The pound, inflation, interest rates and energy bills... what happens next?
This is Money Podcast
This is Money
4.1 • 650 Ratings
🗓️ 16 September 2022
⏱️ 44 minutes
🧾️ Download transcript
Summary
That comes against a backdrop of inflation edging down slightly to 9.9 per cent - taking Britain out of the double-digit inflation club - with a colossal rescue plan to save households and businesses from spiralling energy prices about to kick in.
The details on that energy price guarantee rushed out by new Prime Minister Liz Truss - and how it's potential £150billion cost will be paid for - are still sparse, but are expected to be sketched out in more detail this week.
Meanwhile, on Friday a mini-Budget is due to arrive with a rumoured round of tax cuts as Truss and her new Chancellor Kwasi Kwarteng go all out for growth.
On this podcast episode, Georgie Frost, Helen Crane and Simon Lambert look at the pound, energy bills, inflation and interest rates, how all these issues connect and what could happen next?
Also on the agenda for discussion are rising savings rates and whether savers should fix or stick with short-term easy access deals, and a question over a life-changing £500,000 early inheritance and where the balance lies between saving, paying off the mortgage or investing.
And finally, overshadowing all the financial events of a whirlwind fortnight, Queen Elizabeth II died, ending her 70 year reign, and ushering in a period of national mourning that came to a close under the eyes of the entire world with her funeral.
But what will happen now to Britain's money and when will we start to see King Charles III on our cash?
Transcript
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| 0:00.0 | Welcome to This Is Money podcast. I'm Georgie Frost and joining me and editor Simon Lambert today is assistant editor Helen Crane. |
| 0:09.1 | And coming up, sterling falls, energy prices, freeze and savings rates are on the rise. |
| 0:14.2 | Plus what to do with a big windfall and when will we see King Charles on our banknotes and coins? |
| 0:19.2 | Don't forget you step to date with all the latest breaking money news, just go to |
| 0:22.2 | this ismoney.co.com.com or download the app. |
| 0:25.3 | Market updates and conversations around the financial world don't have to be boring. |
| 0:29.8 | The Digest and Invest podcast by E. Toro is a great way to tune into what's happening |
| 0:33.9 | in a fun and easily digestible format. |
| 0:36.8 | Discover the Digest and Invest |
| 0:38.1 | Podcast at Eutoro.com forward slash academy forward slash podcasts. But first, sterling slid to its |
| 0:44.1 | lowest level since 1985 against the dollar on Friday with concerns that the country is headed |
| 0:49.8 | for a prolonged recession. Bound dropped 0.8% in the morning trading in London to $1.137. It's the first |
| 0:58.0 | time it's breached the $1.14 mark in almost four decades. So Simon Lambert, what does it mean? |
| 1:05.8 | Well, unfortunately, it potentially means more inflation for us here in the UK because it means that all the things that we buy priced in dollars become more expensive in pounds. |
| 1:15.9 | Oil, for example. |
| 1:18.5 | But it's a number of different things going on here that need to be unpicked to an extent. |
| 1:25.0 | So you've got concerns over the UK economy are one of them, that we are going to fall into a recession. The UK is suffering from a higher dose of inflation than many other developed economies. And then we are seeing interest rates go up. With interest rates going up, that slows the economy. Are we potentially raising rates into a recession? If you look at the interest rate expectations now and how much people could end up paying on their mortgages versus what they were a year ago, then you can see how the brakes are really being slammed on the economy. |
| 2:02.6 | But there's also an element where the pound is falling against the dollar |
| 2:07.6 | because we aren't putting up interest rates fast enough |
| 2:11.6 | because the US is putting up interest rates even faster than we are |
| 2:15.6 | or by an even larger amount. It started later, |
| 2:18.6 | but it's gone bigger. And as countries raise their interest rates, they become more attractive |
... |
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