0:00
The labor market is much, much weaker,
0:02
right? In 2022, there were more job
0:04
vacancies than there were unemployed
0:06
people in the UK. We've now had a period
0:07
of nearly 3 years where the unemployment
0:09
rate's been rising and job vacancies
0:11
have come down a lot. So, that that is
0:13
no longer the case. The labor market's
0:14
much less tight, and therefore the risk
0:16
of those kind of second-order effects of
0:17
a wage-price spiral are much lower.
0:20
You've also obviously got interest rates
0:21
that are much higher already, right? So,
0:23
we had that interest rate tightening
0:25
because of the 2022 shock. So, I don't
0:27
think you're going to get the same kind
0:28
of increase in interest rates. And I
0:29
think if anything, probably the Bank of
0:31
England are quite reluctant to raise
0:33
rates unless inflation really does pick
0:35
up. Now, I think you are going to see,
0:37
even in a scenario where Hormuz reopens,
0:39
I think inflation is going to rise,
0:41
partly because of food prices. And And
0:43
so, you could easily see a scenario,
0:44
even with Hormuz reopening, where you
0:46
get inflation heading to around 4%. Of
0:48
course, if Hormuz doesn't reopen, then
0:50
you could see a scenario where oil
0:52
prices and gas prices go a lot higher.
0:55
And in that scenario, it's very hard to
0:56
predict exactly how high we go.
