YouSaid · the spoken record

Kallum Pickering

lines on the record: 15
first: 2024-05-07
most recent: 2024-05-07
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Side suggests that there's going to be little change with regard to the relationship, whereas labor officials have hinted at areas of closer cooperation. So, for example, in agriculture or in services, but do not plan to return to the customs union or the single market.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, maybe I can start from a macro perspective. I would say that the differences between the two main parties, between labor and the conservatives in terms of economic plans, to us look rather limited. And I think the reason really is that fiscal consolidation is really needed under either outcome of the election and that ultimately somewhat limits the scope for significant deviations in coming years. Now that said, there are of course a number of important differences. I would highlight on the labor side. People have talked about a number of tax-raising measures. Let's say on the conservative side there's been signaling towards further rate reductions, particularly on the national insurance contribution side. Finally, I would say there are some differences with regard to the future relationship with the EU. I would say the commentary from the Conservative”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“The arrangement with the EU is clear. For a long time, this was very unclear. The uncertainty weighed on investment decisions. And then third, there's been a significant change in the immigration pattern into the United Kingdom. I think what's most interesting here is that it's not so much the total number of people coming into the UK that has fallen. In fact, that's actually gone up. But it's really the composition of the immigration that has changed very much. So we used to have a lot of EU workers come in, people who came to the UK with a specific purpose and objective to work, so had very high labour force participation rates. But now obviously those workers find it much harder to come into the UK. And so there's been a shift in the immigration pattern. And we do think that this has made the supply of labour in the UK less elastic and has been a”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, we see very clearly in the data that the UK has underperformed other similar advanced economies since 2016, since the EU referendum, specifically around 5%. So in other words, a Doppelganger economy, an economy that's otherwise very similar to the UK has grown cumulatively 5% more since 2016. And we do think you can trace that back to a number of areas where the UK economy is underperformed that includes trade. So there's been a significant contraction in trade, particularly with the EU. There's been weak investment and I think quite clear evidence that firms have cited Brexit and Brexit uncertainty as a source of concern and therefore a reason to invest less. We've seen some improvement there recently. Obviously that now”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think it's really the three criteria that the Bank of England has focused on. That's, first of all, labor market tightness, where we are seeing quite a lot of loosening now. In fact, in the latest labor market report, there was actually quite a sharp contraction in employment. So I think that's one key issue to watch. The second is wage growth, where, as I said earlier, the numbers are still high, but we think we're moving in the right direction. I think the speed of the cooling on wage growth is going to be important. And then the third is services inflation, where I think the unwind of these past energy effects, I think is really the most important. So we'll really look out for data around those key indicators in coming months to see whether we're on track with that cut in June.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“I mean, it's true that the Fed historically has often cut before the European central banks, both the Bank of England and the ECB, but then historically the recessions often emanated in the US, so at least if we take the last two, the financial crisis and the early 2000s, those were clearly periods of weakness that started in the US. And so it's natural, I think, that the Fed would respond to them before the European central banks do once the shock is spilled over. So I don't think that's a hard and fast rule that the Bank of England needs to go after the Fed or can't cut ahead of the Fed. I really think it comes down to economic conditions. And the way we read the economic outlook is that the Bank of England is likely to cut”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Limited effect. So, for example, on headline inflation, we think there might be a quarter of a percentage point of an effect on core inflation is probably a lot smaller because the magnitude of these shocks, at least so far, looks much more limited.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Fairly confident that the very acute phase of that energy crisis, or really the gas crisis, is behind us. I think we've seen a lot of progress in terms of gas supply to Europe, in terms of liquid gas flowing into Europe. And so we think these days of very acute risk of shortages, I think that is behind us. And of course, we've seen that in natural gas prices, largely normalizing relative to those days where we had the very intense stress. Now that said, we're obviously seeing associated with the tensions of the Middle East, renewed upward pressure on energy prices. But I would say the magnitude at this point is very different from what we saw in 2022. So we're talking about 10, 15% on gas and oil prices. And we think the standard kind of mappings and elasticities.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Let's talk about that energy risk for a moment, though, because obviously we are seeing elevated tensions in the Middle East. There's a lot of concern about the Russia, Ukraine trajectory, and where that goes from here. So how confident are you that the energy crisis is behind us?”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“That would suggest that this progress will extend, which is mostly that a lot of the remaining strength in services and wages seems to be reflecting the effects of the past energy prices. So when you look at energy intensive parts in services, for example, catering or restaurants and pubs and so on, we think there's very strong evidence that we're going to see a significant amount of cooling in those categories in coming months. And so we ultimately don't think that the UK will look that different in terms of the inflation picture come the end of the year and think that despite some of the recent upside surprises, the disinflation process in the UK is pretty much on track.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“We have, but they have been more limited, I would say, than in the US. I think the story in the UK ultimately is a little different in the sense that we have seen a huge decline of radian headline inflation. We've gone from about 11% at the peak to about 3%. And we think that will fall further in the near term as more energy effects unwind. Now the underlying measures of inflation are still very high and actually higher than in the US. So core inflation is still around 4%. Services inflation is about 6%. And that we think really links back to wage growth, which is still running at about 6%, which is way above normal levels. But that said, we have seen progress already since the peak, and we are seeing a number of signs.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“We have headline inflation coming down further in the forecast, so there should be continued growth in real incomes this year. And we also expect the Bank of England to cut rate soon. And again, that should provide more mortgage relief for households. And so when you take the year together, we look for 0.6% growth this year, and that's a bit above the consensus. And I think that's the right place to be as a forecaster.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“Of course, had to tighten a lot. The Bank of England raised interest rates by about 500 basis points. We saw a big increase in mortgage rates. Credit volumes contracted. And we think that together with the cost of living squeeze is really responsible for the very weak growth performance that we've seen over the last couple of years. But I think it is fair to say that we are now turning the corner. We are tracking first quarter GDP, growth now at 0.4%. That's the strongest in a couple of years. And we're also seeing that improvement in some of the survey data, some of the consumer and business surveys that had been extremely weak throughout this period. And so we have a construct called the current activity indicator, which summarizes the hard data and the survey data, and that has now turned positive. And we think that improvement has more room to run.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“So, I think that's right. The economy has been very weak. We've effectively seen real GDP stagmade since the middle of 2022. We saw a mild contraction, as you say, in the second half of last year, which did actually qualify as a technical recession, even though a very shallow one. We think that two main reasons behind this weak performance. One is obviously the energy crisis. We had a huge surge in energy prices, particularly natural gas prices across Europe, including in the UK. That pushed up headline inflation to a peak of about 11% at the end of 2022. And that, of course, weighed very significantly on real purchasing power and on consumption. And consumption has really underperformed relative to the US over this time period. The second is that monetary policy, like in many other places around the world,”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT
“I think it is fair to say that we are now turning the corner, we are tracking first quarter GDP, growth now at 0.4%. That's the strongest and a couple of years. And we are also seeing that improvement in some of the survey data, some of the consumer and business surveys that had been extremely weak throughout this period.”
2024-05-07 · Goldman Sachs Exchanges · Is the UK economy finally turning the corner? · IDENTIFIED FROM THE TRANSCRIPT