Latest / Best of Business / Vicky Pryce: Business Correspondent on the upcoming UK Budget announcement, cost of living protests in Europe

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Vicky Pryce: Business Correspondent on the upcoming UK Budget announcement, cost of living protests in Europe · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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• 0:16
  Speaker 2: Let's go to Vicky Price of the business. Vicky, we've
• 0:19
  Speaker 2: got a budget coming for the UK.
• 0:23
  Speaker 3: Yes, and it's a very important one because it's going
• 0:25
  Speaker 3: to be the first one of the new Chancellor. As
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  Speaker 3: everyone will remember, there's been a change of Prime Minister
• 0:31
  Speaker 3: just a few months ago. It's now 100 days since
• 0:33
  Speaker 3: that happened and more or less. And we're going to
• 0:36
  Speaker 3: have the first budget to show really you know, what
• 0:38
  Speaker 3: this government is thinking. We've already got lots of hints,
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  Speaker 3: of course. They do want to do some redistribution from
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  Speaker 3: the richer members of the population and also firms, if possible,
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  Speaker 3: to those who need it most, with some support for
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  Speaker 3: household and energy bills, reducing or capping bus fares. And
• 1:00
  Speaker 3: a number of other measures which people generally have welcomed,
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  Speaker 3: but they don't really make a huge amount of difference
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  Speaker 3: given that we have oil prices going up significantly and
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  Speaker 3: loads of costs on businesses right now, which are preventing
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  Speaker 3: them from hiring people. So it's very tight fiscally and
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  Speaker 3: it will be watched very, very carefully by the capital markets.
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  Speaker 3: Having said that. the UK is in a better position
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  Speaker 3: than other parts of Europe and also the US. So
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  Speaker 3: France is going through a tumultuous period right now. And
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  Speaker 3: of course, the US itself is seeing its debt-to-GDP ratio
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  Speaker 3: rising higher than the UK's. So some relief from that
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  Speaker 3: and maybe whatever goes on here will have less prominence
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  Speaker 3: in capital markets views. And John Healy, the new chancellor,
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  Speaker 3: will get away with it until we get really tough
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  Speaker 3: next year when the spending review comes up for the
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  Speaker 3: next few years.
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  Speaker 2: It's a bit of a worry, isn't it? You've got
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  Speaker 2: debt going higher, you've got bond yields going higher for
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  Speaker 2: some countries. What about all these protests? Every time you
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  Speaker 2: turn on the television, there's a new country, a new
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  Speaker 2: European country that seems to be engulfed in protests, all
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  Speaker 2: cost of living related?
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  Speaker 3: Yes, to a very considerable extent. So it's because of
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  Speaker 3: oil prices having gone up a petrol at the pump
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  Speaker 3: has gone up very significantly, particularly, of course, diesel, which
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  Speaker 3: has gone sort of through the roof. But also they're
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  Speaker 3: worried because their wages haven't kept up with inflation in
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  Speaker 3: some cases and rents are going up substantially. Houses haven't
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  Speaker 3: been built in the numbers they should have been built.
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  Speaker 3: Interest rates are so high, so people can't borrow. So
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  Speaker 3: it's pretty widespread. Not dissimilar issues to what we have
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  Speaker 3: here in the UK, except that Europe is slightly better
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  Speaker 3: at protesting about it. And of course, in places like France,
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  Speaker 3: you don't actually have a stable government right now, and
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  Speaker 3: they can't really get the agreement to cut the budget deficits.
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  Speaker 3: And that is, of course, unsettling the markets, hence why
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  Speaker 3: yields are going up.
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  Speaker 2: Tell me about the new EU trading agreements with China.
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  Speaker 3: Well, that is actually quite important. Now, we can call
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  Speaker 3: it a trade agreement. There have been some bits that
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  Speaker 3: have been agreed and others that will still be discussed.
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  Speaker 3: The bits that have been agreed centre very much on
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  Speaker 3: the export of hybrid cars and hybrid plug-in cars, because
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  Speaker 3: hybrid cars both have a combustion engine and also have
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  Speaker 3: a battery, and you can charge one from the other.
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  Speaker 3: So the combustion engine runs, charges the battery, but also
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  Speaker 3: there are plug-in ones. They have been dominating to a
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  Speaker 3: very considerable extent the market. In Europe, in addition to
• 3:36
  Speaker 3: lots of electric cars, there are tariffs, of course, that
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  Speaker 3: Europe has against EVs. But nevertheless, it was inundated with
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  Speaker 3: sort of big increases in exports of hybrids from China.
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  Speaker 3: And they have got some agreement that those exports will
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  Speaker 3: be limited in the future. So on the other hand,
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  Speaker 3: there are so many other areas where the EU has
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  Speaker 3: a deficit with China. So this is only touching a
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  Speaker 3: very small bit. The rest will be looked at a
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  Speaker 3: little bit more in coming months. But there's also some
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  Speaker 3: positive agreements on rare earths. So there will be a
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  Speaker 3: little bit more of a look at ensuring that Europe
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  Speaker 3: doesn't get sort of cut off in the future because
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  Speaker 3: they need all that also for electrification. So there's been
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  Speaker 3: some progress. There's a few more areas to discuss. But
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  Speaker 3: at least I think in terms of unity in Europe,
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  Speaker 3: that's been quite important because we had differences between the
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  Speaker 3: French and the Germans for a while as to the
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  Speaker 3: attitude towards China. Well, at least now it's all you know,
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  Speaker 3: one thinking that has dominated, which is rather good.
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  Speaker 2: Vicky Price does the business.
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