We are 2 10 of 1 lower. Pulling up the board, looking at the bond market across asset classes, you have a bit of a move two basis points higher, back to 485 on the day with the 10year hanging flat just over that level. Gold, taking a breather, here, 1. 2 lower on the day, crude also lower on the day, a 77 handle, 1 lower on the day. We want to bring you also some breaking news from across the pond. Rishi sunak will call for an election for july wording to the guardian. We have livvy burnham outside of 10 downing street with more. What is the latest . Lizzie here we are again, downing street, waiting for the Prime Minister at his lectern. Various announced various july 4 announcements for the election, thats what we are expecting. Why . Not the autumn, as westminster has widely expected. 2. 3 was the inflation data this morning. In the eyes of the Prime Minister, thats back to normal, back to the 2 target, or close enough to call this general election. Markets were reading it a different way, betting on a june rate cut from the bank. Rishi sunak clearly debts clearly deciding now is the time to hedge his bets and go to the polls. Sonali i want to ask you what brought us here, but i also want to talk about the mood. Where you are, whats the mood right now in england . Lizzy if you watched our coverage through brexit, Boris Johnson standing down, the protesters always like to come out on big days like this. The mood in westminster is very exciting. More and more press have come to downing street as the speculation built throughout the day that the Prime Minister would be calling the election. You can hear the Prime Ministers the protesters calling for the tories out. Rishi sunak wants to extend their 14 years in power, labor wants to take over. It would be the first win for the party since 2005. Sonali thank you for your time and reporting, lizzy, outside 10 downing street. We will discuss this with bobby and john from bloomberg opinion. Bobby, sitting here today to look at this moment, tell us how we got here and what it really means. Bobby the tories have been in power for 14 years. A substantial number of britains have sort of lived, have seen their incomes go up in recent months. They have seen inflation rates come down in recent months. Hes counting on people feeling that things are about to get better. Labor will be expecting people to remember how bad it has been for a very, very long time. Inflation, the rate at be down now, but prices are still way up from where they were five years ago and you get much less for your income, now, then you would five years ago. Thats where the competition is going to be. Do people feel optimistic about the future or do they remember how bad things have been . Sonali we will get to that in a moment, but weeks away could potentially mean volatility. What do you think of the investor reaction, john . John it had been worse than people than expected where the chance of the rate cut has down gone down, if you believe the markets. There has been very little move since then that i can identify, as these rumors have become more substantial. Basically, i think, because the polls have been very consistent for a very long time. It would be a huge surprise if the conservatives are still in government after this election. It has been the base case for any sensible investor for the better part of a year that we will see labor in power. There are all kinds of other interesting questions, but basically, we assumed this would happen. Sonali what are the questions . John first of all, does cara somma get the majority without the need to join in with someone else . If labor has strengthened as much as they appear to have, like in scotland its much more plausible they could take it on their own, but its difficult to model. The scottish system is effectively difficult different from the rest of the country. If the s p holds firm, its harder to imagine keir starmer getting in with an outright majority. There was the experience of 2010, David Cameron getting the most seats but needing to form a coalition with the lib dems to govern. That wasnt necessarily the most positive experience for people, but it is also perhaps the single most similar election to this one, in that it was very obvious that people were ready to boot out labor at that point, it wasnt clear that there would be something similar with keir starmer now. Bobby this dynamic here over what people will remember, the good times or the bad times, how do you start to answer that russian . Bobby we will find out over the next few weeks but polling suggests that people are more confident in the ability of labor to manage the economy, which is quite a surprise, because historically the tories projected themselves as better managers of the economy, but polls suggest they think that keir starmer will do a better job at the economy then rishi sunak. 14 years is a long time. There is bound to be a degree of tiredness in any system, never mind a country that has gone through such upheaval over the last few years. Sonali to that note, taking stock of the u. K. Budget budget in the state its in . John there doesnt appear to have been much of it, but im not sure if that is the fault of rishi sunak, jeremy hunt, or anyone else. The situation is not easy. I suspect one of the reasons they might be deciding to go in july, rather than waiting until the fall, was that there had been a hope that the budget would have improved enough that you could have had some kind of giveaway in the autumn. That is looking less plausible. If the treasury had said look, theres no way that we can sugarcoat the economy later in the year, the calculus shifts towards going now. Picking up on what bobby was saying, if you want an analogy, the problem is that when it comes to economic problems, economic embarrassment, electors have a very long memory. Now, the liz truss imbroglio was still two years ago and was as bad as it gets in terms of an awful unforced economic crisis. The most similar thing i can think of to that was black wednesday, 1992, 4. 5 years before the next election, when the pound was forced to devalue. Over the next four years, the conservatives did turn around the economy beautifully. Tony blair inherited something very nice. People just never forgot. Going with the conservatives because Something Like black wednesday or liz truss isnt going to happen and if it does, they wont forgive it. Sonali its interesting, when we talk about the burden of the physical state in the u. K. , there is an amazing chart on the terminal right now with a top live on the terminal going about the decisions being made in the u. K. The tax burden is still heading for a postwar high. The chart is significant here. To the point you made about voters, how are they feeling about that . Bobby not well, not good, especially since prices are still high. There was an attempt to try and paper over that a bit earlier, when jeremy hunt announced the production reduction in some taxes, but it didnt really take. Most of those, taxes will be higher again next year. The impact was not really felt by most people in britain. Its really hard to pin your hopes on one piece of data and the events of two or three months when people can still feel the pain that they have done for the last 5, 6, seven years. Im not sure that the message that things are going to get better is going to work quite so well for the tories. It might have been one thing if the voters did not have faith in the opposition, but it has been a long time since labor managed the british economy and people seem to think they should get that chance. Sonali thank you both so much for your time and experience covering these markets. Of course, the best in bloomberg finance, economics, finance, and government affairs. Stick with us, we will bring you the press conference from rishi sunak himself. Stick with us through the break. This is bloomberg. How am i going to find a doctor when im hallucinating . What about zocdoc . So many options. Yeah, and dr. Xichun even takes your sketchy insurance. Xichun, xichun, xichun youve got more options than you know. Book now. Youve got more options than yo know. Sonali we are now going to cut to the Prime Minister, rishi sunak, in the u. K. Delivering his remarks. P. M. Sunak i cant help but reflect that my first introduction to you was four years ago, i stood behind one of the podiums upstairs behind me. I told you that we faced a generation defining moment and we would not be judged by a government action, but by the all acts of kindness that we showed one another. You met that challenge and then some. I have never been prouder to be british. When i introduced the furlough scheme, i did so not because i saw a country in need of desperate help, although we were, but because i saw a country whose future hung in the balance. I could be bold and trust in the tens of millions of you at home that you would rise to the moment, or i could accept the inevitable millions of job losses and pick up the pieces. In truth, it was no choice at all. I have never and will never leave the people of this country to face the darkest of days alone. You know that because you have seen it. As i did then, i will forever do everything in my power to provide you with the strongest possible protection i can. That is my promise to you. Because for so many of us, it is easy to forget the scale of what we have been through. Hit by a pandemic that upended normal life. Who would have ever thought that the government would tell us how many times a day we can leave our house. Just as we were recovering from covid, war returned to europe, the prudent invasion of ukraine let me put an invasion of ukraine sending Energy PricesVladimir Putin invasion of ukraine sending Energy Prices skyrocketing. Success is the measure, be it defense of the country, or arise in public services. Because of our collect sacrificing your hard work, we have reached two major milestones in delivering that stability, showing that when we work together, anything is possible. Our economy is now growing faster than any protected, outpacing germany, france, and the United States, and this morning it was confirmed that inflation is back to normal, meaning inflation will ease and Mortgage Rates will come down, proof that the plans and priorities i set out are working. I recognize that it has not always been easy. Some of you will just now only start to feel the benefits and for some night still be hard when you look at your bank balance. But this hardearned economic stability was only meant to be the beginning. Now the question is how and who do you trust to turn the foundation into a secure future for you, your family, and our country. Now is the moment for britain to choose its future, to decide if we want to build on the progress we have made or risk going back to square one with no plan and no certainty. Earlier today i spoke with his majesty today to request the dissolution of parliament. The king granted the request and we will have a general election on the fourth of july. It will take place at a time when the world is more dangerous than it has been since the end of the cold war. Russia is waging a brutal war in ukraine. Vladimir putin will not stop there if he succeeds. Its made it clear our risk to Energy Security. In the middle east, forces of islamic extremism threaten regional and global stability. Tensions that were exploited by extremists who seek to undermine our values and divide society here at home. China is looking to dominate the 21st century by stealing the lead in technology. Migration is being weaponized by hostile states to threaten the integrity of our borders. With these uncertain times, we need a clear plan with bold action to chart a course to a secure future. In this election, you must choose who has the plan. Who is prepared to take the bold action necessary to secure a Better Future for our country and our children. I cannot and will not play claim that we have got everything right. No government should. But i am proud of what we have achieved together, the bold actions we have taken, and i am confident about what we can do in the future. We have tackled inflation, controlled that, cut worker taxes, and increased the pension by 900 pounds, seizing the opportunities of brexit to make this the best country in the world to grow a business, putting records amount record amounts of funding into the nhs, making sure that they are training the doctors and nurses that they need in the decades to come. Our children are now the best readers in the western world. We prioritized Energy Security and your Family Finances over environmental dogma in the approach to net zero. We fully funded the increase in defense spending to 2. 5 of gdp, deciding to invest more in local transport that you actually use rather than endlessly plowing more money into hs2. We reformed the welfare system to make it fair for those who pay for it and for those who need it. Immigration is finally coming down and we are stopping the boats with our rwanda partnership. We will make sure that the next generation grows up smoke free. I have heard that my work since i became Prime Minister shows that we have a plan and are prepared to take old action, necessary for our country to flourish. I stuck with that plan and have always been honest with you about whats needed, even when that is difficult, because i am guided by doing what is right for the country, not what is easy. I cannot say the same thing for the labour party. I dont know what they offer and in truth, i dont think that you know, either. That is because they have no plan, there is no bold action. As a result, the future with them can only be uncertain. On the fifth of july, keir starmer or i will be Prime Minister. He has shown time and again that he will take the easy way out and do anything to take power. If he was happy to abandon all the promises he made to become labor leader when he got the job, how can you know he wont do exactly the same thing if he were to become Prime Minister . If you dont have the conviction to stick to anything that you say, if you dont have the courage to tell people what you want to do, and if you dont have a plan, how can you possibly be trusted to lead our country, especially at this most uncertain of times. Over the next few weeks, i will fight for every vote, i will earn your trust, and i will prove to you that only a conservative government led by me will not put our hard earned economic stability at risk, restoring pride and confidence in our country, with a clear plan and bold action, delivering a secure future for you, your family, and our united kingdom. Sonali lizzy is outside of 10 downing street with more. We just heard from the Prime Minister there, and when we think about what he said, he cast uncertainty around the labour party and spoke to his own ability to recover the u. K. Economy, promising that Mortgage Rates will come down, acknowledging that people who are looking at their bank allans is may still be having a hard time. On balance, what about his message do you think will carry him into the july elections . Lizzy well, drowned out by the old labour victory anthem, soaked by the rain, the Prime Minister has chosen july 4 for the election date. Why has he chosen july, when no one in westminster was really expecting it . Lots of reasons. Economic, first. No coincidence, today was the day that inflation fell to 2. 3 . In his eyes, that is back to normal, as he said. Ironically, not so eyes of the markets, paring their bets. As you heard him there, he sees this as a moment to say that we have delivered on the economy. As you mentioned, the costofliving crisis easing for the british people. There are also physical reasons as well. He and the chancellor had been hoping to deliver more tax cuts in the autumn but recent data suggests there might not be enough wiggle room for that. The imf confirming that as well. There are also political reasons for this. Technically, july the fourth is in the second half of the year, as he had promised right up through Prime Ministers questions this afternoon. It will also be before the parliamentary recess. And of course the Prime Minister will have had an eye on the polling and the pole gap of the labour party over the conservatives, which doesnt seem to be closing. So, he has chosen this is the moment. July election could also coincide with the first flights of asylumseekers to rwanda, letting conservatives make their case for migration clampdown. A core focus in the campaign. Finally, sonali, never underestimate the element of surprise. Its a card that he, not usually a risk taker, is playing today. Sonali thank you for your time their reporting outside of 10 downing street, a rainy day, a lot of protesters there for this large moment in the u. K. We are also turning to david westin on wall street week, because there are massive investor implications when we think about what is ahead for the u. K. , with a lot of turnover in leadership in the u. K. Over the last couple of years. How do you think about investors think about his tenure . David remember the liz truss fiasco . He restored economic stability but didnt mention that it was members of his own party that he had restored security for. He has stabilized things. Investors would all have to agree. But when you look at the parallels and the differences between the u. K. And the United States with Simultaneous Elections here, like President Biden he wanted to remind us of how bad it was in pandemic, coming out of it, and how much better off we are today, emphasizing stability and security, something that joe biden will be emphasizing in contrast to trump. At the same time, it comes down in the end 2 do we think we will be better off with one person or the other . It was interesting to me that he really hit on what is the plan for keir starmer . I have heard that from some, we are not sure what his plan is, unlike thinking back for a minute tony blair when he came to office, his plan was clear. Sonali less than a minute here, but he called this the most dangerous time since the end of the cold war. How will the rest of the world be looking at this moment . David when it comes to ukraine and russia right now, the position of the u. K. Is terr