Panel this evening, associate commentator at the daily telegraph, mumtaz ahmed and the transcaucasia expert and former labour mp Stephen Pound. As labour mp Stephen Pound. As always, as you know, i want to hear from you. Its the most important part. Excuse me, of the programme. Email me. Email. The programme. Email me. Email. Margaret gbnews. Com. But now its time. The news of the day with polly middlehurst. With polly middlehurst. Bless you, jacob. Good evening. Now the headlines tonight, a man who broke into Windsor Castle armed with a loaded crossbow with the intention of killing the late queen has been sentenced to nine years in jail for the crime of treason. Just once , king shell treason. Just once, king shell wandered around inside the grounds of Windsor Castle for two hours on Christmas Day 2021, while the late queen was there, the old bailey heard today hed been encouraged by an Artificial Intelligence virtual girlfriend with which hed exchanged thousands of messages. The judge said jail was non psychotic and therefore culpable when he devised the plot but had lost touch with reality and became psychotic by the time he carried it out. In other news today, sir it out. In other news today, sir keir starmer has revealed an extra 700,000 urgent dental appointments would be introduced under a Labour Government in plans to improve the nations oral health. The party, they say, would also introduce super sized toothbrushing in schools across england in order to tackle preventable tooth decay in children. People in most need of treatments, including fillings and root canal work , fillings and root canal work, would be prioritised under proposals aimed at what labour is calling rescuing nhs dentistry. The plans would be financed, the party says, by using £111 million a year from abolishing non dom child tax status. Sir keir says labour wants to target areas where people cant get a dental appointment. Too many places across the country theres a desert where you cant get an nhs dentist, so we also have a scheme in place to ensure that we get newly qualified dentists into those areas. So thats the immediate fix. But obviously in the longer term we need to do preventative measures. So the third limb of measures. So the third limb of this is tooth brushing at schools where weve got the biggest problems in our breakfast clubs to make sure that children are brushing the right way and therefore we prevent some of the problems in international news, at least 51 people have died after a Russian Missile hit a cafe Grocery Store in North Eastern ukraine. Its reported the victims were holding a Memorial Service at the time , ukrainian officials at the time, ukrainian officials called it a heinous crime. The attack was the deadliest in kyiv since the start of the war. And the Prime Minister has met with the Prime Minister has met with the ukrainian president , volodymyr zelenskyy, saying europe must face down the threat from russia. Rishi sunak is in spain for the European Political Community summit. The Prime Minister condemned todays attack and reiterated the uks support for ukraine in the ongoing war, adding the only person responsible for the conflict was president putin, just come from meeting president zelenskyy, where we discussed this horrific attack that has just happened. It just illustrates russias barbarity. He and president barbarity. He and president putin can say all he likes. There is one person responsible for this illegal, unprovoked war, and it is him and he should stop. And thats why the uk has been steadfast in supporting ukraine and will continue to do so. Im proud that we were one of the first and we are one of the largest supporters of ukraine. That will continue to be the case. Rishi sunak speaking there. Youre gb news across the youre with gb news across the uk on tv, in your car, on Digital Radio and now on your Smart Speaker by saying play gb news. This is britains news channel. The Prime Minister has channel. The Prime Minister has had a busy few weeks reforming policies such as net zero, scrapping hs2 or pushing through north sea gas and oil licences. But it seems theres even more method to these sensible measures than some may have thought. What is clear about these policies . Theyre very few costs involved. Indeed scrapping the northern leg of hs2 saves us 32 billion. And considering the previous overruns, potentially much more pushing through north sea gas and oil licences will raise billions for the treasury, especially considering the 75 effective tax rate on Domestic Energy production and the reforms to net zero policy will let you keep more of your own money. But it seems these arent just good policies because theyre cutting waste and being more frugal with your taxpayer money. Theyre good policies because facing because we could be facing a financial shift across western economies. The cost of government borrowing has been rocketing. The return on 30 year u. K. Gilts has just reached a 20 year high. And this has real consequences on capital values. If i give you an example , if you if i give you an example, if you bought the 2073 index linked gilt when it was issued, it would have cost you £330. Its now worth £62. Thats a fall of 80. So if you need the cash now, if you cant wait until 2073, youve had a huge capital loss and were seeing similar things happening in other western economies, such as the us and germany and what this means is that markets are cracking down on government borrowing. Theyre saying that they dont have confidence in these economies to pay confidence in these economies to pay back their debts or particularly in real terms , particularly in real terms, because theyre worried about inflation in. And there is a good reason for this because governments have been spending too freely. If you think that the great costs, the two great costs, taxpayer every year, costs, the taxpayer every year, the nhs at about 183 billion and then welfare 230 billion next you might expect education or defence spending, but youd be wrong in the year to may debt interest payments. Were £117 interest payments. Were £117 billion. Thats the third highest bill after welfare and the nhs. Its more than £2 billion every week. As a consequence of historic borrowing. If you think last borrowing. If you think last year we borrowed 128 billion, were effectively borrowing money to pay the interest on our historic borrowing. It begins to sound like a giant ponzi scheme and this is why the cost in borrowing is so important, because its a signal that we cant afford to borrow no more. In the past , cant afford to borrow no more. In the past, in recent years, combination of quantitative easing and low Interest Rates and the two went hand in glove have given governments across the globe nearly free money. But thats changing with this shift in gilt yields, global bond yields generally. So what does it mean . Well, basically we will have to cut expenditure and this is a problem because if the economy is slowing, the automatic stabilisers put up the cost of welfare , but were going cost of welfare, but were going to find that we dont have the money for it. And it begins to sound like a repeat. The late 19705 sound like a repeat. The late 1970s and early 1980s, and we may well need similarly tough reforms recover from this. Reforms to recover from this. But of course, want to hear but of course, i want to hear from you. Dont forget let me from you. Dont forget to let me know thoughts. Know, from you. Dont forget to let me kno email thoughts. Know, from you. Dont forget to let me kno email off ughts. Know, from you. Dont forget to let me kno email off by hts. Know, from you. Dont forget to let me kno email off by heart know, from you. Dont forget to let me kno email off by heart byknow, from you. Dont forget to let me kno email off by heart by now. The email off by heart by now. Mail morgue at gbnews. Com. Well, first all, im delighted to first of all, im delighted to be by peter the be joined by peter schiff, the chief economist of euro Pacific Asset management. Peter, thank you joining me. How would you for joining me. How would you for joining me. How would you governments to deal you advise governments to deal with . With this . Well, unfortunately , well, unfortunately, governments have to significantly reduce spending. The problem was they spent so much in the past and they borrowed the money to do itjust borrowed the money to do it just because the Central Banks made borrowing so cheap. But but. Unfortunately lately its frozen. But fortunately, ive got somebody whos going to come to the rescue because vicky pryce, the rescue because vicky pryce, the chief economic adviser at the chief economic adviser at the for economic and the centre for economic and business research, is here. Vicky, what would your solution be . How would you advise governments to deal with this . Well there are things that well there are two things that the can the governments can do. All, they can grow first of all, they can grow slightly faster without necessarily generating inflation. That may look like a difficult thing to achieve right now. Nevertheless inflation is falling us. So you falling even in the us. So you mentioned us and the mentioned the us and the interest there, yields Interest Rates there, the yields which gone up quite which have gone up quite significantly well. Significantly in there as well. And yet inflation is half of ours here in the and the ours here in the uk and the trends are downwards. Yes, we may have the odd months when things perhaps sort of tick up a little bit, but overall what were seeing is that energy pnces were seeing is that Energy Prices are going down. Yes. Okay oil prices have come up a little bit recently, but overall, nothing compared to we saw nothing compared to what we saw within invasion of ukraine by russia when energy costs, of course, went significantly. Course, went up significantly. So is so if inflation indeed is perceived to be sorted over the next 12 months, there is no justification for having a central bank. Interest rates as high as they are right now in many countries and frankly also including in the uk. And second, what you can do is you can look at ways in which the economy can perhaps grow faster, because if you do that, of course it eases quite considerably what your debt burden , in fact is. And the debt burden, in fact is. And the interesting thing is that the way in which you can get your debt to gdp ratio to come down is mostly through getting more output, more is mostly through getting more output , more activity is mostly through getting more output, more activity in the economy. But isnt this the dilemma for governments that that they need to get Economic Growth , but higher interest growth, but higher Interest Rates make it harder to get economic but if they Economic Growth, but if they dont have higher Interest Rates, they dont get inflation down. Risk getting in to so you risk getting in to a vicious cycle that makes it really hard to break free. Now, youre quite right. But that of course, assumes that inflation is still an issue. And of course its high, but it is coming down and we have to bear in mind that the very substantial increase in Interest Rates that we have seen over the last year and a half is coming through the system right now. If dont start now. And if we dont start reducing Interest Rates soon, what well see is that the economy actually slows down even further. So Government Debt further. So the Government Debt issue to be much greater. I absolutely agree with that. And wonder whether the bank of england have too far england may have gone too far and waited to the and not waited to see the consequences the consequences of the early Interest Rate increase. Aces. But that the point i was but that was the point i was making the automatic making about the automatic stabilisers you are likely to have the Interest Rate have with the Interest Rate rises weve already had a slowing economy which is likely to push up the demands on welfare , which pressurises the welfare, which pressurises the government budget. Even more and therefore its harder to get growth in these circumstances. I agree. But the very interesting thing about whats happening now now if we compare with what were even with what we were even pre pandemic, that in the pre pandemic, is that in the whole the western world, if whole of the western world, if you the oecd, which is you look at the oecd, which is sort of richer countries, club unemployment is considerably lower it was even lower now than it was even before the financial crisis. So we had this period of an increase in unemployment. Well, of course, welfare spending would be going up. And now unemployment is at almost record lows, which is good news, gives us a bit of hope in terms of not getting into that exact position that youre worried about, except its also potentially an inflationary pressure. And how much of it is people voluntarily having taken themselves labour voluntarily having taken themstherefore labour voluntarily having taken themstherefore increaseibour voluntarily having taken themstherefore increase being force, therefore increase being this pressure on a tight Labour Market when youve got an inflationary problem . That is true and i think it is one of the reasons why why the economists havent really slumped of very slumped as a result of the very substantial increase oil substantial increase in oil prices, basically people prices, because basically people carried they had carried on working and they had savings they were able to savings and they were able to continue to that isnt savings and they were able to conti|caused that isnt savings and they were able to conti|caused inflation. |t isnt savings and they were able to conti|caused inflation. Ofsnt what caused inflation. Of course, the inflation was caused by factors. Those by external factors. Now those external are external factors are disappearing. Worries me disappearing. So what worries me and the reason why the yields are so high right we should are so high right now, we should be back to the issue of be going back to the issue of government being Government Debt being so expensive because expensive right now. Is because it is perceived by the bondholders or those who are playing in the market, that actual inflation often will still be high on Interest Rates, will still be high in the economy , which is going to bring economy, which is going to bring this slowdown in growth is going to bring problems in to bring these problems in with with Government Debt. That with Government Debt. And that comes the Central Banks comes because the Central Banks keep were to keep keep saying were going to keep Interest Rates those high Interest Rates at those high levels for longer than we thought originally. Why, if all thought originally. Why, if all the forecasts are showing quite clearly that we get into target on inflation, 2 really in the next 12 months in the us, its basically already achieved that. But isnt this another one of the most glorious dilemmas for governments . Actually, from governments . Actually, from a governments with governments point of view, with a stock of debt, one of a large stock of debt, one of the that reduces it the things that reduces it fastest proportionate gdp is fastest proportionate to gdp is inflation, right . And so governments are tempted to talk about inflation being so damaging, actually theyre damaging, but actually theyre debt position is improved by a bit of inflation, except that about a quarter of certainly our debtis about a quarter of certainly our debt is index linked , which debt is index linked, which therefore you dont get that benefit. Benefit. But and the other issue about how you reduce it your debt because of inflation it only holds if the inflation rate is higher than the Interest Rate you have to pay. Yes, but were getting to the point now with the yields where they are and pretty soon where that isnt going to be the case. And thats really important because interesting and thats really important bec start interesting and thats really important bec start of interesting and thats really important bec start of the interesting and thats really important bec start of the rise 1teresting and thats really important bec start of the rise of resting the start of the rise of inflation and of Interest Rates is that the negative real Interest Rate was still huge. Interest rate was still huge. And its only in the last few months that its beginning to narrow, which almost certainly has effect on economic has a bigger effect on Economic Activity it did the beginning. Absolutely. And there is another terms of another element in terms of whats happening bond whats happening in the bond market, you market, which is that you mentioned easing mentioned quantitative easing before quantitative before with quantitative tightening thats going on right now. Many more bonds are finding their way the market. So their way into the market. So central are getting of Centra