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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak Europe podcast. I'm Stephanie Flanders,

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Speaker 2: head of Government and Economics at Bloomberg. Earlier today I

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Speaker 2: sat down with Chancellor of the Exchequer Rachel Reeves for

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Speaker 2: an exclusive conversation following her recent Spring statement. We discussed,

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Speaker 2: among other things, her expectations for UK economic growth and

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Speaker 2: how she sees the escalating war in the Middle East

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Speaker 2: impacting the UK. Chancellor, thank you so much for doing this.

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Speaker 2: You've come over to Bloomberg headquarters straight from the Treasury on.

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Speaker 1: A busy day, come straight from the Chamber.

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Speaker 2: From the chambers of course, yes, you want to talk

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Speaker 2: about your growth, your thoughts about the state of the

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Speaker 2: UK economy and the growth plan going forward. But obviously,

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Speaker 2: given everything that's happening today in markets in the Middle East,

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Speaker 2: I want to start with just asking you a few

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Speaker 2: questions about that. I mean, you mentioned in your speech

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Speaker 2: in the Commons that you are planning to talk tomorrow

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Speaker 2: to North oil producers. What are you hoping to get

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Speaker 2: out of that conversation?

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Speaker 1: So I said in the chamber that some of the

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Speaker 1: most affected industries I wanted to spend some time with

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Speaker 1: and been in touch with over the last few days,

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Speaker 1: and obviously developments in oil and gas markets are absolutely

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Speaker 1: crucial for every family and every business in Britain. Now,

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Speaker 1: oil and gas production in the North Sea Council less

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Speaker 1: than one percent of global supply of oil and gas,

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Speaker 1: but it's still very important. It's important for jobs in

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Speaker 1: the UK, it's important for investment, and it's important for

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Speaker 1: every family in Britain. So I'm going to be meeting

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Speaker 1: with them tomorrow to talk about their production plans and

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Speaker 1: also to talk about how they see the situation, because

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Speaker 1: every oil and gas company pretty much that operates in

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Speaker 1: the North Sea will also operate in other parts of

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Speaker 1: the world, whether that is Shell or BP or equanor

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Speaker 1: or others, and so getting their insights into how oil

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Speaker 1: and gas prices might evolve based on a number of

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Speaker 1: different scenarios over the coming days and weeks will be

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Speaker 1: very useful for me and for the government.

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Speaker 2: We're looking I mean, we can give you our scenarios

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Speaker 2: as well, but our economists are looking at this you know, inevitable,

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Speaker 2: as you suggest, there's nothing that our North to oil

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Speaker 2: producers could do to affect a global oil price hike,

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Speaker 2: it is already up significantly. If it sustained for any period,

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Speaker 2: it seems like it would be much harder to get

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Speaker 2: the headline inflation rate in the UK back to two percent,

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Speaker 2: are as you were hoping it would be. You did

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Speaker 2: a lot of things in the budget to make that

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Speaker 2: to encourage shall we say, inflation to go back to

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Speaker 2: two percent even by April. Has Donald Trump's war in

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Speaker 2: Iran taking that away from.

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Speaker 1: You, Well, the first thing I would say is that

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Speaker 1: the action that I took in the budget will still happen.

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Speaker 1: So the freezing prescription charges, the freeze in rail fares,

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Speaker 1: and also the one hundred and fifty pounds off of

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Speaker 1: energy bills that I announced in the budget will take

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Speaker 1: effect next month, and so people paying families paying their

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Speaker 1: gas and electricity bills do not need to worry about

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Speaker 1: the next three months that price cap is set and

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Speaker 1: they will get the benefit of those policies I announced

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Speaker 1: in the budget. But of course, you know, we have

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Speaker 1: to see how things evolve in terms of where oil

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Speaker 1: and gas prices go going forward. But what the Office's

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Speaker 1: Budget Responsibility confirmed today and what the Bank of England

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Speaker 1: said when they published their most recent outlook for inflation

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Speaker 1: in February was that the measures that we have taken

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Speaker 1: as the government are helping bring inflation back down to

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Speaker 1: target much sooner than they anticipated. I think in the

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Speaker 1: OBR numbers today inflation is likely to meet target at

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Speaker 1: six months earlier than they previously envisaged. Now, of course

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Speaker 1: that doesn't take into accounter developments over the last few days,

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Speaker 1: but also we are only just into what is happening

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Speaker 1: in the Middle East. We saw each other last week, Stephanie,

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Speaker 1: and we were not talking about the Middle East or around.

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Speaker 1: There was lots of other things to talk about in

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Speaker 1: the economy, but this only really kicked off on Friday.

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Speaker 1: So of course we're monitor developments very very closely and

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Speaker 1: do everything in our power to protect businesses and families

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Speaker 1: in the UK, and we are better placed to do

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Speaker 1: that than we were just a few months and years

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Speaker 1: ago because of the choices we've taken as a government.

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Speaker 1: So what I was able to set out today in

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Speaker 1: the OBR forecast is that both interest rates and inflation

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Speaker 1: have been falling faster than expect. Government borrowing and debt

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Speaker 1: have been revised down since the budget last year G seven.

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Speaker 1: Borrowing is not coming down at the same rate that

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Speaker 1: it is in the UK. Our public set to net borrowing,

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Speaker 1: forecast to be just four point three percent this year,

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Speaker 1: is the lowest in six years and the first time

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Speaker 1: in twenty two years that our borrowing has been lower

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Speaker 1: than the G seven average. So welcome developments which put

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Speaker 1: us in a stronger position to be able to withstand

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Speaker 1: the shocks, including the shock that we are likely to

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Speaker 1: be responding to in the weeks and months ahead, than

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Speaker 1: we would have been without the action that we've taken

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Speaker 1: as a government to secure and stabilize the public finances.

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Speaker 2: But it is vulnerable. I mean even that fall in

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Speaker 2: borrowing is driven in large part actually by lower than

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Speaker 2: expected spending, which is actually in turn lower spending on

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Speaker 2: guilt interest, which is a result of lower inflation. So

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Speaker 2: that lower path for inflation that we were counting on

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Speaker 2: even market we're assuming for this year, that was also

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Speaker 2: going to potentially pave the way for another rate cut.

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Speaker 2: You mentioned in your speech how proud you were that

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Speaker 2: you've been part of the government at the Bank of

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Speaker 2: England had been able to have six rate cuts since

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Speaker 2: ry King's going on.

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Speaker 1: There's three things that are going on to put our

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Speaker 1: public finances in a better position. First of all, tax

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Speaker 1: revenues have come in stronger than anticipated, and we saw

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Speaker 1: that particularly in the January January borrowing numbers, it was

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Speaker 1: the biggest surplus on record.

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Speaker 2: But yet to day isn't it still lower than the

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Speaker 2: forecast than the abr's forecast, So that that month was

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Speaker 2: very good.

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Speaker 1: But borrowing has come in lower. This revenue, the borrowing

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Speaker 1: has come in lower than forecast. And spending we set

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Speaker 1: out the spending review last summer, many people said, well

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Speaker 1: we wouldn't really able to live within those budgets. Well,

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Speaker 1: this year we have not used all of the surplus

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Speaker 1: that has put us for genuine emergencies and instead we're

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Speaker 1: able to roll that surplus forward, so spending is under control. Whereas,

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Speaker 1: of course when I became Chancellor, the reserve for the

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Speaker 1: year that we were in and we were only three

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Speaker 1: months into it had been spent four times over. So

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Speaker 1: we haven't used a full reserve for this year. And

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Speaker 1: also borrowing costs have come down. The OBR today forecast

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Speaker 1: that borrowing costs next year will be four billion pounds

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Speaker 1: lower than that even they thought in the budget last year.

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Speaker 1: So tax revenewe coming in a bit, stronger, spending coming

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Speaker 1: in as planned and in fact not even using the

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Speaker 1: full reserve, and also borrowing costs coming down because of

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Speaker 1: that additional stability we've brought to the economy have all

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Speaker 1: contributed to the better forecast for the public finances that

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Speaker 1: I was able to set out today.

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Speaker 2: But that good news, A lot of that was related

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Speaker 2: to the falling guilt yields, A lot of some of

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Speaker 2: that has been reversed even just today in the concerns

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Speaker 2: in the markets and expectations of lower interest rates from

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Speaker 2: the Bank of England, which traders in the market this

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Speaker 2: week have decided, you're going to certainly not happen in

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Speaker 2: March now and where as they were expecting, and maybe

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Speaker 2: not happen in the next few months.

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Speaker 1: Well, I won't comment on market movements over a day

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Speaker 1: or two. I think it is too early to know

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Speaker 1: what the market impact is. Obviously, the immediate concern for

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Speaker 1: the government is trying to get the three hundred thousand

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Speaker 1: British citizens who are in the Middle East back home

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Speaker 1: if they want to come back to the UK. I

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Speaker 1: think around one hundred thousand have always already registered for

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Speaker 1: the scheme to say that you are there and that

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Speaker 1: is very welcome, and that's our mediate goal, as well

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Speaker 1: as protecting our personnel and our assets in the region.

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Speaker 1: But of course, the economic consequences of any extended military

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Speaker 1: action in the Middle East, which is so crucial for

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Speaker 1: trade and for oil and gas, would have an impact

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Speaker 1: on the UK economy, But it is too early to

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Speaker 1: judge exactly what that will be and therefore what response

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Speaker 1: would be needed.

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Speaker 2: I mean, I'll focus on the economy today. I'm not

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Speaker 2: going to go into the government stance in relation to

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Speaker 2: the support or not for what the President's doing. But

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Speaker 2: judging from Donald Trump's posts in the last and interviews

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Speaker 2: in the last twenty four hours, he does seem to

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Speaker 2: be not very happy with the Prime Minister as a

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Speaker 2: result of the last few days. Do you worry that

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Speaker 2: that will make it harder to finalize, finally finalize the

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Speaker 2: trade situation, the trade deal with the US, which was

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Speaker 2: put into quite a lot of uncertainty by that Supreme

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Speaker 2: Court judgment a few weeks ago.

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Speaker 1: When it comes to decisions around using British armed forces

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Speaker 1: to take part in conflicts around the world, it is

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Speaker 1: very importan that we judge those on whether it is

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Speaker 1: legal and whether it is the right thing to do.

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Speaker 1: You can't make a decision about whether to get British

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Speaker 1: armed forces involved in a conflict because it may or

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Speaker 1: may not make it more likely to get a trade deal.

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Speaker 1: And we judged that there was not a legal basis

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Speaker 1: for offensive action on Iran, but of course once Iran responded, particularly.

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Speaker 2: Sorry, not a legal basis for the UK or but

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Speaker 2: presumably not for the US either.

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Speaker 1: We can only make judgments for ourselves and that was

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Speaker 1: the judgment that we came to based on our legal advice,

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Speaker 1: and up to other countries to explain what action they've

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Speaker 1: taken and on what basis. But once Iran responded in

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Speaker 1: the way that they did, including with missiles being launched

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Speaker 1: into our allies who were not involved in the offensive action,

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Speaker 1: and the risks to our military basis in Cyprus, of

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Speaker 1: course it was right that we became involved in defensive

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Speaker 1: action and we were involved in that from Saturday, and

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Speaker 1: of course on Sunday we go permission for US jets

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Speaker 1: to use the British assets from which to launch those

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Speaker 1: defensive actions. And that's the decision that we've taken as

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Speaker 1: a government on trade I'm proud of what we've done

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Speaker 1: as a government. We've secured a trade deal with India.

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Speaker 1: I think probably the best trade deal that any country

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Speaker 1: in the world has secured with India, and we hope

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Speaker 1: to be able to bring that into an effect in

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Speaker 1: the next couple of months. But in addition, improving our

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Speaker 1: trade relations with our nearest neighbors and trading partners in

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Speaker 1: the European Union. And I'm going to say more about

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Speaker 1: our relations with the European Union in a speech I'm

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Speaker 1: going to give in a couple of weeks time, because

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Speaker 1: I think that that is one of the big bets

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Speaker 1: that we can take as a country to change our

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Speaker 1: trajectory for productive and growth. We've already rejoining the Erasmus

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Speaker 1: Scheme to allow young people to be able to study

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Speaker 1: in the European Union countries and for young people in

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Speaker 1: those countries to be able to study in the UK.

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Speaker 1: But we also want to deliver an energy and electricity

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Speaker 1: trading deal. We want a food and farming agreement and

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Speaker 1: SPS agreement, and also we want to bring in a

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Speaker 1: youth ability scheme so that young people in Britain can

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Speaker 1: go and take advantage of opportunities in Europe and vice versa.

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Speaker 1: Young people in the European Union can come and work

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Speaker 1: in the UK. I know that some countries around the

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Speaker 1: world are looking to pull up the drawbridge, but Britain

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Speaker 1: benefits from being an open trading economy, open to trade,

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Speaker 1: open to investment, and also open to talent.

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Speaker 2: But for trade, it's enormously important just to have some

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Speaker 2: kind of certainty about what the trade rules are. And

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Speaker 2: it seems I mean, are you able to say to

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Speaker 2: UK exporters to the US that you know currently what

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Speaker 2: the trade rules are for going into the US, because

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Speaker 2: it's not clear to us.

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Speaker 1: Well, we secured a trade deal with the US last

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Speaker 1: year on the export of goods. Since then we've gone

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Speaker 1: further and secured a deal around pharmaceuticals, which is obviously

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Speaker 1: crucial for the UK given the importance of our pharmaceuticals concern.

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Speaker 2: Those things are not affected by the Supreme Court ruling.

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Speaker 1: As far as your concern, well, obviously we are in

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Speaker 1: constant negotiation and dialogue with the US administration, but there's

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Speaker 1: absolutely no reason why the trade deal that we secured

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Speaker 1: last year can't be maintained. And of course there are

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Speaker 1: other areas as well. Where we want to go further

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Speaker 1: with our trade links with the US, whether that is

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Speaker 1: on the future of capital markets, where we want to

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Speaker 1: deepen and strengthen the capital market links between our economy,

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Speaker 1: making it easier for British companies to raise finance in

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Speaker 1: the US and US finance, are US businesses to raise

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Speaker 1: finance in London, as well as doing more in terms

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Speaker 1: of mutual recognition of standards so that if you have

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Speaker 1: a license for a product in the US, you can

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Speaker 1: bring it to the UK and again vice versa, to

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Speaker 1: help British businesses in financial services and elsewhere to be

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Speaker 1: able to launch product products in the US, which is

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Speaker 1: obviously hugely beneficial for UK firms. So there are other

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Speaker 1: areas as well where we want to deepen those relations

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Speaker 1: with the US, but our nearest neighbors and trading partners,

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Speaker 1: our countries in the EU, and the benefits from rebuilding

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Speaker 1: trust between US and the European Union, and crucially those

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Speaker 1: trade links in goods and our hope in services in

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Speaker 1: due course is what will have the biggest impact on

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Speaker 1: British businesses and jobs and living standards.

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Speaker 2: So yeah, let's talk about that sort of broader approach

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Speaker 2: to growth that I know you're going to talk about

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Speaker 2: also in a speech in a couple of weeks, you

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Speaker 2: promise that today's spring statements being forecast would be a

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Speaker 2: non event So I think I can say to you

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Speaker 2: succeeded in making it not very eventful. We haven't had

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Speaker 2: all this kind of speculation that we had leading up

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Speaker 2: to the budget, so we haven't had that uncertainty. As

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Speaker 2: you've mentioned, the economic news leading up to this, at

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Speaker 2: least till this week was fairly positive. But obviously that

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Speaker 2: the political environments is if anything, has deteriorated for the government,

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Speaker 2: and we had a poll today that showed labor even

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Speaker 2: potentially behind the Greens as well as reform. I guess

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Speaker 2: I mean your economic mission, which was central to this government.

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Speaker 2: You know, a large chunk of voters you look at

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Speaker 2: the polling, are disappointed, feel that the government should have

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Speaker 2: done better. Do you think that you could have done better?

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Speaker 1: People voted for change at the general election a year

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Speaker 1: and a half ago, and I'm deeply aware of my

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Speaker 1: responsibility and helping to deliver that change. Now since I

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Speaker 1: became chancellor, wages have increased faster than inflation every single month,

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Speaker 1: and there's six cuts in interest rates means that if

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Speaker 1: you're taking out a mortgage, a typical mortgage, you'll be

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Speaker 1: saving around one three hundred pounds a year than if

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Speaker 1: you'd have taken that mortgage out the day before I

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Speaker 1: became Chancellor of the Exchequer. But the years leading up

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Speaker 1: to that had been really tough for people. The last

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Speaker 1: parliament was the first parliament ever where people were poorer

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Speaker 1: on average at the end of it than they were

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Speaker 1: at the start, and it takes time to unwind that legacy.

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Speaker 1: We've made progress, but is there more to do? Absolutely

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Speaker 1: there is, which is why I'm so focused on bringing

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Speaker 1: down inflation and interest rates and returning that stability to

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Speaker 1: the economy. But the other thing that makes people's lives

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Speaker 1: better is having public services that function properly. Being able

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Speaker 1: to get a hospital appointment or a doctor's appointment when

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Speaker 1: you need it, Ensuring your kid gets into the school

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Speaker 1: they want to go to and has good qualified teachers,

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Speaker 1: buses and trains that run frequently and are affordable at

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Speaker 1: all of those things that you know is starting to

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Speaker 1: make a difference. But there is more to do, and

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Speaker 1: that by the end of this parliament, I think that

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Speaker 1: the next election what people are going to ask is

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Speaker 1: and me and my family better off? And I'm determined

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Speaker 1: that the answer to that question is yes, by ensuring

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Speaker 1: that people have more money in their pockets to spend

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Speaker 1: on the things that they want to spend it on,

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Speaker 1: not just the essentials the mortgage, the bills, the weekly

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Speaker 1: food shop, but more money to spend on the things

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Speaker 1: that they actually want to do that give them pleasure

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Speaker 1: in their lives. And are undetermined that people have more

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Speaker 1: of that. But the first thing you need to do

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Speaker 1: to achieve that is to bring stability back to the economy.

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Speaker 1: And what the OBR forecasts show today is that we

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Speaker 1: have made great strides forward in returning that stability to

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Speaker 1: the economy, which should pay dividends in terms of having

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Speaker 1: money to spend on the priorities of working people and

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Speaker 1: to make working people better off.

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Speaker 2: Now there was quite a lot in the forecast. I mean,

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Speaker 2: there is a slightly lower growth forecast for this year,

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Speaker 2: and that's due to lower net migration, which the government

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Speaker 2: has obviously taken a lot of measures on, but the

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Speaker 2: ABI expects it and expects that fall in net migration,

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Speaker 2: the increase in the labor force and people coming in

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Speaker 2: to be permanent, but that that sort of half a

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Speaker 2: percent of GDP loss and growth will be made up

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Speaker 2: for in productivity, will actually get more out of the

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Speaker 2: people we have working in this country. So is that

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Speaker 2: the new sort of UK growth model that we don't allow.

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Speaker 2: We're not really welcoming people in the same way, but

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Speaker 2: we want to get We hope employers get more out

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Speaker 2: of British workers.

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Speaker 1: So we want to make sure that the best talent

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Speaker 1: in the world comes to Britain and that's why we've

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Speaker 1: extended our global talent visas and they're available for high

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Speaker 1: net worth individuals, entrepreneurs and also academics in key subjects,

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Speaker 1: particularly where they bring research teams with them to the UK.

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Speaker 1: And those new global talent visas are proving very popular,

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Speaker 1: and that is about us being able to have greater

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Speaker 1: say about who comes into this country, and we have

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Speaker 1: tightened up the rules around dependents, around students, around low

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Speaker 1: skilled workers. That is the right thing to do, and

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Speaker 1: we want to make sure that people who are already

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Speaker 1: here have got the skills to fill the vacancies that

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Speaker 1: exist in the economy. But as I said before, I

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Speaker 1: want Britain to be seen as a country that is

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Speaker 1: welcome to investment, trade and talent, and that's what those

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Speaker 1: global talent visas do. Now. The OBI have revised down

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Speaker 1: their forecasts for net migration, so it's something like two

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Speaker 1: hundred thousand net migration a year. That is obviously way

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Speaker 1: down on the nearly a million number we had a

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Speaker 1: couple of years ago. But what matters in terms of

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Speaker 1: GDP is whether that GDP is felt in people's lives,

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Speaker 1: and that's why GDP per capita is probably the better

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Speaker 1: measure of whether that GDP is actually impacting on your

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Speaker 1: living standards. And what the OBR today say is that

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Speaker 1: they're revising up GDP per capita and expect GDP per

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Speaker 1: capita to increase by five point six percent during the

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Speaker 1: course of this parliament. And of course in the last parliament,

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Speaker 1: GDP per capita actually fell and so that is a

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Speaker 1: sharp turnaround from one parliament to the next. And those

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Speaker 1: numbers were revised up to day, which is very welcome

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Speaker 1: because in the end, what matters is whether that GDP

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Speaker 1: is being felt by you and your family, and GDP

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Speaker 1: per capita is what really shows that.

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Speaker 2: That's very striking in the numbers. I mean, if we

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Speaker 2: end up. I mean the path we're on now, we

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Speaker 2: could have negative net migration by the end of the year.

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Speaker 2: I'm quite interested in whether that's going to be a

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Speaker 2: sort of cause for celebration inside the Treasury, given the

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Speaker 2: pressure on the government to reduce those numbers, or concern

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Speaker 2: about how that was achieved. I mean the things that

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Speaker 2: were easiest to control. I mean students. For example, I

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Speaker 2: spoke to someone at a major university last night that

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Speaker 2: has been benefiting from some of the measures you just

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Speaker 2: talked about attracting foreign academics, academics from the US, but

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Speaker 2: at the same time they're losing foreign students who find

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Speaker 2: it less attractive the regime here and are even sort

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Speaker 2: of worried about the environment for foreign students. So can

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Speaker 2: you see I mean, if you're undermining the business model

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Speaker 2: for universities and it doesn't matter so much that they're

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Speaker 2: able to attract all these great academics.

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Speaker 1: I think we've done a lot to support universities since

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Speaker 1: we came into office. We've increased R and D funding,

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Speaker 1: and obviously a lot of that budget goes to universities

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Speaker 1: to invest in basic research, and we are reintroducing maintenance

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Speaker 1: grants for the poorest students to encourage them to take

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Speaker 1: that leap and go to university. But we've got to

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Speaker 1: get the balance right. It has been the case some

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Speaker 1: courses at some colleges and universities many people the end

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Speaker 1: of their course are applying for asylum in Britain and

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Speaker 1: that is not what student visas were ever meant for.

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Speaker 1: And so we have got to be tightening up when

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Speaker 1: there is abuse. But at the same time, that gives

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Speaker 1: us greater freedom to introduce those high talent visas because

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Speaker 1: we're freeing up space to enable us to offer more

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Speaker 1: of those and I think that's what is most valuable

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Speaker 1: to us as a country, to attract that wealth creating

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Speaker 1: talent to the UK, and that is that is our ambition.

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Speaker 1: At the same time, we've got to do more to

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Speaker 1: make sure that young people in particular who are already

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Speaker 1: in this country have got the skills and the confidence

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Speaker 1: to succeed in the jobs market.

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Speaker 2: We're running out of time, but as well, I mean,

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Speaker 2: do you worry some of our most successful sectors that

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Speaker 2: we would encourage people to go into are in professional

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Speaker 2: services that are potentially the most going to be the

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Speaker 2: most transformed by AI. So do you worry that some

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Speaker 2: of our successful companies and sectors has got this massive

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Speaker 2: missile headed in its direction called AI.

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Speaker 1: But the industries where we are successful, like professional business services,

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Speaker 1: financial services, creative industries and AI and tech and life sciences.

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Speaker 1: Of course there are risks of destruction and some jobs going,

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Speaker 1: but there's also a massive opportunity if we seize them

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Speaker 1: to get the innovation and get the research here in

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Speaker 1: Britain and then build those new businesses in Britain. I

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Speaker 1: am an optimist when it comes to innovation and AI.

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Speaker 1: Every other wave of transformation and industrial change has resulted

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Speaker 1: in there being more jobs and better paid jobs. There's

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Speaker 1: no reason why this revolution can't be the same. But

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Speaker 1: we've got to make sure that people in this country

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Speaker 1: have got the skills to be able to do those jobs.

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Speaker 1: We're well placed. We've got some of the best universities

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Speaker 1: in the world, we've got some of the best entrepreneurs

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Speaker 1: in the world, and we've got a government is backing that,

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Speaker 1: for example through R and D funding. But we've seize

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Speaker 1: that opportunity rather than being scared a bit. And one

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Speaker 1: of the things I'm going to be talking about in

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Speaker 1: my Maiz's lecture next week is how a government as

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Speaker 1: a country who can do more to back innovation and

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Speaker 1: AI but in a way where the rewards are reaped

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Speaker 1: by ordinary citizens.

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Speaker 2: I mean, as you know, Chancellor, there's a lot of

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Speaker 2: people in the city, a lot of Bloomberg clients who

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Speaker 2: talk about how the environment, the tax environment and elsewhere

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Speaker 2: other things has changed since labor came into power, and

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Speaker 2: they're all they say, they're advising their children to move

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Speaker 2: to Dubai. We're seeing clients move their accounts, headge fund

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Speaker 2: investors and others move their accounts to Dubai. Do you

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Speaker 2: think that those kind of judgments are going to be

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Speaker 2: affected by Does that look like such a safe decision

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Speaker 2: today when the missiles are flying.

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Speaker 1: Look, I think all of us are reading stories in

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Speaker 1: the paper or hearing of people who we know or

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Speaker 1: we've worked with, who have made those decisions to move abroad.

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Speaker 1: But I would say that there are lots of things

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Speaker 1: that are attractive about the UK. A safe and secure

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Speaker 1: economy with strong defenses, and that is one of the

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Speaker 1: many things that is attractive about being in the UK.

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Speaker 1: But we only have those things because we pay for them,

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Speaker 1: including investing more in our defense which in the world

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Speaker 1: that we live in today seems more important than ever.

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Speaker 2: Well, another time I'll ask you how you're going to

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Speaker 2: get that three percent of GDP. But I'm getting ushered out,

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Speaker 2: So thank you very much Chancellor for joining us.

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Speaker 1: Thank you, Stephanie.

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Speaker 2: Thanks for listening to my conversation with the Chancellor of

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Speaker 2: the Exchequer Rachel Reeves, and be sure to check out

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Speaker 2: my weekly podcast, Trump Andomics, where we look at everything

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Speaker 2: in the economic world of Donald Trump. Daybreak Europe. We'll

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Speaker 2: be back tomorrow