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Hello and welcome to Coffee House shots. I'm James Hill and I'm joined today by Katie Bulls and

Kate Andrews. Now Kate, I think the big nighttime story today has been the Bank of England raising

interest rates from 4.25% to 4.5%, which is the highest rate since 2008. Talk us through the

thinking on this and where the Bank sees inflation going. So as you say James, we've seen the 12th

consecutive rate raise in a row voted 7 to 2 by the Monetary Policy Committee and the Bank

was pretty straightforward about this is that at the start of its right up that inflation is still too

high. Pretty obvious information I think for anybody listening to this podcast but also the bank

noted that it continues to be worried about wage increases and across the board. This is something that

the governor of the Bank of England, Andrew Bailey has mentioned several times. The fact that he

fears a wage spiral and how that might make inflation worse. Now this is a questionable assertion.

It's something a lot of people disagree with but we are where we are. The bank decided to raise

rates again. But as I say on Coffee House, I think this was inevitable after we saw the Federal

Reserve hike rates again last week. The rate of inflation in the States is roughly half of what

it is in the UK. There in a much better position than we are in the UK but still well above that 2%

inflation target that both the Federal Reserve and the Bank of England have. So when the Fed was

raising rates with much less of a problem on its hands arguably it seemed inevitable that the

Bank of England was going to do so as well. But as I know I think the real story isn't so much

the rate raised which was widely expected by markets but some of the other forecasts we got from

...