronation to reflect the cost of living crisis. "don't let james�* killer walk free" says the mirror as denise fergus, the mother ofjames bulger who was murdered byjon venebles in 1993 pleads with the pm not to release her son's killer. madeleine mccann suspect has been charged for an unrelated attack on a girl in praia da luzjust days before the toddler went missing in 2007. and the times front page features a tribute to the actress dame angela lansbury who has died at the age of 96. he so let's begin. can go yourturn can go your turn to kick off the to pensions as backbench support is of front—page headline for the times tomorrow morning. this front-page headline for the times tomorrow morning.— front-page headline for the times tomorrow morning. this is the story that is told in _ tomorrow morning. this is the story that is told in several _ tomorrow morning. this is the story that is told in several newspapers i th

the bank of england yesterday. this is morphing into a broader economic crisis. if you are a consumer in the u.k., looking at your mortgage rate which will probably reset in the next two years, looking at the doom and gloom that's coming, what are you going to do? you will do as little as possible and save as much as possible step economy is barreling toward recession and the doom and gloom is back on that. it's hastening or broadening the economic precipice we are on the edge of right now. lisa: talking about the economic precipice, how does it change your view of the fragility and how close we are to the he print -- these impressions from a market perspective? >> the u.k. is half as extended and that needs to be resolved as soon as possible. they will continue to post bond yields higher step the world is watching. -- it's not just a u.k. issue, it's going global. i think you need to know how high bond yields will go. hopefully, you need continued signs that inflation is easing. all the inflation indicators are ea

right now the bank of england is extremely concerned about inflation. the last thing they want to do right now is 7 places written by the government. so both are critical right now, just not the government, but also the bank of england interaction with any new fiscal budgets that are going to be released. i think we're going to see lots of rates volatility throughout the week. and fed reserve board does not have to come here because they're continuing to wrap up the interest rate. so it's not just one area, it's 2 areas that we're continuing to watch. but not every central bank is in the same problem right now. they're really, really worried about inflation. last thing they want is inflation. now they're forced to raise interest rates. but what does interest rates do? especially in economy like the u. k. interest rate. now, higher interest rates are going to stifle the economy and that the risk raising spectrum stack play should. that's the worst of all outcomes. and that's something that we really have to contend with going forward throughout the rest

lizy: let me translate what the bank of england is getting at here. not everyone has been so happy with b.o.e. in history. they are trying to say they'll prioritize fighting inflation, they're not going to be the back stop for the government forever. but they're also going to keep a watchful eye on financial stability. it's andrew bailey putting a confident foot forward and perhaps he deserves to because you can also see that the l.d.i. funds which were at the heart of all this market turmoil after the mini budget do seem to have fortified themselves. so the bank is saying that it will get on with q.t. but it's just going to leave the long end for now at least. manus: liz sy, thank you very much. -- lizzyy, thank you for joining us. let's dig this the economy side at the top of the hour. john is with us, he is bloomberg's u.k. team analyzing the data and economics front. here we go. double digit inflation on the headline. and the core. that's what we're expecting, john. what does it mean for consumers? john: good morning. for consumers it's straightfo

they can stay ahead of any problems here like the bank of england did. alix: too many metaphors for a monday morning. ira, is it possible we have seen the p in yields as we unwind? central banks have to do some different. ira: i think we have seen on the long end of the treasury curve the peak in yields. i think policy will be easier in the u.s. than tighter in 2024. that means the long end of the curve doesn't need to see yields move much higher. that doesn't mean that we will not see volatility that remains within 10, 20 basis point moves in a lot of parts of the yield curve. that is part of the uncertainty. we are use yields being so low, three basis point moves seem large. now that you have treasury yields upwards of 4%, a 10-basis point move feels like a three-basis point used to. you have to realize that part of this, take in context where we are in terms of the actual market. guy: how seriously should we take lael brainard when she said we are going to be careful not to ease policy to early, we will not make that same mistake again? i keep coming

for economy is the independence of the bank of england.— economy is the independence of the bank of england. for people watching us this morning. _ bank of england. for people watching us this morning, pensions _ bank of england. for people watching us this morning, pensions falling, - us this morning, pensions falling, mortgage products being suspended, day by day come interest rates rising, i mentioned the word confidence, how can you inspire confidence, how can you inspire confidence in people trying to pay their bills, apply for a mortgage, one showing their pensions drop? i’m one showing their pensions drop? i'm not one showing their pensions drop? i�*"n not pretending we are in an easy circumstance also dealing with inflation is one of the hardest things central banks and governments have to do. the tightening of monetary policy the bank of england has embarked on leads to higher mortgage rates. that is a decision quite rightly taken permanently by the bank of england but it's hard to see it had any choice against the background of rising inflation. as regards pension funds, there

, these measures announced by the bank of england. they run out friday. what happens then? i think they'll be a 3rd of the reassessment. and if things are, as you know, disturbed as they are currently, i think you might expect to see that they extend these programs like one short term measure after another. but of course, they don't want to commit to intervening in the markets in this way for too long. because of course, well that buying up this government that they're effectively putting money into the economy. i putting money into the hands of consumers just at the same time, i tried to buckle inflation by increasing interest rates. so they bought, you know, to very different conflicting roles that they're playing here, which makes life very, very difficult for them. very briefly, to what extent is the turmoil we're seeing linked to competence in this government? can we really assess that? we can't attribute day on a one to one basis, but i think that there is a lack of confidence. i think there was always an issue for the private.