Liam Halligan, a seasoned British economist and currently the business editor at GB News, shares his insight on the global economy's current state. He highlights the lingering effects of the pandemic, particularly China's slowing growth and vulnerabilities in its property market. The discussion shifts to the geopolitical dynamics of OPEC and BRICS, the complexities of energy policies amid the Ukraine war, and the challenges of the UK housing market. Halligan emphasizes the importance of public engagement in policymaking and the potential economic opportunities in the Pacific Rim.
The war in Ukraine has led to a spike in food prices due to disrupted Ukrainian ports, affecting countries reliant on Ukrainian grain.
Brexit has not led to a decline in UK exports to the EU and the UK economy is growing at a moderate pace compared to other countries.
Big house builders intentionally restrict housing supply to maintain high prices, and investigations are underway to address the issue.
Deep dives
The Impact of the War in Ukraine on the Global Economy
The podcast episode discusses the impact of the war in Ukraine on the global economy. It emphasizes that the war has caused a spike in food prices due to the disruption of Ukrainian ports, which has affected countries reliant on Ukrainian grain. Additionally, the podcast highlights the role of OPEC and OPEC Plus in manipulating oil prices and exerting control over global oil production. This geopolitical shift, led by countries like Russia and Saudi Arabia, challenges the influence and hegemony of the West. The podcast also raises concerns about the potential inflationary effects of continued conflict in Ukraine and the actions of OPEC Plus in manipulating oil prices. Overall, the episode underscores the need for a deeper understanding of these geopolitical dynamics and their implications for the global economy.
Brexit and the UK Economy
The podcast offers insights into the impact of Brexit on the UK economy. Contrary to popular narratives, the episode highlights that UK exports to the EU have never been higher, indicating continued economic relations with the EU. Moreover, it notes that the UK economy, while not in freefall, is growing at a moderate pace compared to other countries. The podcast dismisses exaggerated claims about the negative impact of Brexit on the economy and emphasizes the need for a nuanced understanding of the complex factors at play. It also acknowledges the role of media narratives in shaping public perception and highlights the importance of assessing economic realities objectively.
Housing Market and Interest Rates in the UK
The podcast delves into the future of the housing market and interest rates in the UK. It highlights the issue of housing unaffordability, with prices still at historically high levels compared to income. The episode draws attention to the dominance of big house builders and their influence over housing supply. It suggests that these builders deliberately restrict supply to maintain high prices and profit margins. The podcast discusses the need for increased housing supply and the ongoing investigations into potential restrictive practices by the competition and markets authority. It also speculates about future interest rate movements, with the assumption that rates may decrease, but highlights the potential impact of geopolitical factors, such as the actions of OPEC Plus, on the housing market and interest rates.
OPEC's power and influence on global energy
OPEC, the Organization of the Petroleum Exporting Countries, has long been a major player in the global energy market. Despite criticisms of its declining influence, the numbers speak for themselves. OPEC controls a significant share of daily oil production and global reserves. It relies on member countries agreeing to production cuts in order to maintain its power, as free rider behaviors can undermine its effectiveness. Notably, there is now a formal connection between OPEC and Russia, solidified by the bond between Mohammed bin Salman and Vladimir Putin. The two leaders established a close relationship during the Moscow World Cup when Saudi Arabia and Russia played against each other. This alliance further strengthens OPEC's impact on the global energy landscape.
The growth and coordination of BRICS economies
The BRICS (Brazil, Russia, India, China, and South Africa) is an informal grouping of emerging market economies. Originally viewed as an investment opportunity due to their economic growth potential, the BRICS countries have evolved into a coordinated force on various issues. They have worked together to establish currency swaps, create independent ratings agencies, and set up their own payment systems. One notable development is the settlement of energy trade between China and Russia in their respective currencies rather than the US dollar, challenging the long-standing petrodollar system. While the transition to a multipolar world is gradual, this shift towards greater economic independence and cooperation among the BRICS nations demonstrates their aspirations for a more balanced global order.
Liam Halligan is a British economist, journalist, author and broadcaster. He is currently economics and business editor at GB News. Since 2003, Liam has written a weekly column in The Sunday Telegraph. He also presents The Telegraph's weekly ‘Planet Normal’ podcast.
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