WEBVTT - Eurasia's Rahman: UK Brexit Czar Choice Will Be Critical(Audio)

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<v Speaker 1>Global business news twenty four hours a day. It's Bloomberg

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<v Speaker 1>dot Com, the Radio plus Mobile Act and on your radio.

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<v Speaker 1>This is a Bloomberg Business flat from Bloomberg World Handwaters.

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<v Speaker 1>I'm Charlie Pellett. Just getting word from the United Kingdom

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<v Speaker 1>that Philip Hammond has been named a u K. Chancellor

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<v Speaker 1>of the Exchequer and George Osborne has resigned from the government.

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<v Speaker 1>The US economy expanded at a modest pace since midway

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<v Speaker 1>amidst mid May, amid slight price pressures and some softening

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<v Speaker 1>in consumer spending. That's according to today's page book report

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<v Speaker 1>from the Federal Reserve. Stocks are now trading mix. We've

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<v Speaker 1>got the SMP five hundred indecks down to point at fifty,

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<v Speaker 1>a drop there of point one percent, Dow industriels up fifteen,

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<v Speaker 1>a gain of point one percent, and nastak is down nine,

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<v Speaker 1>drop of two tents of one percent. Ten You're up

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<v Speaker 1>thirteen thirty seconds. Heal there one point four or six percent.

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<v Speaker 1>Gold up eight ninety the ounce to thirteen forty war

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<v Speaker 1>Hire by seven tenths of one percent. Crude big story today,

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<v Speaker 1>down two oh six of barrel West Texas Intermediate now

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<v Speaker 1>at forty four barrel down four point. I'm Charlie Pellett

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<v Speaker 1>and that's a bloomberg business flash. As we leave the

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<v Speaker 1>European Union, we will forge a forge a bold, new

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<v Speaker 1>positive role for ourselves in the world, and we will

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<v Speaker 1>make Britain a country that works not for a privileged few,

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<v Speaker 1>but for every one of us. That will be the

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<v Speaker 1>mission of the government I lead, and together we will

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<v Speaker 1>build a better Britain, a better Britain. That's what Theresa

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<v Speaker 1>May is promising as she takes over as the United

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<v Speaker 1>Kingdom's Prime Minister today, taking the reigns of power from

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<v Speaker 1>former Prime Minister Cameron, forced out by the Brexit vote,

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<v Speaker 1>which he opposed. We're getting some breaking news as we

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<v Speaker 1>start this segment now. George Osborne is the first secred

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<v Speaker 1>Terry of State in the UK. He has resigned from

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<v Speaker 1>the government, the Prime Minister's Office says, and Philip Hammond

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<v Speaker 1>being named the UK Chancellor of the Exchequer. Well, it's

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<v Speaker 1>perfect time to bring in our next guest, with Thoma Robbin.

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<v Speaker 1>He's practiced head uh in Europe, based in London for

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<v Speaker 1>the Eurasia Group. He, among other things, worked at the

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<v Speaker 1>European Commission's Director at General for Economic and Financial Affairs

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<v Speaker 1>and at the UK Treasury, so he certainly knows all

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<v Speaker 1>sides of this story. Mid welcome back to the show.

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<v Speaker 1>Thank you for having me. Well, let's start with George

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<v Speaker 1>Osborne resigning. According to the Prime Minister's Office, Philip Hammon

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<v Speaker 1>named UK Chancellor of the Exchequer. What did these tell

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<v Speaker 1>us about where Theresa May is taking her government? I

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<v Speaker 1>think I think the most important individual that wes still

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<v Speaker 1>waiting for is, of course, who is going to lead

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<v Speaker 1>the Brexit negotiation. That's the individual thought will be critical

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<v Speaker 1>for the trajectory of UK EU relation. Now, Philip ammons

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<v Speaker 1>transfer from the Foreign Office to the Treasury on some

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<v Speaker 1>level was expected. He's competent, well placed within the Conservative Party,

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<v Speaker 1>and I think it's seemed to be a safe pair

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<v Speaker 1>of hands in terms of economic management. So I don't

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<v Speaker 1>I don't really think there are many surprises from Hammond's appointment.

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<v Speaker 1>I think most interesting is going to be which leaves

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<v Speaker 1>candidate Thereason May appoints to lead the negotiations with Europe.

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<v Speaker 1>That's going to be critical. Can you tell us some

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<v Speaker 1>names of individuals who you believe will guide the ship

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<v Speaker 1>of state safely through the negotiations. Absolutely. I mean, of

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<v Speaker 1>course that at the highest level Thereason May, I think,

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<v Speaker 1>is going to be very actively involved on this issue.

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<v Speaker 1>I already anticipate for traveling for bilaterals to meet Angela

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<v Speaker 1>merk Or German Chancellor, the French President, as well as

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<v Speaker 1>the institutional heads, who said in Brussels there are a

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<v Speaker 1>number of names doing the rounds in London. I think

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<v Speaker 1>um Chris Grailing, Speaker of the House of Commons, is

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<v Speaker 1>a potential name. He was a prominent leave member of

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<v Speaker 1>the cabinet close to Treason May Andrea led them who

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<v Speaker 1>was the obviously a competitor, let's say to Mayo, who

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<v Speaker 1>stepped down at the weekend. She's also seen to be

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<v Speaker 1>a potential runner for this job, although I don't think

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<v Speaker 1>she's too close to Theresa May, and there'd be some

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<v Speaker 1>concerns I think about her negotiating style. David Davis from

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<v Speaker 1>your administ I think he's also in the running. Oliver

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<v Speaker 1>let Win, who currently holds the portfolio, she could also

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<v Speaker 1>He could also stay in place. I think what's important

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<v Speaker 1>for Theresa May is the internal balance of power within

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<v Speaker 1>her cabinets. I think there's a lot of Leaves members

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<v Speaker 1>that are likely to ultimately end up in the cabinet cabinet,

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<v Speaker 1>and I'm sure one of those will ultimately have to

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<v Speaker 1>lead the Brexit negotiations in order to keep the Tory

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<v Speaker 1>Party happy with the selection of her name, She's the

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<v Speaker 1>right person at the right time. Theresa me or and

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<v Speaker 1>Or to what extent was she considered the safe choice,

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<v Speaker 1>the person everybody could agree on. I think look from

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<v Speaker 1>a from a from a first best perspective, no, I

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<v Speaker 1>don't think so, but from a least worst perspective, she's

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<v Speaker 1>absolutely the right candidate. If it was a choice between her, UM,

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<v Speaker 1>Andrea Ledson, Michael go or indeed Boris Johnson, then absolutely

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<v Speaker 1>she's the best choice. I think Boris Johnson would have

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<v Speaker 1>been more willing to do a dirty deal, if I

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<v Speaker 1>can put it like that, over Europe, so essentially willing

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<v Speaker 1>to undo the commitments he made through the referendum on immigration. UM.

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<v Speaker 1>But there were of course a lot of questions about

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<v Speaker 1>Boris Johnson's disposition towards foreign policy, world leaders, his general

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<v Speaker 1>of his general that's a fumbling approach to policy takes.

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<v Speaker 1>So there were a lot of concerns about how suitable

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<v Speaker 1>she would be overall as as prime ministry, even if

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<v Speaker 1>on the narrow Europe question he'd be effective. Michael Gove

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<v Speaker 1>Andrea led him. Their problem for both, for both of them, frankly,

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<v Speaker 1>is that their ideas their ideological and their ideologically opposed

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<v Speaker 1>to Europe. So getting a deal with the Europeans when

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<v Speaker 1>you have two ideologues at the home I think would

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<v Speaker 1>have made things more difficult. Theresa May is pragmatic, she's

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<v Speaker 1>deal she's a deal maker. I think she's oriented in

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<v Speaker 1>that way. She's well known in Europe, she's well liked

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<v Speaker 1>and well respected, and I think for the for those

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<v Speaker 1>reasons at this juncture, she she is the right person

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<v Speaker 1>for the job. Do you foresee another referendum by another

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<v Speaker 1>European country to leave the European Union. I think there's

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<v Speaker 1>absolutely a risk. There is already a referendum in Italy

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<v Speaker 1>in October on constitutional reform that will de fact to

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<v Speaker 1>be a referendum on the Prime minister, uh Matteo Renzi.

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<v Speaker 1>There's absolutely pressure in the Netherlands ahead of elections next

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<v Speaker 1>year to commit to a referendum. There's a far right

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<v Speaker 1>party led by somebody known as Get World as you

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<v Speaker 1>want the party known as the PDV and they're likely

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<v Speaker 1>to be a powerbroker in government formation next year and

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<v Speaker 1>they're absolutely looking for a reference, so that's definitely a risk.

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<v Speaker 1>Thank you very much for spending time with us. Mutaba

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<v Speaker 1>Raman he is the practice head for Europe for the

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<v Speaker 1>Eurasia Group based in London, speaking about Theresa May taking

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<v Speaker 1>over as Britain's Prime Minister after her predecessor David Cameron

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<v Speaker 1>tended his resignation to Queen Elizabeth the second you're listening

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<v Speaker 1>to taking Stock. Coming up on taking Stock, we're going

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<v Speaker 1>to take a look at the Fed's Beige Book and

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<v Speaker 1>put in the context of rising rate odds, raising rate

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<v Speaker 1>high godds in December. That's coming up on Bloomberg Radio.