Welcome to in the City, Bloomberg's podcast, connecting you to the conversations and the stories shaping the world of finance. I'm Francine Laqua. Here's my conversation with the Prime Minister, Rishie Sunek. Prime Minister, thank you so much for speaking to Bloomberg. Now, you've announced some twenty nine billion pounds of new investments. Investors of course see opportunities, partly because they think that it's actually cheap and has further to grow.
But then there's also things that they worry about, the reversal of AHAs two, your stance on the European Court. How do you address some of those questions they have for you.
Well, first of all, we're excited to be hosting our Global Investment Summit and it's our welcome to business event. I'm also very pleased, as you mentioned, we have secure commitments of almost thirty billion pounds of investment. That's more than double, if not triple, what we had when we last held this summit. So I think that's an enormous vote of confidence in the UK and it comes on the back of a very positive autumn statement that we
just delivered with Signify can support for business. I think there's real momentum in the UK economy. You're seeing that we're tangible commitments from investors at a scale we haven't seen before. So looking we're poys to have a very positive day.
So premnise to Jeremy Hunt framed the item statement as a pathway to growth, and yet the OBR from their forecast for next year in twenty twenty five, do you think.
The OBR is being too conservative?
Look, the story of the UK is an economy that has got real momentum. So I've been Prime Minister for just over a year. During that time, we've halved inflation as I said we would do. We've known now that the UK economy has recovered faster from the pandemic than pretty much any other major European economy, and over the long term we're still forecast to outperform major European economies. But crucially, business investment has grown faster than any other
G seven economy over the last few years. And I think ultimately, if you want to drive growth and productivity and an economy, you need businesses to be investing. We have more momentum for business investment here than anywhere else. So look I feel actually very positive about the long term growth outlook for the UK.
So do you think the OBR is actually going to have to revise them up words? Are you confident that the numbers will come in so that you can continue cutting tax?
What I can tell you is that when I became Prime Minister just over a year ago, not just the OBER, but also the Bank of England, the OECD and the IMF, all of them predicted that the UK would be in recession this year. That hasn't happened. We put in place a set of policies to ensure that it didn't and I'm delighted the UK economy has outperformed all of those
and has grown this year better than anybody thoughts. So look, I've got a track record in outperforming what people think, and they, as I said, the UK economy has real momentum now, inflation has been halved, business investment is growing faster than elsewhere, and has said We've got commitments totally almost thirty billion pounds for our summit. It's significantly more
than we've had in the past. So I think that shows that investors and companies are voting with their pounds and their dollars, and that shows that there is confidence in the economy, and that's what makes me think we're poised for strong growth.
But pretty much if you look at inflation, if you actually exclude energy, it's about you been down by like a fifth. So I don't know how much credit the government can actually take on.
Well, actually, if you look at core inflation, it's pretty much middle of a pack for European economies. Forecast next year to be lower than the Eurozone, and I think in the US the last numbers I checked, So actually the momentum on inflation is downwards and coming down faster than peers over the course of the next twelve months.
If you look at the forecast, and we're making sure that we are disciplined with borrowing, ultimately what investors are looking at to make sure that fiscal policy is sensible. We're not fueling the inflationary fire. We're being sensible on public sector wage settlements. And actually you're seeing that feed through to the economy. And I said, we're also improving labor supply. If I talk to businesses, you know what
they're keen to see is access to labor. We're making sure that our labor market remains flexible, that we're moving people off welfare and into work. All of those things are contributing to I think downward momentum on inflation premiercure.
If the OBR is actually right in the forecast, what does it mean where you can actually find some spending freeze or actually cuts.
Well, what we've just delivered are significant tax cuts, significant tax cuts for business, significant tax cuts for everybody in work. That's what our autumn statement last week did. I the biggest tax cuts in one event since the nineteen eighties. Just to give people a sense of scale. For business, what we're doing is making full expensing permanent, so we will be the only major at G seven economy certainly and even broader than that, where you get a total
rite off against your taxes for capital investment. That's an incredibly generous regime to attract business investment. And it comes on top of the fact that our corporation tax right
here is lower than any other G seven economy. And when it comes to individuals in work, we've just delivered a very significant personal tax cut that will put four hundred and fifty pounds extra in the bank accounts of a typical person in work over the next twelve months, which will also be good for consumption as well.
That you have to find money in, for example, departments where you know that voters actually want you to spend more in certain departments. So are you comfortable as possibly being Prime Minister of austerity.
No, that's simply not the case. Actually, government spending in the UK right now is at very high levels historically over this parliament, it's grown at very high levels even in real terms after the impact of inflation. So I think any commentary or accusation that's what's happening is just simply unfounded. And we're at a point now, given how people are feeling, given the amount that's being spent, where I think the priority has got to be luring the
tax burden. Government's already spending a lot of people's money, and what we need to see going forward is more productivity out of the public sector needs to match what we've seen in the private sector post COVID, and I'd rather focus on efficiency in the public sector and prioritize cutting people's taxes rather than the government spending ever more of their money. That's the point I think, and I'm very clear that that is the choice that we are making.
But even if the voter doesn't necessarily feel that tax cuts because of inflation going up, So how much more can you cut taxes in April and beyond, Well.
It wouldn't be right to speculate on future events. We're just still digesting the one we've had, which, as I said, delivered the biggest tax cuts since any event since the nineteen eighties. But what I have said is that this is the start of a journey. And you know I meant that when I said after we got inflation down, I wanted to focus on making sure that we reward people's hard work, making sure that we grow the economy
and responsibly cutting taxes. And you know, when we can do more, we will, because that's the direction of travel here now.
Premier, is a r Wonda flight taking off before the election actually critical to your message to voters or will bringing down the immigration numbers be enough?
Well?
I think the British people's priority is to stop the votes to stop illegal migration. That's why at the beginning of this year, when I set out five key priorities I had, one of them was to deliver on that. And I'm really pleased that since I said that, we've managed to cut the numbers by a third. Now, you know, when I got this job, they had gone up and up and up. They'd actually quadrupled in the past few years.
But for the first time, they're now coming down, and not down by little, down by a lot, down by third, when in the rest of Europe they're going up. So we're making progress. But I do want to deliver on our Rwanda plan because that's how we will finish the job. And we're going to do everything that I deem necessary to make that happen.
Prime Minister, will you publish a treaty and bill and Rwanda, and will the bill actually contain this notwithstanding class so you can ignore future legal judgments.
You know, what I've been very clear on is that we will address all the concerns that the courts have raised about Rwanda. Would gently point out that the United Nations themselves have used Rwanda for migrant resettlement schemes in the past, and we've worked with the Rwandan government to put in place a treaty which will reassure everyone and
address all the concerns that have been raised. And then Parliament will be given the opportunity to scrutinize that and also demonstrate that it believes that Rwanda is safe for this time.
Well, what does that mean, Prime Minister, that you will push it even if it means going against the European courts.
I think we can act completely in compliance with our obligations, and that's very much the approach we've taken so far. Some objections and concerns have been raised by our court. We will address all of those and then make it crystal clear that our Parliament, which of course is sovereign in these matters, will be able to scrutinize that and then actually determine that Rwanda is safe.
How will you decide when you call an election?
Again, that's something that we announce in.
The normal way. But is there a trigger point? Are you looking at a certain.
I mean, I really am not focused on elections. I'm really just focused on delivering on the things that I said I would do for the British people, and that is, now that we've harved inflation, we can turn onto cutting taxes, rewarding hard work. It's also about growing the economy. That's what our support and tax cuts for business were about last week. Also tackling a legal migration, stopping the votes where we've made good progress already with more to come.
These are all the things I'm focused on. And also, you know, we've taken some big decisions here about a more pragmatic approach to net zero, for example, which is something that I think is right that we've got to bring people with us on that journey. We've got to save working families money as we do it. So you know, we're doing some big things that are making a big difference to people, and I want to make sure that we deliver on the premier.
You've also taken a hard line, of course on rising anti semitism in the UK. The White House has denounced Elon Musk for what happened and on exit in the last couple of days.
Do you do the same?
Yeah, Look, I don't tend to get in the business of scrutinizing what every single person says who I've interacted with. Of Course, I bore anti Semitism, and as you said, we've been unequivocal from the start of this situation that that is not acceptable in our society, and we've been very firm about that. I've personally been very firm about that it's very sad what is happening, but are as I said, I condemn all anti semitism right, it's not
about any one particular personality. I condemn anti semitism in a prime minister well, and as I said, I condemn anti semitism in all its forms. It doesn't matter whether you're Elon Musk or you're someone on the street who's shouting abuse at someone who happens to be walking past you. That's wrong in all its forms. Anti Semitism in all its forms is completely and utterly wrong, and we have strong laws in place here to tackle racial hatred. People
are inciting it. Some of the scenes we've seen have been unacceptable and the police know that they should be using the full force of their powers to bring those people to justice. That's what we've been very clear about and that's what we will continue to do. And we've made sure that the Jewish community gets extra funding here to ensure their safety and security, and we will continue to do that.
Preming sure, what kind of plan do you have for Gaza, When do you think the fighting will start? And can the UK actually be involved in the peacekeeping role afterwards?
You know, we've been consistently clear during this awful tragedy that Israel does have a right to defend itself, it should do that in accordance with humanitarian law. And we've also consistently called for sustained humanitarian pauses where aid can get in, but also hostages can come out. And I'm glad that that is now happening, and I think all of us will have seen some of the scenes over the past day or two and found that very heartening.
It's important that everyone honors the agreement and we can continue to see more progress, and we will be continuing to taught to all our partners in the region, whether that's the Americans, is really easy Egyptians, the Katari Is to make sure that we can see this through.
Is the UK still for a two state solution.
Always has been and can will continue to be, and we need to redouble our efforts towards that, and that's something we've been very clear about and I spoke to the Palestinian president when I visited the region specifically about this. The UK will do everything it can to help the
Palestinian authority. We do need to look to the future of Gaza post to mass and actually make sure that everyone in the region can look forward to a future where they can live lives of dignity and security and opportunity. That's the vision that I think all of us share, but we've got to redouble our efforts to bring that about.
Prime Minister, Thank you so much for your time.
Thank you very much, thanks for listening to this bonus edition of In the City. This episode was hosted by me Francin Laquin. It was produced by Summersati, additional editing by Blake Maples and special thanks to the Bloomberg team for putting this interview together, and of course a Prime Minister for his time.