This is a City AM Studios production. Hello and welcome back to Business as Usual with me, Martin Kimber.
SPEAKER_02And me, Simon Hunt. Coming up on the podcast, the Bank of England hampers Burner's job drive as the MPC votes to hold interest rates again.
SPEAKER_03Andy Burnham asks businesses to lean in a bit more to help solve the youth unemployment crisis and says barriers to providing work experience to young people are largely imagined.
SPEAKER_02Plus, why the controversial electric Ferrari Luce could now be a collector's item. Interest rates look set to stay higher for longer, putting more pressure on borrowers, including the country's biggest borrower, the government. A growing number of the Bank of England's MPC, that's Monetary Policy Committee, voted in favour of raising interest rates, three this time versus two back in June, suggesting things could be headed in the wrong direction for inflation. Though of course, six MPC members still voted for a rate hold. Our financial official and chief reporter Ali Lyon joins us in the studio now. Ali, we've heard from the BOE governor, Andrew Bailey. What about the governor from the north, Andrew Burnham? What will he make of this?
SPEAKER_01I think he'll be disappointed, but not that surprised. To recap, Bank of England opted to hold interest rates at 3.75%. This is the fifth consecutive meeting that they have decided to hold. And bear in mind what has happened since then. Cast your mind back to December, the last time they changed bank rates. And we have seen inflation come right down, but we have also seen the outbreak of the war in the Middle East. And ever since then, the bank has basically been walking this enormous tightrope. On the one hand, we are seeing, as I said, price the speed of price rises fall. We are seeing this really quite concerning disintegration of the labour market, unemployment up, wage rises down, vacancies up. But then on the other side of that coin, we've got everything going on in the Middle East, much higher energy prices. And at the moment, that hasn't quite filtered through into our economy, but MPC members are very, very concerned that eventually it will.
SPEAKER_02Reading through some of the commentary from the different MPC members, and by the way, I think it's great that they now publish that because it's tremendous fun for journalists to see where people disagree with each other. There are a lot of members on the committee doing what the young people refer to as six sevens in their commentary. You know, they're saying, well, on the one hand this, on the other hand, that. You know, there are some signs that inflation's going the wrong direction, some signs it's going the right one. We're waiting for the consensus to build in the data before we decide what to do next. So there is, I mean, the under thing that underscores it all is the uncertainty of it all.
SPEAKER_01Yes, uh, a lot of uncertainty. Uh the the sort of big thing that people are unsure about, uh in disagreement about, is is just quite how much of the initial energy shock um, which we are seeing through higher energy uh prices and energy bills come through now with the the uh higher energy price cap, um, just how much of that will filter through into the sort of real economy? Uh that's the thing that you know gets gets MPC members and rate setters really worried. Do we see not just uh some a little bit of price pressure in supermarkets, but do we see me and you going to our editor and saying, I need a price rise to help afford to help afford my higher rents or my higher, my higher bills? Um do we start seeing companies then raise their prices in what's called a rage price spiral because everyone's got higher wages? And that's that sort of doom loop inflation effect that we saw in 2022 that is looking less likely just because of sort of complicated things like the broad supply of money and uh and sort of the the that slack in the labour market that we've got that means that we can't go to our bosses and ask for wage prices, they'll just fire us.
SPEAKER_03Um Just very, very, very briefly, Allie, why does why do higher interest rates result in depressed um employment? Why why is it harder to get people into work when interest rates are higher?
SPEAKER_01Lower interest rates is basically like this sort of release valve that gets uh that gets given to a company, could get given to a household uh through your mortgage. Um and obviously if you're paying less for for your loans, paying less for um sort of the rolling over loans that you've got already uh already existing, then immediately you've got a bit more money to play with to give to staff or to spend on investment. And so that is genuinely the intention of having interest rates higher is to stop businesses doing these things, to stop households spending so much money and cooling down the economy. Um, and then obviously, once you lower it, you want to get the economy firing up a bit more and keep those price rises at 2%, that Bank of England target, then all of those things happen in reverse. Great explanation. Thank you very much.
SPEAKER_03Ali, um the EasyJet takeover turns out it's still up in the air. Uh I've learned from you, Simon. Uh, and not yet a done deal.
SPEAKER_02It's still time for fight or flight.
SPEAKER_01Um so yeah, all eyes will be on uh RS, the sort of London Stock Exchange's new system, uh, on Monday evening, because that is the deadline for Castle Lake, this American private equity company, to what's called put up or shut up in a really nice phrase of sort of stock exchange jargon. Um where I sugar come up with that. Whereby they basically have to tell EasyJet and tell the stock exchange whether they are going to match a more lucrative offer that EasyJet got uh earlier this month from Apollo, big scary American private equity juggernaut, um, to buy EasyJet off the stock market. Currently, um EasyJet have said that they're minded to accept an Apollo offer for £5.7 billion that came through earlier this month. The Apollo offer itself trumped an earlier offer from Castle Lake uh slightly lower. Um and yeah, Castle Lake are being incredibly tight-lipped. I've been on the phones for quite a lot of this morning trying to work out what's going on. Incredibly tight-lipped about how they're feeling. Um, and Apollo are also being very tight-lipped on um just how much they're willing to get into a bidding or should Castle Lake um get uh decides to go toe-to-toe with them.
SPEAKER_02Finally, Ali, before we put up and shut you up, if you'll forgive uh the Ferrari Luce, uh better known to our listeners as the Apple Mouse on Wheels, how has that now become a collector's item?
SPEAKER_01Well, no, I suppose we still don't really know, to be honest. Um Ferrari raised a huge amount of eyebrows uh a couple of months ago with the launch of its new EV company, uh EV car, as you say, called the Luce, it got an absolutely awful reception at the time. Including by Martin on this podcast. Yes. Shares, but including by investors as well, shares in Ferrari, it's very rare that a launch is that market moving. Shares in Ferrari dropped 8% in that one session. Um, but uh if a report in a lesser financial newspaper is to be believed uh on Thursday, um it's already flying off the shelves. Um this EV car has already surpassed what Ferrari thought it would do in sales just in a couple of months for the year. Um and uh it's sort of left some uh some uh markets commentators, one of whom sat to my left with a bit of an egg on their face. But also a market commentator. It's fantastic. Um but also uh the former chair, uh a guy by the name of Luca Cordero, um uh apologies to our Italian listeners.
SPEAKER_02I mean, that was better than I did the other day.
SPEAKER_01Um who called for it to be stripped of its prancing horse badge. It was such an abomination. We should listen to the man. Uh uh a very, very, very uh prestigious uh supercar maker.
SPEAKER_03Well, thank you very much for that, Ali. Before we let you go, Simon, this is not the only program that you do, is it? You also do other bits of broadcast, um, one of them being GB News. And the other day, you woke up uh in the dead of night to speak to them. And uh you did an excellent hit explaining uh why inflation is is going to wreak havoc on Andy Burnham's spending priorities. And and this, Ali, is how he was thanked.
SPEAKER_00Okay, Simon, thank you so much. Simon Hunt there, the city editor uh for City AM. Right, moving on, I think, now is always that hour we don't have any breaks. Still not got used to the fact that we have two hours without any particular breaks. Um, were you surprised to see that how young that magazine had used a look? Did you know that we have magazine editors which are 15 years old? I'm sure it's not 15, we just look at it.
SPEAKER_02I mean, at least it's quite a weird experience for me, as you can probably imagine. I'll take it as a compliment to my youthful look.
SPEAKER_01I'm also not entirely sure that Steve Denine, the amazing editor of Up City A magazine, will be overly pleased to hear that Beverly Turner thinks that you've taken his job.
SPEAKER_03Uh thank you very much for coming in, uh Ali, and uh well done, Simon. Really nice hit on GB News. Uh coming up after the break, Andy Burnham says that barriers to getting young people work experience are largely imagined by business rather than being real. We'll be joined by his latest interviewer next. Andy Burnham has said that barriers to getting young people into work are largely imagined rather than, well, real. In only his third sit-down interview, the Prime Minister asked business to lean in that bit more to the youth unemployment challenge, but did not rule out diluting employment rights to help young people get on the career ladder. Let's take a quick listen to what he said.
SPEAKER_05I would always be open to looking again at any regulations that made that harder. But I um have had a big drive in my previous role as mayor of Greater Manster around 45-day work placements. Now they were an innovation of the last conservative government, but they were one I was very happy to support, indeed proud to support, because I think they found a solution to the work experience issue that this country's never found before. And I got my team to get on the phone and ring all the big players in Greater Manchester to say, right, we need more of these placements for young people. And last year we got a thousand extra placements just by persuasion. Um I think sometimes the barriers are imagined rather than real. In some professions, law, financial services, there maybe is a challenge in having a 16 to 18-year-old within the environment. But I think there are always, always solutions. I understand um the nervousness, but I am, as Prime Minister, going to be asking uh the business world just to lean in that bit more to the youth unemployment challenge.
SPEAKER_03Now, the man doing the questioning was Jimmy McLaughlin, uh host of the Jimmy's Jobs podcast. We are incredibly delighted to have you in the studio. Thank you very much for coming in on the big day that the that the that the interview drops. So, congrats on that. Firstly, how do you set up an interview with the Prime Minister?
SPEAKER_02You ask him for logistics reasons.
SPEAKER_03Yeah, Simon, write this down now.
SPEAKER_04Well, they just text me on Sunday morning, just being like, you know, would you be around potentially this week to interview the Prime Minister? And you were like, I'll think about it. I was like, you know, second sit-down interview. So he did Coonsburg and he did uh He did Gary Lineker as well. But Lineker was before he was PM. Right. So I'm taking this as uh as the second one. But it all happened very fast, essentially. Like we were in 48 hours later, and we'd done Keir Starmer a year ago, and I think to be fair to the number 10 team, they have been getting on the kind of video podcast side of things for a little while now. Of course, I was in Downing Street 10 years ago. We didn't even have a full-time photographer there when I was there. So I mean, these are jobs of the future, the amount of teen they've got now doing the video side of things. So it's quite extraordinary to see that. But yeah, I was um keen to do it, and he's done a lot of work in Greater Manchester when it comes to jobs. And as you heard in the clip, you know, he's often called business leaders to try and get them to employ more young people. A bit different to do that when you're prime minister, but you know, it is an interesting example of how he actually cares about it.
SPEAKER_02So it falls to me to ask the rude question, at least that's what it says in the script. So bear with me. Brace yourself. Obviously, you are a very talented podcaster. We see that from the from the numbers that your podcast get. I mean, if our podcast was doing anything close to that, we'd be pretty happy. But but uh you are no Andrew Neil, and it's not your job to be Andrew Neil either. Your job is to, you know, broadly have a have a conversation with the people you interview rather than interrogate them. And there has been chatter the past few weeks about uh Andy Burnham avoiding scrutiny of the press, avoiding interviews with newspapers, with broadcasters. So does it say something that you were one of the first people he interviewed? Sorry, that you and that were interviewed by him.
SPEAKER_04I mean, I think it does. I mean, to be fair to him, he did do Laura Koonsberg before, and that was a much more kind of grilling on kind of international affairs, and would you take calls from Vladimir Putin, etc. Um, and it would have been very easy to him for him just to have done a five-minute stand-up with us as opposed to a visit that he was doing in Derby, ironically, which is where I'm from, on Tuesday. But I think uh it is a certain amount of scrutiny of where you've got to sit down for 25 minutes as the Prime Minister and take soft the questions. Like it is different, you know. David Frost, when he did it in the early 90s, would often get more out of people by kind of like softly loosening them in. I mean, we're not going for the killer line, that is absolutely right. I I'm not gonna catch the kind of prime minister out on it. But it it is interesting with this. We did the Tony Blair 18 months ago, but and in the Tony Blair interview, he sort of came out quite strongly against how much we were spending on mental health as a society, and that made big waves at the time. So I think it's it's a different type of scrutiny. Yes, it's not Andrew Neil, the the kind of hardball style of things. But I still think there's a real bad place for that in politics, actually. Like, and I think we'll we'll see a bit of a comeback with it. One of the things that we haven't got yet in the UK, just to speak about a podcasting landscape, is in the States you've got the kind of likes of Rogan and Lex Freeman doing sort of three-hour interviews. At the moment, nobody's really doing that in the UK. Um, you know, we got 25 minutes for a Prime Minister. Um but I I think it will be interesting to see where the landscape goes now. Because actually, sitting down with someone for three hours, even if it is a softer conversation, is quite hard and not what a politician is used to. The other thing I would say about Andy Burnham, and the reason why I think he's good at both the short form and the long form, and he's got similarities with Donald Trump and Nigel Farage in this, which I probably wouldn't like saying. But they have been doing this for a long time, right? All of those people have been involved in the public life in some way for 30 years. So they're just very good at communicating. I think it was one of Keir Starmer's challenges, actually, was that he hadn't actually been in politics. I mean, yes, he'd been a communicator, his director of public prosecutions, but he hadn't been in that sort of space of where he was just used to talking. I think it's one of the reasons Burnham's quite good, is that he has just done lots of this.
SPEAKER_03There is something very populist about him, quite similar to Trump and Farage that I've noticed in terms of very good communicator, speaks in broad brush strokes. I mean, I'm gonna come onto the vibes thing a bit later.
SPEAKER_02Um but I think I I would also just say, I mean, to add to what to what you've said is um there maybe there is a certain degree of entitlement among the Westminster lobby journeys where they think, well, it's it's up to me and about five other people to do all the questioning and no one else should. And if if anyone else gets that job, that's that's uh a sign of avoiding scrutiny. Uh and and there was a feeling of that also when he talks about number 10 north, as though there were just no journalists in the north who would be able to do that kind of scrutiny. So uh, you know, it is I suppose partly a recognition that the media landscape is a bit more diverse than it once was.
SPEAKER_04I think that's absolutely true.
SPEAKER_03Now uh come back to that clip. Um, I thought it was very instructive, actually. You know, a lot of people in the business community are gonna watch that and fear the worst. That, you know, he thinks the hurdles to getting young people into work are imagined rather than real. You are business director in Downing Street, you know, what do you think? I mean, uh i is he right that actually business owners and people who run businesses are just imagining these problems?
SPEAKER_04No, I don't think he is. I mean, he was talking about work shadowing specifically, and I'm looking forward to this clip or the clip of the interview going out on LinkedIn and seeing what people react to it, right? Because I think you're gonna get a lot of pushback from Feral that it is quite hard to sort of do work shadowing and so on. And I enjoyed the way he said, you know, we had 16, 17-year-olds come in and they would stand over my shoulder and get a proper work experience. It's like, yeah, that's fine as great a mayor of Manchester. I'm not sure we're gonna be able to do that when you're PM and you're gonna be having slightly different documents that you're uh reading. Um but I think there is a there is a real challenge about just how much it costs to employ people. Like we talked about this a lot with um what Rachel Reese brought in with Nix, but also the increases in national minimum wage, etc. You're basically looking now at spending almost £100 on somebody uh per day in there, which is a lot at the age of 18, just to essentially be learning the ropes. Um you know that basically works out now an entry-level person on the kind of minimum wage almost costs a business 30,000 pounds. Like that that is a big basically a 40% increase over the last five years. That's a third pressure. No, it's it's it's it's not insignificant, right? Like, um particularly when there's so many other cost pressures on businesses as well at the moment. So I think there will be some challenges around it, but I can also totally see how he you know he calls for sort of like he would look at it if there were problems and so on. So we may well be collating the response to our various LinkedIn posts and uh sending them to him.
SPEAKER_02One of the uh charges that's leveled against Annie Bernard, which you you pick up on in the interview with him, is that people regard him as a sort of career politician that's never had a proper job, never had a you know a proper job in the pro in the private sector. And I suppose there is something quite different about or some something quite valuable about having experience of being an employer. To have some people that you are responsible for, which is quite different from you know working in politics where there are loads of public sector jobs that are kind of guaranteed and you don't have that same level of responsibility. So it is true to say that he lacks that experience.
SPEAKER_04Completely. And I have to say, I wasn't an entrepreneur before I worked at Down the Street, I was the entrepreneurship advisor and so on, very interested in the area. I'm now an entrepreneur, and it is completely different when you're approaching the end of the month and you're looking at your kind of bank statement. Have you got enough to pay everyone? Can you pay people and suppliers quickly as well? Um, yeah, it's a completely different kind of game changer, and you know, you realise the kind of stress that it brings on it. And I think yeah, it's definitely a challenge, but we haven't really had an entrepreneur ever as prime minister. Um so it it's it is just one of those strange things. It is one of the things that I think might change in our politics, give you a quick prediction for the future, is in the last 20 years, because of the internet, it's become much uh easier to get that rich uh in your kind of 20s and 30s, potentially. And you have a lot of entrepreneurs now that have built very successful businesses and are perhaps exiting in their mid-30s. Whereas it used to take a business leader potentially until the age of 50 to kind of build that wealth. I think it will be interesting to see whether you get some more of those people kind of come into politics actually now. Um, and actually, I think the mayor will route is quite an interesting route for some of them. So that's one to watch.
SPEAKER_03Jimmy, thank you very much for coming in and congratulations on uh Big Scoop. Jimmy, the Jimmy from Jimmy's Job doing it lochlin. Thank you very much.
SPEAKER_04Thanks very much, guys. I love the show.
SPEAKER_03Well, that's just about all we have time for today.
SPEAKER_02Thank you very much for listening to Business as Usual and don't forget to subscribe to CityM's daily newsletter and of course to download our free app.
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