Latest / Bloomberg Intelligence / Kit Juckes on Bank of England Decision (Audio)

Transcript

Kit Juckes on Bank of England Decision (Audio) · Bloomberg Intelligence

• 0:01
  Speaker 1: This is taking stock with Kathleen Hayes and Pim Fox
• 0:05
  Speaker 1: on Bloomberg Radio. The Bank of England brexits, the economy.
• 0:11
  Speaker 1: All these factors swirled together today as the Bank of
• 0:15
  Speaker 1: England left its monetary policy unchanged, keeping the door open
• 0:19
  Speaker 1: to another interest rate cut this year, the pound falling
• 0:24
  Speaker 1: on that news. Let's get right to someone who follows
• 0:28
  Speaker 1: this very very closely. Kit Jukes, Global head of Foreign
• 0:31
  Speaker 1: Exchange Strategy at Society General, joining us from London. Where
• 0:35
  Speaker 1: did I hope your home now enjoying a quiet evening? Absolutely,
• 0:40
  Speaker 1: I'm listening to your traffic report thinking I'm glad. I'm
• 0:43
  Speaker 1: not all right, Well, we're glad you're here on on
• 0:46
  Speaker 1: the phone with us. So not really a surprise. Nobody
• 0:49
  Speaker 1: expected this rate cut. I guess where people start dividing
• 0:51
  Speaker 1: is whether or not where the Bank of England that
• 0:54
  Speaker 1: is is heading for a rate cut November. What does
• 0:56
  Speaker 1: Kit Jukes think? Um? I think listening to them. You
• 0:59
  Speaker 1: know that in their statement accompanying the no move decision,
• 1:02
  Speaker 1: they said that they were still going to cut interest
• 1:05
  Speaker 1: rates in due course if they're earlier August assessment, which
• 1:07
  Speaker 1: was pretty dire of the economy proved correct. I don't
• 1:12
  Speaker 1: know how you could easily established that the data was
• 1:16
  Speaker 1: was that much worse by November from now so um
• 1:20
  Speaker 1: that if I were in their shoes, I would be thinking, look,
• 1:23
  Speaker 1: we're keeping some ammunition reserve in case we get a
• 1:27
  Speaker 1: slower but still serious slowdown in the economy over the
• 1:30
  Speaker 1: next few months. But November feels close all of a sudden. Well,
• 1:34
  Speaker 1: what's even closer is tomorrow. And tomorrow in in Bratislava,
• 1:40
  Speaker 1: in Slovakia, there is a special summit meeting among EU leaders,
• 1:47
  Speaker 1: but without anyone from the United Kingdom, at least officially.
• 1:52
  Speaker 1: And I want to get your perspective on this, because
• 1:55
  Speaker 1: there's just not just highlight problems having to do with
• 1:57
  Speaker 1: how do you deal with Brexit? But Tusk, who is
• 2:00
  Speaker 1: the former Polish prime minister, he chairs these summits. Uh,
• 2:05
  Speaker 1: he's gonna have to deal with Luxembourg. They've called for
• 2:08
  Speaker 1: Hungary to get thrown out of the European Union because
• 2:11
  Speaker 1: of treating asylum seekers quote worse than wild animals. Then
• 2:16
  Speaker 1: Hungary counter attacks and says that Luxembourg helps big corporations
• 2:22
  Speaker 1: avoid tax. Is Brexit going to be maybe down on
• 2:25
  Speaker 1: the agenda? I think the agenda, I guess is, you know,
• 2:28
  Speaker 1: at least the public agenda in terms of what they
• 2:30
  Speaker 1: come out and talk about, is going to be life
• 2:33
  Speaker 1: after Brexit, you know, re restarting, re energizing. Where is
• 2:37
  Speaker 1: Europe going in the long run, dealing with the problems
• 2:40
  Speaker 1: of of of the immigration crisis or the refugee crisis,
• 2:44
  Speaker 1: and how they integrate that and how they get growth going.
• 2:47
  Speaker 1: So my guest, if you were trying to spin it
• 2:49
  Speaker 1: positively as as a European leader, and I'm sure they will,
• 2:52
  Speaker 1: it's rebooting Europe. I'm saying, Look, okay, you know the
• 2:56
  Speaker 1: UK thing is is sad, but it is what it is. Um,
• 3:00
  Speaker 1: what do we do to solve the rest of this mess? What?
• 3:03
  Speaker 1: What strong? What strong plans can we have because they
• 3:06
  Speaker 1: have a ton of things they don't agree about, you know.
• 3:08
  Speaker 1: And and it's interesting just in the last couple of
• 3:10
  Speaker 1: days one of the top EU officials was quoted saying
• 3:13
  Speaker 1: that it will be twelve months before any of the
• 3:16
  Speaker 1: talks on Brexit begin. And the Telegraph has a story
• 3:20
  Speaker 1: today where they say, uh, senior figures in the EU
• 3:25
  Speaker 1: believe that Britain will give up on Brexit if they
• 3:27
  Speaker 1: make negotiations as tough as possible. Apparently they have spoken
• 3:32
  Speaker 1: to five senior EU figures. Does that and actually you
• 3:37
  Speaker 1: kind of wonder if that's what's going on. It It
• 3:39
  Speaker 1: seems implausible in a way because the British citizens voted,
• 3:42
  Speaker 1: but could that be what Britain? But the rest of
• 3:45
  Speaker 1: Europe is hoping? Um, the rest of your I don't know.
• 3:48
  Speaker 1: There's probably some people in Europe you hope the UK
• 3:50
  Speaker 1: would leave because they've not been a comfortable partner at
• 3:54
  Speaker 1: any point, even though economically I think it's bad for everyone.
• 3:57
  Speaker 1: But yeah, look, I think it's going to be very elayed,
• 4:00
  Speaker 1: and it's it's not impossible that in the end this
• 4:03
  Speaker 1: doesn't happen, but it's really difficult to see how it happens. Um.
• 4:07
  Speaker 1: You know. The difficulty is the election timetable in Europe?
• 4:11
  Speaker 1: How do you agree on the biggestsues around the terms
• 4:15
  Speaker 1: of the UK leaving until after the German elections in
• 4:18
  Speaker 1: a year's time. I think it's impossible to do that.
• 4:21
  Speaker 1: Why given that you can't agree the biggest issues, if
• 4:24
  Speaker 1: you were the reason May the UK Prime Minister, why
• 4:27
  Speaker 1: would you invoke this article fifty that kick starts the
• 4:29
  Speaker 1: process and gives you two years to sort it out.
• 4:32
  Speaker 1: Why would you do that anytime soon if you know
• 4:34
  Speaker 1: that the biggest decisions are going to sit around getting
• 4:37
  Speaker 1: dusty while officials m and are but the politicians can't
• 4:41
  Speaker 1: can't rub a stamp or agree or make those those
• 4:43
  Speaker 1: critical decisions. So the whole thing, I mean, from where
• 4:46
  Speaker 1: I sit, is just a kind of corrosive slow drag
• 4:51
  Speaker 1: on the economy while people delay, I don't know, hiring,
• 4:54
  Speaker 1: hiring new graduates out of university, making new big investment projects,
• 4:59
  Speaker 1: all those kind decisions where that uncertainty kind of eats aweart.
• 5:02
  Speaker 1: It's so not decimating an economy, but just really just
• 5:06
  Speaker 1: being unhelpful at every level. I think that's the that
• 5:09
  Speaker 1: that that's the message I picked up from from this
• 5:12
  Speaker 1: this delay. And then maybe people do hope that that's
• 5:14
  Speaker 1: bad enough to be give up. By then the economy
• 5:16
  Speaker 1: will have not grown that fast for a while, and
• 5:18
  Speaker 1: I should probably be cross about that.