1 00:00:02,240 --> 00:00:05,640 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:05,680 --> 00:00:08,760 Speaker 1: dot com, the radio, plus mobile lact and on your radio. 3 00:00:09,039 --> 00:00:13,360 Speaker 1: This is a Bloomberg Business flag from Bloomberg World Headquarters. 4 00:00:13,440 --> 00:00:16,560 Speaker 1: I'm Charlie Pellett. The SMP five hundred index trading at 5 00:00:16,560 --> 00:00:19,520 Speaker 1: a record right now. It is up eleven points to 6 00:00:20,320 --> 00:00:23,239 Speaker 1: forty a gain there are five tenths of one percent down. 7 00:00:23,239 --> 00:00:27,040 Speaker 1: Industrials up one hundred eleven points to eighteen thousand, two 8 00:00:27,160 --> 00:00:30,160 Speaker 1: hundred fifty seven, a gain of six tenths of one percent. 9 00:00:30,560 --> 00:00:33,560 Speaker 1: Nan Stack up thirty nine points to forty ninety six, 10 00:00:33,560 --> 00:00:36,200 Speaker 1: a gain of eight tenths of one percent. The tenure 11 00:00:36,200 --> 00:00:38,559 Speaker 1: down twenty one thirty seconds. Looking at a yield there 12 00:00:38,600 --> 00:00:41,560 Speaker 1: of one point four two percent, Gold down a dollar 13 00:00:41,640 --> 00:00:44,159 Speaker 1: eighty be ounce the thirteen fifty six, a drop there 14 00:00:44,200 --> 00:00:47,920 Speaker 1: of point one percent, and crude oil back below forty 15 00:00:47,920 --> 00:00:50,360 Speaker 1: five dollars a barrel down eighty cents right now. That 16 00:00:50,479 --> 00:00:53,240 Speaker 1: is a drop of one point eight percent. West Texas 17 00:00:53,320 --> 00:00:56,960 Speaker 1: Intermediate crude at forty four dollars and sixty cents. I'm 18 00:00:57,080 --> 00:01:03,240 Speaker 1: Charlie Pellett, and that's a Bloomberg Business flash. You're listening 19 00:01:03,240 --> 00:01:06,840 Speaker 1: to taking stock with Pim Box and Kathleen Hayes on 20 00:01:06,920 --> 00:01:12,080 Speaker 1: Bloomberg Radio. A new Prime minister by Wednesday evening. That's 21 00:01:12,120 --> 00:01:15,720 Speaker 1: what David Cameron announced in a brief statement outside his 22 00:01:15,840 --> 00:01:19,800 Speaker 1: official residence in central London. She's strong, she's competent. She's 23 00:01:19,840 --> 00:01:22,400 Speaker 1: more than able to provide the leadership our country will 24 00:01:22,440 --> 00:01:25,400 Speaker 1: need in the years ahead as he gets ready to 25 00:01:25,440 --> 00:01:29,119 Speaker 1: step aside, a step he announced as soon as the 26 00:01:29,319 --> 00:01:33,399 Speaker 1: vote to leave the European Union from the UK was 27 00:01:33,480 --> 00:01:37,240 Speaker 1: a done deal. And I'm talking about Home Secretary Teresa 28 00:01:37,520 --> 00:01:40,480 Speaker 1: may So how is this going to play out? Markets 29 00:01:40,520 --> 00:01:43,240 Speaker 1: seem to be happy, the pound is rising. Let's ask 30 00:01:43,319 --> 00:01:46,960 Speaker 1: Rob Hutton, UK government and politics reporter for Bloomberg News 31 00:01:47,040 --> 00:01:49,880 Speaker 1: in London. So Rob, but tell us first of all 32 00:01:49,920 --> 00:01:55,960 Speaker 1: about Theresa may Well. She's a vicker's daughter, clergyman's daughter. 33 00:01:56,160 --> 00:02:00,400 Speaker 1: She's years old. She's been Home Secretary for six years. 34 00:02:01,000 --> 00:02:03,520 Speaker 1: I don't think there's a direct equivalent to that job 35 00:02:03,520 --> 00:02:10,239 Speaker 1: in America. But she's responsible for crime, policing, the security services, 36 00:02:10,560 --> 00:02:13,960 Speaker 1: lots of stuff. That has traditionally meant that Home sectaries 37 00:02:14,000 --> 00:02:17,560 Speaker 1: have to resign. And not only has she has, she 38 00:02:17,680 --> 00:02:21,160 Speaker 1: not had to resign. She's she's flourished in that role. 39 00:02:21,480 --> 00:02:25,880 Speaker 1: She's her pitch for the leadership was she's experienced, She's 40 00:02:25,919 --> 00:02:29,840 Speaker 1: a steady pair of hands at a dangerous time. So 41 00:02:29,840 --> 00:02:33,640 Speaker 1: so basically her message is steady hand on the tiller. Alright, 42 00:02:33,720 --> 00:02:35,600 Speaker 1: steady hands on the tiller. What are going to be 43 00:02:35,680 --> 00:02:38,960 Speaker 1: some of the most pressing issues for her when she 44 00:02:39,040 --> 00:02:42,959 Speaker 1: assumes the premiership, Well, it's a horrible job. It's a 45 00:02:43,000 --> 00:02:46,280 Speaker 1: horrible job being Prime minister, and it's a particularly horrible 46 00:02:46,320 --> 00:02:49,200 Speaker 1: job at the moment. The next Prime Minister is going 47 00:02:49,240 --> 00:02:52,000 Speaker 1: to have to negotiate Britain's exit from the European Union, 48 00:02:52,320 --> 00:02:56,200 Speaker 1: which means first of all, dealing with dealing with European 49 00:02:56,240 --> 00:02:59,000 Speaker 1: allies and trying to persuade them that they want to 50 00:02:59,000 --> 00:03:02,200 Speaker 1: give Britain all the things for the Britain wants, which 51 00:03:02,360 --> 00:03:06,160 Speaker 1: they don't. And then it means satisfying all the different 52 00:03:06,160 --> 00:03:08,840 Speaker 1: demands of different people who wanted to leave the European Union, 53 00:03:08,880 --> 00:03:11,840 Speaker 1: who all had different ideas about what it meant. And 54 00:03:11,880 --> 00:03:15,680 Speaker 1: then it means finally satisfying all of her parliamentary backbenches, 55 00:03:15,720 --> 00:03:19,119 Speaker 1: some of whom are quite obsessed with this subject. And broadly, 56 00:03:19,560 --> 00:03:22,800 Speaker 1: as someone famously put it the thing about Tory euroskeptics 57 00:03:22,800 --> 00:03:27,240 Speaker 1: as they won't take yes for an answer. So what 58 00:03:27,280 --> 00:03:31,000 Speaker 1: else can you tell us about her policy positions? What 59 00:03:31,040 --> 00:03:33,760 Speaker 1: do we know about her? I mean, to what extent 60 00:03:33,800 --> 00:03:36,200 Speaker 1: would you say, will Catheine just look at the parties 61 00:03:36,200 --> 00:03:38,560 Speaker 1: see what they stand for? To what extent do you 62 00:03:38,600 --> 00:03:40,280 Speaker 1: have to really know what she has done and so 63 00:03:40,400 --> 00:03:43,200 Speaker 1: in the past and what it means for the future. Well, 64 00:03:43,240 --> 00:03:46,800 Speaker 1: that's a really good question. I mean, ideally, I was 65 00:03:46,800 --> 00:03:49,840 Speaker 1: saying someone this morning before all of this happened, that 66 00:03:49,840 --> 00:03:52,920 Speaker 1: that every candidate wants to get through the leadership election 67 00:03:52,920 --> 00:03:56,440 Speaker 1: without promising anything. And and of course, because it's ended 68 00:03:56,480 --> 00:04:00,400 Speaker 1: so abruptly this morning her rival dropped out. She's eave that. 69 00:04:00,800 --> 00:04:03,000 Speaker 1: So there's all sorts of areas where we don't really 70 00:04:03,000 --> 00:04:05,200 Speaker 1: know very much about what she thinks. We know that 71 00:04:05,320 --> 00:04:08,600 Speaker 1: she campaigned against Brexit, but to be honest, not very 72 00:04:08,640 --> 00:04:11,280 Speaker 1: hard and to be honest, can probably live with it. 73 00:04:12,800 --> 00:04:15,880 Speaker 1: We know that on law and order she's been quite firm. 74 00:04:16,160 --> 00:04:20,480 Speaker 1: She she had issues with human rights lawyers about various things. 75 00:04:20,520 --> 00:04:22,520 Speaker 1: But she's also in lots of ways she's a she's 76 00:04:22,520 --> 00:04:26,400 Speaker 1: a modernizing conservative dreamy has done two really politically brave 77 00:04:26,480 --> 00:04:28,400 Speaker 1: things in her life. The first was in two thousand 78 00:04:28,440 --> 00:04:30,800 Speaker 1: and two when she stood up and told the Conservative 79 00:04:30,839 --> 00:04:33,760 Speaker 1: Party that people saw them as the nasty Party. Now 80 00:04:33,800 --> 00:04:36,719 Speaker 1: that was true, but they didn't like it, and a 81 00:04:36,760 --> 00:04:39,080 Speaker 1: lot of them have never really forgiven her for for 82 00:04:39,200 --> 00:04:42,280 Speaker 1: that harsh truth. And the second, the second really brave 83 00:04:42,360 --> 00:04:44,800 Speaker 1: thing that she did, was in she stood up in 84 00:04:44,800 --> 00:04:47,400 Speaker 1: front of the Police Federation, the Police officers trade union, 85 00:04:47,720 --> 00:04:49,880 Speaker 1: and told them that they had to change. She said, 86 00:04:49,920 --> 00:04:52,039 Speaker 1: it's not just a few bad apples, there is a 87 00:04:52,160 --> 00:04:55,520 Speaker 1: there is a cultural problem with Britain's police and they 88 00:04:55,600 --> 00:04:58,640 Speaker 1: didn't like that at all. So she is capable. She 89 00:04:58,720 --> 00:05:01,520 Speaker 1: has the inner steel and she wants it to deliver 90 00:05:01,640 --> 00:05:05,560 Speaker 1: really hard truths to people. Well, delivering hard truths and 91 00:05:05,640 --> 00:05:09,800 Speaker 1: delivering on campaign promises might be two different things. I'm 92 00:05:09,800 --> 00:05:13,200 Speaker 1: wondering if she has the temperament and the leadership skills 93 00:05:13,520 --> 00:05:16,640 Speaker 1: to turn the Brexit vote into something positive for people 94 00:05:16,680 --> 00:05:20,599 Speaker 1: in Britain. That's I mean, that is that is a 95 00:05:20,680 --> 00:05:25,359 Speaker 1: hundred million dollar question. Um. The problem that we have 96 00:05:25,600 --> 00:05:29,120 Speaker 1: with Brexit essentially is that, and it's articulated quite well 97 00:05:29,120 --> 00:05:31,159 Speaker 1: in her campaign. She says she has two priorities in 98 00:05:31,200 --> 00:05:34,640 Speaker 1: the negotiations. The first is to maintain Britain's access to 99 00:05:34,680 --> 00:05:38,359 Speaker 1: the Single Market. That's really important for Britain's economy. We 100 00:05:38,400 --> 00:05:40,560 Speaker 1: sell it awful lot of stuff in Europe. And the 101 00:05:40,640 --> 00:05:46,040 Speaker 1: second is to end free movement of European citizens to 102 00:05:46,200 --> 00:05:49,120 Speaker 1: the UK. Now, if you ask anyone, any European official, 103 00:05:49,200 --> 00:05:51,280 Speaker 1: they say, those two things go together. You can't have 104 00:05:51,320 --> 00:05:55,240 Speaker 1: one without the other. So how will she that there 105 00:05:55,320 --> 00:05:57,760 Speaker 1: is there is an unstoppable force and an immovable object. 106 00:05:57,760 --> 00:06:00,520 Speaker 1: And where will she compromise? Probably she can't compromise on 107 00:06:00,560 --> 00:06:03,919 Speaker 1: free movement, but if she if she doesn't, then she 108 00:06:03,960 --> 00:06:05,600 Speaker 1: will have to go back. And here here is her 109 00:06:05,640 --> 00:06:10,240 Speaker 1: slight problem. She is hamstrung by the campaign commitments of 110 00:06:10,320 --> 00:06:12,680 Speaker 1: a group of people that didn't include her. The lead 111 00:06:12,760 --> 00:06:15,880 Speaker 1: campaign said we can have both of those things. We 112 00:06:15,920 --> 00:06:18,120 Speaker 1: can absolutely have both of those things, and various people 113 00:06:18,120 --> 00:06:20,120 Speaker 1: said I don't think we can, but lead campaign said no, no, 114 00:06:20,200 --> 00:06:22,360 Speaker 1: we can. You know, if it turns out they're wrong, 115 00:06:23,040 --> 00:06:24,720 Speaker 1: it may be that because she wasn't one of them, 116 00:06:24,760 --> 00:06:26,840 Speaker 1: she has an opportunities. She can say, look, I told 117 00:06:26,880 --> 00:06:29,040 Speaker 1: you those people weren't telling you the truth. You know, 118 00:06:29,200 --> 00:06:32,440 Speaker 1: and here we are. But the problem is that a 119 00:06:32,440 --> 00:06:34,640 Speaker 1: lot of the people on her own side will say, ah, well, 120 00:06:34,680 --> 00:06:37,360 Speaker 1: you didn't try hard enough. If only you just tried 121 00:06:37,400 --> 00:06:39,000 Speaker 1: a bit harder, pushed a bit harder, being a bit 122 00:06:39,000 --> 00:06:42,000 Speaker 1: more optimistic, you could have got the things that we 123 00:06:42,040 --> 00:06:45,400 Speaker 1: said that you could get. So there is both an 124 00:06:45,400 --> 00:06:50,560 Speaker 1: opportunity and the problem for her. Well, in your story, Rob, 125 00:06:50,920 --> 00:06:55,560 Speaker 1: you highlight the fact that in her speech may set 126 00:06:55,560 --> 00:06:58,440 Speaker 1: out a pitch for leadership that moved to occupy the 127 00:06:58,520 --> 00:07:02,200 Speaker 1: center ground, agnizing that many voters feel insecure and left 128 00:07:02,200 --> 00:07:06,000 Speaker 1: behind by globalization, promising crackdowns on high corporate pay in 129 00:07:06,080 --> 00:07:11,080 Speaker 1: tax avoidance. Interesting yes, no so so so to read them, 130 00:07:11,120 --> 00:07:12,800 Speaker 1: I sees an opportunity. The other thing is going on 131 00:07:12,840 --> 00:07:15,200 Speaker 1: in British politics is the opposition Labor Party is in 132 00:07:15,240 --> 00:07:18,040 Speaker 1: an impose in all of its own They had they 133 00:07:18,080 --> 00:07:20,440 Speaker 1: had it was a characteristic of the Labor Party that 134 00:07:20,560 --> 00:07:23,880 Speaker 1: they had. Their big moment was a challenge to their 135 00:07:23,960 --> 00:07:27,120 Speaker 1: leader today and it was overshadowed by the Tory leadership. 136 00:07:27,120 --> 00:07:29,120 Speaker 1: They actually have people walking out of the Labor press 137 00:07:29,160 --> 00:07:31,760 Speaker 1: conference in order to go and cover the Tory one. 138 00:07:32,000 --> 00:07:34,320 Speaker 1: So the Tory, the Labor Party just doesn't nowhere in 139 00:07:34,360 --> 00:07:37,080 Speaker 1: British politics at the moment, and for the right Tory 140 00:07:37,200 --> 00:07:40,400 Speaker 1: leader there is a huge opportunity not just to be 141 00:07:40,560 --> 00:07:42,440 Speaker 1: the party of the right, but to be the party 142 00:07:42,440 --> 00:07:45,680 Speaker 1: of everyone. So and and to read them was very 143 00:07:45,720 --> 00:07:49,360 Speaker 1: firmly making that pitch even before she won unopposed, saying 144 00:07:49,560 --> 00:07:51,880 Speaker 1: saying that the Tory Party has to has to speak 145 00:07:51,920 --> 00:07:54,480 Speaker 1: for people who who are struggling, people who are not 146 00:07:54,520 --> 00:07:57,880 Speaker 1: as well off as they were ten years ago, people 147 00:07:57,880 --> 00:07:59,960 Speaker 1: who are worried about their jobsityeople are worried only new 148 00:08:00,040 --> 00:08:01,960 Speaker 1: you know, there's a lot of people who feel that way. 149 00:08:02,120 --> 00:08:04,560 Speaker 1: There's a lot of people who for whom the economy 150 00:08:04,600 --> 00:08:06,400 Speaker 1: hasn't been brilliant. There's a lot of people who look 151 00:08:06,440 --> 00:08:09,320 Speaker 1: at high pay and say, well, these guys get paid 152 00:08:09,320 --> 00:08:12,120 Speaker 1: even when they fail, and I don't even get paid 153 00:08:12,160 --> 00:08:16,120 Speaker 1: when I succeed. What's going on? So she she wants 154 00:08:16,160 --> 00:08:19,160 Speaker 1: to pitch for all of those voters. Now again, the 155 00:08:19,240 --> 00:08:21,080 Speaker 1: problem is that a lot of a lot of the 156 00:08:21,080 --> 00:08:24,080 Speaker 1: things that people want maybe hard to achieve, but but 157 00:08:24,160 --> 00:08:29,040 Speaker 1: that's her ambition. Are there specific industries that you foresee 158 00:08:29,160 --> 00:08:32,920 Speaker 1: doing better with Britain outside of Europe? For example, in 159 00:08:32,920 --> 00:08:38,800 Speaker 1: the agriculture industry. I think industries that the main focuses 160 00:08:38,800 --> 00:08:43,280 Speaker 1: on industries that will do worse. Um industry, Industries that 161 00:08:43,360 --> 00:08:47,080 Speaker 1: don't directly trade with the EU will be better off. 162 00:08:47,120 --> 00:08:49,480 Speaker 1: There's an interesting question as to what happens to Britain's 163 00:08:49,480 --> 00:08:52,079 Speaker 1: farmers at the moment. They get an awful lot of 164 00:08:52,080 --> 00:08:54,559 Speaker 1: subsidies from the EU. Now again, they were promised that 165 00:08:54,600 --> 00:08:56,800 Speaker 1: all of those will stay if we leave, But the 166 00:08:56,840 --> 00:09:00,360 Speaker 1: Treasury has always eyed those subsidies and said, is really 167 00:09:00,360 --> 00:09:03,599 Speaker 1: should we be paying farmers to not farm terribly efficiently? 168 00:09:04,040 --> 00:09:06,040 Speaker 1: So if I were a farmer, I don't know how 169 00:09:06,080 --> 00:09:08,719 Speaker 1: confident I would be. I know the sugar industry is 170 00:09:09,160 --> 00:09:13,360 Speaker 1: quite pleased that we're leaving. There are certain there are 171 00:09:13,400 --> 00:09:16,240 Speaker 1: certain niche products people who people who principally deal with 172 00:09:16,240 --> 00:09:20,640 Speaker 1: America fishing. The fishing industry is hoping that Britain leaving 173 00:09:20,640 --> 00:09:24,240 Speaker 1: means Britain can reclaim it's it's fishing territory. But again, 174 00:09:24,240 --> 00:09:26,080 Speaker 1: it may be too late for that. The stocks may 175 00:09:26,120 --> 00:09:30,560 Speaker 1: already be depleted. This may be a bit too specific 176 00:09:30,760 --> 00:09:33,720 Speaker 1: for Theresa and me to be for us to be 177 00:09:33,760 --> 00:09:38,000 Speaker 1: asking about now, But you know, um uh, the the 178 00:09:38,280 --> 00:09:43,600 Speaker 1: pro breggsit side was saying that Mark Carney, who's the 179 00:09:43,600 --> 00:09:46,160 Speaker 1: head of the Bank of England, should step down, that 180 00:09:46,240 --> 00:09:49,760 Speaker 1: he was, you know, politicizing the vote, being far too 181 00:09:49,840 --> 00:09:54,400 Speaker 1: draconian about how the economy they were, weren't they. Do 182 00:09:54,440 --> 00:09:57,520 Speaker 1: you think that they backed away from that a bit. 183 00:09:57,720 --> 00:09:59,520 Speaker 1: They backed away from that a bit in the last 184 00:09:59,520 --> 00:10:02,360 Speaker 1: couple of week I think when when bricks It happened 185 00:10:03,080 --> 00:10:06,960 Speaker 1: and the pound plunged and the stock market plunged, there 186 00:10:07,320 --> 00:10:10,120 Speaker 1: come back up a bit since there was a there 187 00:10:10,200 --> 00:10:14,120 Speaker 1: was a realization among the Brexiteers that actually, possibly what 188 00:10:14,200 --> 00:10:16,640 Speaker 1: you don't want immediately after you win your vote is 189 00:10:16,679 --> 00:10:19,760 Speaker 1: a sense of total panic and chaos. So at that 190 00:10:19,920 --> 00:10:23,160 Speaker 1: point they backed away. And as there was a period 191 00:10:23,160 --> 00:10:25,040 Speaker 1: where Mark Carney appeared to be the only government that 192 00:10:25,040 --> 00:10:28,680 Speaker 1: Britain had, um, I can't see the reason May getting 193 00:10:28,720 --> 00:10:31,280 Speaker 1: rid of him. At her entire pitch for the leadership 194 00:10:31,440 --> 00:10:36,040 Speaker 1: was everybody calmed down, nothing dramatic is going to happen. 195 00:10:36,080 --> 00:10:38,640 Speaker 1: I'm going to be in charge and nothing's going to happen. 196 00:10:38,760 --> 00:10:42,559 Speaker 1: So I can't see her doing something like that. Whether 197 00:10:42,600 --> 00:10:44,920 Speaker 1: Mark Candy will want to stay, of course, you know 198 00:10:44,960 --> 00:10:46,880 Speaker 1: he's a Canadian he's got a passport, he can leave. 199 00:10:47,600 --> 00:10:51,800 Speaker 1: UM is a different question, but I can't see her 200 00:10:52,040 --> 00:10:54,800 Speaker 1: throwing him out. Thank you very much for spending time 201 00:10:54,800 --> 00:10:57,920 Speaker 1: with us and illuminating this issue. Rob Hutton, the UK 202 00:10:58,320 --> 00:11:02,640 Speaker 1: Government and politics reporter War Bloomberg. The pound sterling trades 203 00:11:02,800 --> 00:11:07,040 Speaker 1: right now at one dollar and thirty cents. You're listening 204 00:11:07,080 --> 00:11:10,160 Speaker 1: to taking Stock. I'm Pim Fox, my co host Kathleen Hayes, 205 00:11:10,559 --> 00:11:12,040 Speaker 1: and this is Bloomberg.