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Hello and welcome to a special Saturday edition of Coffee House Shots. Liz Trust is in the

lead when it comes to the Tory leadership race, though the race is not over yet, but whoever

enters number 10, they face a daunting intrate of problems. And to discuss that, I'm

enjoyed by Isabelle Hardman and James Persif. No, James just to kick things off, obviously

the biggest news from the week we just had has been the Bank of England. And the fact

that we're forecasted on recession, what strikes you most from pretty much a horror warning

that we had this week? So there was so much bad news in that Bank of England report that

sometimes you could have read down it and then were suddenly like, why isn't everyone

talking about this? And then you realise they were talking about something else that

are more immediate horror that are grabbed their attention. I thought two things. One is

the Bank of England is predicting a recession that starts in the final quarter of this year

and goes on for over a year. Now that is not as deep a recession as a recession that

followed the financial crash, but a longer one. And I think it's also fair to say looking

at their projections, we're not suddenly seeing a dramatic return to growth at the end

of that recession. It is still anemic after that. The second thing is how high inflation

remains for how long, which is they think that inflation will still be 9.5% in the third

quarter of next year. And I think that that has big implications for things such as public

sector pay, how reasonable is it to ask you to accept below inflation? Pay increases.

If this is not a temporary spike in inflation, this is a quite prolonged period of high inflation.

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