WEBVTT - "Just Don't Say Anything Stupid": Labour's Winning Strategy? 0:00:00.120 --> 0:00:02.160 Welcome back to London, Francine. 0:00:01.800 --> 0:00:02.640 Dave, I missed you. 0:00:02.720 --> 0:00:03.280 Where have you been. 0:00:03.480 --> 0:00:04.960 I've been in New York. So I went there for 0:00:04.960 --> 0:00:08.000 a couple of days of hunger. 0:00:08.800 --> 0:00:10.920 All of the world leaders right, yes, sending at. 0:00:10.800 --> 0:00:13.800 The UN UN General Assembly. It's if you're in New 0:00:13.880 --> 0:00:17.159 Yorker you hate it because there was traffic gridlock. But 0:00:17.239 --> 0:00:22.880 if you're thrilling, everyone's there, did you see? So there 0:00:22.880 --> 0:00:25.000 were a couple of world leaders. Someone who we did 0:00:25.079 --> 0:00:27.720 not see was Rush Souning because he didn't go. 0:00:28.360 --> 0:00:30.360 Didn't go. So Zelenski was there. 0:00:31.800 --> 0:00:33.960 Biden did a pretty impassionate speech, and then we had 0:00:34.000 --> 0:00:36.839 our own Bloomberg event where Janet Yellen really put the 0:00:36.840 --> 0:00:39.720 focus on at zero and what the US will do 0:00:39.800 --> 0:00:40.960 in the couple of years ahead. 0:00:41.080 --> 0:00:43.159 Actually a year ago, I was over there in the 0:00:43.200 --> 0:00:47.360 States watching with goggle eyes as the UK markets went 0:00:47.400 --> 0:00:50.040 into turmoil after the Liz trust Many budget. I can't 0:00:50.040 --> 0:00:51.040 believe that was now a year ago. 0:00:51.120 --> 0:00:53.280 I remember those days of panic. It was chaos and 0:00:53.320 --> 0:00:55.120 the market's just going completely. 0:00:55.520 --> 0:00:57.120 Bank of England had to intervene. I mean it was 0:00:57.160 --> 0:01:00.000 like the UK economy was about to completely collapse. 0:01:01.640 --> 0:01:03.840 I'm from sin Laqua and I'm David Merritt. 0:01:03.920 --> 0:01:06.840 Welcome to In the City, Bloomberg's podcast connecting you to 0:01:06.920 --> 0:01:08.959 the conversations at the heart of the City of London. 0:01:09.200 --> 0:01:12.399 So, this week, on that anniversary of the panic, the 0:01:12.480 --> 0:01:15.720 termold in the UK economy. How lasting is the impact 0:01:16.080 --> 0:01:19.319 from that infamous mini budget that came out this time 0:01:19.400 --> 0:01:19.880 last year. 0:01:19.959 --> 0:01:22.119 So the votes are in and the main message from 0:01:22.120 --> 0:01:25.520 this Bloomberg survey out this week confidence and UK assets 0:01:25.880 --> 0:01:29.720 have not fully recovered from Truss's forty nine day rule. 0:01:30.120 --> 0:01:33.319 And as a general election looms on the horizon, what 0:01:33.360 --> 0:01:35.600 does it mean for labor and what is the city 0:01:35.640 --> 0:01:41.919 thing the prospects of a labor administration. So to help 0:01:42.080 --> 0:01:44.760 us dive into all of these questions, we've invited to 0:01:44.800 --> 0:01:48.520 the London Studio senior economics reporter Phil Aldrich and senior 0:01:48.560 --> 0:01:52.000 reporter and author of the Money Distilled newsletter John Steppek. 0:01:52.400 --> 0:01:53.840 So welcome to the podcast. 0:01:54.280 --> 0:01:59.520 Heks very much, Happy anniversary. It's great, No, it's so seriously, 0:01:59.520 --> 0:02:01.120 it's crazy thinking that it was twelve months ago. I 0:02:01.160 --> 0:02:02.960 mean it was chaos. We were looking at the guild market, 0:02:03.040 --> 0:02:05.800 we were you know, looking at Stirling Fall. Is it 0:02:05.840 --> 0:02:06.840 now much more stable. 0:02:07.400 --> 0:02:10.919 Yeah, everything's more stable than that was crazy. 0:02:10.960 --> 0:02:12.760 I mean it was the brink, right, we thought that 0:02:12.800 --> 0:02:14.480 the economy was about to actually. 0:02:14.520 --> 0:02:17.880 Well, there was this same England had to do that intervention, 0:02:18.000 --> 0:02:20.520 didn't it put one hundred billion pounds on the line 0:02:20.560 --> 0:02:23.680 if it needed it to stabilize markets, which was you know, 0:02:23.919 --> 0:02:26.000 if you think back to how much they spent on 0:02:26.080 --> 0:02:28.040 Rbs and Lloyds in two thousand and eight, or the 0:02:28.040 --> 0:02:30.960 Treasury did, that was more money was put on the line. 0:02:31.000 --> 0:02:33.839 You can if you're going to make those comparisons. But yeah, 0:02:35.080 --> 0:02:36.840 obviously they didn't need to spend that in the end, 0:02:36.880 --> 0:02:39.560 and things did stabilize relatively quickly because it was just 0:02:39.600 --> 0:02:44.760 an isolated UK showing everyone how rubbish we can be. 0:02:45.520 --> 0:02:47.239 But this trust has come out swinging a bit this week, 0:02:47.240 --> 0:02:51.520 hasn't she. She's trying to rewrite history or the record. 0:02:51.240 --> 0:02:52.760 Perhaps, doesn't she. 0:02:52.840 --> 0:02:56.120 No, interest rates are higher now than they were after 0:02:56.200 --> 0:03:00.760 that that collapsed in guilt prices, So you do we 0:03:00.800 --> 0:03:02.960 over exaggerate that Britain was some sort of outlier as 0:03:02.960 --> 0:03:06.160 a result of what happened in the last year. 0:03:07.320 --> 0:03:09.200 I'd say, I'm mons, I think we do a bet 0:03:09.280 --> 0:03:13.080 and I don't think that anyone talks about the pension 0:03:13.200 --> 0:03:15.440 finds enough when it comes to this. I do think 0:03:15.440 --> 0:03:19.080 that one reason that Breton kicked over is because a 0:03:19.120 --> 0:03:22.560 liability driven investment, which was basically the hedges that feign 0:03:22.600 --> 0:03:26.480 benefit pension find side so that when Entrance Street it's spaked, 0:03:26.840 --> 0:03:28.360 they've essentially margin called. 0:03:29.960 --> 0:03:31.680 But she didn't know about right, So it was general. 0:03:31.760 --> 0:03:33.320 You can be as patriotic as you want, but it 0:03:33.360 --> 0:03:35.720 was a mess. I mean, you're on right. You speak 0:03:35.760 --> 0:03:38.360 to people at dinner who weren't trading floors and they say, 0:03:38.480 --> 0:03:41.640 I've I used to run an emerging market's currency desk 0:03:42.000 --> 0:03:44.480 and I actually had to step away from that to 0:03:44.560 --> 0:03:47.440 try and help, you know, the sterling traders because they 0:03:47.480 --> 0:03:49.480 just were not used to the volatility. Yeah, so, I 0:03:49.520 --> 0:03:52.400 mean it was absolutely chaos. Now, whether it's right or wrong, 0:03:52.720 --> 0:03:54.640 it was like, we've never seen anything like that. 0:03:54.680 --> 0:03:56.560 And this was what the service says, right, got the 0:03:56.640 --> 0:03:59.160 data here, eighty percent of the survey respondents that we 0:03:59.280 --> 0:04:02.400 pulled at Bloomberg Week said, and these are folio managers 0:04:02.400 --> 0:04:05.240 tried as returning busters. They said that confidence in UK 0:04:05.320 --> 0:04:07.200 assets has not free recovered. 0:04:07.520 --> 0:04:08.200 Do you agree with that? 0:04:08.520 --> 0:04:10.720 I mean I don't. I don't disagree with the fact 0:04:10.760 --> 0:04:13.400 that it was a cluster of epic proportions. I just 0:04:13.440 --> 0:04:16.560 feel there's elements of it that are slightly overlooked. I 0:04:16.560 --> 0:04:19.919 think Let's Trust made a lot of mistakes, and I 0:04:19.920 --> 0:04:22.440 think the way that Quasi qua ten came out and 0:04:22.680 --> 0:04:25.840 completely misjudged the tone of the markets at the time, 0:04:25.839 --> 0:04:28.039 which given that you know, he's a clever guy and 0:04:28.040 --> 0:04:31.159 a lot of economics background, probably should have thought of that. 0:04:31.560 --> 0:04:34.320 At the same time, I don't think the bond vigilantes 0:04:34.320 --> 0:04:37.080 were resurrected, and I do think it's interesting that a 0:04:37.080 --> 0:04:39.120 lot of people who would have completely pooh poohed the 0:04:39.120 --> 0:04:42.599 idea that point of vigilantes even exist upuntil that point, 0:04:42.880 --> 0:04:45.320 are suddenly like, oh, you know, Britain really needs to 0:04:45.360 --> 0:04:48.000 watch it. So the fiscal side of things, because the 0:04:48.040 --> 0:04:51.200 fiscal side of things, it isn't the problem, and debt 0:04:51.240 --> 0:04:53.920 to GDP is not particularly worse. In fact, some of 0:04:54.000 --> 0:04:55.159 the middle of the pack, isn't. 0:04:55.000 --> 0:04:57.320 It, the bottom of the G seven Yeah, ah yeah, 0:04:57.400 --> 0:04:58.640 so it's not really. 0:04:58.680 --> 0:05:02.880 I think it's just been dangerous diagnosing exactly what happened. 0:05:02.920 --> 0:05:05.200 And there's a couple of subtle details that actually mean that, 0:05:05.760 --> 0:05:08.960 for example, we could spend more money if we wanted to. 0:05:09.760 --> 0:05:12.080 But John, so if you put into contact and you're 0:05:12.080 --> 0:05:14.599 absolutely right, right, it's all in the nuance. Was it 0:05:14.720 --> 0:05:16.919 the mini budget that freaked people out? Or was it 0:05:16.960 --> 0:05:19.599 also the campaigning a couple of months before that was 0:05:19.640 --> 0:05:23.520 anti establishment, that was anti some of the institutions that 0:05:23.839 --> 0:05:25.320 have run the US faring. 0:05:25.040 --> 0:05:28.440 Of Tom Scholar, those sorts of actions, and they're laying 0:05:28.440 --> 0:05:29.320 into the Bank of England. 0:05:30.160 --> 0:05:32.679 I think that's probably reasonable. Like I said, they didn't 0:05:32.680 --> 0:05:35.920 make good governance decisions, and I definitely agree that the 0:05:36.480 --> 0:05:39.839 tone was wrong. I think low it's a combination of 0:05:39.880 --> 0:05:44.200 that thing of you kind of blundering into your mindfield 0:05:44.279 --> 0:05:46.400 are kind of like, you know, smoking and not realizing 0:05:46.440 --> 0:05:49.400 there's like a box of fireblocks behind you. It's that 0:05:49.480 --> 0:05:53.000 kind of thing. So it's absolutely not saying that they 0:05:53.040 --> 0:05:56.039 were blameless in any way and clearly wasn't very good. 0:05:56.480 --> 0:05:59.320 But it's more I think one danger in misdiagnosing it 0:05:59.440 --> 0:06:03.200 just because and it then restricts ability to actually act 0:06:03.200 --> 0:06:06.039 as a country with better leadership because now everyone's like, oh, 0:06:06.040 --> 0:06:07.240 we've got to go back to stairty. 0:06:07.680 --> 0:06:08.520 Other Wise the. 0:06:08.440 --> 0:06:11.000 Boyd market will exploit and that's not the case anymore 0:06:11.040 --> 0:06:12.039 because the aldized them. 0:06:12.080 --> 0:06:15.440 You know, I think I think I just obviously Liz 0:06:15.680 --> 0:06:19.320 Trust in her speech was saying, obviously interest rates are 0:06:19.360 --> 0:06:21.480 back to where they were, but that's not really a 0:06:21.520 --> 0:06:23.800 fair comparison, is it, Because what we had was a 0:06:23.839 --> 0:06:26.040 premium and everyone called it the more on premium at 0:06:26.040 --> 0:06:28.640 the time, way above all the other markets rates where 0:06:28.680 --> 0:06:30.360 they were in those days. And obviously what's happened in 0:06:30.440 --> 0:06:33.479 the subsequent years, everyone's rates have gone up. So you 0:06:33.520 --> 0:06:35.400 know this that premium is in there. And the eighty 0:06:35.400 --> 0:06:38.520 percent of people who say that we haven't fully recovered, 0:06:38.640 --> 0:06:41.719 I think it does overstate the real picture because what 0:06:42.080 --> 0:06:44.240 eighty percent of the responders are saying is that, yes, 0:06:44.279 --> 0:06:46.440 we're not quite back to where we were, but basically 0:06:46.440 --> 0:06:49.600 we're pretty close about It's a bit like you know, 0:06:50.080 --> 0:06:52.599 twenty ten when the Tory, when the coalition government came in, 0:06:52.880 --> 0:06:55.640 they didn't actually have any decent policies and the fact 0:06:55.640 --> 0:06:57.760 that there was a financial crisis was a brilliant form. 0:06:57.800 --> 0:07:00.239 They could just rally behind this disaster and say, hey, 0:07:00.480 --> 0:07:02.040 we've got a policy here. We're going to get the 0:07:02.040 --> 0:07:04.239 public finance as an order blah blah, fixed the fixed 0:07:04.279 --> 0:07:06.919 economy and basically Liz Trust screws it all up. And 0:07:06.920 --> 0:07:10.760 then obviously Richis has a very single objective to demonstrate 0:07:10.760 --> 0:07:13.360 that he is credible. Obviously he's carrying a lot of baggage, 0:07:13.840 --> 0:07:16.880 so that has been sort of useful for his own I. 0:07:16.880 --> 0:07:18.280 Mean, he's got a small window that has any The 0:07:18.320 --> 0:07:20.720 other interesting I thought result from the survey was that 0:07:20.800 --> 0:07:24.480 two thirds of the respondents actually think labor would be 0:07:24.480 --> 0:07:27.440 better for markets, for UK markets and image now, so 0:07:27.520 --> 0:07:29.880 it's part of this just the kind of general fatigue 0:07:30.480 --> 0:07:34.840 with this conservative administration and a kind of optimism that 0:07:34.880 --> 0:07:37.160 whoever else comes in it's going to be better. 0:07:37.240 --> 0:07:40.120 I mean, I would think, Saul. I mean, it's the 0:07:40.160 --> 0:07:42.400 Tories have been in power for like thirteen years with 0:07:43.280 --> 0:07:46.840 dms NO, and they are obviously entirely so obviously did 0:07:46.920 --> 0:07:51.000 with every single catastrophic decision that has been made along 0:07:51.040 --> 0:07:56.800 the way, and so it's not remotely surprising. Certainly, I 0:07:56.840 --> 0:08:00.320 don't think anyone really the people in this setting are 0:08:00.440 --> 0:08:04.440 back in label because I think it's for it's of 0:08:04.440 --> 0:08:06.680 reflets with the rest of the countries kind of feel 0:08:06.680 --> 0:08:10.240 into a great extent always political fatigue. 0:08:10.760 --> 0:08:13.400 Yeah, but then you can't take away from labor that 0:08:13.400 --> 0:08:17.120 they are they are actively making a big effort to 0:08:17.160 --> 0:08:19.080 get the city on side here and none of they've 0:08:19.080 --> 0:08:21.320 got a Labor in the City group, which is basically 0:08:21.360 --> 0:08:25.480 to you know, have these endless conversations with market makers. 0:08:25.200 --> 0:08:29.600 Story podcast, Thank you for listening. 0:08:31.960 --> 0:08:33.679 And they've been sort of oiding and dining all the 0:08:33.679 --> 0:08:36.360 business they've had, all these breakfasts and rachel reeves and 0:08:36.440 --> 0:08:39.440 kids have made, you know, difficult decisions. This is the 0:08:39.480 --> 0:08:42.000 thing they have to demonstrate that they can be tough 0:08:42.000 --> 0:08:45.160 on themselves, to prove to this city and the business 0:08:45.160 --> 0:08:47.800 community that there will be prudent on the public finances. 0:08:47.800 --> 0:08:49.640 And they roll back the one hundred and forty billion 0:08:49.679 --> 0:08:53.800 pound green Plan, they're the two child benefit cap, they're 0:08:53.920 --> 0:08:57.200 persisting with it. These are not popular policies, particularly among 0:08:57.200 --> 0:09:00.280 the labor. But what they are doing is demonstrate into 0:09:00.320 --> 0:09:04.400 that to that floating voter, particularly in the city, that actually, yes, 0:09:04.440 --> 0:09:07.240 thirteen years of Tory rule should come to an end 0:09:07.240 --> 0:09:09.200 because these guys are not going to be Jeremy Corbyn. 0:09:09.679 --> 0:09:11.200 Phil Is there a danger first of all that you 0:09:11.240 --> 0:09:13.960 can't really tell the two parties apart come election day 0:09:14.559 --> 0:09:16.719 and we're still thin on policy, so we don't really 0:09:16.760 --> 0:09:20.080 know what they'll do with carried interest. Labor's wooing business, 0:09:20.440 --> 0:09:22.560 but they're not giving business a lot of details of 0:09:22.559 --> 0:09:23.320 what they plan to do. 0:09:23.800 --> 0:09:26.080 Well, they've provided that you know, there will not be 0:09:26.120 --> 0:09:29.880 a wealth tax. They've also said so I think Reeves 0:09:29.880 --> 0:09:32.960 said that there will not be further tax rises above 0:09:33.000 --> 0:09:36.000 what I've already announced. The carried interesting, I think is 0:09:36.120 --> 0:09:38.080 part of one of those that they've done. I'm not 0:09:38.200 --> 0:09:40.000 hundred stent sure, but the other ones are the things 0:09:40.040 --> 0:09:42.439 that vat on school fees or private school fees. 0:09:43.960 --> 0:09:46.400 Then the non bombs around the city probably that. 0:09:46.520 --> 0:09:50.120 Yeah, but I think people can wear it, I mean, right, 0:09:50.600 --> 0:09:55.120 but the U and then yeah, the non doms is 0:09:53.920 --> 0:09:56.640 a is another one where they're going to crack down. 0:09:57.120 --> 0:09:59.160 So there are I think I've added it up to 0:09:59.320 --> 0:10:01.520 like there's a b seven billion of tax ris six 0:10:01.559 --> 0:10:04.200 to seven billion of tax risers that they have got 0:10:04.280 --> 0:10:06.240 in the works, which gives them seven billion to spend 0:10:06.240 --> 0:10:08.440 on other things. Basically that's above and beyond what the 0:10:08.720 --> 0:10:10.040 what the Tory plans are already. 0:10:10.880 --> 0:10:13.240 I mean, really, they're just gott to not screw it up, right, 0:10:13.360 --> 0:10:16.439 I mean, you know, you know, Johnson talks about the 0:10:16.559 --> 0:10:19.640 huge win that he had and that majority. 0:10:19.920 --> 0:10:21.520 They also to inspire. 0:10:21.520 --> 0:10:23.640 But I mean it was, I mean, last time, it 0:10:23.679 --> 0:10:26.679 was Jeremy Corbyn, right, who people were allergic to. They 0:10:26.720 --> 0:10:29.319 just need someone who's saying. 0:10:29.280 --> 0:10:31.319 I mean he's kind of move I mean, twenty players 0:10:31.360 --> 0:10:33.080 on the tailor all the time now and you know 0:10:33.280 --> 0:10:36.080 that's kind of the sense that they've moved back to 0:10:36.120 --> 0:10:39.320 the can of Blaby world rather than the Corbinate world. 0:10:39.480 --> 0:10:41.040 And to be fair, I mean, I mean, you're right, 0:10:41.440 --> 0:10:43.480 kiss Slam has done a very good job given that 0:10:43.559 --> 0:10:46.240 he was, you know, near the top when Jeremy Corbyn 0:10:46.360 --> 0:10:49.520 was their candidate for PM. He might have essentially pub 0:10:49.600 --> 0:10:53.439 to the party of the kind of hardcore Corbinates or 0:10:53.520 --> 0:10:56.480 converted the ones who wear healthcore any reasonable sounding kind 0:10:56.520 --> 0:11:00.920 of politicians and the and Rachel Reeves Chross Ferriber was 0:11:00.920 --> 0:11:03.000 a shadow Chancela and kind of I would say, probably 0:11:03.480 --> 0:11:04.079 an economists. 0:11:04.920 --> 0:11:07.160 Yeah, that is the sort of I know what I'm doing. 0:11:07.280 --> 0:11:09.880 Yeah, So there's a sort of mainstreaming of it away 0:11:09.880 --> 0:11:12.640 from what it was the last time, which I think 0:11:12.679 --> 0:11:13.840 probably helps a lot. 0:11:14.160 --> 0:11:16.640 But Sar starmin that inspire. I mean you talk about 0:11:16.640 --> 0:11:19.680 Tony Blair, the know they have a leader of the party, 0:11:20.120 --> 0:11:22.960 he's young. Does he just need to be more bold? 0:11:23.520 --> 0:11:26.800 I think that I don't disagree with. If you can 0:11:26.800 --> 0:11:30.240 get an inspirational leader, that is great, but if you 0:11:30.880 --> 0:11:33.480 if you, if you're running the risk that you may 0:11:34.160 --> 0:11:36.280 he really isn't one of those games now. But it's like, 0:11:36.640 --> 0:11:39.240 just don't see anything really stupid and you want to 0:11:40.000 --> 0:11:41.040 and then you could be inspiring. 0:11:43.480 --> 0:11:46.680 Cooper, who's a who's upposed, who was posted for David Cameron, 0:11:46.720 --> 0:11:49.439 who's been working with Kist. He talks about the Roy 0:11:49.559 --> 0:11:53.000 Jenkins quote about the ming VARs where you're walking across 0:11:53.040 --> 0:11:55.439 the slippery dance for carrying him invass you just want 0:11:55.440 --> 0:11:57.360 to be extraordinarily carefully, don't fall over and break it. 0:11:57.520 --> 0:11:59.480 And that's what and that's the sort of that's the 0:11:59.559 --> 0:12:02.199 labor sort of policy approach at the moment. But he 0:12:02.200 --> 0:12:04.920 he does point out that actually, although there's this big 0:12:05.000 --> 0:12:08.280 vote against against the Tories, there hasn't been an equivalent 0:12:08.320 --> 0:12:11.040 big rise in sort of support for labor among in 0:12:11.080 --> 0:12:13.760 the polls, which is, he says, is much like the 0:12:13.800 --> 0:12:15.959 twenty ten election, where you saw a drop in the 0:12:16.040 --> 0:12:19.160 labor people backing labor, but not a big increase in 0:12:19.200 --> 0:12:20.880 the toy So then you ended up in the coalition. 0:12:21.000 --> 0:12:25.760 So that's where to the point of an inspiration that 0:12:25.920 --> 0:12:28.680 they fall short on laboor body will fall short on 0:12:29.640 --> 0:12:32.720 inspiration and that could mean that they don't get a 0:12:32.760 --> 0:12:36.200 government of their own, have to end up in a coalition. 0:12:36.640 --> 0:12:39.199 And actually digging into this the so a little bit more. 0:12:39.760 --> 0:12:42.679 The way it's phrased is the preferences for a clear 0:12:42.880 --> 0:12:45.800 labor victory. So it's just remembering, you know what it's 0:12:45.840 --> 0:12:48.199 like to have a hung parliament. Obviously that would be 0:12:48.200 --> 0:12:50.880 a bad outcompany markets, right if there was no clear 0:12:50.920 --> 0:12:53.200 winner whenever the election comes and there has to be 0:12:53.200 --> 0:12:55.600 some sort of coalition stitch together and the SMP comes 0:12:55.640 --> 0:12:58.560 into play and all these questions, that could be the 0:12:58.600 --> 0:13:00.720 most negative of all supermarkets. 0:13:01.400 --> 0:13:03.640 I mean, I think that's a really good point because 0:13:03.640 --> 0:13:06.080 then you do get an awful lot of uncertainties coming 0:13:06.080 --> 0:13:09.400 into it, because if you get labor, you know roughly 0:13:09.480 --> 0:13:11.760 what you're getting. If you get the Tories again, you 0:13:11.800 --> 0:13:12.920 know roughly what you're getting. 0:13:13.080 --> 0:13:14.400 Then, I mean, to. 0:13:14.400 --> 0:13:17.000 Be fair, if if there was a clean slate behind 0:13:17.040 --> 0:13:21.520 Richy and Jeremy Hunt. Then there wouldn't be you know, 0:13:22.080 --> 0:13:25.320 they would kind of be much of a muchness between them, 0:13:25.360 --> 0:13:27.559 because I mean, I think the problem is that, I mean, 0:13:27.800 --> 0:13:31.600 as you're saying, Fraten, there's a lack it inspiration because 0:13:31.800 --> 0:13:34.640 there is a sense that we don't have very much 0:13:34.720 --> 0:13:37.600 to work with, and the problem is that all the 0:13:37.679 --> 0:13:40.520 radicalism and this is actually, guess the problem with politics 0:13:40.520 --> 0:13:45.440 in general. The radical ideas are almost universally unpopular the 0:13:45.520 --> 0:13:47.319 things that we need to do, at least with some 0:13:47.520 --> 0:13:49.720 lobby groups. So we need to have you know, yes, 0:13:49.760 --> 0:13:52.920 in my backyardism, but that you know, the nimby is 0:13:53.000 --> 0:13:56.240 only we need maybe think about building HS two at 0:13:56.280 --> 0:13:58.920 some point. But you know that's kind of difficult to 0:13:58.920 --> 0:14:02.000 get done as well. So I think that's why that's 0:14:02.040 --> 0:14:04.400 what I'm trying to think of what Keo Stomach could say. 0:14:04.480 --> 0:14:08.240 They would be simultaneously inspiring and radical and vote winning, 0:14:08.600 --> 0:14:11.360 And that's the sort of difficulty this stage, when you've 0:14:11.400 --> 0:14:13.120 got so much money in the pot. 0:14:13.679 --> 0:14:15.480 Does S and P have a crucial role to play 0:14:15.520 --> 0:14:15.720 in this? 0:14:16.040 --> 0:14:16.800 I hope not. 0:14:18.520 --> 0:14:22.920 To say that they might be the king makers. 0:14:23.040 --> 0:14:25.200 Well, I suppose that's the thing in Scotland. If we've 0:14:25.240 --> 0:14:28.760 lost enough popularity and Labor basically gets back all the 0:14:28.840 --> 0:14:32.160 votes they lost in Scotland, that's them on the path 0:14:32.240 --> 0:14:36.280 to a clear win. So hopefully the SNP's clear role 0:14:37.200 --> 0:14:39.280 is that they lose all the to says. But if 0:14:39.280 --> 0:14:42.880 they did come out as you know, some sort of 0:14:42.880 --> 0:14:45.760 coalition part that that would be very tricky because obviously 0:14:45.760 --> 0:14:49.960 they have much more kind of radical policies that are 0:14:50.120 --> 0:14:54.440 essentially mostly about disrupting the political process down here rather 0:14:54.480 --> 0:14:55.920 than anything helpful. 0:14:56.280 --> 0:14:59.160 And can ask about has prices John, because you came 0:14:59.240 --> 0:15:01.520 on this podcast and think it was probably perfectly tired, right, 0:15:01.560 --> 0:15:04.680 and we asked you for your prediction. It was a 0:15:04.680 --> 0:15:07.680 pretty punchy one for the dropping hat now that's we're 0:15:07.680 --> 0:15:09.480 in the middle of it now, right. House prices are 0:15:09.480 --> 0:15:12.800 falling fastest place for years. You called it, right. The 0:15:12.880 --> 0:15:16.440 survey predicts that they're going to go even further down. 0:15:17.560 --> 0:15:20.000 What's your view now on where house prices are headed? 0:15:20.000 --> 0:15:22.160 Because that's pretty dead to everyone's heart listening to this. 0:15:22.360 --> 0:15:25.080 I was quite surprised because we had so the question 0:15:25.200 --> 0:15:27.000 was like, do you think the peaks and the troughs 0:15:27.040 --> 0:15:28.760 and do you think it's going to go down ten 0:15:28.800 --> 0:15:31.880 percent nomenal, ten to twenty percent norminal on more than 0:15:31.920 --> 0:15:35.000 twenty percent, and most of the most of the readers 0:15:35.000 --> 0:15:38.080 actually went for between ten and twenty percent nominal, which 0:15:38.120 --> 0:15:40.800 I think is actually quite point you because I ringed 0:15:41.080 --> 0:15:45.320 thirty percent roughly, but in real terms, so inflation. So yeah, 0:15:45.360 --> 0:15:48.040 that's kind of in the middle of those. But you know, 0:15:48.120 --> 0:15:52.080 like Bloombergy Economics thinks ten percent down nominal, A couple 0:15:52.080 --> 0:15:54.560 of dollar consultancies think about that, So I thought, actually, 0:15:54.600 --> 0:15:56.320 they're much gloomier than I expected. 0:15:57.600 --> 0:15:58.760 How gloomy are you feel? 0:15:59.520 --> 0:16:02.120 And that's never gloomy, it's just. 0:16:02.080 --> 0:16:06.880 Happy roles, superpositive. Yeah, I think I think ten ten 0:16:06.920 --> 0:16:10.960 percent is phenomenal. Basically, the big sort of unknown is 0:16:11.000 --> 0:16:14.520 what's going to happen to the economy in terms of unemployment, 0:16:14.560 --> 0:16:16.320 because if you do get that pick up, and we're 0:16:16.360 --> 0:16:18.320 already started to say it, if we get that pickup 0:16:18.320 --> 0:16:20.600 in unemployment, and that's when everything starts to get wrong. 0:16:21.400 --> 0:16:23.520 I mean, John, you've I think you've written in your 0:16:23.640 --> 0:16:29.920 newsletter about UK stocks are cheap and correspondents racking they're 0:16:30.120 --> 0:16:33.720 not cheap enough. It's this market going to keep being 0:16:33.800 --> 0:16:34.920 under battery versus it's. 0:16:35.280 --> 0:16:39.200 Well, I mean I tend to think that what will 0:16:39.240 --> 0:16:41.080 happen is that that it will be about the Bank 0:16:41.160 --> 0:16:44.880 England anterest rates speaking. And then what it's interesting because 0:16:44.960 --> 0:16:48.040 also the markets team at Bloomberg have gradually been coming around, 0:16:48.040 --> 0:16:50.800 and you know, lots of analysts are gradually trickying and 0:16:50.800 --> 0:16:53.520 and saying, gosh, so the UK is really cheap. Even 0:16:53.520 --> 0:16:56.960 if it's terrible, it's cheap. And even if it's yeah, 0:16:57.000 --> 0:16:58.760 you get this sort of ton of their holding the 0:16:58.880 --> 0:17:02.640 noises and going yet but that is really cheap. I 0:17:02.760 --> 0:17:05.600 kind of think that price kind of wins out eventually 0:17:05.640 --> 0:17:08.879 over time and can't any number of catalysts could come along, 0:17:09.000 --> 0:17:11.919 like you know, inflation's peaked, I mean, the footy two 0:17:12.000 --> 0:17:14.840 fifties up to day on the hope that the Bank 0:17:14.880 --> 0:17:17.160 of England is going to hold interest rates at least 0:17:17.160 --> 0:17:18.959 they're going to peak at a much lower level than 0:17:19.000 --> 0:17:22.440 we thought two months ago. And given the governments, although 0:17:22.600 --> 0:17:25.720 everyone's still very negative on it, you know, the next 0:17:25.760 --> 0:17:29.560 parliament is going to be led hopefully either by a 0:17:29.640 --> 0:17:32.720 Labor government or a conservative government, both of whom are 0:17:33.119 --> 0:17:39.359 relatively kind of centrist in terms of policies. So I 0:17:39.400 --> 0:17:42.320 suspect the hangover from the whole listrust era will fade 0:17:42.359 --> 0:17:43.920 over the next six months. 0:17:44.200 --> 0:17:47.040 Yeah, there's also belief in Europe filled and actually the 0:17:47.160 --> 0:17:49.680 UK is getting closer to them, so it's not quite 0:17:49.760 --> 0:17:53.240 coming back into the EU, but close enough. 0:17:53.480 --> 0:17:55.480 I mean in terms of getting close to pause bricksit 0:17:55.560 --> 0:17:58.040 in relations with their opinion, it definitely seemed to be 0:17:58.080 --> 0:17:59.760 moving that way. I mean that it's one of the 0:17:59.800 --> 0:18:01.800 good things that Richie Senech has achieved was that the 0:18:01.840 --> 0:18:05.680 Windsor framework and then moving back with Horizon Front texts 0:18:05.800 --> 0:18:07.960 would become members of the sort of border. 0:18:08.080 --> 0:18:11.160 Storms in Paris this week, right and then yeah, well 0:18:11.200 --> 0:18:14.960 they've resurrected this idea of concentric circles of the EU. 0:18:15.240 --> 0:18:17.520 In twenty sixteen, they came up with this idea, which 0:18:17.560 --> 0:18:19.159 is basically that there would be a core group of 0:18:19.200 --> 0:18:21.240 Eurozone members and then you'd have these kind of rings 0:18:21.280 --> 0:18:25.200 outside of where they weren't quite as tied into the EU. 0:18:25.480 --> 0:18:27.960 And it seems that it's being re envisaged, which was 0:18:28.000 --> 0:18:30.199 always which is always a good punt, and so Labor 0:18:30.720 --> 0:18:33.680 maybe they or whoever is the next government will be 0:18:33.720 --> 0:18:35.640 able to negotiate something similar. 0:18:35.320 --> 0:18:38.159 To that but would they get really much closer to 0:18:38.200 --> 0:18:41.840 the EU? I was interested. You know, Macaront actually invited 0:18:42.119 --> 0:18:44.320 here storm at the Eliza. I mean, it's very unusual. 0:18:44.320 --> 0:18:47.040 I've never seen like a French president invite the leader 0:18:47.080 --> 0:18:49.280 of the opposition. And I don't know whether it's a 0:18:49.320 --> 0:18:52.320 stance on Europe that also makes them feel closer. 0:18:52.560 --> 0:18:55.280 I mean, obviously Kir Starmer has made it very clear 0:18:55.320 --> 0:18:58.600 that we're not going to renegotiate the Brexit. We're not 0:18:58.640 --> 0:19:01.199 going to sort of have enough friendum revote on the 0:19:01.400 --> 0:19:04.159 on the Brexit deal. But what we could do is 0:19:04.200 --> 0:19:06.919 basically have a much closer relationship, which was always you know, 0:19:06.960 --> 0:19:08.920