WEBVTT - 'Trussonomics' Gets a Reality Check

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<v Speaker 1>Francie and are your breakfast fan. I'm a huge breakfast

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<v Speaker 1>fan Italian presumably salty. Really I'm a salty I'm actually

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<v Speaker 1>a full English breakfast English no way bacon, sausages, who

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<v Speaker 1>baked beans beans. Wow, I just got back from my

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<v Speaker 1>two weeks. I've basically turned into a cross after. You're

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<v Speaker 1>so continental, I'm so continent. We're sort of inverted. We are.

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<v Speaker 1>I just can't have the English breakfasts too much. I can,

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<v Speaker 1>but it's gotten so expensive. Have you seen the index yet,

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<v Speaker 1>the Bloomberg Breakfast Index. It's pretty it's pretty shocking. Seventeen

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<v Speaker 1>percent more expensive than it was last year. And milk

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<v Speaker 1>was up and like the breakdown all the different bits,

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<v Speaker 1>milk up for I think was the highest increase. And

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<v Speaker 1>this is inflation really where it hurts right the general population.

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<v Speaker 1>They're not going to be able to afford the basics.

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<v Speaker 1>I'll save because I don't have milk and my tea.

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<v Speaker 1>I'm Franci la Well with David Merritt in the London

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<v Speaker 1>studio and this is in the City, Bloomberg's podcast, connecting

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<v Speaker 1>you to the stories at the heart of the City

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<v Speaker 1>of London. Now this week, as we inch closer to

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<v Speaker 1>the election of a new prime minister, we thought it

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<v Speaker 1>would make sense to do a little fact checking on

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<v Speaker 1>the candidates proposals for the struggling economy. That's right, you know,

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<v Speaker 1>obviously inflation a huge topic in everyone's minds. The two

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<v Speaker 1>candidates don't seem to be able to tell us exactly

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<v Speaker 1>what they're going to do to tackle it, do they? Yeah?

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<v Speaker 1>And this is I guess a campaign that's as old

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<v Speaker 1>as times. You promise things and then maybe once you

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<v Speaker 1>get into power, it doesn't really add up because you

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<v Speaker 1>see so many more problems that you have to be

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<v Speaker 1>faced with. And it's a weird campaign, isn't it. Because

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<v Speaker 1>they're not talking to all of us, most of us

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<v Speaker 1>in the population. They're talking to this small group we

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<v Speaker 1>don't even know exactly how many they are, but Tory

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<v Speaker 1>Party members, and you've got to assume their priorities are

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<v Speaker 1>probably a little bit different to the public as a whole.

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<v Speaker 1>So Dave to dissect this difference between what he calls

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<v Speaker 1>campaign economics and the governing kind of economics. I spoke

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<v Speaker 1>to Pania Gordon chief An with Simon French. Sam in French,

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<v Speaker 1>thank you so much for joining us. So we're trying

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<v Speaker 1>to figure out, first of all, where we are in

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<v Speaker 1>the UK economy and how bad is it. It's pretty bad.

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<v Speaker 1>There's no sugarcoating, and I'm afraid we expect a recession

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<v Speaker 1>starting the fourth quarter, lasting for two quarters. Now it

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<v Speaker 1>has to say the Bank of England sea coming five

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<v Speaker 1>successive quarters, which would be a contraction on the scale

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<v Speaker 1>of the global financial crisis. I have to say they

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<v Speaker 1>have to condition those forecasts on a nounced government policy.

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<v Speaker 1>That's an impediment because we expect some more support to come.

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<v Speaker 1>But whichever version you want, the Pamea Gordon's Island French

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<v Speaker 1>version or the Bank of England Andrew Bailey version, it's

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<v Speaker 1>pretty bad going into this winter for the UK, the

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<v Speaker 1>the Andrew Bailey version. So I was in the press

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<v Speaker 1>conference and I have to say people are looking around

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<v Speaker 1>saying I'm a little bit depressed without a very big,

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<v Speaker 1>very big shot. Rising energy prices has exacerbated the fall

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<v Speaker 1>in real income CPR information is now expected to pick

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<v Speaker 1>at just open the UK as slowed and the economy

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<v Speaker 1>is now forecast to enter recession later this year. Were

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<v Speaker 1>they just being honest or is this worst case scenario?

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<v Speaker 1>I think journalists are certainly smart enough to look at

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<v Speaker 1>some of the distribution analysis which isn't necessarily coming across

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<v Speaker 1>in the Monetary Policy report. But we've seen from other

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<v Speaker 1>research organizations the impact on particularly the bottom perhaps even

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<v Speaker 1>the UK population, who by my estimates will be spending

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<v Speaker 1>upwards of one pound in every five on their energy,

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<v Speaker 1>both household energy and petrol for their cars. And that

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<v Speaker 1>is an extraordinary increase and I think the level of

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<v Speaker 1>hardship that that might generate is one of the reasons

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<v Speaker 1>why you look at those macroeconomic forecasts and you look

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<v Speaker 1>at the component part of the distributional impact, and you

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<v Speaker 1>can get quite depressed quite quickly. And what I often

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<v Speaker 1>get asked is why do we not talk about Brexit?

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<v Speaker 1>Is it can you no longer talk about Brexit without

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<v Speaker 1>being accused of being a remainder And how much impact

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<v Speaker 1>does that have on the economy? We should talk about brexits.

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<v Speaker 1>There is little doubt I think that the UK economy

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<v Speaker 1>is about three smaller today as a result of the

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<v Speaker 1>decision of the UK to leave the European Union. Is

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<v Speaker 1>that as bad as was presented in the worst case

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<v Speaker 1>no deal scenario. If Treasury suggested a shrinkage of about

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<v Speaker 1>eight to nine percent GDP. No, that hasn't crystallized, but

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<v Speaker 1>there is clear obvious impact from additional trade frictions, reduced

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<v Speaker 1>business investment, and the fact on a trade way to

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<v Speaker 1>basis sterling is still trading ten to fifteen percent lower

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<v Speaker 1>than it was ahead of the referendum. Now, bringing that

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<v Speaker 1>back to energy, an energy market that is priced almost

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<v Speaker 1>universally in US dollars clearly a weaker sterling. This is

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<v Speaker 1>U S dollars. Means that there is a bigger inflationary

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<v Speaker 1>impulse and is part of the reasons you quote those

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<v Speaker 1>longer and higher inflation figures the impact of a weak currency,

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<v Speaker 1>but also labor shortages, which must filter through of course

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<v Speaker 1>how much people are asking for wage increases. Act. Again,

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<v Speaker 1>this is one of my frustrations with some of the

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<v Speaker 1>economic commentary we get in the UK is the labor

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<v Speaker 1>shortages are not unique to the UK. You're also seeing

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<v Speaker 1>labor shortage another part of the economy as a legacy

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<v Speaker 1>of people reappraising their options, early retirees, people with long COVID.

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<v Speaker 1>But what you do then is in the UK context,

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<v Speaker 1>you ratchet on top of that a change of the

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<v Speaker 1>migration regime what used to be known as third countries India, Pakistan,

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<v Speaker 1>the Philippines, Nigeria and now a much bigger proportion of

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<v Speaker 1>the total net migration of the UK. Employers in the

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<v Speaker 1>UK since the accession of the additional eight EU states

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<v Speaker 1>in two thousand four have built up strong networks between

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<v Speaker 1>the UK and poland UK Lithrough any part of these

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<v Speaker 1>europe now have to pivot adjust to a different route

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<v Speaker 1>of migration. That takes time. That in the parlance of Brexit,

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<v Speaker 1>what we've done is we put sand in the cogs

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<v Speaker 1>of the economy that sam will eventually work through questions

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<v Speaker 1>how much damage you do In the meantime, what are

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<v Speaker 1>the two or three policies that the next Prime minister

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<v Speaker 1>can put in place to try and mitigate some of

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<v Speaker 1>those shocks if we're talking about economic shocks in terms

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<v Speaker 1>of household incomes. We we touched on this a little

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<v Speaker 1>bit earlier, which is the specific targeted support for the

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<v Speaker 1>bottom to three income cohorts, which isn't necessarily what we've

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<v Speaker 1>heard about in the campaign, particularly from the nest Trust campaign,

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<v Speaker 1>which is about tax cuts, particularly to corporations and national insurance. Well,

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<v Speaker 1>there's a lot of people who will be a zero

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<v Speaker 1>beneficiary of those changes. They cost about thirty billion pounds,

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<v Speaker 1>but actually the benefits will not be those people who

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<v Speaker 1>will feel the biggest pinch this winter. So I would

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<v Speaker 1>suggest from a you know, if you give you if

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<v Speaker 1>you want three one would be to start with specific

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<v Speaker 1>support for low income households. Second thing is I think

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<v Speaker 1>we have to acknowledge that over the medium too long

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<v Speaker 1>term this is only solved by energy independence energy security.

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<v Speaker 1>Now it may well be that the political pressure will

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<v Speaker 1>become too much for the government not to broaden its

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<v Speaker 1>windfall tax that's already introduced on all CEA oil and gas.

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<v Speaker 1>If that is going to happen, what message are you

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<v Speaker 1>sending to the domestic supply chain about ramping up capacity.

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<v Speaker 1>Because one of the reasons I've been critical of the

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<v Speaker 1>energy price cap, which has protected households, it disrupts the

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<v Speaker 1>really important price signals that we get in markets, which

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<v Speaker 1>is not which is not a price cab like European style. Right,

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<v Speaker 1>This is not how the French do it. They they

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<v Speaker 1>cap the price. This is a soft pricing cab, yes,

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<v Speaker 1>which actually beautifully segues into the third and final suggestion,

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<v Speaker 1>which is what is the optimal if you like industrial

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<v Speaker 1>structure for retail energy providers, because if you talk about

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<v Speaker 1>what France have done, they've affectively nationalized DDF. Are we

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<v Speaker 1>going to out the back of this maintain a retail

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<v Speaker 1>market where there is a diversified set of providers who

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<v Speaker 1>it appears, at least to the consumer, that it's heads

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<v Speaker 1>you win, tails we lose in the event of uncertainty

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<v Speaker 1>on the future path of energy prices. When wholesale gas

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<v Speaker 1>prices were as they were for a decade, fifty per firm,

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<v Speaker 1>then you know company profit margins, retail energy profit marginers

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<v Speaker 1>will be pretty constant just to playing your margin. But

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<v Speaker 1>in the event that it's gone four d five ten

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<v Speaker 1>x times on the gas price, we're having potentially bailout

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<v Speaker 1>specific industrial support. Does that suggest the starting structure of

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<v Speaker 1>UK retail energy was fit for purpose? I think there

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<v Speaker 1>are more questions and answers on that one of the moment.

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<v Speaker 1>So you have two candidates that are trying to become

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<v Speaker 1>prime minister, one as a former chancellor, the other is

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<v Speaker 1>Liz Truss. They're going around the country. Who are they

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<v Speaker 1>talking to because it feels like they're really talking to

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<v Speaker 1>the hundred and sixty thousand Conservative members that will vote

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<v Speaker 1>for them. You are absolutely right, and I wrote recently

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<v Speaker 1>about the difference between campaign economics and governing economics. At

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<v Speaker 1>the moment, we are hearing the economics of campaigning and

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<v Speaker 1>not campaigning for the votes of thirty forty million UK electured.

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<v Speaker 1>It's the hundred and sixty two hundred thousand Conservative members.

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<v Speaker 1>Now we know the demographic characteristics. They are somewhat older

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<v Speaker 1>than the average electorate, They're somewhat whiter than the average electorate.

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<v Speaker 1>There's somewhat richer than the average electorate. That tells us

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<v Speaker 1>a little bit about their preferences. If you you look

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<v Speaker 1>at you know the sort of demographic profiles and the

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<v Speaker 1>political preferences of that group, which maybe why we're seeing,

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<v Speaker 1>at least from the lizt Trust side, a lot of

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<v Speaker 1>channeling of Margaret Thatcher, former UK Prime Minister in the

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<v Speaker 1>nine eighties, who was very remains very popular, very potemic

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<v Speaker 1>for that group. The flip side from Rashi sink you

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<v Speaker 1>are seeing more conversations about or more statements of fiscal discipline.

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<v Speaker 1>The idea of we're also channeling actually something Margaret Thatcher's keener,

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<v Speaker 1>which is a good housekeeping of the public finances, but

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<v Speaker 1>as a result of actually generated quite a big gap

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<v Speaker 1>in there sort of the scale of their fiscal plans,

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<v Speaker 1>but also the rhetoric they're using. So let's focus on

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<v Speaker 1>tax cuts. Liszt trust her big thing was as soon

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<v Speaker 1>as I get in power, if I get into power,

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<v Speaker 1>I cut taxes. She can hardly do a U turn

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<v Speaker 1>on that. And so what does that mean for the

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<v Speaker 1>UK economy. We're an inflationary environment. This is the biggest

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<v Speaker 1>headache for households, it's the biggest headache for the Bank

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<v Speaker 1>of England. We're going into tax cuts. I mean, let's

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<v Speaker 1>not beat about the bush on this, because I think

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<v Speaker 1>there's been a lot of misinformation spread. Standard economics is

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<v Speaker 1>that if you increase your budget deficit through either additional

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<v Speaker 1>spending or cutting taxes, then that will be at the

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<v Speaker 1>margin inflationary. It's not gonna be deflationary, it's not gonna neutral,

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<v Speaker 1>it's going to be inflationary. But it is also true

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<v Speaker 1>that in the context of inflation that is likely to

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<v Speaker 1>hit something of the order of thirteen percent in the

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<v Speaker 1>UK by the end of the year. That will be

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<v Speaker 1>you're not quite a rounding error. But the impact of

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<v Speaker 1>thirty million pounds worth of tax thirty billion, where the

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<v Speaker 1>tax cuts is going to be relatively small in the

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<v Speaker 1>context of events that are going on three thousand miles

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<v Speaker 1>to the east of us that are impacting wholesale energy prices.

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<v Speaker 1>So it is one of magnitudes. But there is no

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<v Speaker 1>doubt that you are adding fuel, or be it a

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<v Speaker 1>limited amount of fuel to what is already an inflationary fire.

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<v Speaker 1>But that makes the life of the rich easier, but

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<v Speaker 1>not necessarily the ones that are struggling the most with

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<v Speaker 1>the cost of living. Well that certainly if you're looking

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<v Speaker 1>at the type of tax cuts that are being proposed

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<v Speaker 1>by the Trust campaign, let's be quite specific here. She

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<v Speaker 1>is suggesting reversing the increase in national insurance contributions that

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<v Speaker 1>came in earlier in the year. That was quite a

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<v Speaker 1>progressive You can argue whether it's a good or a

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<v Speaker 1>bad thing, but unambiguously, more affluent households paid more than

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<v Speaker 1>poorer households, and therefore if you reverse them, you do

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<v Speaker 1>go on the reverse journey. And at this point, given

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<v Speaker 1>the distributional impact of higher energy prices, do I think

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<v Speaker 1>that is an appropriate tax cut? Um Personally, I think

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<v Speaker 1>it is poorly targeted. If you've got a finite amount

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<v Speaker 1>of public resources you want to devote to supporting households

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<v Speaker 1>through this period, I'm not sure i'd pick that National

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<v Speaker 1>insurance increases the want to reverse let's trust gets in.

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<v Speaker 1>What's her biggest challenge economically in the next four eight hours.

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<v Speaker 1>How is she going to support UK household incomes through

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<v Speaker 1>this winter? How targeted is that going to be? And

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<v Speaker 1>probably the biggest decision is she's got two broad options.

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<v Speaker 1>She can either give money directly to households, you support

0:12:34.720 --> 0:12:39.120
<v Speaker 1>specific cohorts and indeed not support specific codes to govern

0:12:39.280 --> 0:12:41.520
<v Speaker 1>is to choose. She has to make those choices in

0:12:41.559 --> 0:12:44.920
<v Speaker 1>the first forty eight hours um. But then if she

0:12:45.000 --> 0:12:48.680
<v Speaker 1>doesn't want to support household incomes, will she just cap

0:12:48.840 --> 0:12:53.840
<v Speaker 1>the energy tariffs at a level below what the futures

0:12:53.880 --> 0:12:57.559
<v Speaker 1>market is pointing to effectively tear up the formula. If

0:12:57.559 --> 0:13:00.640
<v Speaker 1>she were to do that, most UK retail energy companies

0:13:00.640 --> 0:13:04.400
<v Speaker 1>in the UK would immediately become insolvent and therefore effectively

0:13:04.400 --> 0:13:07.679
<v Speaker 1>you're talking about nationalization. So two very very different paths

0:13:08.120 --> 0:13:10.560
<v Speaker 1>with very very different implications. She's going to decide which

0:13:10.559 --> 0:13:13.719
<v Speaker 1>of those two broad paths she has to pick early on,

0:13:14.040 --> 0:13:16.760
<v Speaker 1>and do you think she'd be prime Minister to the

0:13:16.840 --> 0:13:21.800
<v Speaker 1>people or a prime minister to the Conservatives. The problem,

0:13:21.840 --> 0:13:24.280
<v Speaker 1>if you like, in answering that question about let's trust,

0:13:24.400 --> 0:13:26.880
<v Speaker 1>is let's trust, and her opponents have used this and

0:13:26.920 --> 0:13:29.480
<v Speaker 1>I'm not I'm not jumping on a political Bandmarcon. It's

0:13:29.520 --> 0:13:32.280
<v Speaker 1>just a statement of fact. She was a Republican, she's

0:13:32.280 --> 0:13:34.160
<v Speaker 1>now a monarchist. She was a lib Dem she's now

0:13:34.200 --> 0:13:37.720
<v Speaker 1>a conservative. She was a remainer, she's now a leaver. Therefore,

0:13:37.720 --> 0:13:40.720
<v Speaker 1>it's quite difficult actually to answer your question. I'm not

0:13:40.760 --> 0:13:43.720
<v Speaker 1>going to, sort of, if you like, an criticize her

0:13:43.720 --> 0:13:46.080
<v Speaker 1>for that. I actually think it's a virtue. If you

0:13:46.480 --> 0:13:50.200
<v Speaker 1>experience different stuff in life, you change your views. That's

0:13:50.320 --> 0:13:53.120
<v Speaker 1>that's that's that's a good thing. I don't like ideal

0:13:53.120 --> 0:13:55.360
<v Speaker 1>logues who don't change their view regardless of the evidence.

0:13:55.640 --> 0:13:57.880
<v Speaker 1>But in terms of being able to answer your question,

0:13:58.440 --> 0:14:01.840
<v Speaker 1>it's quite difficult to know how pragmatic she will be

0:14:01.880 --> 0:14:04.480
<v Speaker 1>when the electorate change from the aforementioned hundred sixty two

0:14:04.840 --> 0:14:07.959
<v Speaker 1>thousand to trying to win a re election in late

0:14:09.920 --> 0:14:13.240
<v Speaker 1>The problem is whichever choice she picks, she'll have to

0:14:13.320 --> 0:14:17.360
<v Speaker 1>upset someone by promising if you like campaign economics, you

0:14:17.400 --> 0:14:19.280
<v Speaker 1>want to be all things to all people, which, let's

0:14:19.320 --> 0:14:22.360
<v Speaker 1>be honest, the current UK Prime Minister Boris Johnson made

0:14:22.400 --> 0:14:25.680
<v Speaker 1>a has made a career of doing. Eventually you'll disappoint

0:14:25.680 --> 0:14:28.160
<v Speaker 1>someone because you have to make those decisions in government

0:14:28.200 --> 0:14:30.200
<v Speaker 1>when you campaign. You don't have to make them when

0:14:30.200 --> 0:14:32.760
<v Speaker 1>you are in government. You have to choose. And will

0:14:32.800 --> 0:14:35.960
<v Speaker 1>she disappoint if you like her base who swept her

0:14:35.960 --> 0:14:38.680
<v Speaker 1>to power by promising them stuff on Brexit, on tax

0:14:38.760 --> 0:14:41.840
<v Speaker 1>cuts which the realities of office may may make it

0:14:41.920 --> 0:14:45.080
<v Speaker 1>very difficult to achieve. I guess that the economists and

0:14:45.120 --> 0:14:47.120
<v Speaker 1>the city no, she soon act better because he was

0:14:47.120 --> 0:14:50.120
<v Speaker 1>in charge of finances for this country. Is that what

0:14:50.280 --> 0:14:51.880
<v Speaker 1>he will be as prime minister? Will he put the

0:14:51.920 --> 0:14:55.240
<v Speaker 1>same policies in place? He's been quite public and it's

0:14:55.240 --> 0:14:57.520
<v Speaker 1>no secret I think to any of your listeners that

0:14:58.280 --> 0:15:02.040
<v Speaker 1>him and the current ime Minister Boris Johnson did not

0:15:02.160 --> 0:15:06.240
<v Speaker 1>see eye to eye on the economic path and therefore

0:15:06.400 --> 0:15:09.600
<v Speaker 1>this wasn't I feel like a pure economic strategy of

0:15:09.680 --> 0:15:11.800
<v Speaker 1>Richie Sunk. This was always as it was in the

0:15:11.840 --> 0:15:15.480
<v Speaker 1>latter days of Gordon Brown and Tony Blair. It was

0:15:15.520 --> 0:15:18.560
<v Speaker 1>a compromise which avoided the two hit it and punching

0:15:18.560 --> 0:15:20.080
<v Speaker 1>each other. I don't think it ever came to that,

0:15:20.160 --> 0:15:24.760
<v Speaker 1>but at least metaphorically punching each other. And therefore we

0:15:24.800 --> 0:15:27.320
<v Speaker 1>don't necessarily get a read from his period in office

0:15:27.400 --> 0:15:29.680
<v Speaker 1>as a Chancellor how he would be as Prime minister.

0:15:29.800 --> 0:15:35.200
<v Speaker 1>Having said that, I do think his fiscal conservatism small

0:15:35.320 --> 0:15:39.360
<v Speaker 1>c is genuine. He does worry about debt, he does

0:15:39.400 --> 0:15:43.320
<v Speaker 1>worry about sustainable finances. He is quite from everyone who's

0:15:43.360 --> 0:15:46.000
<v Speaker 1>worked with him, people I have a lot of respect

0:15:46.040 --> 0:15:48.720
<v Speaker 1>for saying he's very, very diligent. I think it is

0:15:48.720 --> 0:15:53.720
<v Speaker 1>that diligence and that work ethic that is, from my perspective,

0:15:53.880 --> 0:15:56.240
<v Speaker 1>was trying to understand his economics the most appealing because

0:15:56.240 --> 0:15:59.600
<v Speaker 1>it's likely therefore to be a consistent and logical So

0:15:59.760 --> 0:16:01.600
<v Speaker 1>it is up to the Prime minister really to set

0:16:01.600 --> 0:16:06.040
<v Speaker 1>the economic targets or the economic trend or a really

0:16:06.080 --> 0:16:07.280
<v Speaker 1>be you know, at the end of the day, the

0:16:07.360 --> 0:16:10.040
<v Speaker 1>Chancellor and their advisors. Well, I think you're alluding to

0:16:10.040 --> 0:16:12.480
<v Speaker 1>a very interesting point, which is who will be the

0:16:12.560 --> 0:16:17.320
<v Speaker 1>chancellor under either Liz Trust or Rishi sink Um. But

0:16:17.360 --> 0:16:20.480
<v Speaker 1>I think the smart money is on current Energy Secretary

0:16:20.560 --> 0:16:24.840
<v Speaker 1>Quasi Quarte being the Chancellor for Trust. For trust and

0:16:25.240 --> 0:16:29.320
<v Speaker 1>what we know about quasi quarteng is he co authored

0:16:29.360 --> 0:16:32.040
<v Speaker 1>with Donic rab and Liz Trust Britannia Unchained, which had

0:16:32.080 --> 0:16:34.440
<v Speaker 1>a very different vision for the UK economy than the

0:16:34.480 --> 0:16:38.200
<v Speaker 1>current UK economy. Will that crystallize in the stuff that's

0:16:38.200 --> 0:16:40.680
<v Speaker 1>coming out of the Treasury or will he be selected

0:16:40.720 --> 0:16:43.800
<v Speaker 1>because this trust thinks as Prime Minister, she wants a

0:16:43.880 --> 0:16:48.640
<v Speaker 1>treasury who are lockstep with what she's setting out. There's

0:16:48.640 --> 0:16:51.480
<v Speaker 1>a very different challenge actually for Rishi Sink, which was

0:16:51.520 --> 0:16:53.880
<v Speaker 1>a challenge that Alisa Darling faced when he took over

0:16:53.920 --> 0:16:56.800
<v Speaker 1>as Chancellor from Gordon Brown, is if the permer Chancellor,

0:16:56.800 --> 0:16:59.360
<v Speaker 1>who knows the Treasury inside out then moves into number ten,

0:17:00.160 --> 0:17:03.160
<v Speaker 1>you can't get much past someone who might want to

0:17:03.200 --> 0:17:05.679
<v Speaker 1>sort of continue to take quite a detailed look at

0:17:05.680 --> 0:17:09.080
<v Speaker 1>the economic brief. I think the reality is whoever they

0:17:09.119 --> 0:17:14.199
<v Speaker 1>surround themselves by, they will be impacted by events that

0:17:14.840 --> 0:17:17.840
<v Speaker 1>even sat here now with the if you like the

0:17:17.880 --> 0:17:20.040
<v Speaker 1>foresight of what is to come in terms of the

0:17:20.080 --> 0:17:23.440
<v Speaker 1>economic slowdown, the economic pressures, it will be shaped by

0:17:23.480 --> 0:17:26.119
<v Speaker 1>events that none of us can predict and What you

0:17:26.160 --> 0:17:30.679
<v Speaker 1>therefore look for is someone who has the intellectual rigor

0:17:30.800 --> 0:17:36.480
<v Speaker 1>consistency to appraise those options in real time and make bold,

0:17:37.119 --> 0:17:39.679
<v Speaker 1>evidence lead decisions. And that's what you would want to

0:17:39.680 --> 0:17:42.440
<v Speaker 1>see from the advisory base, rather than necessarily a makeup

0:17:42.520 --> 0:17:47.280
<v Speaker 1>that has preconceived ideological attachments. Does the city and do

0:17:47.359 --> 0:17:50.439
<v Speaker 1>bankers have a favorite candidate? Oh, to the degree that

0:17:50.480 --> 0:17:52.399
<v Speaker 1>I can ever speak for the city, that anybody can

0:17:52.400 --> 0:17:57.960
<v Speaker 1>ever speak for the city, I think, Um, there is

0:17:58.160 --> 0:18:02.119
<v Speaker 1>probably a slight preference for Rishi Sunak, but I wouldn't

0:18:02.119 --> 0:18:04.320
<v Speaker 1>say it was overwhelming. What are you doing for lunch?

0:18:04.400 --> 0:18:07.479
<v Speaker 1>Last time the podcast crashed a working lunch you had

0:18:07.480 --> 0:18:10.800
<v Speaker 1>at Sweeting? You remember that you're like our first guest

0:18:11.000 --> 0:18:14.199
<v Speaker 1>presenter at Sweeting. I do, and it was it was

0:18:14.240 --> 0:18:16.800
<v Speaker 1>a brilliant way to end that lunch to come and

0:18:16.880 --> 0:18:20.480
<v Speaker 1>chat to you guys. You ran away. I didn't run away.

0:18:20.520 --> 0:18:24.280
<v Speaker 1>I tried to run away because then you know, UM,

0:18:24.560 --> 0:18:29.240
<v Speaker 1>no a client lunch which I'm very much looking putty

0:18:29.280 --> 0:18:32.440
<v Speaker 1>because there is so much for UK focus. Is there's

0:18:32.480 --> 0:18:35.320
<v Speaker 1>a small MidCap UK investor who is looking at the

0:18:35.400 --> 0:18:38.119
<v Speaker 1>UK situation. And we've talked about this for years. Franc

0:18:38.320 --> 0:18:41.280
<v Speaker 1>which is since the Brexit vote, UK assets have been

0:18:41.320 --> 0:18:44.160
<v Speaker 1>at a considerable discount. Global investors have taken a dim

0:18:44.280 --> 0:18:47.840
<v Speaker 1>view of politics and economics in the UK, and this

0:18:47.920 --> 0:18:51.440
<v Speaker 1>individual in question I'm lunching with today has a conviction

0:18:51.480 --> 0:18:54.240
<v Speaker 1>that there's still and its conviction I share the UK

0:18:54.359 --> 0:18:59.920
<v Speaker 1>still has some great companies, some great intellectual property there

0:19:00.000 --> 0:19:03.520
<v Speaker 1>at attractive valuations. But actually, and if you're just going

0:19:03.560 --> 0:19:05.760
<v Speaker 1>to encompass all we've just chatted about in the last

0:19:06.040 --> 0:19:09.400
<v Speaker 1>twenty minutes half an hour, it is if that can

0:19:09.520 --> 0:19:13.560
<v Speaker 1>just be put together with some stable governance. Gosh, I

0:19:13.640 --> 0:19:15.360
<v Speaker 1>was one thing I would agree with the trust campaign

0:19:15.359 --> 0:19:17.120
<v Speaker 1>is the UK's best years could still be in front

0:19:17.160 --> 0:19:19.280
<v Speaker 1>of her. So the business lunch is back. It is

0:19:19.480 --> 0:19:22.840
<v Speaker 1>with a vengeance, even in August. Definitely, Simon French, thank

0:19:22.840 --> 0:19:25.320
<v Speaker 1>you so much. It's been a huge pleasure. Thank you Franz.

0:19:28.960 --> 0:19:31.000
<v Speaker 1>Thanks for listening to this week's in the City. We'll

0:19:31.040 --> 0:19:32.800
<v Speaker 1>be back next week with a look at the London

0:19:32.880 --> 0:19:35.600
<v Speaker 1>housing market for the ultra rich. But in the meantime,

0:19:35.640 --> 0:19:37.159
<v Speaker 1>if you like our show, please head on over to

0:19:37.240 --> 0:19:40.040
<v Speaker 1>Apple Podcasts or wherever you listen to podcasts and rate,

0:19:40.400 --> 0:19:43.520
<v Speaker 1>review and subscribe. This episode was hosted by Me franc

0:19:43.560 --> 0:19:46.320
<v Speaker 1>I Laqua, with a small appearance by ME David Harritt.

0:19:46.480 --> 0:19:48.879
<v Speaker 1>It was produced by Summer Sadi and special thanks to

0:19:48.920 --> 0:19:49.560
<v Speaker 1>Simon French