The second expert completely forgets that the value of Sterling went down, in the first instance , because of Brexit! As soon as the voting result was announced it went down! And now that some of Brexit is implemented it went down again. And the food prices went up because we don't have enough people doing seasonal farm work, we need to import more food and we are having problems on the boarder with delays, etc. Which in turn makes it difficult for foreign companies to sell us their goods, which in turn may cut the suppliers who are willing to sell us in the future.

Both of these economic methods could work and in this situation could be both used. Economic strategy is a means to an END and NOT the final product. Taxation no matter what ANYBODY says is the government's chief earner and the only tool it can use for redistribution. Removing taxation for the poorest will have NO effect on the richest, seems like something even this government can do. If profit CANNOT be taxed equitably then NONE of these systems will work. Money and price's are NOT the problem as profit cannot be made if they ARE. The problems stem from shifting the burden of taxation onto those least able to pay it and removing ALL responsibility from those who MUST pay their fair share of it.

The first caller is wrong simples!! The second caller is also wrong simples, talking sh*te and we stopped immigration from eu, we now dont have freedom of movement because of them!!!! Economics ain't that hard…. they just make out it is. The first caller is talking out of his asse. They make it seem harder than it is. It's q1. What's causing the inflation? Now it's energy costs low spending low wages and a drop already in the economy due to brexit and our gdp. To fix it you need higher wages more money for people renationalised energy kick start small business and sort our borders so we can export simpler and re align the economy with the eu. Better economy stave off the cliff edge and get your workforce healthy!! A decent nhs might be a good idea right now. Germany has an excellent economic model not like our mini style corps

So it´s all about a conflict between the different objektives of the greedy bigots and the bigoted greedy. Between those Tory members whose bigotry is more important than their greed and those whose greed is more important than their bigotry.

Hang on! Hasn't the gvt been banging on about having strong growth,low unemployment and created a firepower? Let's see that then

In the olden days one earner could raise a family.Now two can't and they have to be supported by in-work benefits and live on credit without many aspirations

Minds are enclosed within the skull

The second caller gives the answer most of us learned in school. As a country with more imports than exports needs to have a stronger valuta to be able to buy the same when prizes are growing on the world market.

Interesting. I want James to debate if Thatcherism and privatisation failed.

A politician will tell you what you want to hear because they want you to vote for them while a bank will tell you what they want you to know because they want to make more money.
Either way, greed runs the country!

It's not about you, it never has been, it's about them taking care of themselves, business as usual!

We should nationalise Power, Oil and Gas and get the profits used to lift people out of poverty instead of making disgustingly wealthy people even more wealthy..

like the second caller said, an increased interest rate is necessary because it effects the exchange rate (or better, it prevents a devaluation when other counrtries increase their rates.) Further more it brings more fdi in the country and it shifts money from the stock market into other areas. Or in shifts money from growth driven speculative companies to divident focused stocks. (Which increases the short term real production).
For tax cuts, only very specific tax cuts work deflationary, for example VAT on goods which makes up the basket for the cpi. In most cases increasing taxes and increasing benefits is a better strategy for dealing with inflation.
For example, giving people 1000$ and increasing energy tax will create a bigger the benefit for saving energy, so it shifts the demand from high inflation products to low inflation products (LED lights or whatever) until a new balance is found.

Regarding the GBP/USD rate, that is indeed impacted by the interest rate, BUT it is not the only factor. Credit worthiness is more relevant as the interest rate compensates for the risk associated with the economy. You need to look at the risk for the foreign investor.

The first caller is hoping where the income lost is locked in.

Theresa May, Boris Johnson, Rishi Sunak nor Liz Truss have or has a grip on the issues that the general public face in the UK from their failure to manage the funds they receive in taxes from those same public. The Conservatives only live to share the wealth to the riches, not even trickle down. #EnoughisEnough #GTTO #CorbynwasRight

The first caller stated that once the price rise [of petrol] had passed through the system then [petrol] inflation was down to zero. That is true, but it is not inflation that affects people, but the new high price that is the result. If inflation stops the new high price remains, as do the associated problems.

The second caller recommended an increase in interest rates as a means to increase the value of the pound, making imports cheaper. But the value of Sterling increasing is because money is moving from the interest-rate payer to the foreign investor. The nett value to the UK population is negative (investment means that the investor gets more out than they put in).

Why does an increase in interest rates improve the exchange rate against the dollar?

Sorry but no!
Until all countries understand that constant growth is unsustainable it will keep getting worse. A constant round of inflation, recession.
The planet is dying due to the unsustainable extraction of resources.
People are dying because of the rich's unsustainable extraction of everyone else's money from the economy.
The only way to stop all this shit is to finally legislate against rich greedy people having all the power and money.

Jonty's missing the point that we've got this massively overinflated property bubble to deal with. Just like US, Australia and Canada are allowing their markets to correct downwards. Caller 2 vaguely gets it.

What a fascinating caller. He made really interesting points. This is the kind of conversation I long for on more radio shows.

there is no shortage of money wealth, the problems arise from protecting the wealth of the wealthy at the expense of poorer. lIZ TRUSS WANTS TO REDUCE TAXES FOR THE WHO???? DOES HER PLAN INCLUDE THE WEALTHY AND THE TAX DODGING CORPORATE .How can the oil and energy producers hike up the costs when they have incurred no extra costs, ? The supply of energy has been operating for a number of years yet the production cost have not increased, so why the hike at the pumps? = GREED =, MAXIMIZING FROM MINIMAL. ALL ACTED BY DESIGN AND THE EXPECTATION OF THE GULLIBLE PUBLIC TO CONFORM, COMPLY, CONSENT. = exploitation of society. = lies, deception,falsehoods,threats,fear,force,destabilize, create chaos / CONFUSION, propose the solution, = BLAME ALL THINGS, BLAME OTHERS, DIVIDE SOCIETY, AND THE GAME GOES ON AND WHEELS GO ROUND, THE ACT IS ACTIVE IN THEIR THEATER OF LIFE. Same old school tory doctrines, just newer faces and more greed, evils and cruelty.

Then we get Boris Liz, ect with the red boxes full of Leggo putting in the Mail and Express side of that bias.

The problem is that no one talks about the cause of an unstable economy. An economy becomes unstable when only a few people benefit from it. It's like an upside-down pyramid, an inherently unstable design. When the vast majority of those in the economy are COMFORTABLY OFF, then taking an inflation rise on the chin is much easier. But the vast majority have been plundered for so long by the wealthy, the whole economy is unstable. A correction is needed. Tax the absolute fuck out of the rich and build back a thriving working and middle class through wage hikes. Businesses who can't afford a living wage should go bust: they don't have a viable business model and there will be those who do that will replace them. For those who fall through those cracks and end up as poor, there will be less burden on the state for numbers of people needing state assistance and more people around who are able to fund and support local charities. Big businesses don't work for society, they're a plague on the economies they purport to serve.

what if people cant pay their bills alex? they die alex they die

If you believe the explanation of the second caller, then you must agree that the US by default and hegemony has harmed our economy far far worse than Putin could have dreamed of doing!!! Shadowing US foreign policy, and accepting that the dollar remains the World's number one currency MAKES US VULNERABLE. Refugees by the thousands mostly head to Europe and aim to come to the UK, we should not be wasting time looking for gangs facilitating boat transport, we should be STOPPING FOREIGN POLICY that creates refugees in the first place or at least billing the nation that creates them because of that policy. What is the point of arming the Ukraine, they can NEVER defeat Russia or its dictator whose nuclear arsenal puts fear into NATO itself? We sanctioned Russia and make new enemies for what its dictator has done and attempt to confiscate Oligarch money, yet the hike in gas prices makes the dictator far richer than Bezos and Musk put together?!! We need to curb the giants of US,China and Russia by remaining within the only powerhouse capable of doing just that – EUROPE but no we have doubled down on the folly of Brexit, supported the growth of NATO against our agreement with Russia not to do so.We left Afghanistan despite thousands of our own dead who fought for liberty and against tyranny while leaving the Afghans to the ravages of the Taliban, again shadowing the US, again creating thousands more refugees who continue to head our way!! We will not buy Gas or Oil from Iran or Oil from Venezuela, the first with more reserves than Russia in gas and the second with more reserves than the whole of the M.E in oil despite them begging to sell it to us cheaply, Why? Because the US doesn't want us to, they are sanctioned by it and we are threatened to be cut off US markets if we dare to trade with either!!! WHERE IS OUR SOVEREIGNTY dear daft Brexit supporters?!! We are the 51st state of the US, all in with them against the interests of the UK voter vowing to protect the state of Israel which is the 52nd State of the US. Where is our Sovereignty dear daft Brexit supporters? We roll out the red carpet for the murderer Mohammad Bin Salman a despot and a chopper upper of Khashoggi despite his nations discussing record on human rights – because he is like the other despots of that peninsula a client of the US and has bound that peninsula to only sell M.E oil in the US dollar Currency!! Where is our Sovereignty???

Hi and what about the reducing pay outside London ?

Where all these people going to live?? We need updating and mechanisation of harvesting the products we need and if that is too expensive we import from less wealthy countries and compensate by concentrating on mechanised production,that is less labour extensive.

The First caller is wrong. If you would use this logic on Turkey it would even support Erdogan economic nonsense.

This like solving problems on a technical basis without relating to the actual consequences of inter related issues. If a highly inflationary price is reduced by 1p it is still too high if wages still stay low. We have the worst of all things.

Both answers have some merit, but neither tackle a major issue, the wealthiest are not paying their share in fact many are actively avoiding tax through loop holes and stuffing money in offshore accounts.

To my mind the problem with interest rates is that they have been historically low for far too long. Cheap money is at least as dangerous to the economy, as expensive money. Whilst the economy could hardly be described as overheating in recent years, a weak pound does cause inflation to increase for a country that relies on imports, and if that country slips into recession the BoE has no tools to mitigate this without causing more problems. Brexit plays a far bigger role in this than admitted.

Reduce taxes on the poor. Increase taxes on the wealthy, have a MASSIVE WINDFALL tax on energy companies and basically pay for all the poor's energy with the windfall.
Cost of production has not meaningfully increased, but it is our sanctions that have caused this massive spike in energy prices, so simply take that extra money and pay people's bills.
BUT, we have the Tories in power, so the rich will get tax cuts, the poor will get f*cked, and all the while the city is receiving 10%payrises. Brexit island. How I despise you.

In my very layman understanding, higher interest rates make borrowing more expensive and saving more attractive. In other words, they are designed to take cash out of circulation and thus slam the breaks on inflation.

It sounded to me like the first caller knew what he was talking about and the second one was talking out of his arse. The pound did not lose to the dollar because the US increased the interest rate. It was quite the opposite, they increased the interest rate because their economy started accelerating too fast. This is not the case in the UK.