Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along
Speaker 1: with Jonathan Ferrell and Lisa A. Brawmowitz. Daily we bring
Speaker 1: you insight from the best and economics, finance, investment, and
Speaker 1: international relations. To find Bloomberg Surveillance on Apple podcast, SoundCloud,
Speaker 1: Bloomberg dot Com and of course on the Bloomberg terminal.
Speaker 1: As we begin this ten days of Morning, in our
Speaker 1: commitment to London here with Bloomberg Surveillance, it is good
Speaker 1: to speak to the editor in chief of Bloomberg, John
Speaker 1: michels Waite, and what is important here is his commitment
Speaker 1: to the literature with Adrian Wooldridge and the number of
Speaker 1: books that they have put out over the years. I
Speaker 1: want to go to a what if, John, because we
Speaker 1: do not know the schedule forward. There is In the
Speaker 1: first time I walked into it, I fell apart. Westminster Hall,
Speaker 1: not Westminster Abbey, but this small all right next to it,
Speaker 1: that that one person and a night one said we
Speaker 1: need to save Westminster Hall. Let the commons burn. And
Speaker 1: there has to be some heritage there, some symbolism as
Speaker 1: you more in your Queen. I think Westminster Hall also
Speaker 1: is the place as I remember it, and I may
Speaker 1: have got this wrong that I think Charles the First
Speaker 1: went too shortly before he was executed, and there have
Speaker 1: been countless other people. So it is it is actually
Speaker 1: very um related to the monarchy and to British history,
Speaker 1: and so it's right at the middle things. I do think,
Speaker 1: actually strangely in this case, I think there is something
Speaker 1: very um your sense of history Tom is correct, is
Speaker 1: that there is something at this precise moment that very
Speaker 1: sort of historical about this. And there's also a sense
Speaker 1: of the monarchy from an earlier age if you look
Speaker 1: at the inheritance from Charles's point of view, he is
Speaker 1: coming into a kingdom that is in danger of breaking up.
Speaker 1: He's coming into a kingdom that has got poor relations
Speaker 1: with its ancestral um other half in in France and
Speaker 1: Germany and things like that. And he's also got a
Speaker 1: sort of brand new chancellor if he wanted under the
Speaker 1: old terms in his trust. So there is a there is,
Speaker 1: it's a it's a not easy inheritance, and I think
Speaker 1: in terms of history, from the monarchy's point of view, um,
Speaker 1: this is an unusually difficult time, notwithstanding the huge amount
Speaker 1: of coming together that is happening at the moment, John,
Speaker 1: how do you expect that he is going to reposition
Speaker 1: this monarchy in the world that you describe. I think
Speaker 1: I think it's a mixture between trying to keep the
Speaker 1: inherent strength that his mother had, which was the ability
Speaker 1: to bring people together. You and I just talking before,
Speaker 1: where you could become from wildly different backgrounds. In this country,
Speaker 1: you could come from worldly different racist genders, everything, and
Speaker 1: people saw this woman as a center of what this
Speaker 1: country was about. And in terms of international influence she was.
Speaker 1: She was about as strong as soft power can get.
Speaker 1: Everybody you met around the world, doesn't matter. Even talking
Speaker 1: to rulers in Asia last couple of weeks ago, they
Speaker 1: are still fascinated by this woman who has, after all,
Speaker 1: met everybody, or did meet everybody, and so as a
Speaker 1: kind of weapon of self power, she was extraordinary. Now
Speaker 1: you have a new person coming in, and I think
Speaker 1: for Charles the sort of challenges possibly to step back
Speaker 1: a little bit in terms of his advocacy. He's no
Speaker 1: longer the heir to the throne. He's actually the he
Speaker 1: now is the person at the middle of the English constitution.
Speaker 1: He selects who the Prime Minister can be that. That
Speaker 1: means you have to perhaps come a slightly more objective figure.
Speaker 1: But the second thing is, you know, how do you
Speaker 1: update the monarchy quietly without losing that sense of power
Speaker 1: when you talk about updating the monarchy? Or one thing
Speaker 1: that Queen Elizabeth the Second did was it she became
Speaker 1: an icon of culture. She became, as one historian said,
Speaker 1: she is tower Bridge and a red double decker bus
Speaker 1: and two legs, not to mention big an afternoon tea
Speaker 1: village bets and sheep flecked hills. How much can the
Speaker 1: new king, King Charles the Second really move at a
Speaker 1: point checking Charles the Third come out and actually represents
Speaker 1: something cultural? And if not, what relevancy will this monarchy have?
Speaker 1: Quite interesting? The world in which just thinking whilst you
Speaker 1: were talking, the world in which John and I grew
Speaker 1: up obviously John massively younger than me, but but stamps.
Speaker 1: The basic fact is the thing you were used to
Speaker 1: seeing was the monarch's head on a stamp. Well, now
Speaker 1: we don't see as many stamps. It's difficult to imprint
Speaker 1: the monarch's head on an email, and issues like that.
Speaker 1: I do think it is it's a question of rebranding.
Speaker 1: When you looked at the jubilee celebrations um recently, in
Speaker 1: which Charles is right in the middle. You know, there
Speaker 1: were some things that worked, putting great big images on
Speaker 1: top of sucking palace. There were other things which maybe
Speaker 1: just felt it was a bit like watching your your
Speaker 1: kind of granddad tried to dance. Um that there was
Speaker 1: there was a little is of that. So it's a
Speaker 1: very difficult thing and at different times. The clever thing
Speaker 1: about the Queen is she was quite good at letting
Speaker 1: the junior royals go off and try things. That was
Speaker 1: a famous thing called It's a knockout, which is too
Speaker 1: painful to go through, but where they are dressed in
Speaker 1: medieval costumes and sort of through sponges at each other.
Speaker 1: But that was conveniently. You know, you've got to explain this.
Speaker 1: It was a kind of game show that had appeared
Speaker 1: on television, which the more I think about it, the
Speaker 1: less easier it is to defend to any audience that
Speaker 1: stretches beyond this this particular kingdom. The royals a game
Speaker 1: show they did once and it did not work out well,
Speaker 1: so they perhaps that perhaps was something that went on
Speaker 1: entirely work. They were like it was like a guest
Speaker 1: version for charity um but it didn't entirely work and
Speaker 1: I cannot remember the full details of so please don't
Speaker 1: probably was not a success. A decent place to pause
Speaker 1: and reflect just for another moment. There have been times
Speaker 1: in the history of this royal family, even with Queen
Speaker 1: Elizabeth on the throne, where they've had difficulty connecting with
Speaker 1: the British people. Do you think Charles is going to
Speaker 1: have that difficulty? And I think of a particular generation
Speaker 1: very much enamored with the late Princess Diana, were uncomfortable
Speaker 1: with Camilla taking the title of queen. I think that
Speaker 1: my personal view is that that has moved on. I
Speaker 1: remember that very well. But my my senses, that has
Speaker 1: moved on, and Charles has sort of pushed himself, notwithstanding
Speaker 1: certain Netflix series, has pushed himself back into the and
Speaker 1: several films has pushed himself back into the middle, and
Speaker 1: he is that he is now a more respected figure
Speaker 1: than he was then. But the interesting point is this
Speaker 1: is that the thing that determines the monic is that
Speaker 1: old sort Harold McMillan thing about events, dear boy events.
Speaker 1: You know, it's what nobody could have guessed what was
Speaker 1: going to happen to Elizabeth. Nobody can guess what's going
Speaker 1: to happen to Charles. We know he faces some things
Speaker 1: like the possibility of Scotland and Norman Ireland maybe leaving
Speaker 1: his union. We're here for ten days. You ever restaurant
Speaker 1: place to hear the Bloomberg Country was banned from mentioning
Speaker 1: the Crown on Netflix for a whole time. Henry quite
Speaker 1: right now an important moment with Mohammad l Arion has
Speaker 1: been such a friend of Bloomberg Surveillance over the years.
Speaker 1: He is a president of Queen's College, Cambridge and they
Speaker 1: are deeply affected by the death of their patron. To Arian,
Speaker 1: the history of Queen's College is extraordinary. We don't need
Speaker 1: to go over it now, but it is the back
Speaker 1: and forth of Queen and king over centuries and centuries,
Speaker 1: back to roughly fourteen five. We now have a new
Speaker 1: transition as well. How do you perceive your patron in
Speaker 1: the shift to King Charles? The third calm facts for
Speaker 1: having me um. We are extremely sad at the passing
Speaker 1: of her Majesty the Queen. I don't think I can
Speaker 1: find words that express the size and scale of the
Speaker 1: loss that's being felt by the United Kingdom, by people
Speaker 1: around the world, and especially by our community because as
Speaker 1: you say, she was our patroness. She visited the college,
Speaker 1: she encouraged and inspired generations of students, of faculty and
Speaker 1: of staff. So there's a real sense of loss right
Speaker 1: now in mourning and wanting to honor her incredible reign. Um,
Speaker 1: we're not looking forward to tell you the truth as
Speaker 1: to what next right now. This is a period of
Speaker 1: deep reflection and gratitude for what her Majesty the Queen
Speaker 1: did for Queen's College, Cambridge. One of the hallmarks of
Speaker 1: her reign was the diversity of the United Kingdom. Cambridge
Speaker 1: let on that as well, and some would say Muhammad
Speaker 1: Aryan let on it as well. There's a shark the
Speaker 1: Trust cabinet, the senior officials showing the diversity of the
Speaker 1: United Kingdom from the University of Cambridge state the diversity
Speaker 1: the Queen Elizabeth brought. She would speak to everyone and
Speaker 1: he would and would encourage us to be more inclusive,
Speaker 1: more diverse, and to continue in the daily fight of
Speaker 1: reducing obstacle to access to a Cambridge education. It's all
Speaker 1: about access and participation and her Majesty was a leader
Speaker 1: in this regard. She believed in a very inclusive in community.
Speaker 1: I cannot tell you that when she would come and
Speaker 1: visit us, she would spend as much time with the
Speaker 1: president as she would with the head gardener, with the
Speaker 1: head of our student body. She would go around and
Speaker 1: talk to people in a very personal and engaging fashion,
Speaker 1: and she was an inspiration in terms of inclusion and diversity. Mohammed.
Speaker 1: The last time she visited you was back in as
Speaker 1: recently as can you share with us just a little
Speaker 1: something from that, how special that visit was for you
Speaker 1: in the college, there was incredibly special, John Um, not
Speaker 1: only because we were hosting her Majesty for lunch, but
Speaker 1: we invited our community to come out and the joy
Speaker 1: with which they welcomed her to Queen's and the interaction
Speaker 1: with her Um. There are pictures on our website of
Speaker 1: her meeting with the students, meeting with the start um,
Speaker 1: spending time and caring, and then it was a wonderful
Speaker 1: lunch in which we thanked her for her very strong
Speaker 1: support of our college. You know, she she followed the
Speaker 1: Queen Mother who was our patron as before her UM,
Speaker 1: and it's been a constant for us, just like it
Speaker 1: has been a constant for the whole nation. Mohammed. This
Speaker 1: has been one of the key points that keep coming
Speaker 1: back to, that she was the embodiment of a spirit
Speaker 1: of the United Kingdom that will be hard to replace,
Speaker 1: and that she really created the modern version of a monarchy.
Speaker 1: Can you give us a sense, a more tangible sense
Speaker 1: of why it is, especially for people outside of the
Speaker 1: United Kingdom, that she acted in this role even though
Speaker 1: she is a figurehead right, that she is a political
Speaker 1: by definition, and that she is looking to remain a
Speaker 1: sort of a public relations persona rather than a leader
Speaker 1: like the Parliament. It was Lisa her inspiration. She has
Speaker 1: inspired so many in the United Kingdom and around the world,
Speaker 1: and I would argue she will continue to long inspire
Speaker 1: people around the world. So where did that inspiration come from?
Speaker 1: I think from free things. One her empathy. She she
Speaker 1: was very empathetic, she listened to people. Second, her dedication.
Speaker 1: She said it on day one that she would be
Speaker 1: dedicated to serve the nation and she continued serving the
Speaker 1: nation for over seven decades as the monarch. And third
Speaker 1: was her responsiveness. So when you put these things together,
Speaker 1: it sums up in instruational leadership that overcomes all sorts
Speaker 1: of divisions within society, and that was flexible enough to
Speaker 1: take the United Kingdom through massive changes. If you look at, Wow,
Speaker 1: how different the United Kingdom of today is compared to
Speaker 1: the one of seventy years ago when she became queen,
Speaker 1: and she she was able to navigate all that inspiring
Speaker 1: us inspire a whole nation throughout that whole period, Mohammed.
Speaker 1: Given how much things have changed, as you talk about,
Speaker 1: given Brexit, given the fact that the United Kingdom has
Speaker 1: shrunk in its scope with relation to some of these
Speaker 1: trade partnerships or at least nomenclature, it is the new
Speaker 1: vision going forward? Does it adhere back to that one?
Speaker 1: Or is this truly a marking of a new regime.
Speaker 1: You know, there are many challenges facing the United Kingdom,
Speaker 1: and that's true for the new Prime Minister who recognized
Speaker 1: that on day one. But I think Lisa, right now,
Speaker 1: it's about her majesty, Queen Elizabeth. The second, it's about
Speaker 1: morning her death. It's about honoring her accomplishment and honoring
Speaker 1: her wain Um. There will come the day when we
Speaker 1: will sit down and talk about all the challenges ahead,
Speaker 1: but I think this is a really important moment in
Speaker 1: history because she has played such an important role, not
Speaker 1: just in this country but around the world. Mohammed, thank
Speaker 1: you for marking this moment in history well us. We
Speaker 1: appreciate it and I think we all agree with certainly
Speaker 1: not the day to discuss markets in the economy with you. Mohammed,
Speaker 1: Thank you very much for giving us your time this morning. Mohamed.
Speaker 1: Down are in that of Queen's College, Cambridge. We touched
Speaker 1: on another of the Queen's efforts, which is Chatham House.
Speaker 1: You've heard that name in America less familiar, but in
Speaker 1: London dominant is one of the great think tanks and
Speaker 1: places of perspective for the United Kingdom. Sir Robant Nibla
Speaker 1: joins us right now, Director of Chatham House, and I
Speaker 1: thought on your website the commitment of the Queen, particularly
Speaker 1: Robin to the academics that you did in two thousand
Speaker 1: and fourteen, her leadership to jump start that project give
Speaker 1: us a window into two thousand and fourteen and what
Speaker 1: the Queen did for Chatham House. Tom happy to um,
Speaker 1: I'm now distinguished fellow Chatham House. We have a new
Speaker 1: director as of a month ago Roman Matics, but I
Speaker 1: had the pleasure of it was fine. I've had a
Speaker 1: pleasure of hosting Uh Her Majesty twice in recent years,
Speaker 1: most of the Chata Mouse Prize when she gave it
Speaker 1: to David attenburghen was when we launched the Queen Elizabeth
Speaker 1: Academy for International Affairs. And I think one of the
Speaker 1: big challenges for institutions in London has been able to
Speaker 1: make sure that you're still well connected to young people
Speaker 1: around the world, engaging them in what London has to offer,
Speaker 1: what Britain has to offer as a place of independent thinking,
Speaker 1: which is what Chatham House about is as well. And
Speaker 1: Her Majesty gave her name to the creation of a
Speaker 1: new academy, came met with the first cohort of Academy
Speaker 1: fellows from all over the world UM, and I think
Speaker 1: what we wanted to do by having this UM Academy
Speaker 1: named in her honor was captured. The fact you're not
Speaker 1: gonna have a patron of institution for seventy years very
Speaker 1: often and it was absolutely remarkable, wonderful to be able
Speaker 1: to have to connect it that way, but also to
Speaker 1: be able to track some of the brightest, most driven
Speaker 1: change makers around the world come and spend some time.
Speaker 1: She her example is a draw. It was the most
Speaker 1: important part of written soft power in her example was
Speaker 1: the Commonwealth. There was a Commonwealth of the early fifties
Speaker 1: and the tumult of the sixties and seventies. What does
Speaker 1: Charles the Third's Commonwealth look like? It's going to be
Speaker 1: very difficult, um, for a number of reasons. In a way,
Speaker 1: it was held together by respect for Her Majesty for
Speaker 1: the Queen Um as well as by that common sense
Speaker 1: of heritage of having formed part of the British Empire.
Speaker 1: But being forming part of the British Empire even as
Speaker 1: independent nations is now something that receives a lot more
Speaker 1: scrutiny than it did in the past. And so what
Speaker 1: we're going to find, I think in the coming years
Speaker 1: UM is potentially Charles having to enable the Commonwealth to
Speaker 1: redefine its purpose amongst those nations without the glue of
Speaker 1: Her Majesty the Queen there to hold it together. We've
Speaker 1: already had some moves away from having the Sovereign Her
Speaker 1: Majesty as the head of state from one Commonwealth member
Speaker 1: by betas a year ago, and there's a worry that
Speaker 1: the whole review of the role of empire, slavery and
Speaker 1: so on will start to come back in and put
Speaker 1: the UK in a much more difficult position in the future. Robin,
Speaker 1: we really do mark the end of an era exactly
Speaker 1: as you say, not only a unifying force, but a
Speaker 1: redefinition of globalization, a redefinition of the United Kingdom and
Speaker 1: the broader empire that it used to have. Right, all
Speaker 1: of these redefining aspects of the new moment, What will
Speaker 1: be the new definition of the next ten years? How
Speaker 1: will King Charles the third come out and shape a
Speaker 1: new vision in the world as you see it. Look,
Speaker 1: the challenge that any monarchers here is that they can't
Speaker 1: establish a vision. They can't declare a vision to the
Speaker 1: rest of the nation. In our constitutional monarchy, they really
Speaker 1: are the holders of continuity, but then not the agents
Speaker 1: of political change in politics, so in a way it
Speaker 1: will be up to this trust of future prime ministers
Speaker 1: to establish the vision of the country. What he has
Speaker 1: to communicate is again the linkage to the continuity. Part
Speaker 1: of I'd say Britain's soft power has been the fact
Speaker 1: that it has had such stable politics for so long
Speaker 1: and However, quickly the government's change of the prime ministers change.
Speaker 1: The fact that the head of state has continuity in
Speaker 1: the family is part of its power. So what the
Speaker 1: monarchy does is give space to governments to go through
Speaker 1: profound change without a sense that the whole nation has
Speaker 1: been called into question. So I think in a way
Speaker 1: Prince Charles, who has leant forward quite a bit as
Speaker 1: a Prince of Wales on climate change, on architecture, biodiversity,
Speaker 1: on architecture exactly, is now going to step back and
Speaker 1: have to to become the cipher that the queen was
Speaker 1: for what other people believe the nation is. It's gonna
Speaker 1: be a really delicate change within some real estate investors
Speaker 1: that are happy with this in London. That my in
Speaker 1: my backup, I think they'll be happy for that reason.
Speaker 1: He won't be able to weigh in the way he
Speaker 1: did before important of the New Yorker. I read the
Speaker 1: New Yorker effort here of the last twenty four hours
Speaker 1: and around Mead Rebecca media it was very good about
Speaker 1: this psychological shift that any monarch has to make. Chian
Speaker 1: He's Charles and then he's King. Third, was it Chelsea Barracks?
Speaker 1: Was it Chausy Barracks all those years ago. Ya kataris
Speaker 1: Royal to royal, they were able to have a different
Speaker 1: type of conversation. I think I'm not getting us off
Speaker 1: into trouble. Was your pet projects? I learned the backstory
Speaker 1: when used to live in Chausea. He used to walk
Speaker 1: past there and it was a big, big conversation at
Speaker 1: the time. Do my do my PhD at Oxford? As
Speaker 1: I was writing it, A buildings being built in front
Speaker 1: in mordel In College and done in all of the
Speaker 1: old style of modeling college but being built in nineteen
Speaker 1: was nineteen three or something. And at one point I
Speaker 1: watched the building go up. Suddy saw this person walking
Speaker 1: here us the top with the gaggle of people and
Speaker 1: it was Prince Charles being shown around. And you know,
Speaker 1: I didn't have a mobile in those days, but it
Speaker 1: was the old building in the keeping and I have
Speaker 1: to say it worked beautifully. So we see the king
Speaker 1: doing that. Who knows? So Robin Nibblett, thank you, Thank
Speaker 1: you so much, distinguished fellow at Chatham House. I'm happy
Speaker 1: to say that John gets now. Sevince Cable, the former
Speaker 1: MP and visiting professor at the London School of Economics
Speaker 1: and Political Science, s Vince, fantastic to have you with us,
Speaker 1: Thanks for being with us. Inevitably we'll talk about change
Speaker 1: and what will change with a new monarch on the throne.
Speaker 1: What will change for you, sir well, I was privileged
Speaker 1: as a private councilor of cabinet minister to dealt with
Speaker 1: her Majesty, and you know, and I understand, as I
Speaker 1: have seen out close, the reasons why the country has
Speaker 1: such respect and affection for her um and so it
Speaker 1: is a I mean, this moment is on the one hand,
Speaker 1: very predicted. I mean, we all knew this was going
Speaker 1: to happen, but at the same time momentous. And you
Speaker 1: have a whole generation of people, you know, seventy or under,
Speaker 1: you've lived your whole life in the Elizabethan age. I
Speaker 1: think for a politician, I'm an hour retired politician, I
Speaker 1: think the significance was that although we had, you know,
Speaker 1: a great change, turbulence, um, big secular changes over time,
Speaker 1: you know, the monarchy and the queen was a kind
Speaker 1: of bedrock of continuity and stability throughout that and remains
Speaker 1: one of the sort of underlying strengths of the country
Speaker 1: and it rests upon the fact that it is a
Speaker 1: constitutional monarchy. It doesn't have a political role, and it
Speaker 1: will be very important that the new king, you know,
Speaker 1: is seen by the world in the country as a
Speaker 1: totally non political figure. Surveiance. I think it's so important
Speaker 1: to speak to you you here. I'd love to do a
Speaker 1: two hour conversation with your Now, if you look at
Speaker 1: your party history as a kid, when you were at
Speaker 1: Cambridge and I'm from their Glasgow and such, and then
Speaker 1: you find that you were the chief economist for Royal
Speaker 1: Dutch Shell for a while as well, you have a
Speaker 1: backdrop here of this emergency moment for your United Kingdom.
Speaker 1: How does Charles the third provide support to Prime Minister
Speaker 1: trust Well, I think given the way in which the
Speaker 1: monarchy works, and I think we all wanted to continue
Speaker 1: to work, and I think there are very few Republicans
Speaker 1: in Britain. Um, it is by respecting this boundary between
Speaker 1: politics and the head of state role, and um, I
Speaker 1: mean King Charles. It's an enormously difficult job. I mean
Speaker 1: he's been auditioning for this for fifty years. He could
Speaker 1: have stepped into the monarch role at any time and
Speaker 1: he it's it's required extraordinary self discipline from him um
Speaker 1: and has been a very very difficult role. And he's now,
Speaker 1: as you say, seventy three and he's inheriting this responsibility.
Speaker 1: I think one of the things he will be very
Speaker 1: mindful of bearing in mind, you know, the enormous respect
Speaker 1: for his mother, who was scrupulously non political through the
Speaker 1: whole of her reign. I mean, he has at times,
Speaker 1: you know, straight into the political world, most recently over Rwanda,
Speaker 1: and he will, I think, in order to maintain the
Speaker 1: solidity of the monarchy, be very very careful not to
Speaker 1: go into the um. I have no idea. I mean
Speaker 1: I I met him a few times, and I like
Speaker 1: what he did, and he was genuinely socially concerned individual.
Speaker 1: I absolutely no idea about his political thing. I was
Speaker 1: trying to cause some trouble. I think it's such a
Speaker 1: delicate moment because supported he didn't tell me, because we've
Speaker 1: been talking all morning about Dove telling uh the death
Speaker 1: of a monarch who really represented the United Kingdom for
Speaker 1: so many years and grew up through steamboats. Until there's this,
Speaker 1: you know, a smartphone, and we are here on the
Speaker 1: preciface of a massive fiscal package without the unity required
Speaker 1: to give confidence about how it will be executed, about
Speaker 1: how effectively it will be managed with respect to the
Speaker 1: fiscal profile of this nation. How are you watching this
Speaker 1: as a former member of Parliament, the deliberations over the
Speaker 1: energy help that liszt Trusts has proposed to households. I'm
Speaker 1: surprised that the linkage that's been made with this big
Speaker 1: economic moment. I mean they are I think they are
Speaker 1: wholly separate and I I mean certainly the new king
Speaker 1: will want to have absolutely nothing to do with the
Speaker 1: controversies around the fiscal package, and I shouldn't. I mean
Speaker 1: his role list to revive I mean the phrase that
Speaker 1: you've been using common continuity and stability amongst political and
Speaker 1: economic upheaval. That's his job. It's not to take up
Speaker 1: a position on these economic decisions. I mean that will
Speaker 1: happen anyway. The big change and the Treasury, of course,
Speaker 1: has been the loss of the sacking of the Permanent Secretary.
Speaker 1: I mean that is the big event from the economic
Speaker 1: policy point of view. But the planning of the details
Speaker 1: of the fiscal package will proceed, and although there may
Speaker 1: be a slight hiatus in the announcements. Nothing is going
Speaker 1: to happen to disturb the development of the policy. Well,
Speaker 1: things will pause events which are soon from the Bank
Speaker 1: of England. The NPC announcement has been rescheduled to twenty September.
Speaker 1: To the September so I understand that's a one week
Speaker 1: delay for the Bank of Englan at least. I think
Speaker 1: that was the first thing you asked this morning. Go
Speaker 1: for me when we landed, are we still going to
Speaker 1: get a bank having the decision next week? And I said,
Speaker 1: I don't know, we'll see, And here we are. It
Speaker 1: is going to be delayed by one week. Yeah, and
Speaker 1: whether this actually gives them a little bit more certainty
Speaker 1: might be interesting to see as well, whether we get
Speaker 1: more fiscal proposals were concretely from both the European Union
Speaker 1: as well as from list Trust's team over in Parliament.
Speaker 1: Thomas Sevince set things will continue, but for now they pause,
Speaker 1: and we're saying that with the Bank of Englands wound
Speaker 1: and we'll see that with the whole host of events
Speaker 1: to a scheduled to take place over the next ten dice.
Speaker 1: As I mentioned, my template for this in a very
Speaker 1: different moment was nie I had the clearest memories of
Speaker 1: how America paused for the funeral of President Kennedy. Why
Speaker 1: is as different as we saw with the Premier League
Speaker 1: twenty minutes ago. Now with the Bank of England, Who's
Speaker 1: gonna who's gonna push against those institutions? Vince, we say
Speaker 1: thank you, thank you very much. We appreciate your time set.
Speaker 1: She has steeped in theory. Marilyn Watson joins us out
Speaker 1: ahead of global fundamental fixed income strategy at black Rock Maryland.
Speaker 1: Not to make the punt of the moment, but which
Speaker 1: act do I hide under right now? I mean within
Speaker 1: a bond portfolio is a simple solution to shorten you duration.
Speaker 1: So I think as I say, there are a lot
Speaker 1: of moving parts at the moment, and particularly and say
Speaker 1: we have the ECB, but the said coming up in
Speaker 1: a couple of times. Obviously they're backfinant of duty slightly
Speaker 1: out their data as well. But we are as seeing
Speaker 1: a lot of volatility in the markets at the moment.
Speaker 1: And I think you've hit the nail on the head
Speaker 1: there in terms of where do you find some yields,
Speaker 1: Where do you find maybe a little bit of safety
Speaker 1: in the market. I certainly think now there's shifts that
Speaker 1: we've seen in terms of yield, in terms of spread,
Speaker 1: we do see a lot more attractive area in the market,
Speaker 1: whether it's in US duration UM you know, we've seen
Speaker 1: obviously rates there to get the front end um, you know,
Speaker 1: shift significantly, and I do think if you're looking sort
Speaker 1: of at the front end in terms of quality perry,
Speaker 1: then now I do think there are some very attractive
Speaker 1: areas were to invest in fix income. But we are
Speaker 1: expecting to see this continued volatility going forward over the
Speaker 1: next few months, as we have inflation still incredibly in
Speaker 1: the US, in the U Zone an elsewhere, and a
Speaker 1: lot of decisions to be made on a non linear
Speaker 1: basis the path from under two percent and a ten
Speaker 1: year yield in March and up we go. If we
Speaker 1: do break out where many expect to go three and
Speaker 1: a half three point six, five, three point nine ten
Speaker 1: year yield, how does that change your world? So it
Speaker 1: doesn't change it that significantly in the fact that I
Speaker 1: think we, among with many other investors, are still relatively
Speaker 1: cautious around the rate path going paws in terms of
Speaker 1: where the peak might be in terms of rates we
Speaker 1: expected to peak the term or right to be maybe
Speaker 1: around just under four percent. But I think looking at
Speaker 1: the path now, if you if you do see a
Speaker 1: little bit of a spread there in terms of where
Speaker 1: they not, it might be why the top of the
Speaker 1: you might be I think, you know, we're expecting that,
Speaker 1: we're expecting volatility. I think a lot of the investors
Speaker 1: are respecting the same as well. We still still still
Speaker 1: have a lot of money invested um, you know, in
Speaker 1: very safe assets. We have money so on the sidelines
Speaker 1: in terms of cash, we do expect to see a
Speaker 1: lot more supply going forward. We see expects a lot
Speaker 1: of opportunities actually, So I think, you know, looking at
Speaker 1: the market at the moment, as we do have quoditive
Speaker 1: tightening going on, as the you know, the third is
Speaker 1: reducing its balance sheet, as rates continue to rise in
Speaker 1: the US and elsewhere, we can actually use this volatility
Speaker 1: to take advantage of evaluations where we see them. So
Speaker 1: let's talk about some of the guides that you use
Speaker 1: Maryland when you're looking for opportunities at a time when
Speaker 1: we have inflation that may just may come down to
Speaker 1: eight point one percent in the euroregion or that's the
Speaker 1: expectation on average, and then go down to two point
Speaker 1: eight percent several years from now. This is the baseline
Speaker 1: and some would say even optimistic projection from the ECB.
Speaker 1: We've got the same kind of talk from the Federal Reserve.
Speaker 1: How do you factor inflation into your forecast? Is that
Speaker 1: the reason why your underweight duration? Or is the fiscal
Speaker 1: response that really has your attention? Um? So, it's both,
Speaker 1: and I think the fiscal packages that you mentioned in
Speaker 1: the fiscal response are going to play into inflation going
Speaker 1: forward as well, and potentially they might make the job
Speaker 1: of central banks that a little bit harder if we
Speaker 1: do have we have these very sizeable packages that we're
Speaker 1: seeing coming through from the UK, the US, and you
Speaker 1: know in the Eurozone as well. Inflation does play obviously
Speaker 1: a very key role in terms of um you know,
Speaker 1: central bank munchro policy, but also obviously the yields of
Speaker 1: bonds going forward, and it is something that we do
Speaker 1: pay very keen attention to here in the US. Obviously,
Speaker 1: next week we have some very significant data coming out
Speaker 1: in terms of inflation cp I, p p I, and
Speaker 1: the Federal obviously be paying very close attention to those
Speaker 1: as it then goes into the following week. It's Muntro
Speaker 1: policy stance announcement to the FETAM announced that they are
Speaker 1: able to continue to be very aggressive in terms of
Speaker 1: trying to get inflation back down towards the two percent target.
Speaker 1: And so inflation does play a very few role. And
Speaker 1: I think at the moment in terms of central banks
Speaker 1: that are also very concerned about credibility and the fact
Speaker 1: that you know investors, they don't want investors to be
Speaker 1: anchored in high inflation expectations. It's very important for them,
Speaker 1: for investors and for the market to see inflation coming
Speaker 1: down and to view the credibility of central banks in
Speaker 1: bringing that inflation right down um. And I think that
Speaker 1: is absolutely critical Maryland. When you talk about the idea
Speaker 1: of credibility, we talk about the idea that the ECB
Speaker 1: is not projecting a recession even as they get inflation
Speaker 1: down at a time when even the CEO of Deutsche
Speaker 1: Bank is saying that a recession is all but inevitable
Speaker 1: in Europe's biggest economy. How what does that do for
Speaker 1: their credibility that we are not hearing the recession calls
Speaker 1: from the central bank to a Wall street, to a
Speaker 1: city in and in to the rest of Europe. That
Speaker 1: seeing a very different picture. Yes, so, I think in
Speaker 1: terms of the credibility the very aggressive hawk stance that
Speaker 1: they took yesterday in terms of raising rates by centifized
Speaker 1: basis points by announcing that they're going to continue to
Speaker 1: raise rates on a pretty aggressive path. They mentioned their
Speaker 1: reference maybe two to five meetings UM and the reference
Speaker 1: that they could go above the terminal raid. So they were,
Speaker 1: in terms of the rhetoric and their decisions that they
Speaker 1: made yesterday, relatively hawkish. However, I think it took a
Speaker 1: lot of the mokel by surprise that the growth forecasts,
Speaker 1: particularly for this year were much higher than think a
Speaker 1: lot of people expected, and next year still very positive number.
Speaker 1: I'll buy the much lower. In terms of GDP, I
Speaker 1: think there's just so much uncertainty out there. I do
Speaker 1: think there's a lag in terms of some of the
Speaker 1: data coming through for the us n G d P numbers,
Speaker 1: but the huge amount of uncertainty that we have yet
Speaker 1: to see as we go into winter in terms of
Speaker 1: the impact of energy prices UM that will have you know,
Speaker 1: potentially a noted impact on GDP further and more that
Speaker 1: has been prison at the moment. I think that's the difficulty.
Speaker 1: So if you have a fan chart, I think you
Speaker 1: see would be very very wide in terms of what
Speaker 1: the ECB were projecting. But that middle number, I think, yeah,
Speaker 1: aiming potentially, aiming maybe for a positive for a positive number,
Speaker 1: but I think the risk of uncertainty is very very
Speaker 1: high at the moment. Malie Watson of Black Rock Malin,
Speaker 1: thank you, thank you. This is the Bloomberg Surveillance Podcast.
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