While inflation may have peaked in 2022, households and firms are getting more used to it, making it harder to dislodge

British Retail Consortium says figure eased to 8.4% in June from 9% in MayBritain's biggest retailers have said shop price inflation is easing ahead of a crunch meeting with MPs on Tuesday over the soaring cost of groceries, but warned food prices were continuing to rise at near record rates.The British Retail Consortium (BRC) said annual inflation in overall shop prices eased to 8.4% in June, down from 9% in May, as retailers cut the price of many staples including milk, cheese and eggs. Clothing and electrical goods prices also fell ahead of the summer holidays. Continue reading...

Home secretary says benefits of deterring irregular immigration should also be considered, as economic impact assessment publishedThis is what Rishi Sunak said in his clip for broadcasters in response to claims that today's King's Fund report (see 9.28am) showed the NHS was going in the wrong direction" under the Conservatives. He replied:One of the my five priorities is to count NHS waiting lists. That's why we've put record sums into the NHS since I became prime minister, with record numbers of doctors, nurses, and new ways of doing things which are starting to make a difference.But we also need to make the decisions that will modernise the NHS for the long term. Today's example, rolling out lung cancer screening, will really help improve survival rates for lung cancer, something where we are behind other countries, but today's announcement will help to fix that. Continue reading...

Readers offer solutions to rising interest rates and mortgage costsHow very apt to compare the rises in interest rates on mortgages with other European countries (Report, 20 June). In any other aspect of life, taking on a loan when you do not know what the future repayments will be would be very bad financial practice. Yet when homebuyers take on what is likely to be by far their biggest loan, the best they can hope for is a fixed term of two or, at best, five years - thereafter they are at the mercy of the financial markets and government policy. Why? The mortgage company does not need to raise more cash for their loan, so raising the interest rate during the term of a mortgage seems to be out-and-out profiteering.A fixed-term, 30-year mortgage seems to be far more sensible, and gives homeowners confidence and security. When will we start adopting a system that is fair to all?

Associated British Foods says group sales rose by 16% with steeper prices helping to drive Primark's growth

Traders will not be able to absorb estimated 10m extra cost on goods entering from EU, warns Fresh Produce ConsortiumThe UK's post-Brexit border strategy risks further pushing up food prices, according representatives of Britain's fresh produce industry.Traders in the food supply chain are warning they will not be able to absorb the extra cost of charges levied for import checks on goods entering the country from the EU and the rest of the world, due to be introduced in the new year. Continue reading...

Chancellor to meet watchdogs to discuss claims that company profiteering is stoking inflation

Bank of International Settlements warns that economies, such as in the UK, need policies to cool price growthGovernments must raise taxes or cut public spending after central banks kept interest rates too low for too long in the face of higher inflation, according to the Bank of International Settlements.Closing the gap between government income and expenditure would calm inflation", according to the annual report from the Basel-based organisation, which advises 63 central banks covering 95% of global economic output. Continue reading...

Policymakers are too quick to slow the economy and risk recession when the solution is to rejoin the EUAsked some time before the latest increase in Bank rate whether he was comfortable with such a prospect, even at the risk of precipitating a recession, Jeremy Hunt, the chancellor, replied yes".During the 1990-92 recession, John Major, as chancellor, declared: If it isn't hurting it isn't working." But that was when the recession was well under way. And when he became prime minister, his chancellor, Norman Lamont, said: Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying." (This is often misquoted as worth paying", but accuracy matters.) Continue reading...

The best paid have had the highest wage hikes, but the majority of workers have seen their salary growth fall, according to ONS dataPay rises for the top 10% of UK earners, including City bosses, have clearly outstripped those for the rest of the workforce and been prime drivers of recent inflation and soaring interest rates, according to new analysis of official figures.After a week that saw interest rates rise for the 13th consecutive time, by 0.5 percentage points, to their highest level level since 2008, the Bank of England's governor, Andrew Bailey, angered union leaders by appearing to blame low and middle earners for wage demands that had fuelled the crisis. Continue reading...

Beware the jaws that bite, prime minister! You can order your own copy of this cartoon Continue reading...

Options for homeowners and first-time buyers as they face maelstrom in market

Delay is under intense scrutiny from City watchdog - but it may not just be simple profiteeringActivists, campaigners and MPs are growing increasingly concerned that savings rates are failing to keep pace with the rapid rise in borrowing costs, putting the behaviour of the UK's biggest banks in the spotlight.While worries are mounting about how mortgage holders will cope with higher interest rates, less focus has been put on savers. This group is often frustrated when mortgage rates seem to rise lock-step with the Bank of England's base rate, while savings rates seem to be lower and slower to respond. Continue reading...

Measure among three to emerge from meeting to help struggling households after sharp rate hike

PM says he still backs Andrew Bailey despite criticism he has failed to take the right measures to curb inflationThe Bank of England governor, Andrew Bailey, has come under fire for failing to predict prices would would increase by so much and for not acting sooner to tame inflation. Although Russia's invasion of Ukraine fuelled price rises in other parts of the world as energy costs soared, inflation has since slowed in many parts of Europe and the US. In the UK, however, it has remained stubbornly high.The result of persistently high inflation is that the Bank has rapidly raised interest rates, from 0.1% in December 2021 to 5% on Thursday, causing panic among millions of homeowners facing the prospect of sharply higher borrowing costs. Continue reading...

From Tony Blair to George Osborne, our rulers painted false pictures of success while real wealth and wages withered awayYou know the central conceit of Oscar Wilde's The Picture of Dorian Gray, of course you do. A lad of sun-kissed beauty is presented with a stunning likeness of himself. Disturbed at the notion that he will grow old while the painting doesn't, he locks it away - where it is the portrait that ages and uglifies while Dorian stays boyish and beautiful. But perhaps you've forgotten what happens next.The story has come to my mind many times, as the foulness of British politics becomes ever harder to ignore. Genteel liberals wonder how their land of cricket whites and orderly queues could be ruled by a grasping liar such as Boris Johnson and I hear a whisper on the wind: Dorian Gray. The New York Times and Der Spiegel report in bewilderment on a country with pockets of deep poverty and unslaked anger, and again rasps that hoarse voice: the horror was hidden here all along.Aditya Chakrabortty is a Guardian columnist Continue reading...

Bank raises base rate to 5% and is predicted to go to 6% as pressure grows on government to interveneRishi Sunak's pledge to ease the cost of living crisis is in tatters after the Bank of England was forced to raise interest rates to 5% in an inflation-busting move that risks driving the economy into recession.With the prime minister under fire over the soaring cost of borrowing, the central bank pushed through a half-point hike, deploying what economists described as shock and awe" tactics. Continue reading...

Move at Paris summit on global finance will only apply to repayments on new loansPoor countries will be able to pause their debt repayments if hit by climate disaster, under plans announced by the World Bank at the finance summit in Paris.The international development organisation said it would insert new clauses in any agreements with developing countries, allowing them to suspend debt payments in the case of extreme weather events, starting with some of the poorest and most vulnerable nations. Continue reading...

Rates will remain at level until summer 2024 after Bank of England hikes benchmark rate by half a percentage pointThe financial markets are predicting UK interest rates will hit 6% by the end of the year, and remain at that level until next summer, after the Bank of England hiked its benchmark rate by half a percentage point.The financial markets were volatile as economists warned that the Bank's efforts to cool inflation by lifting its key lending rate to 5% on Thursday could trigger a recession. Continue reading...

Prime minister says he knows people will be anxious about rate rise but it is going to be OK'. This live blog is closed

Rolling coverage as the Bank of England lifts UK interest rates to a 15-year high, as it contnues to fight inflation

Research allays fears that rapid scaling back of production would hit people's savings and pensions hardA rapid reduction in fossil fuels, essential to avoid devastating climate breakdown, would have minimal financial impact on the vast majority of people, new research has shown.Urgently cutting back on fossil fuel production is essential to avoid the worst impacts of climate breakdown and the economic and social turmoil that would ensue. However, some opponents of climate action claim it is too expensive. They argue that rapidly scaling back fossil fuel production would leave billions of pounds of stranded assets", leading to an economic slump that would impoverish the public through a fall in the value of savings and pension funds. Continue reading...

Britain is facing a new economic era that will hurt those already struggling, and could radicalise even the previously comfortableThe sleepless nights are here again, then. It's back to the bad old days of poring over a calculator, trying and failing to make the sums add up; back to scrimping and saving, hiding from the bank, wondering dizzily what just hit us.Even before the Bank of England pushed up interest rates to 5% on Thursday, the Resolution Foundation thinktank was warning that anyone coming off a fixed-rate mortgage next year could expect their repayments to rise on average by 2,900 a year. But that's just an average: recently I bumped into a friend whose payments trebled when she remortgaged. She and her partner count themselves lucky as they're earning well enough to absorb the shock, but only by sticking to the absolute bare essentials. No more going out. No more fun stuff.Gaby Hinsliff is a Guardian columnist Continue reading...

Experts say increase from 8.5% may be insufficient to tackle surging inflation some estimate to be 110%Turkey's central bank has raised interest rates for the first time in more than two years, from 8.5% to 15%, but there is widespread concern that the move is insufficient to combat rising inflation and a continuing economic crisis.The decision marks a partial shift in the unorthodox economic policy of the president, Recep Tayyip Erdoan, under which interest rates have been frozen since March 2021 despite a sharp devaluation in the Turkish lira. Continue reading...

Critics say Bank should pay less attention to economic models and more to what is happening on the ground

Move brings borrowing costs to highest level since April 2008 as Bank intensifies efforts to control inflation

Borrowers with expiring fixed-rate or tracker mortgages face difficulties, with some saying they will be forced to sell their homes

The Bank of England is expected to raise interest rates again today, leaving millions of homeowners facing higher costs. Richard Partington reportsBritain's inflation rate remained at 8.7% in figures released yesterday. It means that when the Bank of England announces its interest rate decision at noon today, it will almost certainly raise the base rate from the current level of 4.5%.As our economics correspondent Richard Partington tells Nosheen Iqbal, this rise will pile further pain on to mortgage holders, who are already smarting from successive interest rate rises. Many took on large debts to buy homes during an era of record-low borrowing costs and are now facing monthly bills hundreds of pounds higher than they budgeted for. It comes at a time when utility bills are pinching hard and food prices are at record highs. Continue reading...

Starmer and his party seem to have concluded direct support for homeowners cannot be justified - but it's smart politics to be seen to take on the banksLabour's five-point plan" to ease the pain in the mortgage market can be boiled down to a single idea: get heavy with the lenders - the banks and building societies - to make them play nicely with over-stretched borrowers.One cannot call it a radical idea, however. First, it's in the interests of lenders themselves, up to a point, to be flexible by, say, lengthening the term of the loan, granting a payment holiday or allowing a borrower to switch to interest-only arrangements for a while. Second, many banks say they already have such policies in place, even if critics say they're not advertising them with enthusiasm. Continue reading...

Shadow chancellor Rachel Reeves says party would force banks to take a range of steps to protect borrowersLabour has piled further pressure on Rishi Sunak to take action to help struggling mortgage holders as the Bank of England prepares to raise interest rates again to levels not seen since before the 2008 financial crash.Rachel Reeves, the shadow chancellor, said on Wednesday that if Labour were currently in power, it would force banks to offer a range of support to borrowers, including letting them move on to interest-only mortgages and extending their repayment period. Continue reading...

Former health secretary says understanding important of early quarantining could have helped prevent disease spreading. This live blog is closed

The speaker had to step in after the PM's claims about the economy stretched the credulity of at least one MP at PMQIt was just after Rishi Sunak had answered Stephen Flynn's first question that the speaker intervened. The SNP leader in Westminster had merely wondered if some of the prime minister's promises to fix the economy showed that he had been taking honesty lessons from Boris Johnson. This was too much for Lindsay Hoyle. He urged MPs to be more cautious in their use of language. There was a danger that people might think Flynn was accusing the prime minister of deliberately misleading parliament.So there we had it. A new precedent. No one can now compare another MP to Boris Johnson, because to do so is to accuse them of lying. Spare a thought for Jacob Rees-Mogg. Or Jake Berry. Now officially banned from being mentioned in the same breath as their hero. From now on, to do a Johnson" is officially translated in Hansard as to habitually tell lies". Continue reading...

After taking the US by storm with her Eras tour, Taylor Swift is set to perform in Australia once again in February - and fans are frantically trying to secure a ticket.Guardian Australia opinion editor Bridie Jabour tells Gabrielle Jackson how Taylor Swift became a pop culture phenomenon and how Swiftonomics' may impact Australia's economyRead more: Continue reading...

Member of Jeremy Hunt's economic advisory council says BoE must create uncertainty and frailty", after UK headline inflation was unchanged at 8.7% in MayFalling prices for motor fuel led to the largest downward contribution to monthly inflation in May.Today's inflation report shows that motor fuel prices fell by 13.1% in the year to May 2023, compared with a fall of 8.9% in April. Continue reading...

Expected surge in costs by 2025 likely to hit people in 30s hardest, says Institute for Fiscal Studies reportMore than 1 million households across Britain are expected to lose at least 20% of their disposable incomes thanks to the surge in mortgage costs expected before the next election, the UK's leading economics thinktank has warned.Sounding the alarm as mortgage costs reach the highest levels since the 2008 financial crisis, the Institute for Fiscal Studies (IFS) said that almost 1.4m mortgage holders would see at least a fifth of their disposable income erased. Continue reading...

ONS figures show stabilising energy prices were offset by rises in cost of air fares, holidays and secondhand cars

In blow to Rishi Sunak's plans to cut taxes before general election, net debt reached 2.6tn at of end of MayThe UK's total government debt pile in May reached more than 100% of annual national income for the first time since 1961 as state borrowing more than doubled, according to official figures.In a blow to Rishi Sunak's plans to cut taxes before the general election, which is expected next year, the Office for National Statistics (ONS) said net debt reached 2.6tn as of the end of May, estimated at 100.1% of gross domestic product (GDP). Continue reading...

From gig tickets to video games to air fares, costs soared in May as food and drink prices also rose sharply

As Bank raises interest rates again and big business greedflation pushes prices higher, the PM's vow is a gamble

While the rate has fallen from its October peak of 11.1%, the figure for May remains stubbornly highUK inflation remained stubbornly high in May at 8.7% - the same as the previous month - despite a string of forecasts earlier this year predicting a sharp fall in response to tumbling energy prices.Official figures had been expected to show that the UK's consumer prices index (CPI) eased slightly last month, to 8.4%. But unlike almost everywhere else in the world, that didn't happen. Continue reading...

Borrowers who made a short-term choice after the 2008 banking crisis were lucky - current borrowers have been equally unluckyAs mortgage lending rates surge to levels not seen since the banking crisis, some borrowers are wondering whether there is something to be said for the certainty of fixing the borrowing rate for the full term of the loan.In 2007 two of the UK's biggest lenders launched 25-year fixed-rate mortgages. They were responding to a call from the then chancellor, Alistair Darling, who suggested consumers would be better off if they did not have to find a new deal every two years, typically paying charges each time. Continue reading...

Largest amount of money Kyiv previously worked with was $6bn a year in 2014, Mustafa Nayyem says

Kantar survey is released day before official figures expected to show a slight easing in UK inflation rate

Figures released on Wednesday expected to confirm UK stuck with highest inflation rate in G7Conservative MPs are increasingly split over whether ministers should intervene to defuse Britain's mortgage timebomb, as the Bank of England prepares to raise interest rates for a 13th consecutive time.In a crunch week for the economy, official figures on Wednesday morning are expected to confirm the UK remains stuck with the highest level of inflation in the G7, as the cost of living crisis continues to squeeze household budgets. Continue reading...

Jeremy Hunt faces calls to introduce mortgage interest tax relielf from Conservative MPs at Treasury Questions, and rules out price caps on food

Exclusive: Kristalina Georgieva calls for debt for climate swaps' ahead of world summit on new global financial pactPoor countries hit by climate disaster should not be forced to struggle with crippling debt payments, the head of the International Monetary Fund has urged before a global summit on climate finance.Kristalina Georgieva, managing director of the IMF, said providing debt relief to countries suffering from extreme weather was a matter of urgency. Extreme weather is hitting harder around the world, and countries already facing debt mountains cannot afford to service their debts, particularly at a time of high interest rates. Continue reading...

Author of landmark UK review into the economic value of nature joins UN environment chief in calls for action, not just words' on biodiversity goalsHumans are exploiting nature beyond its limits, the University of Cambridge economist Prof Sir Partha Dasgupta has warned, as the UN's environment chief calls on governments to make good on a global deal for biodiversity, six months after it was agreed.Dasgupta, the author of a landmark review into the economic importance of nature commissioned by the UK Treasury in 2021, said it was a mistake to continue basing economic policies on the postwar boom that did not account for damage to the planet. Continue reading...

Institute for Public Policy Research points to 500bn-plus underspend compared with other advanced economiesMore than half a trillion pounds' worth of underinvestment by government and business over recent decades has left Britain's economy trapped in a growth doom loop", according to a thinktank.Sounding the alarm as the economy struggles to gain momentum, the Institute for Public Policy Research said the UK risked falling further behind comparable wealthy nations without a sharp turnaround in approach. Continue reading...

Report finds that raising minimum energy efficiency standards by 2030 could have huge impact beyond billsFixing Britain's draughty homes could add almost 40bn to the economy by the end of the decade by cutting energy use and improving health, according to research by Citizens Advice.The consumer group said raising the minimum energy efficiency standards of Britain's homes could have a profound impact beyond reducing bills and should be the government's top priority. Continue reading...

There are some doubts as to whether Starmer's publicly-owned energy company will have its emphasis in the right placeA Labour government would establish a new publicly-owned energy generation company in Scotland, Keir Starmer announced on Monday. Fine, if expertise and jobs from the North Sea industry are to be transferred over time, Scotland is a logical place to put it. But the location is only a minor piece of the decision-making. Two more important questions about Great British Energy" are these: how much money will it have to invest? And which investments would it prioritise?There is - as yet - no hint of an answer to the first question, perhaps understandably if a general election is still more than a year away. But note that many outsiders think GBE would need an annual investment budget of 5bn-10bn to make a meaningful difference to the pace of energy transition. Clarity can't wait for ever. Continue reading...