WEBVTT - Why Sunak May Quit Ahead of a July 4th Election 0:00:03.120 --> 0:00:11.000 Bloomberg Audio Studios, podcasts, radio news, John Mel do you 0:00:11.119 --> 0:00:13.680 remember how excited you were last week when inflation went 0:00:13.720 --> 0:00:14.760 down and it's you we need bit. 0:00:15.400 --> 0:00:17.040 I was thrilled you were. 0:00:17.160 --> 0:00:19.400 Well, this week the footsy one hundred has gone up 0:00:19.400 --> 0:00:22.079 and it'sy, we need bit and we have a new high. 0:00:22.200 --> 0:00:23.560 So how excited are you today? 0:00:24.000 --> 0:00:26.920 Actually significantly more excited than I was last week. 0:00:28.280 --> 0:00:30.720 You wait and you wait, and you wait, and finally 0:00:30.760 --> 0:00:32.680 the thing you've been wanting for happens. It kind of 0:00:32.720 --> 0:00:35.240 happens all the time, and stop markets should regularly hit 0:00:35.360 --> 0:00:38.320 new highs. Right, that was a normal stop market would 0:00:38.360 --> 0:00:40.080 hit the new high all the time. But I do 0:00:40.240 --> 0:00:41.720 want to say one thing before we go on to 0:00:41.760 --> 0:00:44.239 talk about how wonderful it is that the footy one 0:00:44.280 --> 0:00:47.360 hundred it's finally going up. I do want to say 0:00:47.360 --> 0:00:49.479 that this is not a and you high and inflation 0:00:49.720 --> 0:00:52.680 adjusted terms, but that would have to get through about 0:00:52.960 --> 0:00:56.280 well well over nine thousand, nine one hundred and sixty eight. 0:00:56.360 --> 0:00:58.880 I calculated it just now. But you know, don't don't 0:00:58.920 --> 0:01:02.080 take my accuracy as say nine thy two hundred to 0:01:02.120 --> 0:01:04.000 make it to a reason a random But so we're 0:01:04.000 --> 0:01:05.679 not there yet. In real term, so of course we 0:01:05.720 --> 0:01:07.520 had have dividends along the way, so we mustn't be 0:01:07.520 --> 0:01:11.039 two respondent. But nonetheless a new higher nominal terms is nice. 0:01:11.120 --> 0:01:14.080 Right do you feel, John, do you feel that there's 0:01:14.120 --> 0:01:15.679 a turning point of any kind here? 0:01:17.600 --> 0:01:22.560 Actually I do a better, do you? I do a better? Yeah? 0:01:22.640 --> 0:01:25.560 I mean so like one of the things that I mean, 0:01:25.600 --> 0:01:28.199 from a purely technical point of view, when stuff makes 0:01:28.240 --> 0:01:30.840 new highs, it just tends to go in to make 0:01:30.920 --> 0:01:35.360 more new highs. You also get the sentiment issue of 0:01:35.400 --> 0:01:39.039 people noticing the oh wait, man, the UK is doing 0:01:39.160 --> 0:01:41.440 much better this year so far than the S and P, 0:01:41.720 --> 0:01:43.679 for example, And I mean that really is a bit 0:01:43.720 --> 0:01:47.039 more significant, you know. You get the Magnificent seven have 0:01:47.120 --> 0:01:50.600 come off the boil a bit, and some people were panicking. 0:01:50.640 --> 0:01:52.520 Last week's the na's deck was down like one and 0:01:52.520 --> 0:01:54.280 a half percent. I was like, oh, the nurse DC 0:01:54.360 --> 0:01:59.880 never goes down. But you know, but going on nothing, Yes, no, 0:02:00.160 --> 0:02:02.600 I don't try being British for a while. 0:02:03.400 --> 0:02:05.840 British. I'm telling you that is a job. This is 0:02:05.880 --> 0:02:08.840 not the first time that the footsie's done or right, right, 0:02:08.880 --> 0:02:11.519 I mean, there is a general view in the market 0:02:11.680 --> 0:02:16.440 that the US has always had this wonderful acceptionism about it, 0:02:16.720 --> 0:02:20.600 and that US markets automatically do better and American stocks 0:02:20.760 --> 0:02:25.240 automatically deserve a premium. But this isn't true. Is it 0:02:25.360 --> 0:02:26.840 actually quite a recent phenomenon. 0:02:27.120 --> 0:02:29.960 It is recent, And I do think the other thing 0:02:30.000 --> 0:02:32.239 you often hear with the Footy one hundred is almost 0:02:32.240 --> 0:02:34.880 the sense that it hasn't gone anywhere since basically the 0:02:34.919 --> 0:02:39.560 dot com bust, because it was about seven thousand, nineteen 0:02:39.639 --> 0:02:42.640 ninety nine. And the thing is, if you can actually 0:02:42.639 --> 0:02:44.400 look at the stats, because I looked at them this morning, 0:02:44.520 --> 0:02:46.560 if you if you did the choice to buy either 0:02:46.680 --> 0:02:50.120 UK stocks or US stocks after the dot com bubble 0:02:50.160 --> 0:02:52.640 bottomed out, so don about November two thousand and two 0:02:52.760 --> 0:02:55.560 or March two thousand and three, and then if you'd 0:02:55.600 --> 0:02:58.960 held until the top of the banking kind of mortgage 0:02:58.960 --> 0:03:02.680 bubble in mid two thousand and seven, the foot one 0:03:02.760 --> 0:03:06.519 hundred absolutely thrashed the S and P. It's actually spending 0:03:06.560 --> 0:03:08.680 the dates. It's kind of like you get anything up 0:03:08.680 --> 0:03:12.520 to double the return, you know, so the foot say 0:03:12.680 --> 0:03:15.960 basically trebled in value, whereas the S and P just 0:03:15.960 --> 0:03:18.640 went up one hundred percent over that period. I mean 0:03:18.680 --> 0:03:22.200 that's including evidence. So you know it's and it's in 0:03:22.480 --> 0:03:24.600 you know, it's in whatever currency you want to choose. 0:03:24.639 --> 0:03:26.560 No pounds or US do all us. There's there's no 0:03:26.639 --> 0:03:30.720 jiggery pokery here. The foot say UK stocks roundly beat 0:03:30.919 --> 0:03:34.000 US stocks during that period, and yes, it's because you know, 0:03:34.200 --> 0:03:36.560 we had lots of banks and minors whereas they had 0:03:36.920 --> 0:03:39.480 banks and kind of you know, shooting my staples and 0:03:39.520 --> 0:03:43.280 things like that. But you know, you would have been 0:03:43.280 --> 0:03:45.880 better off in the UK stock. So this is a 0:03:46.000 --> 0:03:51.200 relatively recent phenomenon and is mostly a post financial crash phenomenon. 0:03:51.560 --> 0:03:53.400 And to be fair, it's not just the UK. The 0:03:53.840 --> 0:03:58.760 US is basically beaten everyone. I mean, that's not to 0:03:58.760 --> 0:04:01.480 say the UK hasn't been one of the the wast laggards, 0:04:01.520 --> 0:04:05.520 particularly in developing markets, but you really there is normal 0:04:05.560 --> 0:04:08.880 market that has come close to the US, even when 0:04:08.920 --> 0:04:12.600 the kind of obscure, kind of amusing market say yeah. 0:04:12.400 --> 0:04:14.480 It's interesting. So the key thing that we'd like to 0:04:14.480 --> 0:04:17.200 think here is that this kind this kind of thing, 0:04:17.320 --> 0:04:19.800 the new high, even modern inflation and justice new high, 0:04:20.080 --> 0:04:23.640 does draw attention to us and does mean that people 0:04:23.720 --> 0:04:25.560 might look over and go look at that. And we 0:04:25.640 --> 0:04:28.160 had Nick Train, a very well known UK fund manager, 0:04:28.640 --> 0:04:33.440 out earlier this week talking again about how incredibly cheap 0:04:33.560 --> 0:04:36.240 UK stocks are and saying we just need something to 0:04:36.320 --> 0:04:39.159 draw attention to it, something to make people realize that 0:04:39.200 --> 0:04:42.000 this is this is true, that there are fabulous opportunities here, 0:04:42.000 --> 0:04:44.680 that you have a once in a generational opportunity to 0:04:44.720 --> 0:04:47.440 buy very high quality stocks at low prices. And his 0:04:47.640 --> 0:04:51.159 thought was that as soon as there's a very big 0:04:51.360 --> 0:04:55.000 takeover of a name on the on the UK market 0:04:55.000 --> 0:04:58.359 that is internationally known that has taken over because it 0:04:58.440 --> 0:05:02.520 is so cheap, that will turn all international investorized towards 0:05:02.520 --> 0:05:04.960 the UK. They will notice what's going on here and 0:05:05.000 --> 0:05:07.159 that once in a generational opportunity will be doubled up 0:05:07.480 --> 0:05:08.120 fairly quickly. 0:05:08.760 --> 0:05:13.200 I think that's a really good point. I mean, you know, 0:05:13.560 --> 0:05:17.680 like this week, another foot two fifty stock was bought 0:05:17.720 --> 0:05:20.080 by a US rival. It's like our doors and window 0:05:20.120 --> 0:05:24.440 frames maker, and we actually saw a bid battle erupt 0:05:24.520 --> 0:05:29.680 for hypnosis trust of all, you know. I mean, that's 0:05:30.240 --> 0:05:34.560 a troubled, troubled asset for a while there, and I 0:05:34.560 --> 0:05:36.880 think a lot of shared holders were probably relieved when 0:05:36.920 --> 0:05:39.599 they got you know, the below I p o prize 0:05:39.640 --> 0:05:44.200 bid from Concord I think it was, but then kind 0:05:44.200 --> 0:05:47.200 of Blackstone came in and offered more, and suddenly, you know, 0:05:47.320 --> 0:05:48.760 everyone's off to the races. 0:05:48.960 --> 0:05:50.960 So I'm pretty thrilled to get out of that. 0:05:51.080 --> 0:05:54.880 Yeah, I mean, cheapness well out eventually. 0:05:56.520 --> 0:05:59.080 Interesting. Now listen on the on the zebrage cheapness I 0:05:59.120 --> 0:06:02.320 want to talk about. I'll not talk about my column 0:06:02.360 --> 0:06:02.720 this week. 0:06:03.040 --> 0:06:04.960 Yes, I think you should, because this one. 0:06:04.880 --> 0:06:07.640 Caused a lot, a lot of trouble. I mean, it's 0:06:07.680 --> 0:06:09.360 not like I go out of my way course problem. 0:06:09.920 --> 0:06:13.640 I go out of my way to course controversy on Twitter, 0:06:13.720 --> 0:06:16.520 sorry X or anything like that. But this column. You know, 0:06:16.520 --> 0:06:18.839 I wrote a few weeks ago about how the problem 0:06:18.880 --> 0:06:21.520 with the UK house building market is that we build 0:06:21.720 --> 0:06:24.480 lots and lots of tiny, really rubbish houses, and our 0:06:24.520 --> 0:06:26.640 house builders are culpable there and I just like them 0:06:26.680 --> 0:06:30.279 intensely for building these horrible, horrible houses, although I accept 0:06:30.279 --> 0:06:32.640 the part of that is driven by regulation and planning 0:06:32.680 --> 0:06:34.760 stuff all give than that. So I wrote about how 0:06:34.800 --> 0:06:37.760 awful tiny houses are, and then this week I thought 0:06:37.920 --> 0:06:41.760 I'd write another column about how absolutely brilliant tiny house 0:06:42.560 --> 0:06:47.479 but in a slightly different context. So looking around the 0:06:47.520 --> 0:06:50.040 coast of the UK and a particularly you know, some 0:06:50.080 --> 0:06:53.200 of the incredibly beautiful Scottish islands off the West coast, 0:06:53.279 --> 0:06:55.880 and some of the Welsh coast and the Cornish coast, 0:06:56.200 --> 0:06:58.599 and one of the extraordinary things about the coast of 0:06:58.640 --> 0:07:03.000 the UK is how probably unpopulated it, how few houses 0:07:03.040 --> 0:07:05.720 there are, how few of us have holiday houses. And 0:07:05.720 --> 0:07:08.159 when you look at the stats for the UK relative 0:07:08.240 --> 0:07:11.840 to Europe, a very small number of people in the 0:07:11.920 --> 0:07:14.640 UK either own or have access to Are you not 0:07:14.720 --> 0:07:18.440 renting better access to a holiday home? We don't have 0:07:18.520 --> 0:07:24.000 the same cabin or the hucked culture that lots of 0:07:24.040 --> 0:07:27.560 Scandinavia has, for example, or the second home culture that 0:07:27.640 --> 0:07:33.120 France has, for example. And our politicians just hate anyone 0:07:33.200 --> 0:07:35.680 having holiday homes or second homes, although obviously they all 0:07:35.680 --> 0:07:38.520 have them themselves, that they hate anybody else having them. 0:07:38.600 --> 0:07:41.520 So you constantly get a sort of barrage of insult 0:07:41.560 --> 0:07:44.200 and new tax I think, are colleague Marcus Ashworths worried 0:07:44.200 --> 0:07:46.600 about that a few weeks ago? And so I'd just 0:07:46.720 --> 0:07:49.000 like to make the case, and please everyone, go and 0:07:49.040 --> 0:07:50.680 read the column and tell me if you think I 0:07:50.720 --> 0:07:55.600 made the case. Well, for us changing planning completely so 0:07:55.760 --> 0:07:59.360 that anyone, anyone build a nice little cabin and I 0:07:59.440 --> 0:08:02.440 repeat the word nice, you know, scandy wooden kind of 0:08:02.480 --> 0:08:06.360 thing anywhere across the UK where there's space for it 0:08:06.400 --> 0:08:10.120 self built. Let's get self built cabins going. So not 0:08:10.240 --> 0:08:13.880 fewer tiny houses, but more tiny houses. Are you in, John, 0:08:13.960 --> 0:08:14.360 Are you in? 0:08:14.520 --> 0:08:16.720 I think it's a great idea. I think it would 0:08:16.760 --> 0:08:20.160 really walk and also it be a good stepping stone 0:08:20.240 --> 0:08:25.040 towards perhaps getting more self build fast houses as well 0:08:25.160 --> 0:08:29.000 if it were too. It strikes me as a good experiment. 0:08:29.120 --> 0:08:32.199 And you also, I mean, people pay like insane amounts 0:08:32.200 --> 0:08:34.839 of money for these little beach huts on the shore 0:08:35.280 --> 0:08:37.800 like a Dorset and all that, and they've got a 0:08:37.840 --> 0:08:40.480 space to boil. Okay, well you can't even sleep in 0:08:40.520 --> 0:08:42.600 them overnight. So I think you would. 0:08:42.600 --> 0:08:45.920 Think there is demage that's demanded. And you know when 0:08:45.920 --> 0:08:48.320 people say, oh they couldn't, people don't want that. People 0:08:48.360 --> 0:08:51.240 couldn't possibly, you know, not enough people want to travel 0:08:51.240 --> 0:08:53.320 to the to the Hebrides, to go to these islands 0:08:53.360 --> 0:08:55.120 and to a little house, et cetera. I'm like, yeah, okay, 0:08:55.120 --> 0:08:57.439 well look at the price of a tiny little plot 0:08:57.480 --> 0:08:59.320 on one of these islands has planning. You'll pay one 0:08:59.360 --> 0:09:01.840 hundred grand plots plus for a tiny blood that doesn't 0:09:01.840 --> 0:09:03.840 even run right down to the beach. That tells me 0:09:03.880 --> 0:09:05.040 those demand right. 0:09:05.360 --> 0:09:07.800 No, absolutely, and I think I think. 0:09:07.640 --> 0:09:09.600 There's information in those prices. Yeah. 0:09:09.840 --> 0:09:12.319 The one thing would say is just clarify so you 0:09:12.800 --> 0:09:14.640 because I know that some readers will be sitting and 0:09:14.640 --> 0:09:16.240 they're going, oh my gosh, she wants to build those 0:09:16.360 --> 0:09:18.760 you know, the entire course, the pamblic shut or whatever. 0:09:19.120 --> 0:09:24.160 It's not. It's not that is this idea of sort 0:09:24.200 --> 0:09:28.719 of market driven sympathetic development because you can only use 0:09:28.760 --> 0:09:30.240 it for three months a year. 0:09:31.720 --> 0:09:34.800 Four months exactly. Allowed to reside in it permanently, that 0:09:34.840 --> 0:09:36.480 would be wrong. So you're not allowed to use the 0:09:36.520 --> 0:09:40.200 infrastructure of the holiday area or the coach, you know, 0:09:40.240 --> 0:09:43.040 you don't get to use the schools or the hospital. Yeah, 0:09:43.080 --> 0:09:44.920 that kind of thing. So you just you know, so 0:09:45.000 --> 0:09:47.880 maybe you'd pay fifty percent council tax, probably allow the 0:09:47.920 --> 0:09:50.440 local councils to build the schools and hospitals that everyone 0:09:50.440 --> 0:09:52.320 else needs to use the people who live there permanently. 0:09:52.760 --> 0:09:55.560 And then you take the proper houses and you say, 0:09:55.600 --> 0:09:56.960 do you know what this is going to come with 0:09:57.000 --> 0:09:59.160 the covenants they can only be sold onto locals, and 0:09:59.240 --> 0:10:01.240 that'd be very had for the people who paid five 0:10:01.240 --> 0:10:03.480 million pounds for a big house and say you know 0:10:03.640 --> 0:10:05.320 rock or something like that, but you know, too bad, 0:10:07.240 --> 0:10:10.920 and that would solve the problem of local people saying, well, 0:10:10.960 --> 0:10:13.439 these holidaymakers are driving up the prices of our houses 0:10:13.480 --> 0:10:14.679 and then they were for us to live and this 0:10:14.800 --> 0:10:16.640 is destroying our community. So I think it's a bit 0:10:16.640 --> 0:10:19.840 of a win win. And interestingly, the as ever on 0:10:19.880 --> 0:10:22.240 things like this, the response has been completely down the middle, 0:10:22.240 --> 0:10:24.600 half of the people saying brilliant idea, let us do that, 0:10:24.840 --> 0:10:26.920 and half the people saying, why do you hate us? 0:10:28.040 --> 0:10:33.800 You know? Onwards, John Onwards. I know I didn't ask 0:10:33.840 --> 0:10:35.800 our guest about this this weekend. We talked about all 0:10:35.840 --> 0:10:38.679 sorts of other things, but I know you suggested that 0:10:38.720 --> 0:10:41.920 we get Helen Thomas from Blonde Money on because you've 0:10:41.960 --> 0:10:44.240 led she was excellent and would be a great guest, 0:10:44.280 --> 0:10:47.000 and I think she she is. But why did you 0:10:47.040 --> 0:10:47.880 suggest we had her on? 0:10:48.679 --> 0:10:51.679 Well, basically, ILL sent me oldly is the forodcast for 0:10:51.720 --> 0:10:54.760 what's going to happen election ways in the UK, And 0:10:54.800 --> 0:10:58.240 when I did, I thought God, that's pretty poinchy. Need 0:10:58.280 --> 0:11:03.600 to get you to discuss that. And I can't remember 0:11:03.640 --> 0:11:07.400 how much that you discussed in the actual podcast, but 0:11:07.559 --> 0:11:10.440 that this if you want a quick summary, she's basically 0:11:10.520 --> 0:11:14.760 saying she's going to step down before the election, call 0:11:14.840 --> 0:11:18.600 it in July, and it will probably be pay any 0:11:18.640 --> 0:11:22.400 moderant who takes over as the Prime minister during the 0:11:22.440 --> 0:11:26.920 election period. And I thought July is a lot earlier 0:11:26.920 --> 0:11:29.400 than personally I was expecting an election. I thought they 0:11:29.440 --> 0:11:32.440 would string out for as long as possible, you know, 0:11:32.480 --> 0:11:35.079 and they wouldn't even get an interest straight cut before then. 0:11:35.320 --> 0:11:39.400 So yeah, so I thought it was pretty punchy. 0:11:41.000 --> 0:11:43.440 Welcome to Merren Drugs Money the podcast and which people 0:11:43.480 --> 0:11:46.320 who know the markets explain the markets. I'm Merrin Sumset Web. 0:11:46.520 --> 0:11:49.520 It's my conversation with Helen Thomas of market commentary firm 0:11:49.600 --> 0:11:52.360 Belonde Money. Helen has I have a fifteen years experience 0:11:52.360 --> 0:11:54.360 working in a number of banks for funds. She's a 0:11:54.440 --> 0:11:57.400 CFA charter holder and says on the board of CFI UK. 0:11:57.880 --> 0:12:00.320 She also has political experience as an advisor the former 0:12:00.360 --> 0:12:04.520 Chaetom with the Exchequer George Osborne. And then thank you 0:12:04.559 --> 0:12:06.480 so much for joining us today. It's really good to 0:12:06.480 --> 0:12:06.960 have you on. 0:12:07.160 --> 0:12:08.960 Thank you very much. I'm delighted to be here. 0:12:09.640 --> 0:12:12.360 Now let's start with what you've been writing about UK 0:12:12.480 --> 0:12:15.880 politics recently, and your most recent note is about the 0:12:15.920 --> 0:12:18.880 next election in the UK and one of the lines 0:12:18.920 --> 0:12:21.960 towards the end of the note that particularly leapt out 0:12:22.000 --> 0:12:24.600 at me was this suggestion that the whiskey and the 0:12:24.720 --> 0:12:29.160 revolver are already in Rischie Sunek's office. He knows what 0:12:29.200 --> 0:12:31.200 he has to do. What do you think it is 0:12:31.240 --> 0:12:33.280 that Rischie has to do? 0:12:33.840 --> 0:12:37.880 Rischie seem like he's entering the world of least worst options. 0:12:38.200 --> 0:12:41.400 And this is because the Conservative Party is polling so 0:12:41.600 --> 0:12:46.320 badly that we're talking about extinction level events. But by 0:12:46.320 --> 0:12:47.960 the way, let me just stop one minute and say, 0:12:48.520 --> 0:12:51.880 the reason I started my business was to look at 0:12:51.920 --> 0:12:54.640 what actually is going to happen, to get away from 0:12:54.880 --> 0:12:57.800 the all hyperbole that people reading the newspapers about politics, 0:12:57.800 --> 0:13:00.840 which just total noise. That is a nightmare for people 0:13:00.880 --> 0:13:02.520 in markets who just want to know what's going to happen. 0:13:03.160 --> 0:13:06.240 So when I talk about this, it's because of the 0:13:06.360 --> 0:13:08.840 very low level in the polls the Conservative Party are 0:13:08.880 --> 0:13:12.640 at back down to those post trust lows and what 0:13:12.720 --> 0:13:16.520 that will translate into in terms of seats tricky to calculate, 0:13:16.559 --> 0:13:20.559 but it's clearly now a bad situation, as we're seeing 0:13:20.559 --> 0:13:22.960 from so many of the polls. So basically we're in 0:13:22.960 --> 0:13:26.479 a situation where the Conservative Party itself could be decimated 0:13:26.720 --> 0:13:30.280 and will it even survive as a political party. 0:13:30.480 --> 0:13:32.760 More than decimated? Way more than decimating. 0:13:32.800 --> 0:13:36.360 Yeah, it's yeah, just obliterated maybe is a better Wayeah. 0:13:36.400 --> 0:13:39.680 And so what that means, of course, when you're in politics, 0:13:39.880 --> 0:13:43.120 is where is the blame going to lie? And also 0:13:43.600 --> 0:13:47.600 what do the different political actors need from this situation, 0:13:47.640 --> 0:13:49.920 because there are people who want the Conservative parties to survive. 0:13:50.080 --> 0:13:52.320 Maybe that's a surprise to some of the listeners, but 0:13:52.400 --> 0:13:56.959 there are and therefore they now need there for Rishisunak 0:13:57.160 --> 0:14:02.120 to be buried with the with this situation and in 0:14:02.200 --> 0:14:05.160 order to resurrect the party whichever direction they want to 0:14:05.200 --> 0:14:07.240 take it. And look, by the way, should also say 0:14:07.240 --> 0:14:09.280 it doesn't matter what I think, doesn't matter what you think. 0:14:09.559 --> 0:14:12.360 We're just going to say that these are the calculations 0:14:12.360 --> 0:14:14.280 that go on with politicians. 0:14:14.920 --> 0:14:17.160 Yeah, can we just go back a little bit and 0:14:17.280 --> 0:14:20.400 talk about why things are so bad for Rissius Sink. 0:14:20.480 --> 0:14:22.880 He's put in place as a stability prime minister, the 0:14:22.920 --> 0:14:25.520 guy who was going to make everything look okay, and 0:14:25.600 --> 0:14:28.240 he is delivering a little bit on some of his pledgures. 0:14:28.360 --> 0:14:30.520 You can argue about whether it's down to him in 0:14:30.600 --> 0:14:33.640 any way whatsoever or his government that inflation has come down, 0:14:33.640 --> 0:14:35.640 but it has cause the price level has not come down, 0:14:35.680 --> 0:14:38.080 but the rate of price growth has come down, and 0:14:38.120 --> 0:14:40.760 that still matters. Small boat crossings it down a bit. 0:14:41.000 --> 0:14:43.240 We can talk about GDP per ahead, which is awful, 0:14:43.280 --> 0:14:46.400 but GDP growth as a whole isn't so awful, So 0:14:46.560 --> 0:14:48.440 why is it quite this. 0:14:48.640 --> 0:14:52.160 Bad for so A couple of things on this one 0:14:52.320 --> 0:14:56.360 is the economics, where if you look at a you 0:14:56.360 --> 0:14:59.120 gov question of which party is best placed to deal 0:14:59.120 --> 0:15:02.280 with the economy, and as you might expect, the Conservative 0:15:02.320 --> 0:15:04.320 Party is now below the Labor Party and has been 0:15:04.360 --> 0:15:07.760 for a while. But that actually started to get worse 0:15:08.360 --> 0:15:10.440 well before Richies, and that well before Liz Tross. It 0:15:10.480 --> 0:15:14.160 actually happened in twenty twenty one twenty two as inflation 0:15:14.320 --> 0:15:19.520 was rising. So the inflation shock has been extremely pernicious, 0:15:19.560 --> 0:15:22.560 and not just here. President Biden's also facing this the US. 0:15:22.600 --> 0:15:25.560 Many other politicians are too. You said it there merin. 0:15:26.080 --> 0:15:28.120 The rate of change of prices is coming down, but 0:15:28.160 --> 0:15:31.280 prices are still higher. People still feel it. Perhaps it's 0:15:31.280 --> 0:15:36.000 slightly part of Richestynac's academic approach to life that the 0:15:36.040 --> 0:15:38.480 spreadsheet shows the numbers coming down and that looks good. 0:15:39.000 --> 0:15:41.640 But to people who fill up their car with petrol 0:15:41.760 --> 0:15:44.480 go to the shops, it still feels really quite bad. 0:15:44.560 --> 0:15:47.040 They still remember it was nowhere near that much to 0:15:47.080 --> 0:15:48.960 fill your car up with petrol a few years back. 0:15:49.120 --> 0:15:51.560 Time goes by and things should be beginning to feel 0:15:51.600 --> 0:15:54.160 a little bit better because wages arise in quite nicely, 0:15:54.240 --> 0:15:58.840 But nonetheless Rissiu Scenac's approval ratings does keep falling. Nothing 0:15:58.840 --> 0:16:00.000 seems to make them any better. 0:16:00.280 --> 0:16:03.080 This is where you have to come into the politics 0:16:03.080 --> 0:16:04.880 of this and the man himself. By the way she 0:16:05.000 --> 0:16:07.520 declare that we were at university together at the same 0:16:07.560 --> 0:16:11.000 time as most people. I'm sorry, I'm another Oxford ppeist. 0:16:11.280 --> 0:16:14.200 I don't know what that qualifies before these days, but anyway. 0:16:14.240 --> 0:16:16.080 But this it qualifies you for this. 0:16:16.600 --> 0:16:20.520 But yeah, I suppose that's fair. But it means that 0:16:20.640 --> 0:16:24.400 the way that he became prime Minister was actually always 0:16:24.400 --> 0:16:27.000 going to be a problem for him because of course 0:16:27.120 --> 0:16:30.160 he was a loser in an election campaign against Liz Trust. 0:16:30.200 --> 0:16:33.200 Now it's just within the Tory Party membership, but he 0:16:33.280 --> 0:16:36.520 lost that campaign. This casts quite a long shadow. He 0:16:36.600 --> 0:16:39.080 never went to a vote with his MPs when he 0:16:39.120 --> 0:16:41.720 was up against Penny Mordant. People remember back to that period. 0:16:41.760 --> 0:16:42.880 They went in a bit of a rush to get 0:16:42.880 --> 0:16:45.760 the Prime Minister sorted. They never actually had a round 0:16:45.800 --> 0:16:48.280 of voting. They just said Penny Morden said no, look, 0:16:48.480 --> 0:16:49.960 I'll pull out at this stage. We'll just get on 0:16:50.000 --> 0:16:52.800 with it. But what that means is you're never really 0:16:52.880 --> 0:16:56.320 sure who your enemies are. And so the key problem 0:16:56.320 --> 0:16:58.040 for issues here because he built a lot of enemies 0:16:58.040 --> 0:17:01.800 within his own party, of various different kinds. So it's 0:17:01.800 --> 0:17:04.240 not just got the opposition to worry about, and it's 0:17:04.240 --> 0:17:06.680 not just one group in his own party, for example, 0:17:06.680 --> 0:17:09.000 the Trust sites. He has got all these other different 0:17:09.040 --> 0:17:11.639 elements who don't like the way he got there, don't 0:17:11.680 --> 0:17:14.880 like his focus on certain policies. You should just look 0:17:14.920 --> 0:17:18.600 at the vote that we've just had about banning the 0:17:18.640 --> 0:17:21.520 sale of cigarettes to people born after the year of 0:17:21.520 --> 0:17:24.240 two thousand and nine. Now that went through, but it 0:17:24.359 --> 0:17:28.080 went through on opposition votes. Half of Conservative MP's either 0:17:28.119 --> 0:17:32.719 abstained or voted against it. That's quite something. Didn't get 0:17:32.760 --> 0:17:34.600 covered a lot because it feels like that maybe wasn't 0:17:34.600 --> 0:17:36.679 that consequential a vote, but he had half of his 0:17:36.720 --> 0:17:39.280 own party against that. And do the public care that 0:17:39.440 --> 0:17:41.840 much if they can't get a doctor's appointment or they're 0:17:41.840 --> 0:17:43.680 worried about getting on a train because there's a strike, 0:17:43.760 --> 0:17:46.240 or they're worried about the votes. The key point is 0:17:46.520 --> 0:17:48.760 he's not very good at the politics and the public 0:17:48.800 --> 0:17:50.080 know it well. 0:17:50.080 --> 0:17:52.440 He's not regular the politics. And also there's really nothing 0:17:52.480 --> 0:17:55.760 he could do to improve matters in the time he's 0:17:55.760 --> 0:17:57.680 got left. When it comes to the economy, cott really 0:17:57.720 --> 0:18:01.400 doing anything about the NAT it's too late, anything about productivity, 0:18:01.440 --> 0:18:03.560 can't really do anything about the number of people who 0:18:03.560 --> 0:18:06.040 aren't in the workforce, etcetera, etcetera. There's very few things 0:18:06.040 --> 0:18:08.200 that he can really do with this time to turn 0:18:08.240 --> 0:18:10.520 things around, and that's been obvious for some time now. 0:18:10.600 --> 0:18:12.720 The point is actually was that maybe not obvious when 0:18:12.720 --> 0:18:15.240 he took over. The parliament has to end in January 0:18:15.280 --> 0:18:17.719 twenty twenty five. People might be delighted to hear and 0:18:17.760 --> 0:18:19.960 so what was that that were two years? It's some 0:18:20.000 --> 0:18:22.560 of that stuff, the productivity stuff you've been talking about 0:18:22.560 --> 0:18:25.600 that a long time merin anyone following UK economy has. 0:18:25.640 --> 0:18:27.840 It's been a problem for a decade, if not more. 0:18:28.359 --> 0:18:29.840 But the other element to all of this is of 0:18:29.840 --> 0:18:34.760 course the trust period guilt crisis, because that changed the 0:18:34.800 --> 0:18:37.400 whole narrative of what could be done. Neither the next 0:18:37.480 --> 0:18:40.760 labor government as looks likely, nor this one feels they 0:18:40.760 --> 0:18:45.440 can do anything because they're so constrained by obr by 0:18:46.080 --> 0:18:50.160 the markets. So we're in this you know, death spiral 0:18:50.359 --> 0:18:53.840 hesitates use that phrase. But it's quite difficult that taking 0:18:53.880 --> 0:18:56.320 over in the wake of all of that, As you say, 0:18:56.320 --> 0:18:57.959 a lot of these long term challenges would have been 0:18:58.000 --> 0:19:01.119 very hard to address. It was pretty much an impossible task. 0:19:01.240 --> 0:19:04.280 But the one thing you can do as a leader 0:19:04.840 --> 0:19:09.800 is lead and inspire and give a vision, and it's 0:19:09.800 --> 0:19:12.800 been extremely hard to know what that vision is from 0:19:12.840 --> 0:19:13.480 this Prime minister. 0:19:14.320 --> 0:19:16.119 I suppose one of the things that he has wanted 0:19:16.240 --> 0:19:18.160 is maybe not to be the vision guy, but there'd 0:19:18.160 --> 0:19:20.280 be the stability guy, and that's been a mistake. 0:19:20.920 --> 0:19:23.040 Yeah, absolutely, But then that's the point about being a 0:19:23.119 --> 0:19:25.520 sort of technocrat. Yeah, this is an ongoing question, isn't 0:19:25.520 --> 0:19:28.680 it's oh sick of experts? Oh no, we want the experts. Ideally, 0:19:28.720 --> 0:19:31.359 you want a bit of both. You need the person 0:19:31.600 --> 0:19:34.920 at the LEC turn outside number ten Downing Street. It 0:19:34.960 --> 0:19:37.439 should have a really simple message. I don't know Blair 0:19:37.480 --> 0:19:40.080 Tony Blair's education education, education. People knew what that was, 0:19:40.600 --> 0:19:42.320 and then you need people around you to implement it, 0:19:42.359 --> 0:19:44.879 and it just failed on both fronts. 0:19:45.400 --> 0:19:47.239 Okay, so we know he's got to go. I think 0:19:47.359 --> 0:19:49.320 pretty obvious to everybody that Rich is doing it. It's 0:19:49.320 --> 0:19:50.879 not going to be a prime minister for much longer, 0:19:50.960 --> 0:19:53.600 either either pre or post an election. Right, it is 0:19:53.680 --> 0:19:56.639