WEBVTT - Kit Juckes on Bank of England Decision (Audio)

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<v Speaker 1>This is taking stock with Kathleen Hayes and Pim Fox

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<v Speaker 1>on Bloomberg Radio. The Bank of England brexits, the economy.

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<v Speaker 1>All these factors swirled together today as the Bank of

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<v Speaker 1>England left its monetary policy unchanged, keeping the door open

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<v Speaker 1>to another interest rate cut this year, the pound falling

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<v Speaker 1>on that news. Let's get right to someone who follows

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<v Speaker 1>this very very closely. Kit Jukes, Global head of Foreign

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<v Speaker 1>Exchange Strategy at Society General, joining us from London. Where

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<v Speaker 1>did I hope your home now enjoying a quiet evening? Absolutely,

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<v Speaker 1>I'm listening to your traffic report thinking I'm glad. I'm

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<v Speaker 1>not all right, Well, we're glad you're here on on

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<v Speaker 1>the phone with us. So not really a surprise. Nobody

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<v Speaker 1>expected this rate cut. I guess where people start dividing

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<v Speaker 1>is whether or not where the Bank of England that

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<v Speaker 1>is is heading for a rate cut November. What does

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<v Speaker 1>Kit Jukes think? Um? I think listening to them. You

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<v Speaker 1>know that in their statement accompanying the no move decision,

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<v Speaker 1>they said that they were still going to cut interest

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<v Speaker 1>rates in due course if they're earlier August assessment, which

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<v Speaker 1>was pretty dire of the economy proved correct. I don't

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<v Speaker 1>know how you could easily established that the data was

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<v Speaker 1>was that much worse by November from now so um

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<v Speaker 1>that if I were in their shoes, I would be thinking, look,

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<v Speaker 1>we're keeping some ammunition reserve in case we get a

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<v Speaker 1>slower but still serious slowdown in the economy over the

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<v Speaker 1>next few months. But November feels close all of a sudden. Well,

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<v Speaker 1>what's even closer is tomorrow. And tomorrow in in Bratislava,

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<v Speaker 1>in Slovakia, there is a special summit meeting among EU leaders,

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<v Speaker 1>but without anyone from the United Kingdom, at least officially.

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<v Speaker 1>And I want to get your perspective on this, because

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<v Speaker 1>there's just not just highlight problems having to do with

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<v Speaker 1>how do you deal with Brexit? But Tusk, who is

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<v Speaker 1>the former Polish prime minister, he chairs these summits. Uh,

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<v Speaker 1>he's gonna have to deal with Luxembourg. They've called for

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<v Speaker 1>Hungary to get thrown out of the European Union because

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<v Speaker 1>of treating asylum seekers quote worse than wild animals. Then

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<v Speaker 1>Hungary counter attacks and says that Luxembourg helps big corporations

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<v Speaker 1>avoid tax. Is Brexit going to be maybe down on

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<v Speaker 1>the agenda? I think the agenda, I guess is, you know,

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<v Speaker 1>at least the public agenda in terms of what they

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<v Speaker 1>come out and talk about, is going to be life

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<v Speaker 1>after Brexit, you know, re restarting, re energizing. Where is

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<v Speaker 1>Europe going in the long run, dealing with the problems

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<v Speaker 1>of of of the immigration crisis or the refugee crisis,

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<v Speaker 1>and how they integrate that and how they get growth going.

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<v Speaker 1>So my guest, if you were trying to spin it

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<v Speaker 1>positively as as a European leader, and I'm sure they will,

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<v Speaker 1>it's rebooting Europe. I'm saying, Look, okay, you know the

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<v Speaker 1>UK thing is is sad, but it is what it is. Um,

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<v Speaker 1>what do we do to solve the rest of this mess? What?

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<v Speaker 1>What strong? What strong plans can we have because they

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<v Speaker 1>have a ton of things they don't agree about, you know.

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<v Speaker 1>And and it's interesting just in the last couple of

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<v Speaker 1>days one of the top EU officials was quoted saying

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<v Speaker 1>that it will be twelve months before any of the

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<v Speaker 1>talks on Brexit begin. And the Telegraph has a story

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<v Speaker 1>today where they say, uh, senior figures in the EU

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<v Speaker 1>believe that Britain will give up on Brexit if they

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<v Speaker 1>make negotiations as tough as possible. Apparently they have spoken

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<v Speaker 1>to five senior EU figures. Does that and actually you

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<v Speaker 1>kind of wonder if that's what's going on. It It

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<v Speaker 1>seems implausible in a way because the British citizens voted,

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<v Speaker 1>but could that be what Britain? But the rest of

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<v Speaker 1>Europe is hoping? Um, the rest of your I don't know.

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<v Speaker 1>There's probably some people in Europe you hope the UK

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<v Speaker 1>would leave because they've not been a comfortable partner at

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<v Speaker 1>any point, even though economically I think it's bad for everyone.

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<v Speaker 1>But yeah, look, I think it's going to be very elayed,

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<v Speaker 1>and it's it's not impossible that in the end this

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<v Speaker 1>doesn't happen, but it's really difficult to see how it happens. Um.

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<v Speaker 1>You know. The difficulty is the election timetable in Europe?

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<v Speaker 1>How do you agree on the biggestsues around the terms

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<v Speaker 1>of the UK leaving until after the German elections in

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<v Speaker 1>a year's time. I think it's impossible to do that.

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<v Speaker 1>Why given that you can't agree the biggest issues, if

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<v Speaker 1>you were the reason May the UK Prime Minister, why

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<v Speaker 1>would you invoke this article fifty that kick starts the

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<v Speaker 1>process and gives you two years to sort it out.

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<v Speaker 1>Why would you do that anytime soon if you know

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<v Speaker 1>that the biggest decisions are going to sit around getting

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<v Speaker 1>dusty while officials m and are but the politicians can't

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<v Speaker 1>can't rub a stamp or agree or make those those

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<v Speaker 1>critical decisions. So the whole thing, I mean, from where

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<v Speaker 1>I sit, is just a kind of corrosive slow drag

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<v Speaker 1>on the economy while people delay, I don't know, hiring,

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<v Speaker 1>hiring new graduates out of university, making new big investment projects,

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<v Speaker 1>all those kind decisions where that uncertainty kind of eats aweart.

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<v Speaker 1>It's so not decimating an economy, but just really just

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<v Speaker 1>being unhelpful at every level. I think that's the that

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<v Speaker 1>that that's the message I picked up from from this

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<v Speaker 1>this delay. And then maybe people do hope that that's

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<v Speaker 1>bad enough to be give up. By then the economy

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<v Speaker 1>will have not grown that fast for a while, and

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<v Speaker 1>I should probably be cross about that.