1
00:00:02,720 --> 00:00:09,680
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bailey for taking a

2
00:00:09,680 --> 00:00:10,360
Speaker 1: couple of questions.

3
00:00:10,360 --> 00:00:13,480
Speaker 2: I mean I should say that our conversation had moved

4
00:00:13,480 --> 00:00:15,560
Speaker 2: on to the much more important subject of rugby.

5
00:00:15,600 --> 00:00:16,520
Speaker 3: But we'll get back to.

6
00:00:16,520 --> 00:00:20,079
Speaker 1: The you know, we will talk rugby, you know what

7
00:00:20,120 --> 00:00:20,960
Speaker 1: will end with rugby.

8
00:00:21,000 --> 00:00:21,560
Speaker 3: But before we.

9
00:00:21,480 --> 00:00:24,520
Speaker 4: Get to rugby rugby, we can talk trade, right, Okay,

10
00:00:25,200 --> 00:00:28,240
Speaker 4: So you've urged the government basically to strike in your

11
00:00:28,280 --> 00:00:30,640
Speaker 4: speech earlier, to strike a deeper trade deal with the

12
00:00:30,680 --> 00:00:34,720
Speaker 4: European Union to improve growth and minimize negative effects of Brexit.

13
00:00:34,760 --> 00:00:35,560
Speaker 1: Where would you start?

14
00:00:35,600 --> 00:00:38,680
Speaker 2: Where would you go first? Well? I would say I

15
00:00:38,680 --> 00:00:41,200
Speaker 2: think the government, you know, has made some important steps

16
00:00:41,200 --> 00:00:43,280
Speaker 2: and I think that's helpful. I mean, as I said,

17
00:00:43,320 --> 00:00:45,479
Speaker 2: I don't take a view on brexitfasly. What I do

18
00:00:45,840 --> 00:00:50,040
Speaker 2: say is, you know, we should take it do everything

19
00:00:50,080 --> 00:00:55,080
Speaker 2: we can to ensure that the trading relationship you know, redeveloped,

20
00:00:55,120 --> 00:00:57,600
Speaker 2: if you like. I think there's important things we can

21
00:00:57,680 --> 00:01:00,360
Speaker 2: do together in financial services, and I think by the wait, look,

22
00:01:00,360 --> 00:01:04,000
Speaker 2: I think the recent obviously market volatility of recent weeks

23
00:01:04,000 --> 00:01:08,080
Speaker 2: and months illustrates why it's important that we do work

24
00:01:08,120 --> 00:01:10,160
Speaker 2: closely together and when we do by the way we do,

25
00:01:10,200 --> 00:01:12,720
Speaker 2: and that's that's true also in the financial stability board.

26
00:01:13,840 --> 00:01:16,119
Speaker 2: You know, we have we have many common interests. There

27
00:01:16,160 --> 00:01:18,520
Speaker 2: are many things that are common to our markets that

28
00:01:18,520 --> 00:01:21,680
Speaker 2: are happening, and so we can do that. Plus I say,

29
00:01:21,720 --> 00:01:25,119
Speaker 2: I think that there's a natural common interest between UK

30
00:01:25,200 --> 00:01:27,680
Speaker 2: and Ireland and the UK and EU on these things.

31
00:01:27,680 --> 00:01:29,920
Speaker 2: So I hope we can, you know, very much hope

32
00:01:29,959 --> 00:01:32,080
Speaker 2: now we can take that forward away.

33
00:01:31,840 --> 00:01:34,240
Speaker 1: From financial services or there are areas that you want

34
00:01:34,240 --> 00:01:37,000
Speaker 1: the other areas that you think that the government should

35
00:01:37,000 --> 00:01:40,200
Speaker 1: focus on without overstepping any of the red lines that

36
00:01:40,240 --> 00:01:41,000
Speaker 1: they've put in place.

37
00:01:41,360 --> 00:01:43,560
Speaker 2: Well, I think that I start often, as I said

38
00:01:43,560 --> 00:01:45,480
Speaker 2: in the remarks I made, I start from the point

39
00:01:45,480 --> 00:01:50,120
Speaker 2: that trade is an important underpinning for growth, It's an

40
00:01:50,120 --> 00:01:54,200
Speaker 2: important underpinning for activity in the economy. There are lessons

41
00:01:54,240 --> 00:01:57,080
Speaker 2: to learn from from recent years which we you know,

42
00:01:57,080 --> 00:02:00,000
Speaker 2: which we can put into effect. But there's no question

43
00:02:00,440 --> 00:02:03,960
Speaker 2: that you know, open economies are important. And let me

44
00:02:03,960 --> 00:02:07,560
Speaker 2: put this into an important perspective, and this is the

45
00:02:07,600 --> 00:02:10,799
Speaker 2: story on growth. I mean, you know, the UK is

46
00:02:10,800 --> 00:02:12,680
Speaker 2: not a loneliness respect by any means. So this is

47
00:02:12,680 --> 00:02:14,800
Speaker 2: not a it's a UK story, but it's not a

48
00:02:14,840 --> 00:02:18,680
Speaker 2: uniquely UK story. We have had a lower potential growth

49
00:02:18,800 --> 00:02:21,520
Speaker 2: rate in the UK for the last well really since

50
00:02:21,520 --> 00:02:23,600
Speaker 2: it's a financial crisis by the way. I'm not sure

51
00:02:23,600 --> 00:02:26,240
Speaker 2: that's causal, by the way, but it happens to coincide,

52
00:02:27,680 --> 00:02:28,200
Speaker 2: so that you know.

53
00:02:28,720 --> 00:02:30,400
Speaker 3: The point I always make is that if you go back.

54
00:02:30,240 --> 00:02:32,880
Speaker 2: Before the financial crisis, the potential growth rate in the

55
00:02:33,000 --> 00:02:35,000
Speaker 2: UK was probably around two two and a half percent

56
00:02:35,000 --> 00:02:37,640
Speaker 2: a Yet since then it's been one to one and

57
00:02:37,639 --> 00:02:41,880
Speaker 2: a half percent, and most of the difference is to

58
00:02:41,880 --> 00:02:45,600
Speaker 2: do with productivity and to do with investments. And you know,

59
00:02:45,639 --> 00:02:47,640
Speaker 2: you look at the job we have with monetary policy,

60
00:02:47,680 --> 00:02:49,720
Speaker 2: which is balancing supply and demand. You look at the

61
00:02:49,800 --> 00:02:52,920
Speaker 2: obviously the job that you know, fiscal policy has. It

62
00:02:53,000 --> 00:02:56,720
Speaker 2: is harder to run macroeconomic policy when you've got a

63
00:02:56,760 --> 00:02:59,040
Speaker 2: lower growth rate. I mean, history tells us this.

64
00:03:00,120 --> 00:03:00,960
Speaker 3: So raising the.

65
00:03:01,000 --> 00:03:04,360
Speaker 2: Potential growth rates is critical. And say the UK is

66
00:03:04,360 --> 00:03:05,760
Speaker 2: not alone in this respect.

67
00:03:06,200 --> 00:03:08,760
Speaker 1: How much more necessary is it because of the trade

68
00:03:08,760 --> 00:03:09,880
Speaker 1: war also that we're seeing.

69
00:03:09,880 --> 00:03:11,720
Speaker 3: I mean, I think it underlines.

70
00:03:11,280 --> 00:03:16,560
Speaker 2: The importance of it because the trade situation will you know,

71
00:03:16,880 --> 00:03:20,880
Speaker 2: if the world economy fragments, that will also have an

72
00:03:20,880 --> 00:03:23,600
Speaker 2: impact on growth, you know point I made. I mean

73
00:03:23,600 --> 00:03:28,480
Speaker 2: it impacts on things like knowledge transfer packs, impacts on

74
00:03:28,600 --> 00:03:30,800
Speaker 2: supply chains, so it will have an effect.

75
00:03:30,880 --> 00:03:34,359
Speaker 1: Yes, Is it world fragmenting for real? Or are these

76
00:03:34,440 --> 00:03:35,960
Speaker 1: just digitters that then will settle?

77
00:03:36,080 --> 00:03:38,560
Speaker 2: Well, I hope, I hope we can get past the

78
00:03:38,600 --> 00:03:41,800
Speaker 2: sort of disruption we're going through. It's why, as I

79
00:03:41,800 --> 00:03:44,600
Speaker 2: said in my remans, I do think it's critically important

80
00:03:45,880 --> 00:03:49,880
Speaker 2: that we focus on ensuring that what I call the

81
00:03:49,960 --> 00:03:53,400
Speaker 2: multilateral system is you know, is.

82
00:03:53,320 --> 00:03:55,000
Speaker 3: Rebuilt and is robust.

83
00:03:55,360 --> 00:03:58,000
Speaker 2: And you know, I include the World Trade Organization actually

84
00:03:58,080 --> 00:04:02,320
Speaker 2: the IMF, because they are are absolutely important fundamental sort

85
00:04:02,320 --> 00:04:04,000
Speaker 2: of parts of the system.

86
00:04:04,760 --> 00:04:07,280
Speaker 1: But does the current I guess trade turmoil make it

87
00:04:07,320 --> 00:04:10,120
Speaker 1: more necessary, yes, for the UK and you to get

88
00:04:10,160 --> 00:04:11,040
Speaker 1: together one hundred percent?

89
00:04:11,120 --> 00:04:13,200
Speaker 2: Well, I think I think it does emphasize the need

90
00:04:13,240 --> 00:04:15,040
Speaker 2: to do it. Yeah, because it puts you know, puts

91
00:04:15,080 --> 00:04:17,359
Speaker 2: all of us in a situation where we've got another

92
00:04:17,520 --> 00:04:21,280
Speaker 2: risk to activity in the economy. So I think, you know,

93
00:04:21,480 --> 00:04:25,840
Speaker 2: doing everything we can to rebuild that relationship in this situation.

94
00:04:25,920 --> 00:04:27,480
Speaker 2: But of coaurse, we also don't by the way, Look,

95
00:04:27,560 --> 00:04:29,560
Speaker 2: we don't want to lose the relationship with the US.

96
00:04:29,600 --> 00:04:31,720
Speaker 2: I mean, we really want to under you know, get

97
00:04:31,760 --> 00:04:34,200
Speaker 2: to the issues that are underlying this and help to

98
00:04:34,279 --> 00:04:36,320
Speaker 2: solve them. It's it's not something we want to sort

99
00:04:36,320 --> 00:04:36,960
Speaker 2: of wish away.

100
00:04:38,240 --> 00:04:40,800
Speaker 1: Is there more uncertainty because of the trade turmoil than

101
00:04:40,800 --> 00:04:41,919
Speaker 1: there was after Brexit?

102
00:04:43,800 --> 00:04:46,200
Speaker 3: Oh, that's a that's a hard thing. I think.

103
00:04:46,400 --> 00:04:49,279
Speaker 2: Well, I think post breaksit. I mean, there was obviously

104
00:04:49,279 --> 00:04:52,400
Speaker 2: there was no question what the decision was. The uncertainty

105
00:04:52,520 --> 00:04:53,840
Speaker 2: was of course, it was around how it was going

106
00:04:53,839 --> 00:04:55,280
Speaker 2: to be put into effect, and that went on for

107
00:04:55,360 --> 00:04:56,719
Speaker 2: quite you know, you think about it, That went on

108
00:04:56,760 --> 00:05:00,400
Speaker 2: for quite a long time. I think the the challenge

109
00:05:00,440 --> 00:05:02,120
Speaker 2: we have at the moment is that we don't actually

110
00:05:02,160 --> 00:05:04,279
Speaker 2: know what the outcome is here. I mean, this is

111
00:05:04,279 --> 00:05:05,760
Speaker 2: one of the problems we have in you know, obviously

112
00:05:05,839 --> 00:05:08,480
Speaker 2: in market policy is you know, I would say, when

113
00:05:08,480 --> 00:05:10,440
Speaker 2: we take our decisions on interest rates, so you have

114
00:05:10,480 --> 00:05:12,839
Speaker 2: to sort of stop the music, as it were, and say, okay,

115
00:05:13,560 --> 00:05:17,320
Speaker 2: we'll take this read of what's going on, what's going

116
00:05:17,320 --> 00:05:20,200
Speaker 2: on in the economy and in the world economy, and

117
00:05:20,240 --> 00:05:23,039
Speaker 2: then apply it into our monetary policy decision. But obviously,

118
00:05:23,240 --> 00:05:26,800
Speaker 2: when I say that, however, you're making decisions on a

119
00:05:26,800 --> 00:05:29,800
Speaker 2: forward basis, because marketary policy has its effect looking forward.

120
00:05:29,839 --> 00:05:31,800
Speaker 2: So then you've got the challenge as we had, you know,

121
00:05:31,880 --> 00:05:36,480
Speaker 2: three weeks ago, what exactly is going to.

122
00:05:36,400 --> 00:05:37,680
Speaker 3: Be the end point of all of this.

123
00:05:37,920 --> 00:05:39,880
Speaker 2: I mean, you know, if we've been having this conversation

124
00:05:40,200 --> 00:05:42,160
Speaker 2: twenty four hours ago, we might have had a different

125
00:05:42,360 --> 00:05:44,599
Speaker 2: you know, we'd have a different facts around this for

126
00:05:44,680 --> 00:05:48,120
Speaker 2: the moment. So that you know, that introduces you know,

127
00:05:48,320 --> 00:05:51,160
Speaker 2: we we're sort of classic as central backs and talking

128
00:05:51,200 --> 00:05:54,600
Speaker 2: about uncertainty constantly. We've also introduced the word unpredictability because

129
00:05:54,640 --> 00:05:56,200
Speaker 2: I think that's a slightly different thing.

130
00:05:56,880 --> 00:05:59,559
Speaker 1: I mean, I know investment managers, you know in Europe,

131
00:05:59,600 --> 00:06:01,960
Speaker 1: are really around the world, are again trying to figure

132
00:06:01,960 --> 00:06:04,120
Speaker 1: out the turmoil. I think someone's come up with the

133
00:06:04,240 --> 00:06:07,520
Speaker 1: term the taco trade, which is Trump always chickens out

134
00:06:08,080 --> 00:06:11,359
Speaker 1: when it comes to imposing ruthy tariff, getting like a

135
00:06:11,400 --> 00:06:16,960
Speaker 1: slightly nervous laugh. But how you know, if you're thinking,

136
00:06:17,000 --> 00:06:19,000
Speaker 1: because I know you think about trade wars, like how

137
00:06:19,000 --> 00:06:21,239
Speaker 1: should investment managers think about the trade wars?

138
00:06:21,240 --> 00:06:21,880
Speaker 2: Like what do we know?

139
00:06:21,920 --> 00:06:23,679
Speaker 1: What do we not know? At every decision?

140
00:06:23,720 --> 00:06:24,440
Speaker 2: How do you look at it?

141
00:06:24,480 --> 00:06:25,680
Speaker 3: How do you look at probability.

142
00:06:27,360 --> 00:06:29,440
Speaker 2: Well, I think there's a number of things that we

143
00:06:29,520 --> 00:06:33,240
Speaker 2: have to think about. Well, let me take one in

144
00:06:33,240 --> 00:06:35,560
Speaker 2: the real economy and then we'll come on to markets maybe.

145
00:06:36,200 --> 00:06:37,919
Speaker 2: I think the one in the real economy that we

146
00:06:37,960 --> 00:06:42,200
Speaker 2: have to think about is if there is a negative

147
00:06:42,200 --> 00:06:45,880
Speaker 2: effect on activity, is it going to be a demand

148
00:06:45,920 --> 00:06:47,640
Speaker 2: effect or is it going to be a demand and

149
00:06:47,720 --> 00:06:50,680
Speaker 2: supply side effect. And this is important because obviously we

150
00:06:50,720 --> 00:06:54,400
Speaker 2: saw with we COVID and Ukraine this problem of having

151
00:06:55,400 --> 00:06:56,880
Speaker 2: repeated supply side.

152
00:06:56,600 --> 00:06:57,479
Speaker 3: Shocks going on.

153
00:06:58,560 --> 00:07:00,520
Speaker 2: I mean, I think it's quite interesting and I observe

154
00:07:00,600 --> 00:07:02,800
Speaker 2: quite all of the commentators that and this tends to

155
00:07:02,839 --> 00:07:05,320
Speaker 2: happen that they immediately assume that it's a demand shock,

156
00:07:06,080 --> 00:07:08,359
Speaker 2: and obviously that from uncy policy. If you if you

157
00:07:08,400 --> 00:07:10,320
Speaker 2: stop there as it were, then you think, well, that's

158
00:07:10,360 --> 00:07:13,760
Speaker 2: actually negative for inflation. But of course, if it's actually

159
00:07:13,800 --> 00:07:17,960
Speaker 2: turns out and this does happen that there is a

160
00:07:17,960 --> 00:07:20,680
Speaker 2: supply shock element to it, and if that's say on

161
00:07:20,720 --> 00:07:23,160
Speaker 2: supply chains, and if that turned out to be persistent,

162
00:07:23,200 --> 00:07:25,160
Speaker 2: then that would not the effect on inflation would be

163
00:07:25,240 --> 00:07:28,440
Speaker 2: quite different. Now, reading that is very hard at the moment,

164
00:07:28,480 --> 00:07:30,720
Speaker 2: So we have to keep coming back to that. It's

165
00:07:30,760 --> 00:07:32,520
Speaker 2: why we keep using as you know, we could, we

166
00:07:32,840 --> 00:07:36,240
Speaker 2: keep using these terms gradual and careful in the approach

167
00:07:37,560 --> 00:07:40,720
Speaker 2: on markets. I think, you know, the issue is that

168
00:07:40,760 --> 00:07:45,760
Speaker 2: I think is this. We've seen very big changes in

169
00:07:45,840 --> 00:07:48,080
Speaker 2: what I call the sort of structure of core financial

170
00:07:48,120 --> 00:07:50,760
Speaker 2: markets in recent in the last five years ten years,

171
00:07:52,800 --> 00:07:55,960
Speaker 2: big shift from the sort of traditional sort of bank

172
00:07:56,040 --> 00:07:59,720
Speaker 2: dealer model to a non bank model. And before any

173
00:07:59,720 --> 00:08:02,280
Speaker 2: of this happened, we were already, you know, spending a

174
00:08:02,280 --> 00:08:04,680
Speaker 2: lot of time saying, well, what is the sort of

175
00:08:04,760 --> 00:08:07,119
Speaker 2: pattern that you know, what shocks can that can happen

176
00:08:07,120 --> 00:08:09,920
Speaker 2: and how would they sort of push and go through

177
00:08:09,960 --> 00:08:10,600
Speaker 2: that system.

178
00:08:11,240 --> 00:08:13,120
Speaker 3: And of course it's even more acute.

179
00:08:12,760 --> 00:08:15,440
Speaker 2: Now in terms of understanding you know, where the fragilities

180
00:08:15,480 --> 00:08:19,200
Speaker 2: are in a world of volatile markets with that structure

181
00:08:19,240 --> 00:08:21,720
Speaker 2: of bond markets for instance. So it's a thing we

182
00:08:21,760 --> 00:08:22,720
Speaker 2: spend a lot of time on.

183
00:08:23,080 --> 00:08:25,720
Speaker 1: But how close have markets come to this financial doom

184
00:08:25,720 --> 00:08:29,360
Speaker 1: loop spiral similar to what happened in the LDI crisis.

185
00:08:30,000 --> 00:08:32,439
Speaker 2: Well, the good news is is that I don't think, yeah,

186
00:08:32,480 --> 00:08:36,240
Speaker 2: we didn't get near to that point. And by the way,

187
00:08:36,280 --> 00:08:38,160
Speaker 2: I think that's you know, that's important for a number

188
00:08:38,200 --> 00:08:41,080
Speaker 2: of reasons. One is that it does suggest and this

189
00:08:41,160 --> 00:08:42,960
Speaker 2: is where I do somewhat push back on the sort

190
00:08:43,000 --> 00:08:46,280
Speaker 2: of the you know, the deregulation agenda, which is not

191
00:08:46,360 --> 00:08:48,960
Speaker 2: because I think our rules and regulations are all perfect.

192
00:08:49,000 --> 00:08:49,600
Speaker 3: They're not.

193
00:08:50,800 --> 00:08:54,240
Speaker 2: But there isn't a trade off between financial stability and growth,

194
00:08:54,240 --> 00:08:56,959
Speaker 2: and there isn't a trade off between financeidability and sort

195
00:08:56,960 --> 00:08:58,679
Speaker 2: of macroeconomic stability.

196
00:08:58,720 --> 00:08:59,600
Speaker 3: And that's important.

197
00:09:01,880 --> 00:09:02,080
Speaker 1: Now.

198
00:09:02,240 --> 00:09:04,320
Speaker 2: I think what we should you know, what we have

199
00:09:04,400 --> 00:09:07,280
Speaker 2: seen so far is that the system has stood up

200
00:09:07,480 --> 00:09:10,080
Speaker 2: in that sense. Now so far, of course, you know,

201
00:09:10,400 --> 00:09:12,360
Speaker 2: you know, we've got to keep a very careful eye

202
00:09:12,360 --> 00:09:14,200
Speaker 2: on this, and we've then got to know we'll have

203
00:09:14,240 --> 00:09:16,400
Speaker 2: to come back and you know, as we always do,

204
00:09:16,520 --> 00:09:18,880
Speaker 2: sort of go over the entrails of what's happened and

205
00:09:18,920 --> 00:09:21,720
Speaker 2: sort of you know, look look look under the bonnet

206
00:09:21,760 --> 00:09:23,920
Speaker 2: and say, well what, you know, what can we learn

207
00:09:24,000 --> 00:09:25,840
Speaker 2: from this? And we will, know, doubt learn a lot

208
00:09:26,040 --> 00:09:29,440
Speaker 2: we always do. So far, I would say the system

209
00:09:29,480 --> 00:09:31,360
Speaker 2: has stood up, but you know, but there has been

210
00:09:31,360 --> 00:09:31,960
Speaker 2: straining in there.

211
00:09:32,000 --> 00:09:33,679
Speaker 3: I mean it's clearly been straining in markets.

212
00:09:33,800 --> 00:09:36,439
Speaker 1: I mean, so far, this doesn't feel anyone with confidence,

213
00:09:36,720 --> 00:09:37,920
Speaker 1: how big of a risk is.

214
00:09:37,920 --> 00:09:42,120
Speaker 2: It Now you think, well, well, you know that there's

215
00:09:42,120 --> 00:09:44,280
Speaker 2: a lot of unpredictability and uncertainty out there, so we

216
00:09:44,320 --> 00:09:47,000
Speaker 2: have to watch it very carefully. What I would say

217
00:09:47,040 --> 00:09:48,600
Speaker 2: is that I think we've you know, all of us

218
00:09:49,000 --> 00:09:52,560
Speaker 2: have now developed tools you know, to handle that.

219
00:09:52,679 --> 00:09:53,440
Speaker 3: We've got more.

220
00:09:53,360 --> 00:09:54,800
Speaker 2: Tools to handle it. So that was one of the

221
00:09:54,880 --> 00:09:57,319
Speaker 2: things that you know, we we built out of the

222
00:09:57,400 --> 00:10:01,960
Speaker 2: ld I issue, for instance. It's not just about having

223
00:10:02,760 --> 00:10:05,800
Speaker 2: resilience in the sense of more protection, it's also you know,

224
00:10:06,480 --> 00:10:08,480
Speaker 2: my view is, look, these are what I call sort

225
00:10:08,480 --> 00:10:11,800
Speaker 2: of tailor the distribution risk events. There comes a point

226
00:10:11,880 --> 00:10:17,080
Speaker 2: where holding sort of permanent resilience for very very extreme

227
00:10:17,120 --> 00:10:19,160
Speaker 2: events is not the right answers. You know, there is

228
00:10:19,200 --> 00:10:21,120
Speaker 2: a there is a world where it's actually more cost

229
00:10:21,120 --> 00:10:23,000
Speaker 2: effective for the central bank to come in and.

230
00:10:23,520 --> 00:10:24,120
Speaker 3: Deal with it.

231
00:10:24,920 --> 00:10:27,559
Speaker 2: That's why we've you know, we're moving towards having these

232
00:10:27,640 --> 00:10:31,280
Speaker 2: you know, non bank emergency lending facilities which we can

233
00:10:31,840 --> 00:10:34,720
Speaker 2: we can trigger more easily. They're not standing facilities, because

234
00:10:34,720 --> 00:10:37,920
Speaker 2: that's the world of banks and money, but because we've

235
00:10:37,920 --> 00:10:40,200
Speaker 2: had this shift to the non bank world so much

236
00:10:40,240 --> 00:10:42,280
Speaker 2: in our markets, we've got to have these tools at

237
00:10:42,280 --> 00:10:42,920
Speaker 2: our disposal.

238
00:10:43,240 --> 00:10:43,920
Speaker 3: But I know you were.

239
00:10:44,080 --> 00:10:46,400
Speaker 1: I mean, you're paid to worry really about inflation, about grows,

240
00:10:46,400 --> 00:10:49,400
Speaker 1: about everything. But do you worry more about a market

241
00:10:49,440 --> 00:10:51,120
Speaker 1: event than anything else.

242
00:10:52,280 --> 00:10:55,120
Speaker 2: Well, look, we're paid to do both. I mean, we

243
00:10:55,160 --> 00:10:57,880
Speaker 2: worry about monetary policy because that's crucial to you know,

244
00:10:57,920 --> 00:10:59,800
Speaker 2: to the well being of the economy. It's crucial to

245
00:10:59,840 --> 00:11:03,040
Speaker 2: the value of money, to real value of money. And

246
00:11:03,160 --> 00:11:05,560
Speaker 2: you know, I sometimes hear people saying central banks are

247
00:11:05,559 --> 00:11:06,320
Speaker 2: taking their eye off it.

248
00:11:06,400 --> 00:11:09,000
Speaker 3: No, we haven't at all. But you know we have to.

249
00:11:09,160 --> 00:11:10,080
Speaker 3: We have to do both.

250
00:11:10,200 --> 00:11:12,880
Speaker 2: You know, these things don't they can't exist in a

251
00:11:12,920 --> 00:11:15,079
Speaker 2: separate universe. That's the mistake that was made before the

252
00:11:15,120 --> 00:11:18,800
Speaker 2: financial crisis, certainly in the UK. So we have to

253
00:11:18,800 --> 00:11:20,600
Speaker 2: spend a lot of time on financial stability, and we

254
00:11:20,600 --> 00:11:23,760
Speaker 2: do because that is equally about the resilience of markets.

255
00:11:23,760 --> 00:11:27,800
Speaker 2: It's about the nominal value of money. And you know,

256
00:11:27,840 --> 00:11:31,000
Speaker 2: I say to people, Look, the last few months would

257
00:11:31,040 --> 00:11:33,520
Speaker 2: have been wholly worse if we've been dealing with a

258
00:11:33,559 --> 00:11:36,320
Speaker 2: fragile financial system at the same time that we're having

259
00:11:36,320 --> 00:11:39,000
Speaker 2: these shots gone. You know, we've had that experience, We've

260
00:11:39,040 --> 00:11:40,559
Speaker 2: dealt with it. That's wholly worse.

261
00:11:41,559 --> 00:11:44,280
Speaker 1: Governor, you have said that trade wars are bad and

262
00:11:44,280 --> 00:11:47,080
Speaker 1: that imbalances in the global economy need to be managed

263
00:11:47,120 --> 00:11:51,760
Speaker 1: by multinational institutions or multilateral issudes like the IMF, But

264
00:11:51,800 --> 00:11:55,199
Speaker 1: actually their scope is very limited. So it is you know,

265
00:11:55,320 --> 00:11:57,840
Speaker 1: is President Trump not right to try something different?

266
00:11:58,440 --> 00:12:01,480
Speaker 2: Well, I think, I mean, you're right about the scope.

267
00:12:01,480 --> 00:12:03,200
Speaker 3: But the scope is the scope.

268
00:12:02,840 --> 00:12:05,960
Speaker 2: And the effectiveness of these institutions is what we, as

269
00:12:06,120 --> 00:12:09,440
Speaker 2: the sort of the member countries, enable them to be.

270
00:12:10,720 --> 00:12:12,400
Speaker 2: You know, I don't think we can expect you know,

271
00:12:12,760 --> 00:12:14,280
Speaker 2: I work for a moment and I spend a lot

272
00:12:14,280 --> 00:12:16,080
Speaker 2: of time with the IMF. I don't think we can

273
00:12:16,120 --> 00:12:18,240
Speaker 2: expect the IMF to go around waiving a magic wand

274
00:12:18,840 --> 00:12:20,680
Speaker 2: solving every problem that comes our way.

275
00:12:21,679 --> 00:12:22,520
Speaker 3: What they can do.

276
00:12:22,720 --> 00:12:24,560
Speaker 2: And I think this is crucial and it's been you know,

277
00:12:24,960 --> 00:12:27,840
Speaker 2: it's deeply embedded in the Breton Woods system. Is you know,

278
00:12:27,880 --> 00:12:30,200
Speaker 2: if you look at the articles of the of the IMF,

279
00:12:30,360 --> 00:12:36,000
Speaker 2: trade is right up there from a macro perspective, and

280
00:12:36,360 --> 00:12:39,199
Speaker 2: we have to then as the as the participant countries,

281
00:12:39,240 --> 00:12:41,040
Speaker 2: as as we are as you know, as a as

282
00:12:41,080 --> 00:12:42,839
Speaker 2: a permanent member of the board, as one of the

283
00:12:42,840 --> 00:12:46,000
Speaker 2: big shareholders. You know, we have to enable them to

284
00:12:46,200 --> 00:12:48,240
Speaker 2: you know, to help us in that sense and to

285
00:12:48,280 --> 00:12:51,320
Speaker 2: provide the you know, the evidence and the analysis and

286
00:12:51,400 --> 00:12:54,360
Speaker 2: the you know, the sort of the framework for them saying, look,

287
00:12:54,360 --> 00:12:58,080
Speaker 2: we've got to rebuild policy. I'm not so closely involved

288
00:12:58,160 --> 00:12:59,719
Speaker 2: or not closely involved in the w t A, but

289
00:12:59,760 --> 00:13:02,120
Speaker 2: I do see, you know, as we see them a

290
00:13:02,120 --> 00:13:04,000
Speaker 2: lot in the context of the IMF I talked to

291
00:13:04,040 --> 00:13:04,960
Speaker 2: and goes see a lot.

292
00:13:05,160 --> 00:13:06,040
Speaker 3: And again, I think.

293
00:13:05,920 --> 00:13:11,320
Speaker 2: We've got to say, look, if it isn't working, we

294
00:13:11,360 --> 00:13:14,360
Speaker 2: can't just abandon it, you know, We've got to get

295
00:13:14,360 --> 00:13:17,600
Speaker 2: together and say what does it take to bring it

296
00:13:17,640 --> 00:13:19,600
Speaker 2: back to where where it can play the role that

297
00:13:19,600 --> 00:13:21,800
Speaker 2: we need it to play. We can't say sorry, that's

298
00:13:22,280 --> 00:13:24,240
Speaker 2: you know, that's no more. What do you think is

299
00:13:24,280 --> 00:13:26,880
Speaker 2: needed to bring well? I think I think I said

300
00:13:26,880 --> 00:13:28,560
Speaker 2: in my remarks, I mean, I think we've got to

301
00:13:28,600 --> 00:13:31,000
Speaker 2: sort of look at the question of to what extent well.

302
00:13:31,000 --> 00:13:32,719
Speaker 2: First of all, I think, just because this is where

303
00:13:32,720 --> 00:13:34,679
Speaker 2: the macrolamac comes in, I think we've got to come

304
00:13:34,720 --> 00:13:38,479
Speaker 2: to an agreed view on what is a persistent imbalance,

305
00:13:39,440 --> 00:13:43,520
Speaker 2: because it isn't any imbalance clearly, what is a persistent imbalance.

306
00:13:43,559 --> 00:13:47,600
Speaker 2: What's the meaning of a persistent imbalance? And then what

307
00:13:47,640 --> 00:13:49,880
Speaker 2: do we do about it? And then I think allied

308
00:13:49,920 --> 00:13:51,360
Speaker 2: to that is this question of what you might have

309
00:13:51,480 --> 00:13:54,360
Speaker 2: loosely called industrial policy, which is, to what extent is

310
00:13:54,400 --> 00:13:59,400
Speaker 2: that being in the sense contributed to by industrial And

311
00:13:59,400 --> 00:14:01,840
Speaker 2: then's got to be a more robust framework in which

312
00:14:01,880 --> 00:14:04,319
Speaker 2: those things can be sort of in a sense hammered out.

313
00:14:05,760 --> 00:14:08,000
Speaker 1: Do you think the rest of the world is decoupling

314
00:14:08,040 --> 00:14:11,880
Speaker 1: from America but pulling tighter somewhere else, or is it

315
00:14:11,960 --> 00:14:13,400
Speaker 1: just decoupling full stop?

316
00:14:14,600 --> 00:14:16,120
Speaker 3: I don't think.

317
00:14:16,160 --> 00:14:18,840
Speaker 2: I don't don't think frankly, the whole process is that advanced. Really,

318
00:14:19,120 --> 00:14:22,080
Speaker 2: First of all, I don't really believe that. I think

319
00:14:22,120 --> 00:14:26,320
Speaker 2: it doesn't. It's not useful or really right to talk

320
00:14:26,360 --> 00:14:29,400
Speaker 2: about this sort of you know, is the dollar going

321
00:14:29,400 --> 00:14:31,080
Speaker 2: to be a reserve currency? The dollar is still the

322
00:14:31,120 --> 00:14:32,800
Speaker 2: most used currency and is going to go on being

323
00:14:32,800 --> 00:14:35,320
Speaker 2: the most because there's so much infrastructure built around it

324
00:14:35,440 --> 00:14:39,240
Speaker 2: that you know, that's a long way off. We may

325
00:14:39,280 --> 00:14:43,800
Speaker 2: see some rebalancing of sort of activity, but I don't

326
00:14:43,800 --> 00:14:45,320
Speaker 2: think we're anywhere near that, and I don't think we

327
00:14:45,360 --> 00:14:50,040
Speaker 2: should want to be anywhere, know that. Frankly, I don't

328
00:14:50,080 --> 00:14:53,240
Speaker 2: think really there's a you know, there's a great sort

329
00:14:53,240 --> 00:14:55,600
Speaker 2: of move to sort of let's get together and sort

330
00:14:55,640 --> 00:14:57,880
Speaker 2: of fight the US together. I don't think that's the case.

331
00:14:57,880 --> 00:15:00,640
Speaker 2: I think there's still a lot of you know, what,

332
00:15:00,640 --> 00:15:01,920
Speaker 2: what are we going to how are we going to

333
00:15:01,960 --> 00:15:05,280
Speaker 2: deal with this? And I think we want to come together,

334
00:15:05,320 --> 00:15:08,200
Speaker 2: and we want to come together with the US and say, look,

335
00:15:08,640 --> 00:15:11,480
Speaker 2: you know, we we've got these multilateral forums. We've got

336
00:15:11,520 --> 00:15:15,400
Speaker 2: to make these things work together to deliver you know,

337
00:15:15,560 --> 00:15:16,480
Speaker 2: sensible outcomes.

338
00:15:16,800 --> 00:15:17,200
Speaker 3: I guess the.

339
00:15:17,280 --> 00:15:20,280
Speaker 1: Question could be, you know, is there can it come

340
00:15:20,320 --> 00:15:23,040
Speaker 1: back to what it was? Or is the world splintering,

341
00:15:23,680 --> 00:15:25,200
Speaker 1: you know, irrevocably.

342
00:15:26,440 --> 00:15:29,440
Speaker 2: Well, look, I think we have to we have to

343
00:15:29,480 --> 00:15:31,720
Speaker 2: put all our effort into doing that. I mean, I'm,

344
00:15:31,760 --> 00:15:33,720
Speaker 2: you know, as you know you said earlier, I'm you know,

345
00:15:33,720 --> 00:15:36,840
Speaker 2: I'm taking over the chair of the FSB of Fantanctability Board.

346
00:15:36,840 --> 00:15:39,360
Speaker 2: I mean, I you know, fortunately we haven't seen those

347
00:15:39,360 --> 00:15:41,240
Speaker 2: tensions in the FSB, but we have to be very

348
00:15:41,880 --> 00:15:42,960
Speaker 2: acutely aware of it.

349
00:15:43,040 --> 00:15:44,440
Speaker 3: And I certainly am.

350
00:15:45,440 --> 00:15:47,880
Speaker 2: So it isn't it isn't fracturing. I think, look, I

351
00:15:47,880 --> 00:15:51,000
Speaker 2: think the world economy has come under strain. I mean,

352
00:15:51,080 --> 00:15:54,600
Speaker 2: let's be honest, you know, the Russia Ukraine situation has

353
00:15:54,640 --> 00:15:57,600
Speaker 2: created a lot of strain in what a my called

354
00:15:57,600 --> 00:16:00,640
Speaker 2: sort of world economic policy and world em for it.

355
00:16:00,720 --> 00:16:02,640
Speaker 2: So if you go to the G twenty for instance,

356
00:16:02,680 --> 00:16:05,680
Speaker 2: you know it's you know, it is having an effect

357
00:16:06,320 --> 00:16:09,280
Speaker 2: on those institutions. They're not able to do the job

358
00:16:09,360 --> 00:16:10,280
Speaker 2: that we need them to do.

359
00:16:11,080 --> 00:16:13,040
Speaker 1: But how much do you worry about bond markets in

360
00:16:13,080 --> 00:16:16,320
Speaker 1: general when you look at financial stability, right? I mean,

361
00:16:16,320 --> 00:16:19,840
Speaker 1: I think the IMF was saying that guild market has vulnerabilities,

362
00:16:19,840 --> 00:16:22,560
Speaker 1: that management office targeting sales at the short end of

363
00:16:22,600 --> 00:16:25,760
Speaker 1: the curve where the demand is pension funds have pulled back.

364
00:16:25,800 --> 00:16:27,080
Speaker 3: I mean, there's just a lot going on.

365
00:16:27,200 --> 00:16:28,240
Speaker 1: Something could go wrong.

366
00:16:28,840 --> 00:16:31,520
Speaker 2: Yes, I mean, obviously we're not responsible for that management policy.

367
00:16:31,560 --> 00:16:35,920
Speaker 2: It's the debt management office. I mean, I think that

368
00:16:36,280 --> 00:16:38,840
Speaker 2: they've said they're looking at this because the UK course

369
00:16:38,880 --> 00:16:41,240
Speaker 2: has had a history of actually.

370
00:16:41,560 --> 00:16:43,480
Speaker 3: Issuing more at the long end.

371
00:16:44,080 --> 00:16:46,520
Speaker 2: And look, there's a lot of sense to that, a

372
00:16:46,520 --> 00:16:50,480
Speaker 2: lot of sense to that, but the curve has deepened

373
00:16:50,480 --> 00:16:52,440
Speaker 2: a lot, and I think you know they're rightly now

374
00:16:52,480 --> 00:16:55,080
Speaker 2: looking at well, what does that tell us about going

375
00:16:55,080 --> 00:16:58,640
Speaker 2: forwards about the market government.

376
00:16:58,680 --> 00:17:00,520
Speaker 1: We have five minutes left and by poor Man, I

377
00:17:00,520 --> 00:17:02,760
Speaker 1: think we'll talk a little bit about UK monetary policy

378
00:17:02,800 --> 00:17:06,679
Speaker 1: and wage and inflation growth since the Mayor decision and

379
00:17:06,760 --> 00:17:10,399
Speaker 1: some recent CPI and wage data markets slashing their bets

380
00:17:10,400 --> 00:17:13,280
Speaker 1: on radcuts to just one this year. Does that sound

381
00:17:13,320 --> 00:17:13,800
Speaker 1: about right?

382
00:17:14,320 --> 00:17:21,479
Speaker 2: Well, you're welcome, yes, yes, yes, or no? Hands up.

383
00:17:26,640 --> 00:17:29,800
Speaker 2: There's a there's a there's a lot of uncertainty around

384
00:17:29,840 --> 00:17:32,760
Speaker 2: at the moment. You know, it's three weeks since obviously

385
00:17:32,800 --> 00:17:34,680
Speaker 2: since I think we were last sitting talking to another

386
00:17:34,760 --> 00:17:38,960
Speaker 2: discussing this the day we took the decision to be

387
00:17:39,000 --> 00:17:41,280
Speaker 2: honest with you on the UK front. I think the

388
00:17:41,320 --> 00:17:44,239
Speaker 2: evidence that we've seen since really it's been pretty much

389
00:17:44,280 --> 00:17:47,119
Speaker 2: in line with what we were expecting to see and

390
00:17:47,160 --> 00:17:51,000
Speaker 2: it really underlines the big decisions and the big questions.

391
00:17:50,560 --> 00:17:51,679
Speaker 3: That we have to keep coming back to.

392
00:17:51,840 --> 00:17:55,479
Speaker 2: So we we we've been predicting this, this hump up

393
00:17:55,480 --> 00:17:58,800
Speaker 2: and inflation for some time. It was basically sort of

394
00:17:58,840 --> 00:18:01,400
Speaker 2: give or take under NAT point one what we expected

395
00:18:01,400 --> 00:18:04,040
Speaker 2: it to be. It's not in what I call the

396
00:18:04,119 --> 00:18:05,880
Speaker 2: sort of the pieces of the parts of the economy.

397
00:18:05,880 --> 00:18:08,119
Speaker 2: We tell you much about supply and demand. Unfortunately it's

398
00:18:08,600 --> 00:18:11,560
Speaker 2: it's in the sort of so called administered prices. But

399
00:18:11,600 --> 00:18:13,320
Speaker 2: the big issue for us is it going to call

400
00:18:13,400 --> 00:18:15,960
Speaker 2: second round effects in the labor market.

401
00:18:16,000 --> 00:18:16,600
Speaker 3: I think.

402
00:18:18,280 --> 00:18:20,280
Speaker 2: The aroound of data that we've had since we're pretty

403
00:18:20,320 --> 00:18:21,359
Speaker 2: much in line with.

404
00:18:21,280 --> 00:18:21,920
Speaker 3: What we thought.

405
00:18:23,000 --> 00:18:25,239
Speaker 2: But the big question, and I think Hugh pull has

406
00:18:25,240 --> 00:18:28,440
Speaker 2: put this story well, is you know, have we seen

407
00:18:28,600 --> 00:18:30,639
Speaker 2: some change and the sort of structure of the labor

408
00:18:30,680 --> 00:18:34,240
Speaker 2: market which is causing for instance, you know, the pay

409
00:18:34,280 --> 00:18:37,159
Speaker 2: increases to be higher than it's consistent with the target.

410
00:18:37,240 --> 00:18:40,480
Speaker 3: Is that going to be persisting or are.

411
00:18:40,359 --> 00:18:44,679
Speaker 2: We seeing this very gradual sort of movement back to

412
00:18:45,560 --> 00:18:47,520
Speaker 2: a position which is which which is going to sort

413
00:18:47,560 --> 00:18:49,480
Speaker 2: of bring us back to the sort of the target framework.

414
00:18:49,480 --> 00:18:52,000
Speaker 2: And we have to keep coming back to that. And

415
00:18:52,040 --> 00:18:53,280
Speaker 2: you know by the way that you know we we

416
00:18:53,320 --> 00:18:55,879
Speaker 2: obviously you know, we convoke different ways as we do.

417
00:18:56,000 --> 00:18:57,920
Speaker 2: I mean, you know, if I describe the difference between

418
00:18:57,920 --> 00:19:00,840
Speaker 2: probably my position and somebody who you know didn't vote

419
00:19:00,840 --> 00:19:02,800
Speaker 2: for a cut last time, it's not because we have

420
00:19:02,880 --> 00:19:06,119
Speaker 2: a really different, different analytical framework. I'm probably sort of

421
00:19:06,840 --> 00:19:09,399
Speaker 2: I see slightly probably more evidence that I think we

422
00:19:09,480 --> 00:19:11,680
Speaker 2: are going back, But I have to keep coming back

423
00:19:11,720 --> 00:19:15,800
Speaker 2: to this judgment every time. Now, I would say, and

424
00:19:15,840 --> 00:19:18,119
Speaker 2: I think you know we've discussed this before that I

425
00:19:18,160 --> 00:19:21,680
Speaker 2: think you know, certainly in our case, All okay, all

426
00:19:21,680 --> 00:19:25,080
Speaker 2: the news is coming out of tarifs and trade and

427
00:19:25,119 --> 00:19:28,159
Speaker 2: obviously they can have a very big impact, but I

428
00:19:28,160 --> 00:19:31,040
Speaker 2: think still the fundamental drivers of what's going to sort

429
00:19:31,040 --> 00:19:34,400
Speaker 2: of influence inflation in the UK is UK issues.

430
00:19:35,160 --> 00:19:37,400
Speaker 1: Yeah, and given that, you know, you were just talking

431
00:19:37,440 --> 00:19:39,639
Speaker 1: about that crucial payrolls data for April, how does it

432
00:19:39,680 --> 00:19:42,679
Speaker 1: impact your thinking on where interest rates should go?

433
00:19:43,520 --> 00:19:46,560
Speaker 2: Well, it was pretty much in line with what eye

434
00:19:46,600 --> 00:19:47,800
Speaker 2: slash we were expecting.

435
00:19:48,720 --> 00:19:50,360
Speaker 1: So you weren't surprised that it held up.

436
00:19:50,840 --> 00:19:51,919
Speaker 3: No, I wasn't surprised.

437
00:19:51,920 --> 00:19:54,040
Speaker 2: I mean it was basically very much in line with

438
00:19:54,080 --> 00:19:56,000
Speaker 2: what our staff had been telling it it would be.

439
00:19:56,040 --> 00:19:57,760
Speaker 2: In terms of the lad market data that we had

440
00:19:57,760 --> 00:20:01,439
Speaker 2: a couple of weeks ago. I spent a lot of

441
00:20:01,440 --> 00:20:03,480
Speaker 2: time talking to firms. I was in Norman, Ireland, just say,

442
00:20:03,560 --> 00:20:05,560
Speaker 2: talking to firms and about what they're seeing.

443
00:20:07,280 --> 00:20:08,040
Speaker 3: You know, we've got it.

444
00:20:08,080 --> 00:20:10,719
Speaker 2: We've got essentially got a profile that brings you know,

445
00:20:11,080 --> 00:20:15,440
Speaker 2: pay increases down to you know, somewhere like three three

446
00:20:15,480 --> 00:20:19,800
Speaker 2: point seven percent later this year. I think we're still

447
00:20:20,240 --> 00:20:23,919
Speaker 2: broadly seeing that pattern intact, but we have to keep

448
00:20:23,960 --> 00:20:28,720
Speaker 2: coming back to it. It's not something where we can assume, well, will.

449
00:20:28,520 --> 00:20:30,560
Speaker 3: Just happen on inflation.

450
00:20:30,640 --> 00:20:33,520
Speaker 1: I have two final questions on inflation. The print overshot

451
00:20:33,600 --> 00:20:38,120
Speaker 1: your projections, especially in services. Why do you think what?

452
00:20:38,119 --> 00:20:39,239
Speaker 1: What do you think is driving there?

453
00:20:39,520 --> 00:20:39,600
Speaker 3: So?

454
00:20:39,760 --> 00:20:42,560
Speaker 2: I think I think services inflation is interesting because it

455
00:20:42,600 --> 00:20:44,640
Speaker 2: really has two parts to it. There's a volatile part

456
00:20:44,720 --> 00:20:48,879
Speaker 2: and a sort of a non volatile part. So the

457
00:20:48,960 --> 00:20:51,800
Speaker 2: volatile part is in the sort of the transport, hotels,

458
00:20:52,400 --> 00:20:54,879
Speaker 2: you know, what have you that that part it is

459
00:20:54,960 --> 00:20:57,280
Speaker 2: quite volatile. It may have got a bit more volatile.

460
00:20:58,040 --> 00:21:01,399
Speaker 2: We had a stronger number in the in the data

461
00:21:01,440 --> 00:21:05,040
Speaker 2: release we've just had. You know, was it because easter

462
00:21:05,119 --> 00:21:07,040
Speaker 2: had a different time. I don't know, to be honest

463
00:21:07,119 --> 00:21:09,640
Speaker 2: with your time. Time will tell. We'll have another set

464
00:21:09,640 --> 00:21:12,280
Speaker 2: of data before we take the final decision next time

465
00:21:12,320 --> 00:21:17,919
Speaker 2: in three weeks time. The non volatile the less volatile paths. Again,

466
00:21:18,560 --> 00:21:22,200
Speaker 2: it's sort of gradually grinding down, but very slowly.

467
00:21:24,000 --> 00:21:25,480
Speaker 3: You look at other parts of the picture.

468
00:21:25,960 --> 00:21:29,440
Speaker 2: Good surprice inflation was a bit weaker, but food we're

469
00:21:29,480 --> 00:21:32,480
Speaker 2: seeing some you know, we're seeing strengthening and food inflation.

470
00:21:32,520 --> 00:21:34,479
Speaker 2: But I think that's we're not alone in that respect.

471
00:21:34,560 --> 00:21:37,480
Speaker 2: I mean, I think we see other countries. Other governors

472
00:21:37,480 --> 00:21:40,400
Speaker 2: told me they're seeing somewhat similar things. But of course,

473
00:21:40,520 --> 00:21:42,280
Speaker 2: you know, the thing about food is that it does

474
00:21:42,359 --> 00:21:44,639
Speaker 2: have a very big director. You know, it's what people

475
00:21:44,720 --> 00:21:48,719
Speaker 2: perceive inflation to be. Can be heavily influenced, particularly by

476
00:21:48,760 --> 00:21:50,520
Speaker 2: food and energy. I'm governor.

477
00:21:50,640 --> 00:21:54,240
Speaker 1: Final question, bringing it back to trade. Since the boes

478
00:21:54,400 --> 00:21:58,280
Speaker 1: May forecasts, the UK government has actually secured trade agreements

479
00:21:58,320 --> 00:21:58,960
Speaker 1: with the US.

480
00:21:58,800 --> 00:21:59,240
Speaker 3: And the EU.

481
00:21:59,359 --> 00:22:01,960
Speaker 1: So how big of a boost to growth do you

482
00:22:01,960 --> 00:22:02,600
Speaker 1: think that will be?

483
00:22:03,160 --> 00:22:06,600
Speaker 2: Well, look, I think it's a good thing. You know,

484
00:22:06,600 --> 00:22:09,119
Speaker 2: obviously it's a good thing in the circumstances. And I

485
00:22:09,160 --> 00:22:12,320
Speaker 2: say that I'm not criticizing the UK government. Look, I

486
00:22:12,359 --> 00:22:14,520
Speaker 2: think they would say the same thing. The circumstances are

487
00:22:14,560 --> 00:22:17,680
Speaker 2: of course that you know, even with this agreement, we're

488
00:22:17,680 --> 00:22:19,239
Speaker 2: still going to have tariffs that are higher than they

489
00:22:19,240 --> 00:22:21,400
Speaker 2: were before all of the started. So you know, that's

490
00:22:21,400 --> 00:22:22,800
Speaker 2: something that we have to bear in mind. And the

491
00:22:22,840 --> 00:22:24,320
Speaker 2: second thing we have to bear in mind, and it

492
00:22:24,359 --> 00:22:26,040
Speaker 2: goes back to the points I made about you know,

493
00:22:26,600 --> 00:22:29,200
Speaker 2: economies like the UK and Ireland being as open as

494
00:22:29,240 --> 00:22:32,840
Speaker 2: they are, is that, of course the UK US Trade

495
00:22:32,880 --> 00:22:35,320
Speaker 2: Agreement is important, but what the rest of the world

496
00:22:35,400 --> 00:22:40,280
Speaker 2: does is as important to our economy because our economy

497
00:22:40,320 --> 00:22:42,320
Speaker 2: is so open, So we have a very strong interest

498
00:22:42,359 --> 00:22:46,639
Speaker 2: in what the rest of the world does alongside the

499
00:22:46,720 --> 00:22:49,280
Speaker 2: UK and the UK the UK Trade Agreement doesn't sort

500
00:22:49,280 --> 00:22:51,120
Speaker 2: of settle it across the board in that sense.

501
00:22:51,160 --> 00:22:52,080
Speaker 3: It can't do obviously.

502
00:22:53,240 --> 00:22:55,600
Speaker 1: Maybe one final question, because I get asked that a lot.

503
00:22:55,600 --> 00:22:58,040
Speaker 1: How do you get briefed on the leaders to just

504
00:22:58,280 --> 00:23:00,960
Speaker 1: trade news? I mean, do you you know, are you

505
00:23:01,040 --> 00:23:04,199
Speaker 1: scrolling through I don't know, a Bloomberg website or do

506
00:23:04,200 --> 00:23:07,080
Speaker 1: you get you know, hourly updates from.

507
00:23:06,920 --> 00:23:10,199
Speaker 2: Your spare Well, you get up in the morning and

508
00:23:10,280 --> 00:23:15,440
Speaker 2: you say, oh my god, what's happened overnight this today?

509
00:23:16,160 --> 00:23:16,600
Speaker 3: Uh?

510
00:23:16,640 --> 00:23:18,639
Speaker 2: Well, I mean if you do, I still look at

511
00:23:18,640 --> 00:23:20,600
Speaker 2: we have staff, We spend a lot of time following it,

512
00:23:21,440 --> 00:23:23,280
Speaker 2: you know, we have obviously I talked to I talked

513
00:23:23,280 --> 00:23:26,639
Speaker 2: to other central banks, we talked to the market a lot. Obviously,

514
00:23:26,640 --> 00:23:30,000
Speaker 2: we talked to your authorities, and we then have to

515
00:23:30,000 --> 00:23:34,159
Speaker 2: try and piece the story together really and particularly obviously.

516
00:23:34,760 --> 00:23:35,280
Speaker 3: How is it.

517
00:23:35,520 --> 00:23:40,520
Speaker 2: I mean, trade data also are inherently quite volatile. You know,

518
00:23:40,560 --> 00:23:44,200
Speaker 2: they're not the most stable data necessarily ever to look

519
00:23:44,240 --> 00:23:46,159
Speaker 2: at it in that sense, and that's not a criticize the

520
00:23:46,200 --> 00:23:50,119
Speaker 2: fact of life. So for instance, trying to you know,

521
00:23:50,200 --> 00:23:52,040
Speaker 2: taking the data that have been released in the last

522
00:23:52,080 --> 00:23:55,200
Speaker 2: month or so and saying, well, let's sort of spot

523
00:23:55,280 --> 00:23:58,960
Speaker 2: the impact, you know, it's it's not easy to often

524
00:23:59,000 --> 00:24:00,320
Speaker 2: to do that. I think you can probably see more

525
00:24:00,320 --> 00:24:02,199
Speaker 2: of it in the US data because obviously they've had

526
00:24:02,280 --> 00:24:04,159
Speaker 2: quite a big so as I can see quite a

527
00:24:04,200 --> 00:24:08,000
Speaker 2: big obviously anticipation, you know, stuff being taken into the

528
00:24:08,080 --> 00:24:11,560
Speaker 2: US and anticipation which was why you've got slightly negative

529
00:24:11,640 --> 00:24:14,960
Speaker 2: GDP but positive domestic demand going on. It's a negative

530
00:24:15,000 --> 00:24:17,879
Speaker 2: net trade effect. But our data it's it's it's not

531
00:24:17,960 --> 00:24:19,960
Speaker 2: as it's not not yet as easy to see.

532
00:24:20,560 --> 00:24:22,919
Speaker 1: Governor, Thank you so much for your time. That was

533
00:24:23,200 --> 00:24:25,000
Speaker 1: Andrew Bailey. Everyone before you get