1 00:00:02,560 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,480 --> 00:00:12,160 Speaker 2: This is the BlueBag Day BAQ podcast, available every morning 3 00:00:12,160 --> 00:00:15,120 Speaker 2: on Apple, Spotify or wherever you listen. It's Wednesday, the 4 00:00:15,120 --> 00:00:17,800 Speaker 2: twelfth of March here in London. I'm Caroline Hepki. 5 00:00:17,680 --> 00:00:20,800 Speaker 1: And I'm Stephen Carroll. Coming up today. Donald Trump follows 6 00:00:20,840 --> 00:00:23,960 Speaker 1: through on his threat to impose twenty five percent tariffs 7 00:00:24,000 --> 00:00:27,960 Speaker 1: on all steel and aluminium imports. As the EU responds 8 00:00:27,960 --> 00:00:29,360 Speaker 1: with rapid countermeasures. 9 00:00:29,520 --> 00:00:32,960 Speaker 2: The United States pressures Russia to accept a thirty day 10 00:00:33,080 --> 00:00:38,519 Speaker 2: Ukraine ceasefire agreement hammered out with President Zelinsky's advisors. 11 00:00:38,000 --> 00:00:41,599 Speaker 1: Plus a special report on the UK mental health crisis 12 00:00:41,640 --> 00:00:45,080 Speaker 1: that's driven half a million more people onto benefits. 13 00:00:45,240 --> 00:00:47,239 Speaker 2: Let's start with the roundup of our top stories. 14 00:00:47,760 --> 00:00:51,240 Speaker 1: President Donald Trump's twenty five percent tariff on all US 15 00:00:51,360 --> 00:00:54,640 Speaker 1: imports of steel and aluminium has come into effect as 16 00:00:54,680 --> 00:00:58,400 Speaker 1: of four am London time, triggering rapid retaliation from the 17 00:00:58,400 --> 00:01:02,080 Speaker 1: European Union. Speaking hours before the levies were enacted, the 18 00:01:02,160 --> 00:01:05,200 Speaker 1: US President explained his justification for the move. 19 00:01:05,720 --> 00:01:07,840 Speaker 3: Our country had to do this. We had to go 20 00:01:07,880 --> 00:01:11,240 Speaker 3: and do this. They've taken away other countries have taken 21 00:01:11,280 --> 00:01:14,800 Speaker 3: away our business. They've taken away our jobs. I did 22 00:01:14,840 --> 00:01:18,440 Speaker 3: it initially very strongly against as you know, China and 23 00:01:18,480 --> 00:01:21,800 Speaker 3: some others in the first term, and it was a 24 00:01:21,920 --> 00:01:24,640 Speaker 3: very successful term. We had no inflation, We had the 25 00:01:24,680 --> 00:01:26,720 Speaker 3: greatest economy in the history of our country. 26 00:01:27,480 --> 00:01:30,000 Speaker 1: Trump's decision to press on with the metals tariffs came 27 00:01:30,080 --> 00:01:33,679 Speaker 1: despite a flurry of last minute lobbying from US stakeholders, 28 00:01:33,880 --> 00:01:37,840 Speaker 1: including the country's largest aluminium producer, al CoA. The company 29 00:01:37,880 --> 00:01:40,440 Speaker 1: says the charges put tens of thousands of jobs at 30 00:01:40,520 --> 00:01:42,920 Speaker 1: risk while raising prices for Americans. 31 00:01:43,520 --> 00:01:46,840 Speaker 2: The EU has responded to the tariffs with what the 32 00:01:46,880 --> 00:01:52,320 Speaker 2: European Commission says are quote swift and proportionate countermeasures. They 33 00:01:52,360 --> 00:01:56,000 Speaker 2: will apply to US imports into the EU worth up 34 00:01:56,000 --> 00:02:00,000 Speaker 2: to twenty six billion euros the Italia Tree. Measures include 35 00:02:00,200 --> 00:02:03,640 Speaker 2: allowing tariffs that were suspended during Trump's first term to 36 00:02:03,880 --> 00:02:06,960 Speaker 2: lapse from the first of April, and also levies on 37 00:02:07,000 --> 00:02:11,079 Speaker 2: additional goods to come into force from mid April. It's 38 00:02:11,120 --> 00:02:15,079 Speaker 2: a planned step. Here is European Commission President Ursula Vondelion 39 00:02:15,400 --> 00:02:16,560 Speaker 2: speaking in February. 40 00:02:17,320 --> 00:02:23,799 Speaker 4: We believe that trade wars and punitive tariffs make no sense. 41 00:02:24,280 --> 00:02:30,040 Speaker 4: Tariffs act like attacks their drive inflation. The hardest hit 42 00:02:30,400 --> 00:02:35,679 Speaker 4: are inevitably workers, companies, the small income, the middle classes 43 00:02:35,840 --> 00:02:37,680 Speaker 4: on both sides of the Atlantic. 44 00:02:38,760 --> 00:02:42,080 Speaker 2: Ursula Vondeline speaking there on the fourteenth of February, the 45 00:02:42,120 --> 00:02:45,640 Speaker 2: EU Commission will now consult with member countries on the 46 00:02:45,680 --> 00:02:49,040 Speaker 2: second phase of retaliatory tariffs, with the goal of bringing 47 00:02:49,080 --> 00:02:51,720 Speaker 2: them into effect by the thirteenth of April. 48 00:02:52,360 --> 00:02:55,080 Speaker 1: The UK Prime Minister and Business Secretary of both called 49 00:02:55,080 --> 00:02:58,200 Speaker 1: their American counterparts in recent days to try to escape 50 00:02:58,240 --> 00:03:01,160 Speaker 1: the effects of the steel tariffs. Blomberg's learn the UK 51 00:03:01,320 --> 00:03:04,720 Speaker 1: hopes to secure a last minute upt out, possibly even 52 00:03:04,800 --> 00:03:07,880 Speaker 1: after the levees levies had begun. On Wednesday morning. James 53 00:03:07,880 --> 00:03:08,720 Speaker 1: Worcock has more. 54 00:03:09,200 --> 00:03:12,560 Speaker 5: US President Donald Trump spoke about a great trade deal 55 00:03:12,639 --> 00:03:15,560 Speaker 5: when Kirs Starmer went to Washington last month, so many 56 00:03:15,680 --> 00:03:18,360 Speaker 5: UK officials had thought they had a shot at negotiating 57 00:03:18,480 --> 00:03:21,560 Speaker 5: around the steel tariffs, giving Britain's trade with America is 58 00:03:21,639 --> 00:03:24,640 Speaker 5: broadly balanced. So far, the tariffs are in effect, with 59 00:03:24,680 --> 00:03:28,240 Speaker 5: britain steelmakers calling it a hugely damaging move, affecting their 60 00:03:28,280 --> 00:03:31,880 Speaker 5: second largest export market. But unlike the EU, Britain has 61 00:03:31,919 --> 00:03:35,000 Speaker 5: signaled it would not retaliate with the Business Secretary instead 62 00:03:35,040 --> 00:03:39,040 Speaker 5: this morning, calling the tariffs disappointing. In London, James Wallcock 63 00:03:39,080 --> 00:03:40,800 Speaker 5: Bloomberg Radio, the. 64 00:03:40,880 --> 00:03:44,520 Speaker 2: Latest global tariffs kick in. After a tumultuous day at 65 00:03:44,560 --> 00:03:47,520 Speaker 2: the White House, President Trump threatened to double the metals 66 00:03:47,600 --> 00:03:51,520 Speaker 2: tariffs on Canada to fifty percent, only to back off 67 00:03:51,560 --> 00:03:56,080 Speaker 2: when Ontario agreed to drop plans to impose a surcharge 68 00:03:56,280 --> 00:04:00,520 Speaker 2: on electricity sent to the US. Speaking to reporters, Ontario 69 00:04:00,600 --> 00:04:03,920 Speaker 2: Premier Doug Ford said that he would now be meeting 70 00:04:04,000 --> 00:04:07,920 Speaker 2: with Trump's Commerce Secretary, Howard Latnik to discuss a renewed 71 00:04:08,040 --> 00:04:12,800 Speaker 2: trade deal ahead of the second of April reciprocal tariff deadline. 72 00:04:13,080 --> 00:04:16,320 Speaker 6: I thought this was the right decision. They understand how 73 00:04:16,360 --> 00:04:21,119 Speaker 6: serious we are about the electricity and the tariffs, and 74 00:04:21,560 --> 00:04:24,800 Speaker 6: rather than going back and forth and having threats to 75 00:04:24,880 --> 00:04:29,520 Speaker 6: each other, we have both agreed. Let cooler heads prevail. 76 00:04:30,080 --> 00:04:32,240 Speaker 6: We need to sit down and move this forward. 77 00:04:33,440 --> 00:04:37,320 Speaker 2: Doug Ford, speaking there as US tariff uncertainty has helped 78 00:04:37,320 --> 00:04:40,799 Speaker 2: fuel a three week stretch of volatility in global markets. 79 00:04:41,040 --> 00:04:44,839 Speaker 2: Over recent weeks, Trump imposed twenty five percent duties on 80 00:04:44,960 --> 00:04:48,320 Speaker 2: Canadian and Mexican goods, then delayed them for a month 81 00:04:48,480 --> 00:04:51,680 Speaker 2: then let them take effect last week, then within days 82 00:04:51,800 --> 00:04:56,159 Speaker 2: offered exemptions that could cover most trade with those countries. 83 00:04:56,880 --> 00:04:58,960 Speaker 1: Trump's moved to widen as trade offense have comes at 84 00:04:59,000 --> 00:05:02,080 Speaker 1: a perilous juncture. Seven weeks into his second term, the 85 00:05:02,160 --> 00:05:05,520 Speaker 1: US President's rapid effort to rewire the economy as a 86 00:05:05,520 --> 00:05:10,799 Speaker 1: global manufacturing powers rattled financial markets, spooked consumers, and fueled 87 00:05:10,839 --> 00:05:14,760 Speaker 1: recession fears. Muhammad Larian, chief economics advisor to Alian's and 88 00:05:14,839 --> 00:05:18,320 Speaker 1: Bloomberg opinion columnist, says the back and forth could cost 89 00:05:18,360 --> 00:05:19,280 Speaker 1: the US economy. 90 00:05:19,480 --> 00:05:22,920 Speaker 7: Companies are just waiting to see what's happening before they 91 00:05:22,960 --> 00:05:26,000 Speaker 7: commit to major expenditure. The problem is if they wait 92 00:05:26,040 --> 00:05:31,159 Speaker 7: and see, and if consumers aren't feeling income insecure, then 93 00:05:31,320 --> 00:05:35,160 Speaker 7: we could easily fork ourselves or weigh ourselves during recession. 94 00:05:35,960 --> 00:05:39,160 Speaker 1: Mohammad Larian, speaking there as, Goldman Sachs lowered its year 95 00:05:39,279 --> 00:05:41,400 Speaker 1: end target for the S and P five hundred index 96 00:05:41,480 --> 00:05:45,239 Speaker 1: to six two hundred from six thousand, five hundred, citing 97 00:05:45,320 --> 00:05:50,840 Speaker 1: reduced GDP growth forecasts, hire assumed tariff freights and increased uncertainty. 98 00:05:51,160 --> 00:05:53,360 Speaker 1: On Tuesday, volatile trading day saw the S and P 99 00:05:53,480 --> 00:05:56,880 Speaker 1: five hundreds three weeks sell off briefly reached ten percent 100 00:05:57,160 --> 00:05:59,960 Speaker 1: before a late rally kept it out of correction territory. 101 00:06:00,440 --> 00:06:03,159 Speaker 2: Now to the war in Ukraine, President Trump is putting 102 00:06:03,160 --> 00:06:06,440 Speaker 2: pressure on Russia to accept a c SPA agreement reached 103 00:06:06,520 --> 00:06:10,360 Speaker 2: with Ukrainian advisors in Saudi Arabia. The accord includes a 104 00:06:10,400 --> 00:06:13,719 Speaker 2: thirty day halt in fighting, but it hinges on the 105 00:06:13,760 --> 00:06:18,120 Speaker 2: cooperation of Russian President Vladimir Putin. US Sectory of State 106 00:06:18,160 --> 00:06:21,800 Speaker 2: Marco Rubio says that his administration is hoping for a 107 00:06:21,920 --> 00:06:22,919 Speaker 2: swift response. 108 00:06:23,560 --> 00:06:25,480 Speaker 8: Our hope is that the Russians will answer yes as 109 00:06:25,520 --> 00:06:27,679 Speaker 8: quickly as possible so we can get to the second 110 00:06:27,720 --> 00:06:32,240 Speaker 8: phase of this, which is real negotiations, not never ending dialogue, 111 00:06:32,600 --> 00:06:35,800 Speaker 8: talk forever, but real negotiations to end this conflict in 112 00:06:35,839 --> 00:06:38,880 Speaker 8: a way that's acceptable to both sides, sustainable, and that 113 00:06:39,040 --> 00:06:42,160 Speaker 8: ensures the stability and security of Ukraine for the long term. 114 00:06:42,640 --> 00:06:45,880 Speaker 2: That was Marco Rubio speaking after eight hours of meetings 115 00:06:45,960 --> 00:06:49,920 Speaker 2: with a Ukrainian delegation in Jedda in Saudi Arabia. In 116 00:06:50,000 --> 00:06:52,800 Speaker 2: exchange for Ukraine agreeing to a thirty day truce, the 117 00:06:52,839 --> 00:06:56,480 Speaker 2: Trump administration will lift its freeze on military aid and 118 00:06:56,600 --> 00:06:59,960 Speaker 2: intelligence for Kiev President Vladimir Zelinski said in a video 119 00:07:00,080 --> 00:07:04,440 Speaker 2: addressed to Ukrainians, Russia must show whether it is ready 120 00:07:04,440 --> 00:07:06,800 Speaker 2: to end the war, whether it continues the war. 121 00:07:07,440 --> 00:07:09,920 Speaker 1: Both ships involved in a crash off the UK coast 122 00:07:09,920 --> 00:07:13,400 Speaker 1: are now expected to stay afloat. The Solon caused fires 123 00:07:13,440 --> 00:07:15,800 Speaker 1: and explosions when it plowed into the oil tanker the 124 00:07:15,840 --> 00:07:20,240 Speaker 1: Stena immaculates on Monday. Stas karen Paridis from the Maritime 125 00:07:20,280 --> 00:07:23,000 Speaker 1: Transport Research Groups says the incident's very rare due to 126 00:07:23,080 --> 00:07:24,080 Speaker 1: modern systems. 127 00:07:24,520 --> 00:07:27,800 Speaker 9: They'd have sonars, they have as systems which is automatically 128 00:07:27,920 --> 00:07:32,720 Speaker 9: identificate and the deficiant case the vessel's position real time 129 00:07:32,920 --> 00:07:35,120 Speaker 9: and there's always someone on what's on the bridge to 130 00:07:35,120 --> 00:07:37,280 Speaker 9: see what is happening around. There were some reports there 131 00:07:37,360 --> 00:07:40,200 Speaker 9: was folk, but the systems were too able to avoid 132 00:07:40,200 --> 00:07:41,040 Speaker 9: that kind of collision. 133 00:07:41,480 --> 00:07:44,680 Speaker 1: It's maritime experts Stavros karen Paridis the so long as 134 00:07:44,720 --> 00:07:48,200 Speaker 1: captain has now been arrested on suspicion of gross negligence. 135 00:07:49,120 --> 00:07:51,440 Speaker 2: Those are our top stories for you this morning. Let's 136 00:07:51,440 --> 00:07:54,680 Speaker 2: look at the markets. European equity futures given a boost. 137 00:07:54,680 --> 00:07:57,560 Speaker 2: They're up by one point one percent this morning. Both 138 00:07:57,600 --> 00:08:01,920 Speaker 2: the US, Ukraine sees far blueprints and also the retaliation 139 00:08:02,040 --> 00:08:06,800 Speaker 2: though from the EU on US imposed tariffs. The Euro 140 00:08:06,920 --> 00:08:10,040 Speaker 2: this morning is currently trading at one sport zero nine 141 00:08:10,200 --> 00:08:13,720 Speaker 2: zero nine, so down by a tenth of one percent. 142 00:08:13,960 --> 00:08:18,880 Speaker 2: US equity futures muted reaction to metals tariffs we're up 143 00:08:18,920 --> 00:08:20,480 Speaker 2: by three times of one percent on the S and 144 00:08:20,480 --> 00:08:23,640 Speaker 2: P five hundred. But of course yesterday we saw the 145 00:08:23,840 --> 00:08:27,080 Speaker 2: market really whipsword. It closed down zero point eight percent. 146 00:08:27,120 --> 00:08:29,800 Speaker 2: There was a late session boost so it managed to 147 00:08:29,800 --> 00:08:33,520 Speaker 2: close off its lows after Trump walked back tariff threats 148 00:08:33,559 --> 00:08:38,120 Speaker 2: on Canada and in terms of treasury yields up seven 149 00:08:38,200 --> 00:08:40,400 Speaker 2: basis points of four twenty eight into the close of 150 00:08:40,440 --> 00:08:43,480 Speaker 2: the ten year yield. We get the USCPI date about 151 00:08:43,520 --> 00:08:47,800 Speaker 2: twelve thirty pm today. Weakness in US treasuries also seeing 152 00:08:47,880 --> 00:08:50,640 Speaker 2: Japanese thirty ee yields hitting the higher since two thousand 153 00:08:50,640 --> 00:08:51,040 Speaker 2: and six. 154 00:08:51,600 --> 00:08:53,520 Speaker 1: Well have more in the tariff store in the moment. 155 00:08:53,720 --> 00:08:56,160 Speaker 1: Plus a special report on the growing number of people 156 00:08:56,200 --> 00:08:59,839 Speaker 1: in the UK claiming disability benefits from mental health problems, 157 00:09:00,320 --> 00:09:02,440 Speaker 1: but just not the story that caught our eye this morning. 158 00:09:02,559 --> 00:09:05,120 Speaker 1: Amid the raft of cuts that we've seen at federal 159 00:09:05,120 --> 00:09:07,760 Speaker 1: agencies in the US. Interesting to see that weather forecasters, 160 00:09:07,760 --> 00:09:10,480 Speaker 1: many of whom go on to be employed by these agencies, 161 00:09:10,480 --> 00:09:13,320 Speaker 1: are actually founding a new jobs market in hedge funds. 162 00:09:13,520 --> 00:09:16,600 Speaker 2: Yeah, I miss my vocation. I should have studied geography 163 00:09:17,240 --> 00:09:22,720 Speaker 2: because climate change is having such an impact on commodities markets. Actually, 164 00:09:22,760 --> 00:09:26,120 Speaker 2: if you can muddel weather patterns and basically help firms 165 00:09:26,160 --> 00:09:28,559 Speaker 2: get ahead of price spikes, then you know you could 166 00:09:28,559 --> 00:09:30,760 Speaker 2: be in line for a very big payday. The paychecks 167 00:09:30,800 --> 00:09:31,360 Speaker 2: are enormous. 168 00:09:31,400 --> 00:09:33,560 Speaker 1: Yeah, up to a million dollars now for these employees 169 00:09:33,559 --> 00:09:36,000 Speaker 1: as well. So Square Point Capital, Janes tore eet DV 170 00:09:36,160 --> 00:09:39,000 Speaker 1: Trading Millennium among those that have been beefing up teams 171 00:09:39,000 --> 00:09:41,959 Speaker 1: that focus on the weather. Clearly an important investment. Think 172 00:09:42,000 --> 00:09:44,760 Speaker 1: about just this year, record breaking cold weather in the 173 00:09:44,880 --> 00:09:47,679 Speaker 1: US sending natural gas futures surging. If you can predict 174 00:09:47,720 --> 00:09:49,839 Speaker 1: these sort of things happening in advance can be of 175 00:09:49,880 --> 00:09:52,000 Speaker 1: great advantage to those trading, and, as I say, at 176 00:09:52,040 --> 00:09:54,240 Speaker 1: a time when jobs are being caught elsewhere, a welcome 177 00:09:54,280 --> 00:09:55,840 Speaker 1: opportunity for any of these experts. 178 00:09:55,960 --> 00:09:56,200 Speaker 7: Yeah. 179 00:09:56,240 --> 00:09:58,400 Speaker 2: Absolutely. One of the stories that caught our eye this 180 00:09:58,480 --> 00:10:02,120 Speaker 2: morning on the Blueberg terminal. But let's discuss, of course, 181 00:10:02,280 --> 00:10:05,240 Speaker 2: the main story today, President Donald Trump's twenty five percent 182 00:10:05,320 --> 00:10:09,040 Speaker 2: tariffs on steel and aluminium imports. They have come into 183 00:10:09,080 --> 00:10:13,600 Speaker 2: effect without any last minute exemptions. The European Union has 184 00:10:13,640 --> 00:10:16,840 Speaker 2: announced its response, which will come in two stages and 185 00:10:16,920 --> 00:10:20,520 Speaker 2: affects twenty six billion euros worth of US goods. 186 00:10:20,520 --> 00:10:20,839 Speaker 6: For more. 187 00:10:20,880 --> 00:10:24,040 Speaker 2: We are joined by our senior US Government editor Derek 188 00:10:24,080 --> 00:10:28,000 Speaker 2: Wallbank and our EMEA News director Roslyn Matheson. Welcome to 189 00:10:28,040 --> 00:10:31,199 Speaker 2: both of you. Derek, Donald Trump has done what he 190 00:10:31,240 --> 00:10:34,760 Speaker 2: promised to do here with no negotiations but no deal 191 00:10:34,800 --> 00:10:38,280 Speaker 2: making either. What's going to be worst hit do you think? 192 00:10:39,440 --> 00:10:42,120 Speaker 10: Well, yeah, the lack of a carve out was really 193 00:10:42,120 --> 00:10:43,839 Speaker 10: something that I think was a blow to a certain 194 00:10:43,920 --> 00:10:46,839 Speaker 10: number of countries, Australia particularly, which thought that they had 195 00:10:46,840 --> 00:10:50,240 Speaker 10: a path to a carve out. But it does suggest 196 00:10:50,360 --> 00:10:53,960 Speaker 10: look that Donald Trump is serious as a heart attack 197 00:10:54,000 --> 00:10:56,560 Speaker 10: when it comes to going forward on the tariffs. He 198 00:10:56,600 --> 00:10:59,480 Speaker 10: has pledged that tariffs are not only going to be 199 00:10:59,880 --> 00:11:03,520 Speaker 10: more than they are right now, but are going to 200 00:11:03,640 --> 00:11:07,120 Speaker 10: generate sufficient revenue to be able to be a difference 201 00:11:07,160 --> 00:11:09,360 Speaker 10: maker when it comes to his tax and spending plan. 202 00:11:09,440 --> 00:11:13,280 Speaker 10: So this is really sort of critical in terms of 203 00:11:13,679 --> 00:11:16,840 Speaker 10: in terms of the effect here. You know, I'm struck. 204 00:11:16,880 --> 00:11:21,559 Speaker 10: I'm looking at a chart of US imports steel in aluminum. 205 00:11:22,120 --> 00:11:24,720 Speaker 10: Canada is number one in both, number one by a 206 00:11:24,880 --> 00:11:30,200 Speaker 10: mile for the US in aluminum, number one in steel Mexico, Brazil, China, Taiwan, 207 00:11:30,280 --> 00:11:33,880 Speaker 10: South Korea, Germany, Japan, India, Vietnam as the next ones 208 00:11:33,960 --> 00:11:36,640 Speaker 10: to follow. And so even though you do see this 209 00:11:36,679 --> 00:11:42,440 Speaker 10: European Union retaliation here, the biggest effects is going to 210 00:11:42,480 --> 00:11:46,160 Speaker 10: be on some of the United States as continental partners. 211 00:11:47,040 --> 00:11:50,480 Speaker 10: But bear in mind tariffs are ultimately things that are 212 00:11:50,520 --> 00:11:55,000 Speaker 10: paid on the import right, and so the biggest sort 213 00:11:55,080 --> 00:11:57,920 Speaker 10: of where is this price going to get paid is 214 00:11:57,960 --> 00:12:02,000 Speaker 10: going to be on the US users of these who 215 00:12:02,080 --> 00:12:08,240 Speaker 10: are likely to fill you feel some effect of price 216 00:12:08,320 --> 00:12:09,560 Speaker 10: increases from the tariffs. 217 00:12:11,040 --> 00:12:13,520 Speaker 1: Ros Mathsen turning to you. We've had a response from 218 00:12:13,520 --> 00:12:17,240 Speaker 1: the European Union, clearly timed to be announced after the 219 00:12:17,360 --> 00:12:20,280 Speaker 1: measures came into force. What exactly has the EUS that 220 00:12:20,360 --> 00:12:22,559 Speaker 1: it will do well, that's right. 221 00:12:22,640 --> 00:12:25,480 Speaker 11: In fact, they announced their statement quite early this morning 222 00:12:25,880 --> 00:12:29,200 Speaker 11: saying they're going to impose duties on twenty six billion 223 00:12:29,280 --> 00:12:32,440 Speaker 11: euros worth of American goods, I mean, getting a few 224 00:12:32,440 --> 00:12:35,640 Speaker 11: more details on that now. Obviously they're going to target 225 00:12:35,760 --> 00:12:39,160 Speaker 11: US steel and alumined products, but they're also going to 226 00:12:39,200 --> 00:12:43,800 Speaker 11: look at textiles, agricultural products, and home appliances, and they're 227 00:12:43,800 --> 00:12:45,760 Speaker 11: going to look back at some of the products that 228 00:12:45,840 --> 00:12:49,200 Speaker 11: got hit in previous trade tensions with Donald Trump. And 229 00:12:49,200 --> 00:12:52,080 Speaker 11: that's some of the kind of big name US products, 230 00:12:52,080 --> 00:12:56,319 Speaker 11: including bourbon and motorbikes. Of course, famously, years ago they 231 00:12:56,360 --> 00:13:00,840 Speaker 11: targeted Levi Strauss genes and they targeted Harley Davidson motorbikes 232 00:13:01,040 --> 00:13:04,600 Speaker 11: and US bourbon. So we're getting some more specifics on 233 00:13:04,679 --> 00:13:06,840 Speaker 11: that now. I mean, the EU describes this in the 234 00:13:06,880 --> 00:13:11,320 Speaker 11: statement as strong but proportionate. They're leaving the door open, 235 00:13:11,559 --> 00:13:15,720 Speaker 11: obviously to continue to negotiate on this. They are saying 236 00:13:15,760 --> 00:13:19,320 Speaker 11: that they can also look to re up some of 237 00:13:19,360 --> 00:13:23,520 Speaker 11: the penalties they had previously. They're holding fire on those 238 00:13:23,520 --> 00:13:27,200 Speaker 11: obviously to see what happens with reciprocal tariffs potentially in 239 00:13:27,240 --> 00:13:31,040 Speaker 11: a couple of weeks, but certainly coming out of the 240 00:13:31,080 --> 00:13:34,280 Speaker 11: gate pretty hard this morning, and as they had said 241 00:13:34,320 --> 00:13:37,439 Speaker 11: they would do in fact if these tariffs did take place. 242 00:13:38,760 --> 00:13:40,680 Speaker 2: Derek, what do you think we learned though? From the 243 00:13:40,760 --> 00:13:45,400 Speaker 2: clash with Canada yesterday, I mean an extraordinary ramping up 244 00:13:45,520 --> 00:13:49,320 Speaker 2: Trump threatening to raise tariffs against Canada to fifty percent, 245 00:13:49,360 --> 00:13:53,800 Speaker 2: but then backing down hours later because of the clash 246 00:13:53,840 --> 00:13:57,640 Speaker 2: with individual Canadian politicians. What do you think the world 247 00:13:57,720 --> 00:13:58,920 Speaker 2: will take from that? 248 00:14:00,440 --> 00:14:03,040 Speaker 10: Well, look, I think that I think that the world 249 00:14:03,080 --> 00:14:07,040 Speaker 10: is looking to Canada as the frontline of trying to 250 00:14:07,120 --> 00:14:11,600 Speaker 10: figure out how to deal with Donald Trump. And look, 251 00:14:11,600 --> 00:14:14,199 Speaker 10: my granddad always used to tell me that experience is 252 00:14:14,200 --> 00:14:16,440 Speaker 10: the best teacher. Doesn't have to be your experience, though, 253 00:14:17,080 --> 00:14:19,360 Speaker 10: So everyone's looking at this as an object lesson To 254 00:14:19,400 --> 00:14:22,160 Speaker 10: the degree that Canada pushes back, they're trying to see 255 00:14:22,160 --> 00:14:24,760 Speaker 10: how that works. To the degree that they try and 256 00:14:26,000 --> 00:14:30,240 Speaker 10: play a little bit of friendly push game, maybe that works. 257 00:14:30,320 --> 00:14:32,920 Speaker 10: Let's see how that goes. So everyone's trying to sort 258 00:14:32,920 --> 00:14:37,000 Speaker 10: of get an education very rapidly on how to do this. Now, 259 00:14:37,080 --> 00:14:41,200 Speaker 10: Canada did take a line similar to what Roz described 260 00:14:41,240 --> 00:14:44,160 Speaker 10: as the Europeans doing, trying to find some areas that 261 00:14:44,200 --> 00:14:49,920 Speaker 10: would particularly bite, especially on electricity. Now, now that was 262 00:14:49,960 --> 00:14:54,000 Speaker 10: something that has gotten Trump's attention. He has posted about 263 00:14:54,040 --> 00:14:58,800 Speaker 10: it many times. He has been particularly vocal about that 264 00:15:00,000 --> 00:15:02,920 Speaker 10: and using that you know, maybe coming off of that 265 00:15:03,000 --> 00:15:08,280 Speaker 10: was maybe a lever Ross very very rightly mentioned, you know, 266 00:15:08,360 --> 00:15:11,960 Speaker 10: the targeting of red state products like bourbon. I do 267 00:15:12,000 --> 00:15:13,760 Speaker 10: think that's going to be something that you're going to 268 00:15:13,800 --> 00:15:18,400 Speaker 10: see a lot more of. Overall. I think you're looking 269 00:15:18,480 --> 00:15:21,840 Speaker 10: at the idea that there is some space for negotiations. 270 00:15:21,920 --> 00:15:25,120 Speaker 10: Still we are seeing some negotiation, but the trend is 271 00:15:25,200 --> 00:15:29,160 Speaker 10: towards implementation of tariffs, albeit not at the maximum level 272 00:15:29,520 --> 00:15:32,840 Speaker 10: that we have been that we have been warned of 273 00:15:33,400 --> 00:15:36,520 Speaker 10: by the Trump administration, but still more than I think 274 00:15:36,680 --> 00:15:39,040 Speaker 10: markets are looking at. The last thing that I would 275 00:15:39,080 --> 00:15:41,280 Speaker 10: say is that this is all playing out against the 276 00:15:41,320 --> 00:15:45,240 Speaker 10: specter of some of these economic moves that we've seen. 277 00:15:45,680 --> 00:15:48,320 Speaker 10: And even though the White House has downplayed how much 278 00:15:48,360 --> 00:15:51,600 Speaker 10: they're paying attention to the stock market, they very clearly 279 00:15:51,720 --> 00:15:54,680 Speaker 10: are paying attention to the stock market, as the event 280 00:15:55,320 --> 00:15:57,480 Speaker 10: at the White House with Donald Trump shopping for a 281 00:15:57,560 --> 00:16:02,400 Speaker 10: Tesla clearly showed. Amid the fall in the stock price 282 00:16:02,520 --> 00:16:04,800 Speaker 10: that Tesla has encountered year to date. 283 00:16:06,160 --> 00:16:09,360 Speaker 1: Ro was thinking about the economic effects of this as well. 284 00:16:09,600 --> 00:16:11,600 Speaker 1: You know, the Opin Union had been prepared for this. 285 00:16:11,760 --> 00:16:13,960 Speaker 1: We've seen that in the form of the response that's 286 00:16:14,000 --> 00:16:17,200 Speaker 1: been taken. But of course the economic picture much darker 287 00:16:17,360 --> 00:16:20,840 Speaker 1: in the EU than it is in the United States. 288 00:16:20,960 --> 00:16:25,080 Speaker 1: How does this set the stage for potential escalation. We're expecting, 289 00:16:25,080 --> 00:16:27,240 Speaker 1: of course reciprocal tariffs be announced in just a couple 290 00:16:27,280 --> 00:16:27,880 Speaker 1: of weeks time. 291 00:16:29,360 --> 00:16:31,760 Speaker 11: Well, that's right, and certainly they're worried in Europe about 292 00:16:31,760 --> 00:16:34,440 Speaker 11: the impact. I mean, Derek was just pointing out, of course, 293 00:16:34,440 --> 00:16:38,720 Speaker 11: also the potential economic impact in the US. If you 294 00:16:38,800 --> 00:16:42,320 Speaker 11: see an impact on inflation in the US and really 295 00:16:42,360 --> 00:16:46,320 Speaker 11: starting to impact Americans there and vote is there. That's 296 00:16:46,360 --> 00:16:50,560 Speaker 11: something that Donald Trump may be attuned to and perhaps Europeans, 297 00:16:50,640 --> 00:16:53,280 Speaker 11: you know, the officials are hoping in a way that 298 00:16:53,280 --> 00:16:56,360 Speaker 11: that does drive some of his thinking because they are concerned. 299 00:16:56,680 --> 00:17:00,080 Speaker 11: It's not just that you get a fall off in 300 00:17:00,120 --> 00:17:04,000 Speaker 11: European exports to the US so that market becomes harder 301 00:17:04,040 --> 00:17:07,359 Speaker 11: and more expensive to access. But also, you know, Derrek 302 00:17:07,440 --> 00:17:09,600 Speaker 11: was pointing out, a lot of this stuff comes from 303 00:17:09,680 --> 00:17:12,000 Speaker 11: places like Canada, and it's got to go somewhere else 304 00:17:12,040 --> 00:17:16,360 Speaker 11: potentially now. And do you get a lot more Canadian 305 00:17:17,480 --> 00:17:20,560 Speaker 11: particularly again in the in the steel and aluminum space, 306 00:17:20,880 --> 00:17:23,080 Speaker 11: does a lot of that come towards Europe? So you 307 00:17:23,160 --> 00:17:26,639 Speaker 11: get the market flooded in Europe as a result, and 308 00:17:26,680 --> 00:17:30,080 Speaker 11: therefore you have a real issue about oversupply and that 309 00:17:30,160 --> 00:17:34,360 Speaker 11: really affects companies here. So you get a double pronged effect, 310 00:17:34,400 --> 00:17:37,679 Speaker 11: which they're clearly worried about both on the steel and 311 00:17:37,720 --> 00:17:41,040 Speaker 11: aluminum side. So obviously they are going to wait and watch. 312 00:17:41,080 --> 00:17:44,440 Speaker 11: They are taking it step by step. They are saying, yes, 313 00:17:44,520 --> 00:17:48,720 Speaker 11: we're looking at the reciprocal tariff state they have suspended. 314 00:17:49,840 --> 00:17:53,040 Speaker 11: They have suspended some tariffs or US products. There do 315 00:17:53,119 --> 00:17:55,840 Speaker 11: you to come back into place, to snap back at 316 00:17:55,840 --> 00:17:57,840 Speaker 11: the end of March, And that's not a difficult thing, 317 00:17:57,920 --> 00:17:59,960 Speaker 11: just to unfreeze them and to say that they're back 318 00:18:00,640 --> 00:18:01,119 Speaker 11: in place. 319 00:18:01,200 --> 00:18:02,560 Speaker 1: So they do have the. 320 00:18:02,600 --> 00:18:06,960 Speaker 11: Lever of unfreezing further measures. But again it seems like 321 00:18:07,000 --> 00:18:10,680 Speaker 11: Donald Trump can change his mind very quickly within ours, 322 00:18:10,720 --> 00:18:13,720 Speaker 11: as Derek was saying, and so perhaps they're hoping that 323 00:18:13,760 --> 00:18:16,560 Speaker 11: there's a way through in the coming days. The question 324 00:18:16,640 --> 00:18:19,520 Speaker 11: for Europe really is more who can be the one 325 00:18:19,560 --> 00:18:22,560 Speaker 11: who speaks for Europe to Donald Trump, who has got 326 00:18:22,600 --> 00:18:25,720 Speaker 11: his ear, who can get in there and perhaps get 327 00:18:25,800 --> 00:18:28,840 Speaker 11: him to change his mind, And who can that person be, 328 00:18:28,840 --> 00:18:32,879 Speaker 11: Because it just doesn't seem as though the HEDE Commissioner 329 00:18:33,480 --> 00:18:37,199 Speaker 11: Ocelan Vonderline does have that rapport with Donald Trump. And 330 00:18:37,240 --> 00:18:39,720 Speaker 11: the question is can one of the individual leaders perhaps 331 00:18:39,720 --> 00:18:41,400 Speaker 11: in Europe have better luck. 332 00:18:42,800 --> 00:18:45,720 Speaker 2: Well, it doesn't look at the moment like the UK 333 00:18:45,880 --> 00:18:47,880 Speaker 2: has had the luck that it might have hoped for. 334 00:18:48,000 --> 00:18:52,920 Speaker 2: It's not been excluded from tariffs ros you know, surely 335 00:18:53,480 --> 00:18:55,720 Speaker 2: not a turn down. His suit will be quite concerned 336 00:18:55,720 --> 00:18:58,440 Speaker 2: about that. What do you make of the tone today? 337 00:18:59,119 --> 00:19:01,560 Speaker 11: Well, that's right because even up to yesterday there was 338 00:19:01,600 --> 00:19:04,119 Speaker 11: a sense from Downey Street they were at least hoping 339 00:19:04,400 --> 00:19:07,919 Speaker 11: for an exemption for the UK. Because of course things 340 00:19:07,920 --> 00:19:11,000 Speaker 11: so far had been pretty warm between Donald Trump and 341 00:19:11,040 --> 00:19:15,200 Speaker 11: the UK Prime Minister Keir Starmer. They've had good meetings 342 00:19:15,240 --> 00:19:18,520 Speaker 11: so far. The narrative from Donald Trump in the UK 343 00:19:18,680 --> 00:19:20,800 Speaker 11: has been quite positive, and it seemed as though he 344 00:19:20,840 --> 00:19:24,919 Speaker 11: hadn't really focused his ire on the trade side on 345 00:19:24,960 --> 00:19:28,159 Speaker 11: the UK, and that being out of the European Union 346 00:19:28,640 --> 00:19:31,800 Speaker 11: was that's one of perhaps the one benefit of Brexit 347 00:19:31,960 --> 00:19:34,960 Speaker 11: is that the UK's out on its own and therefore 348 00:19:35,080 --> 00:19:38,120 Speaker 11: off the radar a bit. But as we can see, 349 00:19:38,119 --> 00:19:39,840 Speaker 11: Donald Trump in this case didn't really want to give 350 00:19:39,840 --> 00:19:45,359 Speaker 11: anybody an exemption, including other allies like Australia, as Derek 351 00:19:45,880 --> 00:19:49,120 Speaker 11: was noting, and so real questions now for kir Starmer 352 00:19:49,560 --> 00:19:52,439 Speaker 11: and for his government, you know, all that effort hasn't 353 00:19:52,480 --> 00:19:56,399 Speaker 11: really achieved anything, and what can they do now in 354 00:19:56,440 --> 00:19:58,960 Speaker 11: further conversations. So I'm sure quite a bit of scrambling 355 00:19:59,040 --> 00:20:01,359 Speaker 11: going on this morning in the halls of power in 356 00:20:01,400 --> 00:20:01,760 Speaker 11: the UK. 357 00:20:02,440 --> 00:20:04,880 Speaker 1: Okay Roslind Maths and our EMA news director and our 358 00:20:04,920 --> 00:20:07,960 Speaker 1: senior US Government editor Derek Wolbank, thank you very much 359 00:20:08,240 --> 00:20:11,119 Speaker 1: for joining us with the latest on this story. Just 360 00:20:11,160 --> 00:20:13,680 Speaker 1: a couple of hours after those tariffs have come into 361 00:20:13,720 --> 00:20:16,080 Speaker 1: a force. We've already had the responses we've been hearing 362 00:20:16,400 --> 00:20:19,919 Speaker 1: from the European Union. Worth noting not much reaction on 363 00:20:20,000 --> 00:20:23,920 Speaker 1: markets to this move as well. We'd have seen aluminium 364 00:20:23,920 --> 00:20:25,919 Speaker 1: prices are up slightly on the day on the London 365 00:20:25,920 --> 00:20:30,480 Speaker 1: Metals Exchange, but this had been an expected measure, and 366 00:20:30,720 --> 00:20:33,320 Speaker 1: looking at how markets have moved, the focus does seem 367 00:20:33,359 --> 00:20:35,800 Speaker 1: to be more on the developments in the talks in 368 00:20:36,160 --> 00:20:39,399 Speaker 1: over Ukraine and that potential for a thirty day ceasefire. 369 00:20:39,640 --> 00:20:41,399 Speaker 1: Of course, you're waiting for the Russian response on that 370 00:20:41,440 --> 00:20:44,719 Speaker 1: European stock features are pointing significantly higher ahead of today's 371 00:20:44,760 --> 00:20:46,359 Speaker 1: open as well. We did see the euros strength and 372 00:20:46,440 --> 00:20:48,639 Speaker 1: yesterday it's down slightly off its highs, but still trading 373 00:20:48,680 --> 00:20:52,400 Speaker 1: at one oh nine against the dollar, which is stronger 374 00:20:52,440 --> 00:20:54,119 Speaker 1: than we have seen it now for many months. 375 00:20:54,240 --> 00:20:56,800 Speaker 2: Yeah, a couple of points that I'd make on the markets. 376 00:20:56,840 --> 00:20:59,760 Speaker 2: Of course, Ray Daio comparing the current trade situation to 377 00:21:00,040 --> 00:21:04,479 Speaker 2: nineteen thirties Germany, I think is one thing worth noting. 378 00:21:04,560 --> 00:21:07,520 Speaker 2: Warning that the tariffs could lead to fighting between countries 379 00:21:07,600 --> 00:21:10,880 Speaker 2: didn't necessarily mean military fighting, and he was talking about 380 00:21:10,960 --> 00:21:13,919 Speaker 2: him being that he is an observer, and yet I 381 00:21:13,920 --> 00:21:16,840 Speaker 2: think this sort of raises alarm bells Gold and Sax 382 00:21:16,880 --> 00:21:19,000 Speaker 2: also cutting its year end target for the S and 383 00:21:19,000 --> 00:21:21,439 Speaker 2: P five hundred down to six thy two hundred. And 384 00:21:21,480 --> 00:21:25,760 Speaker 2: then although the Tesla share price was up on Tuesday 385 00:21:25,800 --> 00:21:28,480 Speaker 2: by three point eight percent on the day, there was 386 00:21:28,520 --> 00:21:30,600 Speaker 2: a fifteen percent route and of course it is down 387 00:21:30,680 --> 00:21:33,199 Speaker 2: fifty two percent from the all time high that we 388 00:21:33,240 --> 00:21:36,800 Speaker 2: saw in mid December, So that was the Tesla price 389 00:21:36,880 --> 00:21:37,879 Speaker 2: action in the market. 390 00:21:38,240 --> 00:21:40,280 Speaker 1: Well to the UK now where analysis and the Institute 391 00:21:40,280 --> 00:21:43,080 Speaker 1: for Fiscal Studies says half a million more people in 392 00:21:43,119 --> 00:21:46,440 Speaker 1: England and Wales are now claiming benefits from mental health 393 00:21:46,480 --> 00:21:49,480 Speaker 1: problems compared to before the pandemic. It's a figure which 394 00:21:49,480 --> 00:21:52,400 Speaker 1: may add to concerns around government plans to reform spending 395 00:21:52,720 --> 00:21:55,639 Speaker 1: on welfare. Our UK economy reporter Tom Reese joins us 396 00:21:55,680 --> 00:21:58,320 Speaker 1: Now from more. Tom, Good morning. What did we learn 397 00:21:58,400 --> 00:21:59,840 Speaker 1: from this IFS report? 398 00:22:00,240 --> 00:22:00,800 Speaker 3: It kind of. 399 00:22:00,880 --> 00:22:03,679 Speaker 12: Reveals or exposes the extent to which kind of there 400 00:22:03,760 --> 00:22:07,120 Speaker 12: is a mental health crisis in the UK and how 401 00:22:07,160 --> 00:22:11,320 Speaker 12: that is worsened kind of our worker participation problem. You know, 402 00:22:11,520 --> 00:22:13,920 Speaker 12: in the last couple of years, we've seen a lot 403 00:22:13,920 --> 00:22:18,359 Speaker 12: of workers leave the workforce altogether and that's led to 404 00:22:18,640 --> 00:22:20,879 Speaker 12: a lot of problems such as the amount you know, 405 00:22:20,880 --> 00:22:23,320 Speaker 12: the government pays out in terms of welfare support. And 406 00:22:23,520 --> 00:22:26,080 Speaker 12: what this report really does is it sort of builds 407 00:22:26,080 --> 00:22:29,919 Speaker 12: a picture on why that inactivity has increased, and it 408 00:22:29,960 --> 00:22:32,560 Speaker 12: seems to show that a lot of it is due to, 409 00:22:32,800 --> 00:22:35,320 Speaker 12: you know, a deterioration in kind of mental health, so 410 00:22:35,359 --> 00:22:38,280 Speaker 12: that they think half of the increase in working age 411 00:22:38,280 --> 00:22:41,880 Speaker 12: people on disability benefits since twenty nineteen has been due 412 00:22:41,920 --> 00:22:44,320 Speaker 12: to mental health. And it is huge numbers. It is 413 00:22:44,359 --> 00:22:47,960 Speaker 12: like five hundred thousand people, So it's a lot of 414 00:22:47,960 --> 00:22:50,760 Speaker 12: people that have left the workforce just because of this 415 00:22:50,800 --> 00:22:52,840 Speaker 12: one one issue, and that's a big problem for the government. 416 00:22:53,000 --> 00:22:55,440 Speaker 2: So then I mean, what effect is it having basically 417 00:22:55,480 --> 00:22:58,200 Speaker 2: on the UK economy? And there is some debate about 418 00:22:58,240 --> 00:23:01,360 Speaker 2: this worklessness, the root of it and how to resolve it. 419 00:23:01,680 --> 00:23:04,200 Speaker 2: What is the effect though, actually on the UK economy 420 00:23:04,440 --> 00:23:07,200 Speaker 2: of what has been a very big, notable increase in 421 00:23:07,280 --> 00:23:09,960 Speaker 2: the number of people who are too sick to work. 422 00:23:10,200 --> 00:23:13,800 Speaker 12: The two main facts. Firstly, obviously it reduces your labor 423 00:23:13,840 --> 00:23:16,240 Speaker 12: supply relative to what it would have been and given 424 00:23:16,280 --> 00:23:19,679 Speaker 12: our productivity growth is pretty pathetic at the moment, so 425 00:23:19,880 --> 00:23:22,280 Speaker 12: you're really relying on the labor supply to keep the 426 00:23:22,320 --> 00:23:26,439 Speaker 12: economy and GDP motoring. So if the labor supplies is 427 00:23:26,480 --> 00:23:29,280 Speaker 12: also misfiring and as well as the productivity growth, you know, 428 00:23:29,320 --> 00:23:30,919 Speaker 12: you get what we have at the moment, which is 429 00:23:30,920 --> 00:23:34,520 Speaker 12: an economy that's barely growing. And the second problem is 430 00:23:34,520 --> 00:23:36,399 Speaker 12: is that it's keeping the labor market tighter than the 431 00:23:36,440 --> 00:23:38,840 Speaker 12: Bank of England would like it. So you know that 432 00:23:38,840 --> 00:23:42,160 Speaker 12: that lack of available workers is keeping wage growth very high, 433 00:23:42,280 --> 00:23:44,760 Speaker 12: keeping you know, kind of competition for workers very high. 434 00:23:44,800 --> 00:23:47,840 Speaker 12: And that's making the bank's job of keeping inflation you know, 435 00:23:47,920 --> 00:23:51,400 Speaker 12: much harder, and to be honest, that's why the relative 436 00:23:51,440 --> 00:23:55,720 Speaker 12: to previous interest rate cutting cycles, the UK Central Bank 437 00:23:55,760 --> 00:23:58,240 Speaker 12: is really kind of moving at a glacial pace. 438 00:23:58,640 --> 00:24:01,119 Speaker 1: Tom these figures, you know, it's a big number to 439 00:24:01,119 --> 00:24:03,240 Speaker 1: talk about half million more people. I just wonder how 440 00:24:03,280 --> 00:24:05,320 Speaker 1: does this compare to the data that we have for 441 00:24:05,400 --> 00:24:07,720 Speaker 1: other countries and the number of people who are on 442 00:24:07,880 --> 00:24:10,719 Speaker 1: illness benefits sense the pandemic. 443 00:24:10,720 --> 00:24:12,880 Speaker 12: So the idea that kind of mental health has gone 444 00:24:12,880 --> 00:24:15,280 Speaker 12: worse in recent years obviously not a unique problem to 445 00:24:15,280 --> 00:24:17,560 Speaker 12: the UK. You know, everyone went through the pandemic, Everyone's 446 00:24:17,560 --> 00:24:21,760 Speaker 12: had kind of the rise of social media, cost living crisis, 447 00:24:21,800 --> 00:24:25,480 Speaker 12: et cetera. So there are there are definitely similar signs 448 00:24:25,560 --> 00:24:27,840 Speaker 12: in the kind of stats in other countries. But I 449 00:24:27,840 --> 00:24:29,800 Speaker 12: think what's kind of unique to the UK is that 450 00:24:29,920 --> 00:24:33,960 Speaker 12: you know, there's rise in economic inactivity among workers, so 451 00:24:34,040 --> 00:24:36,840 Speaker 12: you know, those people not in jobs and not seeking jobs, 452 00:24:37,160 --> 00:24:39,920 Speaker 12: and that is fairly unique to the UK, that large rise, 453 00:24:39,960 --> 00:24:42,680 Speaker 12: and we know that that we think that's been driven 454 00:24:42,680 --> 00:24:45,119 Speaker 12: by ill health. And if that has been driven largely 455 00:24:45,119 --> 00:24:48,040 Speaker 12: by mental health, as this report suggests, then it could 456 00:24:48,080 --> 00:24:51,000 Speaker 12: suggest that the UK is kind of mental health crisis 457 00:24:51,320 --> 00:24:55,000 Speaker 12: has actually been worse than than other countries in recent years. 458 00:24:55,040 --> 00:24:57,919 Speaker 2: But the Prime Minister has talked about the welfare system 459 00:24:57,960 --> 00:25:03,560 Speaker 2: being unsustainable. The government is looking to cut spending, of course, 460 00:25:03,600 --> 00:25:07,119 Speaker 2: and trying to find ways to do that. So what 461 00:25:07,320 --> 00:25:09,520 Speaker 2: changes you think they're going to consider? 462 00:25:10,200 --> 00:25:12,600 Speaker 12: So far, they've been pretty vague about what they might do, 463 00:25:12,640 --> 00:25:15,920 Speaker 12: and I kind of understand why because you know, cut 464 00:25:16,000 --> 00:25:18,920 Speaker 12: the benefits are never popular in the the labor part. 465 00:25:19,119 --> 00:25:20,560 Speaker 12: You know, we're going to have to see what, you know, 466 00:25:20,600 --> 00:25:23,760 Speaker 12: the backlash to things like the two child benefits system 467 00:25:23,960 --> 00:25:27,080 Speaker 12: and the winter fuel Alliance last year, and so they're 468 00:25:27,119 --> 00:25:29,199 Speaker 12: talking about things that are kind of maybe looked at, 469 00:25:29,240 --> 00:25:32,159 Speaker 12: you know, reforms that the Personal Independence payments could be 470 00:25:32,200 --> 00:25:33,800 Speaker 12: on the card. You know, this is given to people 471 00:25:33,840 --> 00:25:36,560 Speaker 12: to help with the extra cost caused by long term 472 00:25:36,880 --> 00:25:38,920 Speaker 12: ill health. There's been some talk in some of the 473 00:25:38,960 --> 00:25:42,760 Speaker 12: papers emerging certain benefits to give people who've worked more 474 00:25:42,800 --> 00:25:46,440 Speaker 12: priority over those who haven't. But the bottom line is that, 475 00:25:46,520 --> 00:25:48,840 Speaker 12: you know, when people talk about reforms in this areas, 476 00:25:48,840 --> 00:25:51,320 Speaker 12: it's about making them less generous to save money and 477 00:25:51,440 --> 00:25:54,680 Speaker 12: to try and increase the incentive to work. Its concerns 478 00:25:54,760 --> 00:25:57,600 Speaker 12: among some people that these people not working actually worsens 479 00:25:57,640 --> 00:26:00,760 Speaker 12: their situation, so you know, it means that they maybe 480 00:26:00,840 --> 00:26:03,480 Speaker 12: should get a little push into employment. Obviously, there's people 481 00:26:03,480 --> 00:26:05,600 Speaker 12: on neither sides saying that they worried that, you know, 482 00:26:05,600 --> 00:26:07,879 Speaker 12: support is going to be pulled out from underneath people. 483 00:26:08,440 --> 00:26:12,399 Speaker 12: So it's a very politically contentious area. But there's a 484 00:26:12,440 --> 00:26:15,080 Speaker 12: lot of money going into this area, so they can 485 00:26:15,160 --> 00:26:16,840 Speaker 12: say any really helps the Chancellor. 486 00:26:17,320 --> 00:26:20,040 Speaker 1: This is Bloomberg Daybreak Europe. 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