WEBVTT - PIIE's Kirkegaard: Brexit Driven By Anti-Immigrant Views(Audio)

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<v Speaker 1>I'm Charlie Palette. Stocks are fluctuating right now. We have

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<v Speaker 1>forty seventy four. I'm Charlie Pallett. That's a Bloomberg Business flash.

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<v Speaker 1>You're listening to Taking Stock with Kathleen Hayes and Pim

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<v Speaker 1>Fox on Bloomberg Radio. Grexits remain? Will the UK vote

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<v Speaker 1>to leave the European Union just one week from today,

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<v Speaker 1>and if they do, what does it mean not only

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<v Speaker 1>for the United Kingdom but for the rest of Europe.

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<v Speaker 1>Jacob Kirkgard joined US now senior fellow at the Peterson

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<v Speaker 1>Institute for International Economics in Washington, d C. He has

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<v Speaker 1>been writing a great deal about fears over immigration and

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<v Speaker 1>what they and how they play into this Brexit vote. Jacob, welcome,

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<v Speaker 1>great to be here, but I actually want to start

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<v Speaker 1>by asking you, um, the death of UK opposition Labor

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<v Speaker 1>Party lawmaker Joe Cox today, killed by a man who

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<v Speaker 1>is in favor of leaving the European Union. Uh does

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<v Speaker 1>this Do you think this impact sentiment in the UK

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<v Speaker 1>at all on this vote? Oh? I don't think there's

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<v Speaker 1>any doubt that it will. I mean, I think we

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<v Speaker 1>we just have to be running the risk of being

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<v Speaker 1>very cynical here. But you have a forty two year old,

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<v Speaker 1>very photogenic mother of two killed as part of a

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<v Speaker 1>political process in a country that is highly unaccustomed to

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<v Speaker 1>political violence. So I think you'll have an enormous impact. Frankly,

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<v Speaker 1>I think it would be very difficult to restart the

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<v Speaker 1>campaigning again. You know, maybe after the weekend or something

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<v Speaker 1>like that without continuingly coming back to this issue. And

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<v Speaker 1>it will also, in my opinion therefore drive turnout at

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<v Speaker 1>the campaign on next to Thursday, because people will feel

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<v Speaker 1>very emotional about it. So I think this is this

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<v Speaker 1>is a really really big deal for this campaign. Jacob

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<v Speaker 1>paint as a scenario of leaving and staying and what

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<v Speaker 1>happens to the British economy in both scenarios, um well,

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<v Speaker 1>starting with the easiest of the two scenarios, which will

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<v Speaker 1>be if Britain votes to remain. In that case, I

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<v Speaker 1>would predict basically the majority of the status quo UH continues.

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<v Speaker 1>I think you would see a slight bounce back in

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<v Speaker 1>the second half of this year by the UK economy.

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<v Speaker 1>You will have a sort of pent up investments being released.

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<v Speaker 1>You would see a swing back in the value of

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<v Speaker 1>the pound and and equities etcetera, which have obviously been

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<v Speaker 1>weighed down by uncertainty. But at the same time, I

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<v Speaker 1>think the reality is that this campaign will have, especially

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<v Speaker 1>after today's tragic events, will have made or or made

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<v Speaker 1>the country split even more over the issue of immigration,

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<v Speaker 1>and that includes both the Conservative and the Labor Party.

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<v Speaker 1>So fundamentally, in the long run, the UK will have

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<v Speaker 1>become a more difficult place to govern after this campaign. UM. Now,

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<v Speaker 1>if there is a vote to leave UH, then I

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<v Speaker 1>am certainly in the camp who believes that this is

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<v Speaker 1>a very bad economic news for the UK, because I

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<v Speaker 1>believe two things will happen. First of all, given that

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<v Speaker 1>a Leave victory will be driven predominantly by anti immigration

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<v Speaker 1>sentiment UH, and that the lead campaign have essentially locked

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<v Speaker 1>themselves into a future, depending on who you ask there

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<v Speaker 1>of reducing net migration to the UK of between seventy

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<v Speaker 1>to UH. That is a low immigration future for the UK,

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<v Speaker 1>which is means is very bad for growth UH and

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<v Speaker 1>a lot of other things in the UK. Secondly, by

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<v Speaker 1>focusing so much on immigration, the UK has essentially ruled

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<v Speaker 1>out the possibility of securing a free trade agreement or

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<v Speaker 1>access to the internal market or any broader economic RelA

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<v Speaker 1>relationship would the rest of the EU, because the one

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<v Speaker 1>of the demands from the EU faily be that UH

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<v Speaker 1>you migration be allowed to continue. UH. So this is

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<v Speaker 1>a situation where, probably after about two years of UH,

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<v Speaker 1>potentially like the futile negotiations, the UK would simply drop

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<v Speaker 1>out of the EU and then simply trade with the

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<v Speaker 1>rest of the EU as any other member of the

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<v Speaker 1>w t O. So, Jacob, you know you say this

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<v Speaker 1>is primarily driven by an immigration anti immigration movement. However,

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<v Speaker 1>this has been going on for at least what at

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<v Speaker 1>least a decade, if not a generation. There had been

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<v Speaker 1>your skeptics for a long time. There have been many

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<v Speaker 1>people not just in in UH, in London or in

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<v Speaker 1>the UK who worry about sovereignty and actually trying to

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<v Speaker 1>turn over some power over the laws of your of

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<v Speaker 1>your land to a body that is not really your government.

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<v Speaker 1>I mean, is it really just immigration? I mean, or

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<v Speaker 1>do you think you've gotten as far if it were,

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<v Speaker 1>or are you saying, oh, this is the thing that

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<v Speaker 1>really heated it up lately. Yeah, No, this is essentially

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<v Speaker 1>the fuel. Anti immigration sentiment is the fuel that has

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<v Speaker 1>made this referendum close. You're absolutely right that there has

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<v Speaker 1>always been ever since the UK joined, a significant part

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<v Speaker 1>of the UK UH population and the representatives that have

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<v Speaker 1>been very strongly against you membership, but they have never

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<v Speaker 1>come close to being the majority. That is something that

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<v Speaker 1>is relatively recent and in my opinion, is overwhelmingly driven

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<v Speaker 1>by UH anti immigrant sentiment in significant parts of the

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<v Speaker 1>UK population. Thank you very much for sharing your thoughts

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<v Speaker 1>with us. Jacob Curecard is a Senior Fellow at the

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<v Speaker 1>Peterson Institute for International Economics in Washington, d C. You

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<v Speaker 1>can follow him on Twitter at j F Kirker Guard

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<v Speaker 1>and we want to thank him for his perspective on

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<v Speaker 1>what may or may not happen. We know that Brexit

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<v Speaker 1>is a vote that we will all be watching. We

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<v Speaker 1>will be covering it around the clock. UH twenty three

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<v Speaker 1>of June voters in the United Kingdom go to the polls.

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<v Speaker 1>I know, Kathleen, you've been looking at what's happening to

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<v Speaker 1>the US treasury market as a result of people mind safety.

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<v Speaker 1>Right now, the yield on the tenures one point five

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<v Speaker 1>seven the yield on the thirty years two point three

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<v Speaker 1>nine percent. You're listening to taking stock on Bloomberg Radio.

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