Faisal Islam

Hello all - I’m back on here, back in economics and after a few weeks wilfully getting lost in transit, am newly on here👇🏾, and shortly on air in a new role as Economics Editor of the BBC.. first take on data, trade wars, Brexit, fiscal gymnastics...👋 bbc.co.uk/news/business-…

Stylishly timed from this gang…. They should get bonus points. 🏃 🏃‍♀️

NEW Bank of England holds interest rates at 3.75%, but its chief economist votes for a rise to 4%. Bank outlines 3 energy shock scenarios, with some rate rises indicated even if global energy prices fall from here. IF oil prices remain above $120 till year end, AND gas prices rise substantially Banks forecasts point to possibility of rates at 5.25% this year

👀 Burnham speaks at Bloomberg City conference in Madrid on national econ policy: …noteworthy comments on borrowing, saying fiscal rules should stay but suggests exemption (as is seen in Germany) for pressure on defence spending (also implying backing for increasing that). Also says market confidence to invest requires working collaboratively with other political parties (hint at PR): “we need to get rid of the turbulence from our politics, because that then doesn’t give the markets confidence to invest”.

“The Stone Age did not end because of a lack of stones. The oil age will not end because of a lack of oil,” the words of Opec figurehead ex Saudi oil minister Sheikh Yamani to me 25 years ago, warning Opec not to overdo the quotas, amid an incentive for substitution…. while we focus on the coherence of the marginal suppliers of crude oil in Opec… a possibly bigger story is in the marginal buyer, China, exhibiting some forward planning in terms of massive stockpiles, but also taking something like a million barrels a day of oil demand off the table through electrification of cars and other transport… it has cushioned the economic hit to China, and led to predictions of an imminent plateau in oil demand… the Emiratis could well be acting with this sort of view in mind. Despite the current situation, rational to pump as much as oil as you can, at any plausible price (remember UAE has low marginal production costs) and reinvest proceeds in diversifying economy further, turning the oil in ground into eg Nvidia chips in massive data centres… question now is what it does to ability for Opec to match medium term supply to demand…?

Significant geopolitical shockwaves from the Iran War.. UAE, which was a member of OPEC, even before the country formally existed, has quit OPEC immediately. UAE has been the second largest holder of spare capacity in OPEC. Longstanding aim to grow production well beyond its 3m bpd quota to its capacity of closer to 5m bpd… (although right now it’s below 2m bpd). In many ways UAE sacrificed greatest proportion of its capacity to keep close to OPEC quotas. Emiratis have options on bypassing the Strait of Hormuz, as it geographically has sea access/ ports on either side, and there will be moves to expand the capacity of pipelines into Fujairah… indeed longer term, that could become an option for other Gulf nations too… As for OPEC, this is a big blow, amid significant questions. Its not just that the UAE, when it can get its oil fully back on the market by sea or pipeline is likely to target 5m bpd production, Saudi might respond with a price war that the UAEs more diversified economy could withstand, but others might not. While the world understandably focusses on oil at $110 per barrel, this is a reason why we should not discount the chance that it could be half that some time next year, depending on the Iran-US talks and the state of the Strait. Chart via @IEA (dark blue is UAE spare capacity)

NEW Soldier charged with using classified info on Maduro operation to make $400k on prediction market Polymarket… FBI chief Kash Patel “Any clearance holders thinking of cashing in their access and knowledge for personal gain will be held accountable.” justice.gov/opa/pr/us-sold…

🚨NEWS: I spoke with Trump by phone earlier today: we discussed the upcoming royal visit, whether Sir Keir Starmer can recover following strained US-UK relations over the last 2 months of war with Iran, and what his social media threats against Iran really mean. 🧵👇

My colleague @BBCsarahsmith has just spoken to President Trump… more online here now: bbc.co.uk/news/articles/…

Crying with laughter at this… who does have a wedding during the World Cup?

@therosebudpod Great man Alistair.

Royal commentator Alistair Bruce shares a deeply moving moment following the death of Queen Elizabeth II, when he became overwhelmed with emotion live on air. Discover the touching gesture from the late Queen that stayed with him, and more, in the latest episode of Rosebud.

NEW Coming up on @BBCNewsnight and BBC News online, former PM & Anthropic adviser @RishiSunak tells me about concerns over the impact of ever more powerful AI models in displacing young entry level workers, with CEOs privately acknowledging “flat” headcount as they assess if AI agents can replace human workers… with concerns about jobs in multiple sectors - law, accounting, creative industries, Sunak floats cutting and over time eliminating taxes on jobs such as National Insurance and shifting the tax base to for example corporate profits, boosted by AI… he says governments need to get head out of sand on the issue and “tip the scales” towards human workers helped not replaced by AI. Watch tonight on BBC Two in 20 Mins and a longer conversation on our social channels…. More on Britmaxxing, his double act with the Deputy PM on boosting UK tech investment, how he encourages his own kids to experiment with AI modes, and is dabbling himself in various automations… x.com/bbcnewsnight/s…

4. “Equity markets doing fairly well, volatility in bond markets but the consumer is doing well. Corporates are doing reasonable well… results coming out of the US banks and others show strength… based on the economic data the US continues to power on, based on the data the UK is doing alright actually, and Europe is holding its own, less strong than the UK”…. Barclays CEO CS Venkatakrishnan describes to me that the economic situation shows a “disconsonance”: 3 long term risks - 1. “overbuilding in tech and AI”. 2. “Private credit and the liquidity risks” and 3. The Middle East… but markets and economic fundamentals seem much better.

3. “France is doing relatively better because of its energy mix… Our electricity prices are going to be flat… we’re using the crisis to double down … invest even more in nuclear, more in renewables… [to further reduce hydrocarbon dependency]”, thanks to its nuclear power and grid, French finance minister Roland Lescure told me last week for @BBCNews. A result of France’s strategic long term response to the 1970s energy shock…. Again, a lot more in this interview on that and on the Brexit reset, will post later:

“The real problem will be, if fertiliser is not available three months from today, and we reach the planting size season of the developing world, of the non northern countries, then we start getting into a difficult cycle on food availability..” Ajay Banga World Bank President: Four Days at IMF, 7 newsworthy interviews with most of the G7 finance ministers, Bank of England Governor exclusive, World Bank President with @BBCNews about this moment of extraordinary geopolitical and economic uncertainty affecting prices, growth, interest rates, and with concerns beyond the Gulf - private credit & Mythos: Will post all in full separately here, but ICYMI: 1. World Bank President Ajay Banga:

Brent crude oil tumbled 11% on the news from Iran about the free opening of the Strait of Hormuz… govt bond yields including gilts tumbling too…. 15-20bps

“certainly it is serious enough to warrant the attention of all the finance ministers” Full Story here: bbc.co.uk/news/articles/…

“Very serious”… “at least we know where the Strait of Hormuz is” Genuine concern here at IMF meetings among finance ministers and bankers about the consequences of the release of the super powerful Mythos AI mode by Anthropic on banking system security… my latest featuring, canadian finance minister @FP_Champagne Barclays CEO CS Venkatakrishnan, and Bank of England Governor Andrew Bailey who raised it with me unprompted:

NEW The @WorldBank President Ajay Banga tells me for @BBCWorld at the Spring Meetings “it could still take months” to stabilise global supplies even if the Strait of Hormuz opened up, and that he has prepared more funds than for Covid to deal with the “asymmetric” impact of the Gulf crisis on emerging economies and poorer countries facing rising gas, oil and food prices, at a time of high debts and now higher interest cost:

NEW & EXCLUSIVE Bank of England Governor Andrew Bailey tells BBC News at Ten at the IMF Meeting that the world is facing a “very big energy shock” but that “it won’t rush to judgement” on rate rises… talk of four this year “seriously” “way ahead of yourself”… MORE soon