WEBVTT - Daybreak Weekend: US GDP, UK Politics, China Eco 0:00:00.240 --> 0:00:07.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.440 --> 0:00:13.440 This is Bloomberg Daybreak Weekend, our global look at the 0:00:13.440 --> 0:00:16.040 top stories in the coming week from our Daybreak anchors 0:00:16.079 --> 0:00:18.560 all around the world. Straight Ahead on the program, we 0:00:18.640 --> 0:00:21.080 look ahead to how big tech may fare in twenty 0:00:21.160 --> 0:00:23.760 twenty six. I'm Nathan Hager in Washington. 0:00:23.880 --> 0:00:26.479 I'm Caroline Hebcker here in London. We look to a 0:00:26.560 --> 0:00:30.000 year in UK politics and what twenty twenty six may 0:00:30.040 --> 0:00:32.519 hold in store for Prime Minister Kissedalma. 0:00:32.800 --> 0:00:35.159 I'm Doug Prisoner, looking at what's in store for the 0:00:35.280 --> 0:00:37.080 Chinese economy in the new year. 0:00:38.360 --> 0:00:42.360 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.400 --> 0:00:46.120 eleven three year, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.600 --> 0:00:51.640 Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syria 0:00:51.920 --> 0:00:55.400 XM one twenty one, and around the world on Bloomberg Radio, 0:00:55.480 --> 0:00:57.640 dot Com and the Bloomberg Business App. 0:01:02.280 --> 0:01:05.120 Good day to you. I'm Nathan Hager. We begin today's 0:01:05.120 --> 0:01:07.920 program with a look at the economy. On Tuesday, we 0:01:07.959 --> 0:01:11.319 get a second read on third quarter GDP. This comes 0:01:11.319 --> 0:01:13.920 on the heels of some softer than expected readings on 0:01:13.959 --> 0:01:16.800 inflation and kind of a mixed report on the labor 0:01:16.840 --> 0:01:18.839 market as we start to get more of the releases 0:01:18.840 --> 0:01:21.559 that we should have gotten weeks ago but we're getting 0:01:21.600 --> 0:01:24.319 now due to the government shutdown. For more on this 0:01:24.400 --> 0:01:26.440 and what to expect from the economy in the new 0:01:26.520 --> 0:01:28.440 year as well, we are very pleased to be joined 0:01:28.440 --> 0:01:32.119 by Ed Harrison, senior strategist at Bloomberg News and author 0:01:32.160 --> 0:01:35.399 of Bloomberg's The Everything Risk newsletter. Great to have you 0:01:35.440 --> 0:01:37.920 with us on the program, Ed, and I'd just like 0:01:37.920 --> 0:01:41.440 to get your expectations for the GDP print this week, 0:01:41.480 --> 0:01:44.600 given some of the questions around some of the latest 0:01:44.680 --> 0:01:46.840 data we've seen in this past week. 0:01:48.160 --> 0:01:52.400 Yeah, Nathan, is a good question, because the CPI report 0:01:52.840 --> 0:01:57.160 was marred by the inability to collect data in the 0:01:57.200 --> 0:02:01.800 previous month, that's October. But luckily, this GDP report is 0:02:01.800 --> 0:02:06.320 a revision of data that goes from July to September. 0:02:06.440 --> 0:02:09.040 So these are numbers that aren't going to have any 0:02:09.080 --> 0:02:12.800 sort of anomalies because of lack of collection. We've already 0:02:12.800 --> 0:02:16.440 seen one number. The Atlanta Fed is talking to us 0:02:16.520 --> 0:02:20.160 about three point five percent number that's the GDP now 0:02:20.200 --> 0:02:24.480 that they put out. But where we actually stand as 0:02:24.520 --> 0:02:25.519 anyone's guess. 0:02:25.919 --> 0:02:27.840 Three and a half percent would be a pretty big 0:02:27.919 --> 0:02:30.640 jump from the preliminary number. What's got you thinking that 0:02:30.680 --> 0:02:34.600 we could see even more of an eye popping number 0:02:34.600 --> 0:02:35.280 this time around? 0:02:36.639 --> 0:02:39.960 Yeah, I think just based on the data that have 0:02:40.120 --> 0:02:44.760 come out for Q three, they've done the statistical analysis 0:02:44.760 --> 0:02:48.079 and they updated the Atlanta FED and run it through 0:02:48.120 --> 0:02:52.680 their models to produce a now cast, and that's telling 0:02:52.720 --> 0:02:55.960 them that it's going to be at three point five percent. 0:02:56.320 --> 0:02:59.760 The range of the top ten and the bottom ten 0:02:59.760 --> 0:03:04.359 four casts are you know, somewhere between two and a 0:03:04.480 --> 0:03:06.640 half and three and a half percent, So that's at 0:03:06.639 --> 0:03:10.080 the high end of the range of economists that are 0:03:10.080 --> 0:03:11.040 predicting that number. 0:03:11.320 --> 0:03:15.480 Of course, third quarter GDP is a backward looking indicator, 0:03:15.720 --> 0:03:18.160 and we're trying to think ahead about where the US 0:03:18.200 --> 0:03:21.520 economy could be going into twenty twenty six and the 0:03:21.600 --> 0:03:24.640 current quarter as well. Are we going to be thinking 0:03:24.720 --> 0:03:27.880 about this third quarter print as something of an anomaly 0:03:28.040 --> 0:03:30.919 given some of the data that we've gotten a more 0:03:30.960 --> 0:03:33.720 forward looking view of the economy. 0:03:34.320 --> 0:03:37.040 No, you know, I think that, you know, there's a 0:03:37.040 --> 0:03:40.680 lot of anngst about the labor market, but there's less 0:03:40.720 --> 0:03:43.720 angst about the growth level of the economy, and I 0:03:43.760 --> 0:03:47.560 think that this bifurcation is due to this so called 0:03:47.680 --> 0:03:51.160 case shaped economy where there's a lot of price pressure 0:03:51.240 --> 0:03:56.240 still in the pipeline. Lower income, lower wage workers are 0:03:56.240 --> 0:03:59.640 feeling that even more, and they're also taking the brunt 0:03:59.760 --> 0:04:03.160 of a slowdown in the labor market. But at the 0:04:03.200 --> 0:04:07.680 same time, there's this AI spend that's happening, there's a 0:04:07.840 --> 0:04:13.360 large government deficits, and the well to do are actually 0:04:13.360 --> 0:04:17.400 doing relatively well. So people are expecting numbers both for 0:04:17.640 --> 0:04:21.159 Q four and for twenty twenty six to be relatively good. 0:04:21.480 --> 0:04:24.960 And we know that especially because of the tax cuts 0:04:24.960 --> 0:04:28.719 that are due to hit already in the first quarter 0:04:28.880 --> 0:04:30.120 of next year. 0:04:30.400 --> 0:04:33.680 Well, you raise the question there about whether the top 0:04:33.760 --> 0:04:38.840 line numbers on GDP sort of mask what everyday Americans 0:04:38.880 --> 0:04:41.880 could be feeling when we think about, as you mentioned, 0:04:41.920 --> 0:04:44.920 all the spending going into artificial intelligence. I mean, what 0:04:44.960 --> 0:04:48.360 could that mean for a labor market that the Federal 0:04:48.400 --> 0:04:51.839 Reserve has put a lot of attention on, saying that 0:04:51.839 --> 0:04:54.040 they're worried about some of those cracks that we're seeing 0:04:54.080 --> 0:04:54.559 in the data. 0:04:55.920 --> 0:04:58.360 Yeah, I think if you look back in terms of 0:04:58.400 --> 0:05:00.920 the numbers that we've seen. We did not an unemployment 0:05:01.040 --> 0:05:06.799 number for October, but we have gotten from the Establishments 0:05:07.080 --> 0:05:10.920 the Establishment Survey in the last six months three numbers 0:05:10.960 --> 0:05:14.440 that were negative, saying that nonfarm payrolls actually declined in 0:05:14.440 --> 0:05:16.440 three of the last six months, and so the running 0:05:16.520 --> 0:05:22.400 total average over the last six months has been very low. Basically, 0:05:22.480 --> 0:05:26.400 what that means is for the average worker, the job 0:05:26.480 --> 0:05:29.800 opportunities are lesser, even though we have this boom in AI. 0:05:30.279 --> 0:05:35.600 You could call it a mismatch between job availability and 0:05:36.480 --> 0:05:40.960 the abilities of the working population. But the only positive 0:05:41.000 --> 0:05:44.320 that we've seen is that in the last report, more 0:05:44.360 --> 0:05:48.520 people came off the sidelines, re entered the labor market 0:05:48.880 --> 0:05:52.279 and we're looking for work, and that's usually a sign 0:05:52.480 --> 0:05:55.240 that they're optimistic that they'll be able to find a job. 0:05:55.839 --> 0:05:58.480 Are you expecting that we're going to see the kinds 0:05:58.480 --> 0:06:02.400 of levels in AI spending that we've seen not just 0:06:02.520 --> 0:06:04.880 this year, but in the years prior as well, And 0:06:05.200 --> 0:06:08.080 what could that mean for inflationary pressures? 0:06:08.839 --> 0:06:13.400 You know, Nathan, I think that AI that it's from 0:06:13.400 --> 0:06:18.280 an investment perspective, we're sort of at a tipping point now. Recently, 0:06:19.000 --> 0:06:22.599 in the past two or three weeks, we've seen a 0:06:22.800 --> 0:06:26.599 rotation out of the large cap tech companies that have 0:06:26.760 --> 0:06:29.960 been driving the market forward, which are very AI related, 0:06:30.279 --> 0:06:34.600 and the reason for that is concern about number one, 0:06:34.680 --> 0:06:37.920 the level of spend and whether that's sustainable, but also 0:06:38.240 --> 0:06:41.680 the fact that the spend that's being done now is 0:06:41.720 --> 0:06:46.240 increasingly done with diminished cash on the balance sheet and 0:06:46.720 --> 0:06:50.560 higher debt levels. And there's a concern particularly around companies 0:06:50.600 --> 0:06:56.359 like Oracle and their balance sheet, their ability to continue 0:06:56.480 --> 0:07:03.400 to invest into artificial and given the deterioration their balance sheets. 0:07:03.760 --> 0:07:06.440 I really appreciate this and thanks again for being with us. 0:07:06.480 --> 0:07:09.760 That is Edward Harrison, senior strategist at Bloomberg News, author 0:07:09.800 --> 0:07:12.920 of Bloomberg's The Everything Risk newsletter. I want to get 0:07:13.000 --> 0:07:16.160 more now on big tech because the Magnificent seven stocks 0:07:16.240 --> 0:07:19.600 once again fueled double digit gains on Wall Street, even 0:07:19.640 --> 0:07:22.320 with those questions about whether the valuations on some of 0:07:22.320 --> 0:07:25.440 these companies may have run too far too fast. Let's 0:07:25.440 --> 0:07:27.600 get more and what to expect from tech in twenty 0:07:27.680 --> 0:07:30.160 twenty six. We are joined by man Deep Saying, Global 0:07:30.160 --> 0:07:34.400 head of Tech research at Bloomberg Intelligence. Man Deep, I'll 0:07:34.520 --> 0:07:37.160 start off with the question that does seem to dominate 0:07:37.200 --> 0:07:40.640 the market all of twenty twenty five. Is it a bubble? 0:07:41.480 --> 0:07:44.960 Well, I mean the best way to fram it is, 0:07:45.640 --> 0:07:49.480 you know, look at the multiples of these companies, both 0:07:49.520 --> 0:07:52.920 in terms of earnings and free cash flow. And when 0:07:52.960 --> 0:07:55.800 it comes to earnings, I think what this year has 0:07:55.840 --> 0:08:00.840 shown is earnings have been very resilient and these companies 0:08:00.960 --> 0:08:05.640 have the levers when it comes to you know, cost rationalization, 0:08:05.960 --> 0:08:10.360 slower hiring, and they can sustain you know, low to 0:08:10.440 --> 0:08:14.400 mid team's growth easily. When it comes to free cash flow, 0:08:14.440 --> 0:08:19.360 the story maybe different in twenty twenty six, given all 0:08:19.440 --> 0:08:24.400 of these hyperscalers are looking to raise their capex by 0:08:24.440 --> 0:08:28.760 forty to fifty percent and we are already at very 0:08:28.800 --> 0:08:33.000 elevated levels. And what that means is even for a 0:08:33.040 --> 0:08:37.640 company like Meta, you know, you may see negative free 0:08:37.640 --> 0:08:40.720 cash flow, which is why they've been talking about, you know, 0:08:41.640 --> 0:08:46.600 rationalizing their spending on the metaverse for example, and I 0:08:46.679 --> 0:08:51.240 think you may see more of that in the first half, 0:08:51.280 --> 0:08:56.720 where companies may have to prioritize you know, certain types 0:08:56.760 --> 0:09:01.680 of AI spend and really offset it with either you know, 0:09:01.880 --> 0:09:06.440 slower hiring or in some case even headcount productions. If 0:09:07.000 --> 0:09:12.320 the ROI on AI is getting questioned more and more, 0:09:12.360 --> 0:09:15.880 and we know this is frontloaded in terms of spend, 0:09:16.200 --> 0:09:19.719 and that's where I think you may see a bifurcation 0:09:20.200 --> 0:09:23.439 when it comes to some of these mag seven names. 0:09:23.200 --> 0:09:27.280 When you talk about prioritizing AI spend, the types of 0:09:27.320 --> 0:09:29.520 AI spend, what are you looking at, what's going to 0:09:29.559 --> 0:09:31.040 be a winner, what's going to be a loser. 0:09:32.840 --> 0:09:37.480 So the clear ROI when it comes to AI spend 0:09:37.600 --> 0:09:41.839 is with the inferencing workloads. And that's what Microsoft has 0:09:42.600 --> 0:09:45.920 shown us this year is they were very selective in 0:09:46.040 --> 0:09:50.320 terms of you know, how they you know, partnered with 0:09:50.440 --> 0:09:53.480 open ai and what they left it for someone like 0:09:53.679 --> 0:09:59.400 Oracle to you know, take up. And I think Microsoft 0:09:59.679 --> 0:10:03.679 has shown that they have the best visibility in terms 0:10:03.720 --> 0:10:08.360 of what kind of workloads enterprises are willing to pay for, 0:10:08.960 --> 0:10:13.520 and they have really positioned the company that way. Oracle, 0:10:13.559 --> 0:10:17.839 on the other hand, has this huge i would say 0:10:17.880 --> 0:10:21.760 exposure to open ai when it comes to their backlog, 0:10:21.840 --> 0:10:25.400 and that's where the quality of Oracle's backlog is getting 0:10:25.520 --> 0:10:30.200 questioned because if open ai doesn't ramp up their revenue 0:10:30.240 --> 0:10:32.480 the way they have laid out to investors, you know, 0:10:32.559 --> 0:10:34.960 in terms of getting to two hundred billion dollars in 0:10:35.080 --> 0:10:38.840 revenue by twenty thirty. Then that will limit their ability 0:10:38.880 --> 0:10:41.800 to spend you know, the one point four trillion in 0:10:41.840 --> 0:10:44.840 commitments that they've made, and that will have a bearing 0:10:44.920 --> 0:10:46.080 on someone like Oracle. 0:10:46.600 --> 0:10:50.440 We have seen though open ai making announcements of a 0:10:50.480 --> 0:10:53.439 lot of investments it's planning to get into the new year. 0:10:53.440 --> 0:10:56.240 I'm thinking, particularly just this past week about a deal 0:10:56.280 --> 0:11:00.800 that they made with Amazon. Is there further room for 0:11:01.160 --> 0:11:04.520 more deals like this for some of these large language models. 0:11:05.000 --> 0:11:09.720 So you're right that open ais it clearly has pivoted 0:11:09.840 --> 0:11:16.920 away from Microsoft and now it's actually working with like 0:11:17.200 --> 0:11:21.080 someone like Amazon. That would have been unimaginable twolve months back. 0:11:21.640 --> 0:11:26.920 But you have to remember the Microsoft contract with open 0:11:26.960 --> 0:11:32.000 ai and the binding they have extends to twenty thirty two. 0:11:32.600 --> 0:11:35.760 So it's not as if, you know, open ai can 0:11:35.880 --> 0:11:41.360 natively integrate with Amazon or Oracle, you know, in terms 0:11:41.400 --> 0:11:44.319 of what they do at the model level, they could 0:11:44.400 --> 0:11:47.320 use the compute from an Amazon, they could use the 0:11:47.360 --> 0:11:52.760 compute from Oracle. But Microsoft still remains in terms of, 0:11:52.880 --> 0:11:57.959 you know, how they build their API and the LLM functionality, 0:11:58.080 --> 0:12:01.040 and that I think will be a limiting factor for 0:12:01.160 --> 0:12:05.360 someone like open Ai that is looking to partner with 0:12:05.440 --> 0:12:09.800 as many companies. In fact, the Disney partnership was notable 0:12:09.880 --> 0:12:12.800 as well in terms of what they're looking to do 0:12:12.840 --> 0:12:16.320 on the content side. But they just can get off, 0:12:16.880 --> 0:12:20.240 you know, what they have to do in terms of 0:12:20.720 --> 0:12:24.240 Microsoft partnership, and that will have a bearing in terms 0:12:24.240 --> 0:12:26.760 of how they roll out the product and their large 0:12:26.760 --> 0:12:27.320 angry mob. 0:12:27.559 --> 0:12:29.720 Thanks for this, Man Deep, great having you on with us. 0:12:29.800 --> 0:12:32.360 That's Man Deep Saying, Global head of Tech research at 0:12:32.400 --> 0:12:35.680 Bloomberg Intelligence. Hey, coming up on Bloomberg day Break weekend, 0:12:35.679 --> 0:12:38.120 we'll look back at the year in UK politics and 0:12:38.160 --> 0:12:40.640 what twenty twenty six may hold in store for Prime 0:12:40.679 --> 0:12:45.199 Minister Keir Starmer. I'm Nathan Hager, and this is Bloomberg. 0:12:56.040 --> 0:12:58.880 This is Bloomberg day Break Weekend, our global look ahead 0:12:58.880 --> 0:13:01.200 at the top stories for investors in the coming week. 0:13:01.360 --> 0:13:04.480 I'm Nathan Hager in Washington. Up later in our program, 0:13:04.520 --> 0:13:06.679 we'll look at what's in store for the world's second 0:13:06.800 --> 0:13:10.120 largest economy in twenty twenty six. But first, from the 0:13:10.240 --> 0:13:13.320 US perspective, the UK looks like it did pretty well 0:13:13.360 --> 0:13:16.360 from this second Trump administration. Britain was first to get 0:13:16.400 --> 0:13:19.199 a trade deal with the US. A second state visit 0:13:19.280 --> 0:13:23.640 delivered FaceTime for brand Britain, with royals and politicians alongside 0:13:23.720 --> 0:13:27.360 President Trump and his entourage, while American business leaders at 0:13:27.360 --> 0:13:31.679 one point promised major AI investments. But from the UK perspective, 0:13:31.720 --> 0:13:35.040 the gains haven't been so easy to see. A midweek growth, 0:13:35.200 --> 0:13:38.319 US demands and a government that's lurched from U turn 0:13:38.440 --> 0:13:41.559 to crisis. Let's get more now. From Bloomberg Daybreak, euro 0:13:41.679 --> 0:13:43.920 banker Caroline Hepgar in London. 0:13:44.000 --> 0:13:49.360 Nathan, not too bad. I'm surviving typical responses in the 0:13:49.480 --> 0:13:52.880 UK if you ask a citizen how are you? And 0:13:52.960 --> 0:13:55.720 so it can be said of the Labor government barely 0:13:55.760 --> 0:13:58.600 a year and a half into office, Kirs Starmer's government 0:13:58.640 --> 0:14:02.040 has little to really hear about and a long list 0:14:02.120 --> 0:14:05.800 of troubles to ponder. And joining me now to discuss 0:14:05.840 --> 0:14:09.360 where we are at is Bloomberg's UK Political editor Alex 0:14:09.400 --> 0:14:13.600 Wickham and our Bloomberg opinion columnist Rosa Prince. Great to 0:14:13.600 --> 0:14:16.280 have you both with me, Alex, Can I start with you? 0:14:17.080 --> 0:14:20.440 What do we know about this government at the end 0:14:20.520 --> 0:14:23.080 of this year that we didn't know when they got 0:14:23.120 --> 0:14:25.359 elected in twenty twenty four. 0:14:25.760 --> 0:14:31.600 I think just how unstable they are and that the 0:14:31.640 --> 0:14:33.400 Labor government would be I think, I think, you know, 0:14:33.480 --> 0:14:37.880 Kirsten was elected in twenty twenty four and basically the 0:14:37.920 --> 0:14:39.840 pitch was We're not going to be like the Tories. 0:14:39.880 --> 0:14:42.920 We're not going to go through constant political crises and 0:14:43.000 --> 0:14:46.000 scandals and dramas and change the leader every five minutes 0:14:46.040 --> 0:14:48.640 and all of this stuff. I always remember this line 0:14:48.680 --> 0:14:51.280 that Kirs Starmer had in the election that politics should 0:14:51.320 --> 0:14:54.480 tread more lightly on everybody's lives, which was sort of 0:14:54.520 --> 0:14:59.000 a you know, wish for thinking, shall we say and instead, 0:14:59.240 --> 0:15:04.320 you know, almost straight away Labor went straight into basically 0:15:04.560 --> 0:15:07.960 copying what the Tories did in terms of you know, 0:15:08.120 --> 0:15:11.320 a lot of a lot of political nonsense and you 0:15:11.360 --> 0:15:14.680 know where we are quite astonishingly, you know, at the 0:15:14.760 --> 0:15:16.920 end of this year is you know, question marks over 0:15:16.960 --> 0:15:19.200 whether star War will still be there in a year's time, 0:15:19.280 --> 0:15:22.600 which you would never have thought even a year ago, 0:15:22.640 --> 0:15:23.440 eighteen months ago. 0:15:23.880 --> 0:15:28.440 Rosa, has it gone wrong? What has gone wrong? And why? 0:15:28.960 --> 0:15:31.760 Yeah, lots and lots have gone wrong. I mean the 0:15:31.760 --> 0:15:35.440 poll speak to themselves for themselves. Labour's ending the year 0:15:35.440 --> 0:15:38.080 in a terrible position. And Kiss Starmer is the most 0:15:38.120 --> 0:15:41.560 unpopular primers that ever, I think, including the dreadful Liz 0:15:41.600 --> 0:15:45.000 trust I think why I'll kind of give a macro 0:15:45.120 --> 0:15:48.840 and a micro answer for a financial podcast Macro. I 0:15:48.880 --> 0:15:52.760 think there's generally been a lack of vision and purpose 0:15:52.840 --> 0:15:56.200 with this labor government. Kiss Starmer often doesn't seem as 0:15:56.240 --> 0:15:58.200 if he knows what he wants to do with this 0:15:58.400 --> 0:16:03.520 enormous power he has big majority and also many many 0:16:03.600 --> 0:16:07.120 own goals. There were really accident prone government. They were 0:16:07.160 --> 0:16:09.920 dealt a tough hand coming in and they've kind of 0:16:10.360 --> 0:16:14.280 handled it really really badly. Specifically, the micro things I 0:16:14.280 --> 0:16:17.080 think they got wrong this year were a failure to 0:16:17.160 --> 0:16:19.600 deliver growth, which is what they put all of their 0:16:19.680 --> 0:16:23.040 kind of eggs in that basket on the economy. A 0:16:23.120 --> 0:16:26.880 failure really to get a grip on people's concerns about immigration, 0:16:27.080 --> 0:16:30.840 which has allowed the Reform UK and Nigel Farad party 0:16:30.920 --> 0:16:34.560 to really thrive this year. And also a failure by 0:16:34.640 --> 0:16:38.480 the government in Kirstarmer to control his own labor MPs, 0:16:38.800 --> 0:16:41.680 which meant he hasn't in particular been able to get 0:16:41.720 --> 0:16:45.440 those public spending cuts through government, which he really needed 0:16:45.480 --> 0:16:47.280 to do to make the sums add up. 0:16:47.600 --> 0:16:53.040 Okay, so record on popularity, some quite complex policy problems 0:16:53.040 --> 0:16:54.840 to solve, as you say, the big one was to 0:16:54.880 --> 0:16:59.360 try to deliver growth, but really a massive challenge. Where 0:16:59.400 --> 0:17:03.120 does that leave Kirs Starmer and also let's let her 0:17:03.160 --> 0:17:06.960 in Rachel Reeves as well, the Chancellor going into twenty 0:17:07.000 --> 0:17:07.600 twenty six. 0:17:08.119 --> 0:17:11.800 I mean, they faced this sort of slightly mind bending 0:17:12.320 --> 0:17:17.160 prospect that they could be a leadership challenge in May 0:17:17.320 --> 0:17:20.520 after the local elections, you know, which Labour's expected to 0:17:20.520 --> 0:17:23.959 do very badly. All of the questions all that anybody 0:17:24.040 --> 0:17:27.119 wants to talk about in Westminster are is you know, 0:17:27.240 --> 0:17:30.040 Andy Burnham gonna get a seat in the House of 0:17:30.040 --> 0:17:33.440 Commons so he can run. Is west streeting going to 0:17:33.520 --> 0:17:36.359 be the sort of the pretender to the throne. Is 0:17:36.400 --> 0:17:40.879 Angela Rainer going to be a candidate from more from 0:17:40.920 --> 0:17:44.479 the left. And all at the same time, Kirs Starmer 0:17:44.560 --> 0:17:47.879 has got to contend with this sort of immensely difficult 0:17:47.880 --> 0:17:50.520 international situation which takes up so much of his time 0:17:50.560 --> 0:17:53.399 on Ukraine US relations. 0:17:53.960 --> 0:17:55.480 Rachel Reeves has got. 0:17:55.320 --> 0:17:58.280 To sort out growth. As Rosa was saying that, you know, 0:17:58.320 --> 0:18:01.800 it is just the shock absence of any growth strategy 0:18:02.000 --> 0:18:05.200 is just therefore to see and they have to find 0:18:05.400 --> 0:18:08.040 a way to deal with these policy problems immigration as well, 0:18:08.119 --> 0:18:12.240 so important for voters, and you know, being able to 0:18:13.000 --> 0:18:16.840 get through the next few months is just looking very 0:18:16.840 --> 0:18:19.639 difficult now. You know, I would say it is hard 0:18:19.680 --> 0:18:22.159 to change the prime minister. You know, I always remember 0:18:22.200 --> 0:18:27.400 back in the sort of Theresa may Boris Johnson days, 0:18:28.040 --> 0:18:30.840 for a long time journalists would say, oh, this prime 0:18:30.840 --> 0:18:33.280 Minister's finished, and it took them a long time to go. 0:18:34.000 --> 0:18:36.280 So it's easier said than done. And people have been 0:18:36.320 --> 0:18:38.439 saying kiss Darma's finished for a few months now and 0:18:38.480 --> 0:18:40.879 he's still there, and you know, there is just a 0:18:41.000 --> 0:18:43.880 chance that he might just survive because it's really hard 0:18:43.920 --> 0:18:45.760 to get rid of the prime minister. I think that's 0:18:45.800 --> 0:18:48.760 perhaps slightly underpriced at the minute, but it doesn't mean 0:18:48.840 --> 0:18:51.360 all of these problems aren't there still. 0:18:52.160 --> 0:18:55.000 And it is quite difficult because each of the political 0:18:55.040 --> 0:18:57.520 parties has their own system for how they get rid 0:18:57.640 --> 0:19:00.919 of their leader, and that leader bit the prime minister 0:19:00.960 --> 0:19:04.439 of course when they're in government. ROSA, how seriously should 0:19:04.440 --> 0:19:08.400 we take a leadership challenge? And who are the potential successors? 0:19:08.880 --> 0:19:12.240 I will just remind listeners. Of course, that the deputy leader, 0:19:12.280 --> 0:19:16.320 Angela Rayner, resigned earlier this year, and she's seen as 0:19:16.359 --> 0:19:20.800 a significant potential candidate. Let's listen in to a little 0:19:20.800 --> 0:19:21.840 bit from Angela Rayner. 0:19:22.080 --> 0:19:26.200 The trade union movement taught me that it's not about yourself, 0:19:26.760 --> 0:19:31.199 it's about us. It's about who we're here for. 0:19:32.040 --> 0:19:35.639 And everything that I've done has been an endeavor for us, 0:19:35.880 --> 0:19:40.760 for our people who are elected doors and who we serve. Rosa. 0:19:40.840 --> 0:19:45.359 In terms of Rayner, is she the lead contender? Who 0:19:45.520 --> 0:19:49.040 else might be possibilities if there were to be a 0:19:49.119 --> 0:19:50.119 leadership challenge? 0:19:50.480 --> 0:19:53.159 Funny enough, I'm right in a column about this because 0:19:53.240 --> 0:19:55.680 my view is that I agree with Alex one hundred 0:19:55.680 --> 0:19:58.920 percent that Starmer is in real trouble. I'm going to 0:19:58.960 --> 0:20:01.040 the same parties and here the same things, which is 0:20:01.080 --> 0:20:03.520 that everyone's very fed up with him. But each of 0:20:03.600 --> 0:20:07.680 the candidates to replace him has serious issues and flaws 0:20:07.680 --> 0:20:10.639 that make it hard for them to achieve it. So, yes, 0:20:10.880 --> 0:20:14.880 people talk about Angela Rainer, but Angela Rana has resigned 0:20:14.880 --> 0:20:17.720 in disgrace only a couple of months ago. There is 0:20:17.800 --> 0:20:20.639 some polling out which shows that the public do not 0:20:20.800 --> 0:20:23.720 welcome her return to government. Now, she's very popular in 0:20:23.760 --> 0:20:26.159 the Labor Party, but I'm not so sure she is 0:20:26.200 --> 0:20:29.479 popular in the country at large. And if the idea 0:20:29.560 --> 0:20:32.160 is you want to get rid of an unpopular prime minister, 0:20:32.600 --> 0:20:35.240 why would you replace him with somebody who is also 0:20:35.640 --> 0:20:39.160 very unpopular, actually more unpopular than he is. The big 0:20:39.160 --> 0:20:42.440 problem with the most popular candidate, who is Andy Burnham, 0:20:42.760 --> 0:20:45.080 is that he's not a member of Parliament. Now he's 0:20:45.119 --> 0:20:47.359 been giving interviews saying well, I could get a seat, 0:20:47.400 --> 0:20:50.240 I could keep back. It's really difficult to do that 0:20:50.359 --> 0:20:52.800 if you've not got the backing of the Labor Party, 0:20:52.840 --> 0:20:56.920 and at the moment the Labor Party, the National Executive Committee, 0:20:56.920 --> 0:20:59.879 which is in charge of this stuff, runs elections and 0:21:00.080 --> 0:21:02.840 elections and probably wouldn't put him in there. So I 0:21:02.880 --> 0:21:05.480 think he can be counted out for the short term. 0:21:05.680 --> 0:21:08.800 And then you've got other candidates like Where Streeting the 0:21:08.840 --> 0:21:12.439 Health Secretary, is Shabana Mahmoud the Home Secretary. Both I 0:21:12.480 --> 0:21:15.880 think are a little bit more popular than say Angelina 0:21:16.080 --> 0:21:18.240 with the public, but they're from the right of the 0:21:18.280 --> 0:21:22.720 party and this Labor Party leans left, particularly the membership does, 0:21:23.119 --> 0:21:25.200 and I think they would find it hard to win 0:21:25.240 --> 0:21:30.040 an election so there's no clear successor to Kirs Starmer, 0:21:30.240 --> 0:21:32.359 which at the moment I think is pretty much what's 0:21:32.520 --> 0:21:33.439 keeping him in the. 0:21:33.480 --> 0:21:37.280 Job, all of which is quite negative for the government. 0:21:37.600 --> 0:21:42.200 Is there a flip side alex where Kirs Starmer manages 0:21:42.280 --> 0:21:45.439 to turn things around? Is it possible? What might be 0:21:45.520 --> 0:21:46.639 the criteria for that? 0:21:47.320 --> 0:21:49.960 Yes, it is possible. I mean, I think Kirs Starmer 0:21:50.000 --> 0:21:52.320 would say, I'm a year and a half in of 0:21:52.359 --> 0:21:55.320 a five year term. It's too soon to write me 0:21:55.359 --> 0:21:57.719 off completely. And to be fair to him that you know, 0:21:57.800 --> 0:22:00.840 that is not an unreasonable argument that you know, he's 0:22:00.880 --> 0:22:04.320 the first labor prime minister in fourteen years. Give him 0:22:04.359 --> 0:22:07.520 a bit more of a chance basically, you know, yes, 0:22:07.560 --> 0:22:11.040 there could be some interest rate cuts. You know, next year, 0:22:11.200 --> 0:22:15.320 people could start to feel that the economy has turned 0:22:15.320 --> 0:22:19.240 a corner a bit. They need to make serious headway 0:22:19.600 --> 0:22:24.399 on immigration and find a way to reduce the numbers 0:22:24.400 --> 0:22:27.359 of small boat crossings. You know, that is I do 0:22:27.440 --> 0:22:31.840 think fundamental to their electoral chances. They're polling the ability 0:22:31.840 --> 0:22:34.240 of them to sort of nip in the buds the 0:22:34.400 --> 0:22:38.440 rise of reform. You know, could they do slightly less 0:22:38.440 --> 0:22:41.240 badly than feared at the local ellections in May and 0:22:41.600 --> 0:22:44.320 launch that as a bit of a way of turning around. 0:22:44.359 --> 0:22:46.800 I think the other big unknown is is what does 0:22:46.800 --> 0:22:50.320 he do on Brexit, because there could be this just 0:22:50.440 --> 0:22:54.359 sort of slight hail Meherry, which is an unpopular leader, 0:22:54.520 --> 0:22:58.200 needs to find a big, game changing policy to get 0:22:58.240 --> 0:23:02.000 his party back on side. And if he just junked 0:23:02.000 --> 0:23:05.119 his red lines on negotiations with the EU on things 0:23:05.200 --> 0:23:08.760 like the custom a customs union and certain even if 0:23:08.800 --> 0:23:10.840 not that you know, some other way of forging a 0:23:10.840 --> 0:23:14.920 closer relationship that could just keep his party happier. 0:23:15.440 --> 0:23:15.720 Rosa. 0:23:16.040 --> 0:23:19.520 Was this the year of Nigel Pharage and the reform 0:23:19.760 --> 0:23:20.640 UK Party? 0:23:21.200 --> 0:23:24.720 Oh yeah, it really was. Everything seems to be coming 0:23:24.760 --> 0:23:28.320 up Rosie for Nigel Farage well ahead in the polls, 0:23:28.760 --> 0:23:32.399 lots of defections from the Conservative Party, which seems to 0:23:32.440 --> 0:23:36.520 be actually killing off what has been the most successful 0:23:36.560 --> 0:23:40.040 electoral party not just in Britain but in the Western world, 0:23:40.480 --> 0:23:44.159