1 00:00:00,720 --> 00:00:07,320 Speaker 1: The Brexit vote on Bloomberg Radio. Polls close at ten 2 00:00:07,480 --> 00:00:11,320 Speaker 1: pm in Britain. That is now and the future Britain's 3 00:00:11,360 --> 00:00:14,440 Speaker 1: relationship with the European Union though, will not be known 4 00:00:14,560 --> 00:00:17,480 Speaker 1: until at least nine hours from now. That's at seven 5 00:00:17,520 --> 00:00:21,520 Speaker 1: am tomorrow morning on Friday, and of course there are 6 00:00:21,560 --> 00:00:24,480 Speaker 1: no exit polls and the results so will come in 7 00:00:24,600 --> 00:00:28,200 Speaker 1: during a three period three hour period on Friday between 8 00:00:28,240 --> 00:00:31,360 Speaker 1: four am and seven am, so by breakfast time the 9 00:00:31,440 --> 00:00:35,680 Speaker 1: results of the European Union referendum should be known. Here 10 00:00:35,720 --> 00:00:39,400 Speaker 1: to tell us more is a leading economist, Danny blanche Flower, 11 00:00:39,520 --> 00:00:43,839 Speaker 1: Professor of Economics at Dartmouth College. He is also a 12 00:00:43,840 --> 00:00:47,800 Speaker 1: former member of the Monetary Policy Committee of the Bank 13 00:00:47,960 --> 00:00:51,280 Speaker 1: of England. He can be followed on Twitter at d 14 00:00:51,720 --> 00:00:55,400 Speaker 1: underscore blanch Flower. Danny blanch Flower. Thank you for being 15 00:00:55,400 --> 00:00:59,840 Speaker 1: with him. Well interesting day, goodness me go ahead give 16 00:01:00,000 --> 00:01:04,520 Speaker 1: to your thoughts. Well. My thoughts are that the markets 17 00:01:04,560 --> 00:01:09,760 Speaker 1: are clearly expecting a Remain vote. They saw polls over 18 00:01:09,800 --> 00:01:13,160 Speaker 1: the last few days. Ten of the last fifteen have 19 00:01:13,280 --> 00:01:18,679 Speaker 1: been for Remain. But we've seen big surprises in UK polling. 20 00:01:18,720 --> 00:01:22,319 Speaker 1: They're hoping that it looks like the Scottish referendum, which 21 00:01:22,400 --> 00:01:25,679 Speaker 1: in the end people turned out for the status quo. 22 00:01:26,400 --> 00:01:29,480 Speaker 1: But the memory is a year ago. Um. They the 23 00:01:29,520 --> 00:01:32,880 Speaker 1: predictions in the polls for the election outcome were very 24 00:01:32,959 --> 00:01:38,080 Speaker 1: bad and obviously the markets and everybody else in economic 25 00:01:38,200 --> 00:01:42,600 Speaker 1: terms anyway, is assuming that remain will come. The worry 26 00:01:42,920 --> 00:01:46,080 Speaker 1: is actually that if Brexit actually is in the majority, 27 00:01:46,640 --> 00:01:49,760 Speaker 1: this would be a surprise to the markets and that 28 00:01:49,800 --> 00:01:54,640 Speaker 1: would likely generate major market turmoil. It would seem to me, 29 00:01:54,920 --> 00:01:59,360 Speaker 1: not least the pound. And that's the reason why contingency 30 00:01:59,440 --> 00:02:02,680 Speaker 1: planning in Britain, banks and around the world that is 31 00:02:02,720 --> 00:02:05,720 Speaker 1: about to swing into gear as we wait for for 32 00:02:05,840 --> 00:02:08,880 Speaker 1: the results. This is this is our a mentor's day. 33 00:02:08,960 --> 00:02:11,560 Speaker 1: I would say, why was this vote so close? Danny 34 00:02:11,600 --> 00:02:15,760 Speaker 1: blanche Fower? You know, year six months ago, maybe Ben 35 00:02:15,800 --> 00:02:17,799 Speaker 1: three or four months ago. Oh Brexit, Yeah, I guess 36 00:02:17,840 --> 00:02:21,240 Speaker 1: we're gonna start talking about it and then suddenly Brexit. 37 00:02:21,440 --> 00:02:27,920 Speaker 1: What happened? Well? Um, interesting? I think it's an interesting question. 38 00:02:28,120 --> 00:02:32,360 Speaker 1: I think actually it's a continuation of the hurt that 39 00:02:32,440 --> 00:02:36,160 Speaker 1: people have seen from the Great Recession. People are not 40 00:02:36,320 --> 00:02:39,520 Speaker 1: happy with the status quo. I guess a number that 41 00:02:39,560 --> 00:02:42,079 Speaker 1: I often kind of look at is If you look 42 00:02:42,120 --> 00:02:46,679 Speaker 1: at the GDP per capita in the UK today compared 43 00:02:46,680 --> 00:02:49,639 Speaker 1: with the start of the recession in two thousand and eight, 44 00:02:49,680 --> 00:02:55,919 Speaker 1: it's up one in total. Real wages are really still 45 00:02:55,960 --> 00:02:58,440 Speaker 1: below what they were in two thousand and eight, and 46 00:02:58,480 --> 00:03:02,280 Speaker 1: there has been a major in looks of people from 47 00:03:02,360 --> 00:03:06,160 Speaker 1: the rest of your Immigration has risen rapidly. Many of 48 00:03:06,200 --> 00:03:09,000 Speaker 1: the issues in the US have repeated in the UK. 49 00:03:09,560 --> 00:03:12,280 Speaker 1: They've seen the flood of immigrants coming and they've also 50 00:03:12,400 --> 00:03:17,040 Speaker 1: seen the poor performance of the European economy. France has 51 00:03:17,040 --> 00:03:19,840 Speaker 1: a temper cent unemployment rate, We've still got twenty odd 52 00:03:20,120 --> 00:03:22,560 Speaker 1: in Spain, in Greece, and people think, you know, we 53 00:03:22,600 --> 00:03:25,600 Speaker 1: want our own sovereignty. We don't want to be stuck 54 00:03:25,600 --> 00:03:28,480 Speaker 1: with these Europeans. Is a losing game, and so we've 55 00:03:28,560 --> 00:03:33,440 Speaker 1: ended up seeing something very close. Um, I'm not sure 56 00:03:33,480 --> 00:03:35,920 Speaker 1: that I that I would have predicted was quite as 57 00:03:35,920 --> 00:03:39,320 Speaker 1: close as this. Quite so difficult to to cool given 58 00:03:39,400 --> 00:03:42,320 Speaker 1: that term, if you like, the status quo has thrown 59 00:03:42,400 --> 00:03:46,360 Speaker 1: everything it has at it. Danny Blancheflower, why did the 60 00:03:46,400 --> 00:03:51,960 Speaker 1: Prime Minister David Cameron promised to hold this referendum? I 61 00:03:52,000 --> 00:03:55,000 Speaker 1: think it's a really great question for him. I think 62 00:03:55,040 --> 00:03:58,600 Speaker 1: he's gonna obviously regret it to this very moment. And 63 00:03:58,640 --> 00:04:02,040 Speaker 1: obviously if Brex had come, he's gone tomorrow, and if 64 00:04:02,040 --> 00:04:04,520 Speaker 1: it's very narrow he may actually be gone as well. 65 00:04:04,720 --> 00:04:08,320 Speaker 1: I think the reality was that there was continuous infighting 66 00:04:08,400 --> 00:04:12,720 Speaker 1: within the Tory Party. It's interesting he managed to get 67 00:04:12,800 --> 00:04:15,280 Speaker 1: himself The good news was he got himself a twelve 68 00:04:15,320 --> 00:04:18,920 Speaker 1: seat majority last May. But that turns out that he 69 00:04:19,000 --> 00:04:23,560 Speaker 1: was vulnerable to views from the euroskeptics within his own party. 70 00:04:23,720 --> 00:04:26,200 Speaker 1: And so what's interesting, I think is that the the 71 00:04:26,279 --> 00:04:31,200 Speaker 1: in fighting, particularly for this vote is actually greater than 72 00:04:31,240 --> 00:04:34,880 Speaker 1: it was at the election, more particularly between people within 73 00:04:34,920 --> 00:04:37,520 Speaker 1: the same party. So I think the answer was it 74 00:04:37,600 --> 00:04:40,960 Speaker 1: was called for internal political reasons. It was certainly not 75 00:04:41,440 --> 00:04:44,520 Speaker 1: something that placed like Northern Ireland and Scotland and Wales 76 00:04:44,600 --> 00:04:47,520 Speaker 1: were really looking for it to if you like, it's 77 00:04:47,520 --> 00:04:50,800 Speaker 1: a sort of internal English issue within the within the 78 00:04:50,839 --> 00:04:55,320 Speaker 1: Tory party. But presumably David Cameron didn't think relate your 79 00:04:55,400 --> 00:04:57,359 Speaker 1: last question. He didn't think it was going to go 80 00:04:57,440 --> 00:04:59,680 Speaker 1: down to the wire and he'd be sitting in Downing 81 00:04:59,720 --> 00:05:03,520 Speaker 1: Street watching these results biting his fingernails. Well, the latest 82 00:05:03,760 --> 00:05:07,120 Speaker 1: UGO of UK pull on Brexit, the UK leaving the 83 00:05:07,120 --> 00:05:13,479 Speaker 1: European Union shows a vote of to remain to leave. 84 00:05:14,080 --> 00:05:18,839 Speaker 1: This is being reported by Sky News, So again a 85 00:05:19,000 --> 00:05:21,479 Speaker 1: narrow victory. So we could go back and forth, what 86 00:05:21,520 --> 00:05:23,560 Speaker 1: if what if they leave? What if they stay? But 87 00:05:23,680 --> 00:05:26,880 Speaker 1: regardless of whether they stay or leave, what does this 88 00:05:27,040 --> 00:05:32,080 Speaker 1: mean for the UK going forward? What does it mean 89 00:05:32,279 --> 00:05:35,880 Speaker 1: for the current government? Do they have to make changes? 90 00:05:35,960 --> 00:05:38,240 Speaker 1: They can't. I guess you can't really adjust this one. 91 00:05:38,279 --> 00:05:40,520 Speaker 1: It's not like all we can boost economic growth, right, 92 00:05:40,640 --> 00:05:44,880 Speaker 1: or trying to raise prices like a central bank. Well, 93 00:05:45,080 --> 00:05:48,040 Speaker 1: let's let's just sort of separate the economics at the moment, 94 00:05:48,040 --> 00:05:50,640 Speaker 1: because obviously if there's a Brexit vote, we're going to 95 00:05:50,760 --> 00:05:52,400 Speaker 1: have to talk about what the bank aving and would 96 00:05:52,440 --> 00:05:55,920 Speaker 1: have to do, and global repercussions and so on. Let's 97 00:05:55,920 --> 00:05:58,040 Speaker 1: think of the politics. I mean, I certainly think it's 98 00:05:58,040 --> 00:06:00,359 Speaker 1: back to Pim's question. I certainly think if there's a 99 00:06:00,400 --> 00:06:03,599 Speaker 1: Brexit vote, David Cameron called this vote there, I'm going 100 00:06:03,640 --> 00:06:06,159 Speaker 1: to try and renegotiate Cam back and say we should remain. 101 00:06:06,920 --> 00:06:10,719 Speaker 1: If if the vote is not to remain, that then 102 00:06:10,760 --> 00:06:14,520 Speaker 1: that's a then politically he's gone, and presumably the Chancellor 103 00:06:14,680 --> 00:06:18,120 Speaker 1: is gone. So that's a political crisis, I would say, 104 00:06:18,920 --> 00:06:22,320 Speaker 1: particularly from a Brexit point of view. But I think 105 00:06:22,360 --> 00:06:26,520 Speaker 1: there's still a major political issue, which is that supposing 106 00:06:26,600 --> 00:06:30,200 Speaker 1: the vote is pretty close, which we sort of think 107 00:06:30,200 --> 00:06:32,520 Speaker 1: it's probably going to be. I don't think it's going 108 00:06:32,560 --> 00:06:34,800 Speaker 1: to be sixty forty when he could be, but I 109 00:06:34,839 --> 00:06:37,839 Speaker 1: suspect no polls have shown that if it's a pretty 110 00:06:37,920 --> 00:06:41,080 Speaker 1: done close vote, then Cameron is going to find it 111 00:06:41,160 --> 00:06:44,560 Speaker 1: extremely hard with a twelve vote majority to pass anything 112 00:06:44,640 --> 00:06:47,200 Speaker 1: or perhaps even to be able to remain as leaders. 113 00:06:47,200 --> 00:06:50,840 Speaker 1: So a political crisis is probably the thing that's on 114 00:06:50,839 --> 00:06:55,680 Speaker 1: the table the most assume. But obviously there's the economics 115 00:06:55,720 --> 00:06:59,440 Speaker 1: we can talk about. Just to reiterate that, the you 116 00:06:59,680 --> 00:07:04,200 Speaker 1: gov the Appolling Service reports that the UK pole on 117 00:07:04,320 --> 00:07:09,679 Speaker 1: the European Union shows fifty remain and forty eight percent leave. 118 00:07:10,160 --> 00:07:12,560 Speaker 1: Danny blanch Fower one thing that I found particularly interesting 119 00:07:12,640 --> 00:07:16,160 Speaker 1: was who is able and eligible to vote? If you're 120 00:07:16,200 --> 00:07:19,360 Speaker 1: a British, Irish or Commonwealth citizen and you're over the 121 00:07:19,360 --> 00:07:23,080 Speaker 1: age of eighteen and registered in the United Kingdom, you 122 00:07:23,560 --> 00:07:28,560 Speaker 1: can vote. Well, that's true, but actually I fit that criteria, 123 00:07:28,640 --> 00:07:31,680 Speaker 1: but in fact I wasn't able to vote because I 124 00:07:31,680 --> 00:07:33,360 Speaker 1: think you had to have been lived in the UK 125 00:07:33,440 --> 00:07:35,920 Speaker 1: as well for the last for the last ten years 126 00:07:36,000 --> 00:07:39,680 Speaker 1: fifteen actually last fifteen years. But I actually didn't get 127 00:07:39,720 --> 00:07:41,920 Speaker 1: to vote. So I tried and I looked and they said, sorry, 128 00:07:41,920 --> 00:07:45,320 Speaker 1: Blanche Flower, that you don't get to vote. Um, yes, 129 00:07:45,400 --> 00:07:48,480 Speaker 1: so so people people who lived there. I think there 130 00:07:48,480 --> 00:07:51,360 Speaker 1: were issues particularly about the say people who live abroad. 131 00:07:51,360 --> 00:07:53,000 Speaker 1: I mean there's a big issue here, which is that 132 00:07:53,040 --> 00:07:55,920 Speaker 1: there are three million people from Europe living in Britain 133 00:07:55,920 --> 00:07:58,000 Speaker 1: who who probably don't get the vote, and there's two 134 00:07:58,000 --> 00:08:00,680 Speaker 1: million people who are Britas who live in Europe. And 135 00:08:00,680 --> 00:08:02,680 Speaker 1: it was I don't recall, I don't think they get 136 00:08:02,720 --> 00:08:06,280 Speaker 1: the voto. Others may may tell me differently, unless you're 137 00:08:06,320 --> 00:08:10,280 Speaker 1: from Ireland, Malta or a Cyprus. And I also found 138 00:08:10,320 --> 00:08:14,360 Speaker 1: interesting that the Commonwealth citizens in Gibraltar are able to 139 00:08:14,440 --> 00:08:16,800 Speaker 1: vote as are members of the House of Lords, and 140 00:08:16,840 --> 00:08:20,760 Speaker 1: they are not necessarily allowed to vote in the general election. Right. 141 00:08:20,840 --> 00:08:23,840 Speaker 1: And David Cameron apparently was headed to Gibraltar to give 142 00:08:23,840 --> 00:08:26,400 Speaker 1: a speech the other day when there was the terrible 143 00:08:26,400 --> 00:08:29,200 Speaker 1: assassination of a British empty and he and he didn't 144 00:08:29,240 --> 00:08:31,360 Speaker 1: actually go there, and we should talk about that that 145 00:08:31,440 --> 00:08:34,880 Speaker 1: in a sense that that that terrible political it was 146 00:08:34,960 --> 00:08:39,080 Speaker 1: highly political event. It certainly appears that the polls were 147 00:08:39,120 --> 00:08:42,240 Speaker 1: moving towards Leave and then there was that event and 148 00:08:42,360 --> 00:08:46,120 Speaker 1: both parties pulled out, stopped campaigning any any further. And 149 00:08:46,200 --> 00:08:49,160 Speaker 1: since that moment, it does look that the remain has 150 00:08:49,240 --> 00:08:51,120 Speaker 1: moved to the ascent. And I'm not saying that that's 151 00:08:51,520 --> 00:08:54,080 Speaker 1: you know, that that's been the driving force, but it 152 00:08:54,080 --> 00:08:56,680 Speaker 1: it does seem that that was a turning moment when 153 00:08:56,800 --> 00:08:59,800 Speaker 1: when the British people were totally shocked. I wonder Danny 154 00:09:00,000 --> 00:09:03,280 Speaker 1: event as as a vote as a doesk settles on 155 00:09:03,320 --> 00:09:06,120 Speaker 1: this vote, Let's say that the remains when I wonder, 156 00:09:07,040 --> 00:09:10,679 Speaker 1: you know, where the focus turns next to people look 157 00:09:10,880 --> 00:09:13,440 Speaker 1: at the economy again? Do they look at what are 158 00:09:13,440 --> 00:09:15,440 Speaker 1: the what are the grapes of the British people they're 159 00:09:15,720 --> 00:09:19,160 Speaker 1: faced with? That's a great question, Kathleen. I mean, my 160 00:09:19,160 --> 00:09:21,840 Speaker 1: my view, as you know, over time has been the 161 00:09:21,920 --> 00:09:25,920 Speaker 1: growth of the UK economy has been a major issue. 162 00:09:26,800 --> 00:09:30,720 Speaker 1: We've seen very palled growth and it certainly appears that 163 00:09:30,800 --> 00:09:35,760 Speaker 1: actually there's been some slowing um. The Monetary Policy Committee 164 00:09:35,840 --> 00:09:39,160 Speaker 1: is has argued that that about half the slowing perhaps 165 00:09:39,760 --> 00:09:42,920 Speaker 1: is because of the fear of Brexit, and so that's 166 00:09:43,080 --> 00:09:45,480 Speaker 1: just if that's right and there isn't a Brexit, that 167 00:09:45,600 --> 00:09:49,800 Speaker 1: actually there may be some turning back and some improvement, 168 00:09:49,880 --> 00:09:53,120 Speaker 1: but all right, public Danny Blanchfare, thanks so much. This 169 00:09:53,240 --> 00:09:54,200 Speaker 1: is Bloomberg Radio.