Surveillance: Remembering Queen Elizabeth II

As we begin this ten days of Morning, in our commitment to London here with Bloomberg Surveillance, it is good to speak to the editor in chief of Bloomberg, John michels Waite, and what is important here is his commitment to the literature with Adrian Wooldridge and the number of books that they have put out over the years. I want to go to a what if, John, because we do not know the schedule forward. There is In the

first time I walked into it, I fell apart. Westminster Hall, not Westminster Abbey, but this small all right next to it, that that one person and a night one said we need to save Westminster Hall. Let the commons burn. And there has to be some heritage there, some symbolism as you more in your Queen. I think Westminster Hall also is the place as I remember it, and I may have got this wrong that I think Charles the First went too shortly before he was executed, and there have

been countless other people. So it is it is actually very um related to the monarchy and to British history, and so it's right at the middle things. I do think, actually strangely in this case, I think there is something very um your sense of history Tom is correct, is that there is something at this precise moment that very

sort of historical about this. And there's also a sense of the monarchy from an earlier age if you look at the inheritance from Charles's point of view, he is coming into a kingdom that is in danger of breaking up. He's coming into a kingdom that has got poor relations with its ancestral um other half in in France and Germany and things like that. And he's also got a sort of brand new chancellor if he wanted under the

old terms in his trust. So there is a there is, it's a it's a not easy inheritance, and I think in terms of history, from the monarchy's point of view, um, this is an unusually difficult time, notwithstanding the huge amount of coming together that is happening at the moment, John, how do you expect that he is going to reposition this monarchy in the world that you describe. I think I think it's a mixture between trying to keep the inherent strength that his mother had, which was the ability

to bring people together. You and I just talking before, where you could become from wildly different backgrounds. In this country, you could come from worldly different racist genders, everything, and people saw this woman as a center of what this country was about. And in terms of international influence she was. She was about as strong as soft power can get.

Everybody you met around the world, doesn't matter. Even talking to rulers in Asia last couple of weeks ago, they are still fascinated by this woman who has, after all, met everybody, or did meet everybody, and so as a kind of weapon of self power, she was extraordinary. Now you have a new person coming in, and I think for Charles the sort of challenges possibly to step back a little bit in terms of his advocacy. He's no

longer the heir to the throne. He's actually the he now is the person at the middle of the English constitution. He selects who the Prime Minister can be that. That means you have to perhaps come a slightly more objective figure. But the second thing is, you know, how do you update the monarchy quietly without losing that sense of power when you talk about updating the monarchy? Or one thing that Queen Elizabeth the Second did was it she became

an icon of culture. She became, as one historian said, she is tower Bridge and a red double decker bus and two legs, not to mention big an afternoon tea village bets and sheep flecked hills. How much can the new king, King Charles the Second really move at a point checking Charles the Third come out and actually represents something cultural? And if not, what relevancy will this monarchy have?

Quite interesting? The world in which just thinking whilst you were talking, the world in which John and I grew up obviously John massively younger than me, but but stamps. The basic fact is the thing you were used to seeing was the monarch's head on a stamp. Well, now we don't see as many stamps. It's difficult to imprint the monarch's head on an email, and issues like that. I do think it is it's a question of rebranding. When you looked at the jubilee celebrations um recently, in

which Charles is right in the middle. You know, there were some things that worked, putting great big images on top of sucking palace. There were other things which maybe just felt it was a bit like watching your your kind of granddad tried to dance. Um that there was there was a little is of that. So it's a very difficult thing and at different times. The clever thing about the Queen is she was quite good at letting

the junior royals go off and try things. That was a famous thing called It's a knockout, which is too painful to go through, but where they are dressed in medieval costumes and sort of through sponges at each other. But that was conveniently. You know, you've got to explain this. It was a kind of game show that had appeared on television, which the more I think about it, the less easier it is to defend to any audience that

stretches beyond this this particular kingdom. The royals a game show they did once and it did not work out well, so they perhaps that perhaps was something that went on entirely work. They were like it was like a guest version for charity um but it didn't entirely work and I cannot remember the full details of so please don't probably was not a success. A decent place to pause

and reflect just for another moment. There have been times in the history of this royal family, even with Queen Elizabeth on the throne, where they've had difficulty connecting with the British people. Do you think Charles is going to have that difficulty? And I think of a particular generation very much enamored with the late Princess Diana, were uncomfortable with Camilla taking the title of queen. I think that my personal view is that that has moved on. I

remember that very well. But my my senses, that has moved on, and Charles has sort of pushed himself, notwithstanding certain Netflix series, has pushed himself back into the and several films has pushed himself back into the middle, and he is that he is now a more respected figure than he was then. But the interesting point is this is that the thing that determines the monic is that old sort Harold McMillan thing about events, dear boy events.

You know, it's what nobody could have guessed what was going to happen to Elizabeth. Nobody can guess what's going to happen to Charles. We know he faces some things like the possibility of Scotland and Norman Ireland maybe leaving his union. We're here for ten days. You ever restaurant place to hear the Bloomberg Country was banned from mentioning

the Crown on Netflix for a whole time. Henry quite right now an important moment with Mohammad l Arion has been such a friend of Bloomberg Surveillance over the years. He is a president of Queen's College, Cambridge and they are deeply affected by the death of their patron. To Arian, the history of Queen's College is extraordinary. We don't need to go over it now, but it is the back and forth of Queen and king over centuries and centuries, back to roughly fourteen five. We now have a new

transition as well. How do you perceive your patron in the shift to King Charles? The third calm facts for having me um. We are extremely sad at the passing of her Majesty the Queen. I don't think I can find words that express the size and scale of the loss that's being felt by the United Kingdom, by people around the world, and especially by our community because as you say, she was our patroness. She visited the college, she encouraged and inspired generations of students, of faculty and

of staff. So there's a real sense of loss right now in mourning and wanting to honor her incredible reign. Um, we're not looking forward to tell you the truth as to what next right now. This is a period of deep reflection and gratitude for what her Majesty the Queen did for Queen's College, Cambridge. One of the hallmarks of her reign was the diversity of the United Kingdom. Cambridge let on that as well, and some would say Muhammad

Aryan let on it as well. There's a shark the Trust cabinet, the senior officials showing the diversity of the United Kingdom from the University of Cambridge state the diversity the Queen Elizabeth brought. She would speak to everyone and he would and would encourage us to be more inclusive, more diverse, and to continue in the daily fight of reducing obstacle to access to a Cambridge education. It's all about access and participation and her Majesty was a leader

in this regard. She believed in a very inclusive in community. I cannot tell you that when she would come and visit us, she would spend as much time with the president as she would with the head gardener, with the head of our student body. She would go around and talk to people in a very personal and engaging fashion, and she was an inspiration in terms of inclusion and diversity. Mohammed.

The last time she visited you was back in as recently as can you share with us just a little something from that, how special that visit was for you in the college, there was incredibly special, John Um, not only because we were hosting her Majesty for lunch, but we invited our community to come out and the joy with which they welcomed her to Queen's and the interaction

with her Um. There are pictures on our website of her meeting with the students, meeting with the start um, spending time and caring, and then it was a wonderful lunch in which we thanked her for her very strong support of our college. You know, she she followed the Queen Mother who was our patron as before her UM, and it's been a constant for us, just like it

has been a constant for the whole nation. Mohammed. This has been one of the key points that keep coming back to, that she was the embodiment of a spirit of the United Kingdom that will be hard to replace, and that she really created the modern version of a monarchy.

Can you give us a sense, a more tangible sense of why it is, especially for people outside of the United Kingdom, that she acted in this role even though she is a figurehead right, that she is a political by definition, and that she is looking to remain a sort of a public relations persona rather than a leader like the Parliament. It was Lisa her inspiration. She has inspired so many in the United Kingdom and around the world, and I would argue she will continue to long inspire

people around the world. So where did that inspiration come from? I think from free things. One her empathy. She she was very empathetic, she listened to people. Second, her dedication. She said it on day one that she would be dedicated to serve the nation and she continued serving the nation for over seven decades as the monarch. And third

was her responsiveness. So when you put these things together, it sums up in instruational leadership that overcomes all sorts of divisions within society, and that was flexible enough to take the United Kingdom through massive changes. If you look at, Wow, how different the United Kingdom of today is compared to the one of seventy years ago when she became queen, and she she was able to navigate all that inspiring us inspire a whole nation throughout that whole period, Mohammed.

Given how much things have changed, as you talk about, given Brexit, given the fact that the United Kingdom has shrunk in its scope with relation to some of these trade partnerships or at least nomenclature, it is the new vision going forward? Does it adhere back to that one? Or is this truly a marking of a new regime. You know, there are many challenges facing the United Kingdom, and that's true for the new Prime Minister who recognized that on day one. But I think Lisa, right now,

it's about her majesty, Queen Elizabeth. The second, it's about morning her death. It's about honoring her accomplishment and honoring her wain Um. There will come the day when we will sit down and talk about all the challenges ahead, but I think this is a really important moment in history because she has played such an important role, not just in this country but around the world. Mohammed, thank

you for marking this moment in history well us. We appreciate it and I think we all agree with certainly not the day to discuss markets in the economy with you. Mohammed, Thank you very much for giving us your time this morning. Mohamed. Down are in that of Queen's College, Cambridge. We touched on another of the Queen's efforts, which is Chatham House. You've heard that name in America less familiar, but in London dominant is one of the great think tanks and

places of perspective for the United Kingdom. Sir Robant Nibla joins us right now, Director of Chatham House, and I thought on your website the commitment of the Queen, particularly Robin to the academics that you did in two thousand and fourteen, her leadership to jump start that project give us a window into two thousand and fourteen and what the Queen did for Chatham House. Tom happy to um,

I'm now distinguished fellow Chatham House. We have a new director as of a month ago Roman Matics, but I had the pleasure of it was fine. I've had a pleasure of hosting Uh Her Majesty twice in recent years, most of the Chata Mouse Prize when she gave it to David attenburghen was when we launched the Queen Elizabeth

Academy for International Affairs. And I think one of the big challenges for institutions in London has been able to make sure that you're still well connected to young people around the world, engaging them in what London has to offer, what Britain has to offer as a place of independent thinking,

which is what Chatham House about is as well. And Her Majesty gave her name to the creation of a new academy, came met with the first cohort of Academy fellows from all over the world UM, and I think what we wanted to do by having this UM Academy

named in her honor was captured. The fact you're not gonna have a patron of institution for seventy years very often and it was absolutely remarkable, wonderful to be able to have to connect it that way, but also to be able to track some of the brightest, most driven change makers around the world come and spend some time. She her example is a draw. It was the most important part of written soft power in her example was the Commonwealth. There was a Commonwealth of the early fifties

and the tumult of the sixties and seventies. What does Charles the Third's Commonwealth look like? It's going to be very difficult, um, for a number of reasons. In a way, it was held together by respect for Her Majesty for the Queen Um as well as by that common sense of heritage of having formed part of the British Empire. But being forming part of the British Empire even as independent nations is now something that receives a lot more

scrutiny than it did in the past. And so what we're going to find, I think in the coming years UM is potentially Charles having to enable the Commonwealth to redefine its purpose amongst those nations without the glue of

Her Majesty the Queen there to hold it together. We've already had some moves away from having the Sovereign Her Majesty as the head of state from one Commonwealth member by betas a year ago, and there's a worry that the whole review of the role of empire, slavery and so on will start to come back in and put

the UK in a much more difficult position in the future. Robin, we really do mark the end of an era exactly as you say, not only a unifying force, but a redefinition of globalization, a redefinition of the United Kingdom and the broader empire that it used to have. Right, all of these redefining aspects of the new moment, What will be the new definition of the next ten years? How will King Charles the third come out and shape a

new vision in the world as you see it. Look, the challenge that any monarchers here is that they can't establish a vision. They can't declare a vision to the rest of the nation. In our constitutional monarchy, they really are the holders of continuity, but then not the agents of political change in politics, so in a way it will be up to this trust of future prime ministers to establish the vision of the country. What he has

to communicate is again the linkage to the continuity. Part of I'd say Britain's soft power has been the fact that it has had such stable politics for so long and However, quickly the government's change of the prime ministers change. The fact that the head of state has continuity in the family is part of its power. So what the monarchy does is give space to governments to go through profound change without a sense that the whole nation has

been called into question. So I think in a way Prince Charles, who has leant forward quite a bit as a Prince of Wales on climate change, on architecture, biodiversity, on architecture exactly, is now going to step back and have to to become the cipher that the queen was for what other people believe the nation is. It's gonna be a really delicate change within some real estate investors that are happy with this in London. That my in my backup, I think they'll be happy for that reason.

He won't be able to weigh in the way he did before important of the New Yorker. I read the New Yorker effort here of the last twenty four hours and around Mead Rebecca media it was very good about this psychological shift that any monarch has to make. Chian He's Charles and then he's King. Third, was it Chelsea Barracks? Was it Chausy Barracks all those years ago. Ya kataris Royal to royal, they were able to have a different type of conversation. I think I'm not getting us off

into trouble. Was your pet projects? I learned the backstory when used to live in Chausea. He used to walk past there and it was a big, big conversation at the time. Do my do my PhD at Oxford? As I was writing it, A buildings being built in front in mordel In College and done in all of the old style of modeling college but being built in nineteen was nineteen three or something. And at one point I

watched the building go up. Suddy saw this person walking here us the top with the gaggle of people and it was Prince Charles being shown around. And you know, I didn't have a mobile in those days, but it was the old building in the keeping and I have to say it worked beautifully. So we see the king doing that. Who knows? So Robin Nibblett, thank you, Thank you so much, distinguished fellow at Chatham House. I'm happy

to say that John gets now. Sevince Cable, the former MP and visiting professor at the London School of Economics and Political Science, s Vince, fantastic to have you with us, Thanks for being with us. Inevitably we'll talk about change and what will change with a new monarch on the throne.

What will change for you, sir well, I was privileged as a private councilor of cabinet minister to dealt with her Majesty, and you know, and I understand, as I have seen out close, the reasons why the country has such respect and affection for her um and so it is a I mean, this moment is on the one hand, very predicted. I mean, we all knew this was going to happen, but at the same time momentous. And you have a whole generation of people, you know, seventy or under,

you've lived your whole life in the Elizabethan age. I think for a politician, I'm an hour retired politician, I think the significance was that although we had, you know, a great change, turbulence, um, big secular changes over time, you know, the monarchy and the queen was a kind of bedrock of continuity and stability throughout that and remains one of the sort of underlying strengths of the country and it rests upon the fact that it is a

constitutional monarchy. It doesn't have a political role, and it will be very important that the new king, you know, is seen by the world in the country as a totally non political figure. Surveiance. I think it's so important

to speak to you you here. I'd love to do a two hour conversation with your Now, if you look at your party history as a kid, when you were at Cambridge and I'm from their Glasgow and such, and then you find that you were the chief economist for Royal Dutch Shell for a while as well, you have a backdrop here of this emergency moment for your United Kingdom.

How does Charles the third provide support to Prime Minister trust Well, I think given the way in which the monarchy works, and I think we all wanted to continue to work, and I think there are very few Republicans in Britain. Um, it is by respecting this boundary between politics and the head of state role, and um, I mean King Charles. It's an enormously difficult job. I mean

he's been auditioning for this for fifty years. He could have stepped into the monarch role at any time and he it's it's required extraordinary self discipline from him um and has been a very very difficult role. And he's now, as you say, seventy three and he's inheriting this responsibility. I think one of the things he will be very mindful of bearing in mind, you know, the enormous respect for his mother, who was scrupulously non political through the

whole of her reign. I mean, he has at times, you know, straight into the political world, most recently over Rwanda, and he will, I think, in order to maintain the solidity of the monarchy, be very very careful not to go into the um. I have no idea. I mean I I met him a few times, and I like what he did, and he was genuinely socially concerned individual. I absolutely no idea about his political thing. I was

trying to cause some trouble. I think it's such a delicate moment because supported he didn't tell me, because we've been talking all morning about Dove telling uh the death of a monarch who really represented the United Kingdom for

so many years and grew up through steamboats. Until there's this, you know, a smartphone, and we are here on the preciface of a massive fiscal package without the unity required to give confidence about how it will be executed, about how effectively it will be managed with respect to the fiscal profile of this nation. How are you watching this as a former member of Parliament, the deliberations over the

energy help that liszt Trusts has proposed to households. I'm surprised that the linkage that's been made with this big economic moment. I mean they are I think they are wholly separate and I I mean certainly the new king will want to have absolutely nothing to do with the controversies around the fiscal package, and I shouldn't. I mean his role list to revive I mean the phrase that you've been using common continuity and stability amongst political and

economic upheaval. That's his job. It's not to take up a position on these economic decisions. I mean that will happen anyway. The big change and the Treasury, of course, has been the loss of the sacking of the Permanent Secretary. I mean that is the big event from the economic policy point of view. But the planning of the details of the fiscal package will proceed, and although there may be a slight hiatus in the announcements. Nothing is going

to happen to disturb the development of the policy. Well, things will pause events which are soon from the Bank of England. The NPC announcement has been rescheduled to twenty September. To the September so I understand that's a one week delay for the Bank of Englan at least. I think that was the first thing you asked this morning. Go for me when we landed, are we still going to get a bank having the decision next week? And I said, I don't know, we'll see, And here we are. It

is going to be delayed by one week. Yeah, and whether this actually gives them a little bit more certainty might be interesting to see as well, whether we get more fiscal proposals were concretely from both the European Union as well as from list Trust's team over in Parliament. Thomas Sevince set things will continue, but for now they pause, and we're saying that with the Bank of Englands wound and we'll see that with the whole host of events to a scheduled to take place over the next ten dice.

As I mentioned, my template for this in a very different moment was nie I had the clearest memories of how America paused for the funeral of President Kennedy. Why is as different as we saw with the Premier League twenty minutes ago. Now with the Bank of England, Who's gonna who's gonna push against those institutions? Vince, we say thank you, thank you very much. We appreciate your time set.

She has steeped in theory. Marilyn Watson joins us out ahead of global fundamental fixed income strategy at black Rock Maryland. Not to make the punt of the moment, but which act do I hide under right now? I mean within a bond portfolio is a simple solution to shorten you duration. So I think as I say, there are a lot of moving parts at the moment, and particularly and say we have the ECB, but the said coming up in a couple of times. Obviously they're backfinant of duty slightly

out their data as well. But we are as seeing a lot of volatility in the markets at the moment. And I think you've hit the nail on the head there in terms of where do you find some yields, Where do you find maybe a little bit of safety

in the market. I certainly think now there's shifts that we've seen in terms of yield, in terms of spread, we do see a lot more attractive area in the market, whether it's in US duration UM you know, we've seen obviously rates there to get the front end um, you know, shift significantly, and I do think if you're looking sort of at the front end in terms of quality perry, then now I do think there are some very attractive

areas were to invest in fix income. But we are expecting to see this continued volatility going forward over the next few months, as we have inflation still incredibly in the US, in the U Zone an elsewhere, and a lot of decisions to be made on a non linear basis the path from under two percent and a ten year yield in March and up we go. If we do break out where many expect to go three and a half three point six, five, three point nine ten

year yield, how does that change your world? So it doesn't change it that significantly in the fact that I think we, among with many other investors, are still relatively cautious around the rate path going paws in terms of where the peak might be in terms of rates we expected to peak the term or right to be maybe

around just under four percent. But I think looking at the path now, if you if you do see a little bit of a spread there in terms of where they not, it might be why the top of the you might be I think, you know, we're expecting that, we're expecting volatility. I think a lot of the investors are respecting the same as well. We still still still have a lot of money invested um, you know, in very safe assets. We have money so on the sidelines in terms of cash, we do expect to see a

lot more supply going forward. We see expects a lot of opportunities actually, So I think, you know, looking at the market at the moment, as we do have quoditive tightening going on, as the you know, the third is reducing its balance sheet, as rates continue to rise in the US and elsewhere, we can actually use this volatility

to take advantage of evaluations where we see them. So let's talk about some of the guides that you use Maryland when you're looking for opportunities at a time when we have inflation that may just may come down to eight point one percent in the euroregion or that's the expectation on average, and then go down to two point eight percent several years from now. This is the baseline and some would say even optimistic projection from the ECB.

We've got the same kind of talk from the Federal Reserve. How do you factor inflation into your forecast? Is that the reason why your underweight duration? Or is the fiscal

response that really has your attention? Um? So, it's both, and I think the fiscal packages that you mentioned in the fiscal response are going to play into inflation going forward as well, and potentially they might make the job of central banks that a little bit harder if we do have we have these very sizeable packages that we're seeing coming through from the UK, the US, and you

know in the Eurozone as well. Inflation does play obviously a very key role in terms of um you know, central bank munchro policy, but also obviously the yields of bonds going forward, and it is something that we do pay very keen attention to here in the US. Obviously, next week we have some very significant data coming out in terms of inflation cp I, p p I, and the Federal obviously be paying very close attention to those

as it then goes into the following week. It's Muntro policy stance announcement to the FETAM announced that they are able to continue to be very aggressive in terms of trying to get inflation back down towards the two percent target. And so inflation does play a very few role. And I think at the moment in terms of central banks that are also very concerned about credibility and the fact that you know investors, they don't want investors to be

anchored in high inflation expectations. It's very important for them, for investors and for the market to see inflation coming down and to view the credibility of central banks in bringing that inflation right down um. And I think that

is absolutely critical Maryland. When you talk about the idea of credibility, we talk about the idea that the ECB is not projecting a recession even as they get inflation down at a time when even the CEO of Deutsche Bank is saying that a recession is all but inevitable in Europe's biggest economy. How what does that do for their credibility that we are not hearing the recession calls from the central bank to a Wall street, to a city in and in to the rest of Europe. That

seeing a very different picture. Yes, so, I think in terms of the credibility the very aggressive hawk stance that they took yesterday in terms of raising rates by centifized basis points by announcing that they're going to continue to raise rates on a pretty aggressive path. They mentioned their reference maybe two to five meetings UM and the reference that they could go above the terminal raid. So they were, in terms of the rhetoric and their decisions that they

made yesterday, relatively hawkish. However, I think it took a lot of the mokel by surprise that the growth forecasts, particularly for this year were much higher than think a lot of people expected, and next year still very positive number. I'll buy the much lower. In terms of GDP, I

think there's just so much uncertainty out there. I do think there's a lag in terms of some of the data coming through for the us n G d P numbers, but the huge amount of uncertainty that we have yet to see as we go into winter in terms of the impact of energy prices UM that will have you know, potentially a noted impact on GDP further and more that has been prison at the moment. I think that's the difficulty. So if you have a fan chart, I think you see would be very very wide in terms of what

the ECB were projecting. But that middle number, I think, yeah, aiming potentially, aiming maybe for a positive for a positive number, but I think the risk of uncertainty is very very high at the moment. Malie Watson of Black Rock Malin, thank you, thank you. This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten am Eastern. I'm Bloomberg Radio and I'm Bloomberg Television each day from six to nine am for insight from

the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg, duck Um, and of course on the terminal, I'm Tom keene In. This is Bloomer m