Latest / Early Edition with Ryan Bridge / Vicky Pryce: Business Correspondent on the upcoming UK Budget announcement, cost of living protests in Europe

Transcript

Vicky Pryce: Business Correspondent on the upcoming UK Budget announcement, cost of living protests in Europe · Early Edition with Ryan Bridge

• 0:01
  Speaker 1: Let's go to Vicky Price of the business. Vicky, we've
• 0:03
  Speaker 1: got a budget coming for the UK.
• 0:06
  Speaker 2: Yes, and it's a very important one because it's going
• 0:08
  Speaker 2: to be the first one of the new chancellor. As
• 0:12
  Speaker 2: everyone will remember, there's been a change of prime minister
• 0:14
  Speaker 2: just a few months ago. It's now 100 days since
• 0:16
  Speaker 2: that happened and more or less. And we're going to
• 0:19
  Speaker 2: have the first budget to show really, you know, what
• 0:22
  Speaker 2: this government is thinking. We've already got lots of hints,
• 0:24
  Speaker 2: of course. They do want to do some redistribution from
• 0:29
  Speaker 2: the richer countries. members of the population and also firms,
• 0:34
  Speaker 2: if possible, to those who need it most, with some
• 0:38
  Speaker 2: support for household and energy bills, reducing or capping bus
• 0:43
  Speaker 2: fares and a number of other measures, which people generally
• 0:47
  Speaker 2: have welcomed, but they don't really make a huge amount
• 0:50
  Speaker 2: of difference given that we have oil prices going up
• 0:52
  Speaker 2: significantly and loads of costs on businesses right now, which
• 0:56
  Speaker 2: are preventing them from hiring people. So it's very tight fiscally.
• 1:01
  Speaker 2: and it will be watched very, very carefully by the
• 1:03
  Speaker 2: capital markets. Having said that, the UK is in a
• 1:07
  Speaker 2: better position than other parts of Europe and also the US.
• 1:11
  Speaker 2: So France is going through a tumultuous period right now.
• 1:14
  Speaker 2: And of course, the US itself is seeing its debt-to-GDP
• 1:17
  Speaker 2: ratio rising higher than the UK's. So some relief from that,
• 1:21
  Speaker 2: and maybe whatever goes on here will have less prominence
• 1:26
  Speaker 2: in capital markets' views. And... John Healy, the new chancellor,
• 1:30
  Speaker 2: will get away with it until we get really tough
• 1:33
  Speaker 2: next year when the spending review comes up for the
• 1:35
  Speaker 2: next few years.
• 1:36
  Speaker 1: It's a bit of a worry, isn't it? You've got
• 1:37
  Speaker 1: debt going higher, you've got bond yields going higher for
• 1:40
  Speaker 1: some countries. What about all these protests? Every time you
• 1:43
  Speaker 1: turn on the television, there's a new country, a new
• 1:45
  Speaker 1: European country that seems to be engulfed in protests, all
• 1:48
  Speaker 1: cost of living related?
• 1:51
  Speaker 2: Yes, to a very considerable extent. So it's because of
• 1:54
  Speaker 2: oil prices having gone up, but petrol at the pump
• 1:58
  Speaker 2: has gone up very significantly, particularly, of course, diesel, which
• 2:02
  Speaker 2: has gone sort of through the roof. But also they're
• 2:04
  Speaker 2: worried because their wages haven't kept up with inflation in
• 2:08
  Speaker 2: some cases and rents are going up substantially. Houses haven't
• 2:12
  Speaker 2: been built in the numbers they should have been built.
• 2:14
  Speaker 2: Interest rates are so high, so people can't borrow. So
• 2:17
  Speaker 2: it's pretty widespread. Not dissimilar issues to what we have
• 2:20
  Speaker 2: here in the UK, except that Europe is slightly better
• 2:23
  Speaker 2: at protesting about it. And of course, in places like France,
• 2:27
  Speaker 2: you don't actually have a stable government right now, and
• 2:29
  Speaker 2: they can't really get the agreement to cut the budget deficits.
• 2:34
  Speaker 2: And that is, of course, unsettling the markets, hence why
• 2:37
  Speaker 2: yields are going up.
• 2:38
  Speaker 1: Tell me about the new EU trading agreements with China.
• 2:42
  Speaker 2: Well, that is actually quite important. Now, we can call
• 2:45
  Speaker 2: it a trade agreement. There have been some bits that
• 2:47
  Speaker 2: have been agreed and others that will still be discussed.
• 2:50
  Speaker 2: The bits that have been agreed centre very much on
• 2:54
  Speaker 2: the export of hybrid cars and hybrid plug-in cars, because
• 3:01
  Speaker 2: hybrid cars both have a combustion engine and also have
• 3:05
  Speaker 2: a battery, and you can charge one from the other.
• 3:09
  Speaker 2: So the combustion engine, as it runs, charges the battery,
• 3:12
  Speaker 2: but also there are plug-in ones. They have been dominating
• 3:15
  Speaker 2: to a very considerable extent the market in Europe, in
• 3:18
  Speaker 2: addition to lots of electric cars. There are tariffs, of course,
• 3:21
  Speaker 2: that Europe has against EVs, But nevertheless, it was inundated
• 3:25
  Speaker 2: with sort of big increases in exports of hybrids from China.
• 3:31
  Speaker 2: And they have got some agreement that those exports will
• 3:34
  Speaker 2: be limited in the future. So on the other hand,
• 3:37
  Speaker 2: there are so many other areas where the EU has
• 3:40
  Speaker 2: a deficit with China. So this is only touching a
• 3:43
  Speaker 2: very small bit. The rest will be looked at a
• 3:46
  Speaker 2: little bit more in coming months. But there's also some
• 3:49
  Speaker 2: positive agreements on rare earths. So there will be a
• 3:52
  Speaker 2: little bit more of a look at ensuring that Europe
• 3:56
  Speaker 2: doesn't get sort of cut off in the future because
• 3:59
  Speaker 2: they need all that also for electrification. So there's been
• 4:03
  Speaker 2: some progress. There's a few more areas to discuss. But
• 4:07
  Speaker 2: at least I think in terms of unity in Europe,
• 4:12
  Speaker 2: that's been quite important because we had differences between the
• 4:14
  Speaker 2: French and the Germans for a while as to the
• 4:16
  Speaker 2: attitude towards China. Well, at least now it's all you know,
• 4:21
  Speaker 2: one thinking that has dominated, which is rather good.
• 4:24
  Speaker 1: Vicky Price does the business.