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Quest Means Business
OPEC+ Agrees To Cut Oil Production By Two Million Barrels A Day; Biden Speaks On Hurricane Recovery Efforts In Florida; Ukrainian Troops Appear To Have Advanced In Luhansk; Wall Street Claws Back Losses In Early Trading; Norwegian Cruise Line Drops Passenger COVID-19 Testing; U.K. Prime Minister's Priority: "Growth, Growth And Growth"; Dash To The Bell. Aired 3-4p ET
Aired October 05, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALISON KOSIK, CNN BUSINESS HOST: At least with the stock market, all good things come to an end. The markets are struggling to extend a remarkable
two-day rally. As you can see a flat showing for the Dow this afternoon, trying to turn positive after clawing back some early losses.
Those are the markets and these are the main events. Adding fuel to the inflation fire. Oil prices bounce as OPEC announces a production cut
Growth and growth. British Prime Minister Liz Truss sticks to her tax cuts strategy at the Tory Party Conference.
And the Norwegian is hoping to turn the tide dropping COVID restrictions after a rough few years.
Live from the New York Stock Exchange. It's Wednesday, October 5th. I'm Alison Kosik in for Richard Quest and this is QUEST MEANS BUSINESS.
Tonight, OPEC and its allies are adding fuel to the global inflation fire with plans to cut oil production by two million barrels a day. The price of
oil climbing sharply on the announcement. Brent crude had come down about 20 percent since June. US President Joe Biden called the move short
sighted. He says it will hurt the global economy. OPEC says it is responding to economic uncertainty. Its Secretary-General defended the
surprisingly drastic cuts. Listen.
(BEGIN VIDEO CLIP)
HAITHAM AL GHAIS, OPEC SECRETARY GENERAL: We are not endangering the energy markets. We are providing security, stability to the energy markets.
UNIDENTIFIED FEMALE: At a price.
AL GHAIS: Everything has a price. Energy security as a price as well.
(END VIDEO CLIP)
KOSIK: Anna Stewart is in London for us.
Anna, good to see you.
So, two million barrels a day in this production cut. Walk us through how significant this is.
ANNA STEWART, CNN REPORTER: Well, that was certainly operand of all the expectations we've had and we have had expectations of a sizable output cut
for days now. We've seen oil prices moving in that direction all week.
Interesting, wasn't it? Well, you heard from the OPEC Secretary-General there and he actually said energy security has a price. Really interesting
comment, not least given of course that OPEC has made this decision with its allies, which includes Russia and Alexander Novak, the Deputy Prime
Minister of Russia was actually in that meeting face-to-face. Of course, he was sanctioned by the US just last week.
Why have they made this cut? Well, they talk a lot in the statement about uncertainty around global economic and oil market outlooks. Of course,
going into this, there was a lot of discussion about what a looming recession could look like for the oil market in terms of oil demand, and
how that could potentially be a drag on prices, which is something all OPEC members certainly don't want to see.
However, going into this meeting, I've also heard lots of different perspectives, even from the CEO of Saudi Aramco. Yesterday, I was at an oil
and gas forum in London, and they -- well, he expressed a lot of concern, I'd say about spare capacity of oil in the market and whether or not there
is enough of a buffer to respond if there was an increase in oil demand, which he believes there could be.
This has been a really interesting decision. Two million barrels a day is the big cut. It's more than we expected and oil prices are a little bit
higher on that news, Alison.
KOSIK: Anna, will it make any real difference? You know, given that OPEC continually falls short in their output targets, is this actually two
million physical barrels?
STEWART: Yes. That was always the first question really. And you have to take a look at what OPEC set out to produce and what they actually produce
and there is a pretty big difference. I can show you a chart that we have looking at the gap that you can see there. The blue line is production, you
can see what they're actually producing. And then in the red line, you can see the quota, which is the target they're trying to reach. You see there
is a sizable gap.
And actually in August, OPEC and its allies missed out but targets by 3.5 million barrels a day. So if you put into context, the two million barrels
per day cut, you wonder what real impact that will have. Clearly some, I think looking at oil prices and where they have been going all week on
anticipation of these moves, but it's an important question to ask and analysts today say in real terms that could leave you with maybe half a
million to a million barrels per day actually being cut from the market.
KOSIK: Thank you for all that clarification, Anna Stewart. Thanks very much.
The White House is accusing OPEC of siding with Russia and by the same token, dealing a major blow to President Biden. The President visited Saudi
Arabia in July, meeting the Crown Prince hoping to persuade his host to shore up oil supplies. It is a meeting that resulted in a temporary
The new production cut puts Mr. Biden in a precarious position as midterms loom. The President has leaned on decreasing oil prices to try to convince
voters he has inflation under control. A White House spokesperson told reporters on Air Force One, it was clear OPEC+ was aligning with Russia,
according to Reuters.
Let's go to Matt Egan. He's got more on this.
Matt. What are you learning about this about how the President is reacting? I mean, this is in clear defiance of what President Biden went to Saudi
MATT EGAN, CNN REPORTER: Yes, Alison. You've got to think that the President is wondering what exactly he got out of that visit to Saudi
Arabia, because remember, he was actually undercutting one of his own campaign promises to make Saudi Arabia a pariah state over its human rights
issues and what happened was the Kingdom, you know, as part of OPEC, they announced this production increase in August, but that was a 100,000 barrel
per day increase. We're now talking about a two million barrel per day decrease.
And so I think there has got to be some disappointment. The relations between this White House and Saudi Arabia have never been great, but
tensions are clearly on the rise.
You mentioned that statement from the White House Press Secretary. She made that statement to reporters on Air Force One today, talking about how
clearly OPEC+ is aligning with Russia.
Now, I would also note, though, that Russia is a party of OPEC+, so I mean, core OPEC is literally aligning with Russia, because they are all working
together to sort of manage supply.
But I think all this raises questions about sort of what is the response? I talked to Democratic Congressman Ro Khanna this week, and he said that he
wants President Biden to retaliate against Saudi Arabia by cutting off the country's supply to aviation parts, to weaponry.
The White House also put out a statement today, saying that in light of today's action, the Biden administration will also consult with Congress on
additional tools and authorities to reduce OPEC's control over energy prices. It's pretty vague. We don't know exactly what that would mean, but
some of the energy analysts I'm talking to, they see that as a signal that the White House might be willing to talk about NOPEC legislation, which is
legislation that's been bandied about for years, and it would sort of undercut OPEC's ability to influence prices to be able to go after them on
So, that would be a huge shift from this White House if that actually happened. But clearly, Alison, the tensions between this White House and
Saudi Arabia and OPEC broadly are running pretty high right now.
KOSIK: Yeah, That's putting it mildly. Matt Egan, thanks very much.
Happening right now President Biden is speaking in Fort Myers, Florida, an area ravaged by Hurricane Ian, the President is there to survey the damage.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: I want to thank the Mayor and the County Chair, Cecil, who took me on a little helicopter ride and we
went on Sanibel Island and all across.
I mean, I'm sure it's much worse on the ground, but you can see a whole hell of a lot of the damage from the air. And you can imagine because
unfortunately, I've been to a lot of disaster areas in the last couple of months, last six months, you know, more fires have burned in the west and
the southwest, burned everything right to the ground -- the entire state of New Jersey is as much of the room that takes up.
And the reservoirs out west are down to almost zero. We're in a situation where the Colorado river looks more like a stream. There's a lot going on.
And I think the one thing this has finally ended is a discussion about whether or not there is climate change and we should do something about it.
But folks, I also want to -- Jill and I have had you all in our prayers and I mean that sincerely. And we're here today because we wanted to tell you
in person that we're thinking of you and we're not leaving. We are not leaving until this gets done. I promise you that.
You know, when you walk around here, what's left of the Fisherman's Wharf, and you don't have to have much of an imagination to understand that
everything -- everything is historic, titanic, and unimaginable storm just ripped into pieces. You've got to start from scratch and move again.
And it's going to take a lot, a lot of time, not weeks or months. It is going to take years for everything to get squared away in the State of
Florida to fully recover and rebuild.
We are here today with Governor DeSantis and Senator Rubio and Senator Scott and Congressman Donalds. You know, today, we have one job, and only
one job and that is to make sure that people in Florida get everything that they need to fully and thoroughly recover.
We are one of the few nations in the world that on a basis of the crisis we face, we are the only nation that comes out of it better than we went into
it them, and that is what we're going to do this time around, come out of it better because this is the United States of America and I emphasize
We've seen extraordinary cooperation at every level of government, as the Governor has said, and the cooperation began before the storm hit. Number
one priority was saving lives at the request of the Governor, I signed an Emergency Declaration. Let's see if this thing works. Is this one working?
I signed the Emergency Declaration. I've prepositioned Federal assets including food and water and generators, not only in Florida, but in other
States. So, be ready if the worst happened, and it happened.
We also pre-positioned the largest number of search and rescue teams ever assembled in the United States -- ever assembled in the United States. And
FEMA, The Pentagon, the Coast Guard, other agencies, so we can be ready to respond immediately -- immediately -- working with State and local
officials, and the search and rescue teams have knocked on nearly 70,000 doors and rescued over 3,800 people.
Yesterday, in Lee County alone, the search and rescue teams examined 24,000 structures, just in this county, making sure we're counting for everyone
who still may be trapped.
We have over 4,000 Federal personnel on the ground as I speak, and the Army Corps of Engineers providing emergency power to hospitals across the State,
nursing home, water treatment plants to make sure these facilities are able to continue to operate. Tens of thousands utility to workers all across
America, not just in Florida, all across America responded to the call from Florida that needed help.
Thousands -- thousands from all across America, working around the clock to get power restored. This is about America coming together and I really mean
it. America coming together.
FEMA has also delivered as has been mentioned four million meals, more millions of bottles of water, and making sure that you have the immediate
But we know from experience, I know from experience, how much -- how much anxiety and fear and concern there are in the people. We did lose our whole
home when a lightning struck and we lost an awful lot of it about 15 years ago, and we had a lot to go to. We had relatives nearby. It wasn't like
everything was wiped out. But we know the feeling, that feeling about where am I going to put my head down on a pillow tonight? How's that going to
work, and is my kid going to be okay?
Are they going to be able to go back to school? Am I going to rebuild or build my home? Will the insurance cover it? If I don't have insurance, God
knows what am I going to do?
And, you know, we're working to speak to all those issues, because they all want immediate responses. I've instructed my administration to bring every
element, I mean, every element of the Federal government together to help with immediate needs and long term rebuilding.
Yesterday, we opened a disaster recovery center right here in Lee County. Three more will be opened in this part of the State by tomorrow and with
more to come. And the State is co-locating insurance villages at the same centers, so you're not sure what your insurance circumstance is, you're not
sure what you're going to get, you can show up and determine in one place - - one place -- meet with your insurance company and also apply for Federal assistance at the same time.
From FEMA to the Small Business Administration, to the Department of Housing and Urban Development, there are many ways we can help and we have
already started. Already, 200,000 Floridians, 200,000 families I should say have registered for urgent assistance, like buying food, getting the
prescriptions, clothing, basics and how many of you lost your businesses? Well, insurances may not cover insurance, it may not cover everything. It
may not cover the full cost.
So, we're in a position, some of the folks are going to have lost their homes as well and the question is, if you have insurance and we will cover
I directed the Small Business Administration to speed up the processing of low interest disaster loans that can provide up to $2 million for small
businesses and nonprofits, and additional money for lost income, $200,000.00 for homeowners. We need to close the gap between what insurance
won't cover and what their needs are, and that is around of one-and-a-half percent interest rate.
And folks, look, yesterday, the State asked me, and we immediately agreed to activate our hotel program. So individuals who need hotel rooms won't
have to pay for anything. I know, there is not many around here, but they can go to the nearest hotel, and not have to worry about paying anything
and just have the coverage.
If you don't have insurance, or if you're underinsured, and you found a place to rent, or your car has been destroyed, you're entitled -- maybe
entitled up to $37,900.00 in Federal funds.
If you need to make repairs to your home, you may be eligible for another $37,900.00 -- not $39,700.00. Thirty seven thousand nine hundred dollars,
so you possibly could be able to get close to $80,000.00 for your needs that is available.
And folks look, the most important thing you can do is register so we can help figure out who is eligible for these things. Hundreds of FEMA
personnel are going door-to-door and to help with that, where you call 800- 621-3362 and I am told, you're waiting for hours and hours to get through and you're not getting anybody answering the phone.
We've talked about that in the way down in Air Force One and we're going to try to speed that up by having additional personnel, we're trying to expand
it. So, you have to have a little patience for us to get it all done. So many people are contacting, or you can go online to disasterassistance.gov
and find out what you're eligible to receive or you can sign up to one of the multiple Disaster Recovery Centers, the one that is opened here and
many more that are going to be opening.
Meanwhile, on the counties hardest hit, the Federal government at the request of the Governor from the very beginning said we'll cover 100
percent of the cleanup cost, the debris costs, which is billions of dollars when it is all over if you think about it, that we're going to pay 100
percent for 30 days, I just extended for another 30 days and the Governor and I talked, I think he is going to have to come back and ask for some
more beyond those 60 days, because it is consequential. Unless you clear the area, there is not much else you can do.
(END VIDEO CLIP)
KOSIK: And that was President Biden speaking moments ago from Fort Myers, Florida. He was surveying the damage after Hurricane Ian struck the western
coast of Florida. He talked about the Federal funding that's available for residents there in Florida who have not only lost their homes, but their
businesses as well. Many will have lost both.
He said the one job that he is there to make sure happens is that the people of Florida get fully what they need.
Vladimir Putin signs into Russia law the illegal annexation of four regions of Ukraine. On the battlefield though, Ukrainian troops are the ones
winning that territory.
KOSIK: Ukrainian forces appear to be advancing through a region that Russia now claims to have annexed. Vladimir Putin signed the sham
annexations into law earlier today, but his forces there are under pressure, even a correspondent for a pro-Kremlin tabloid says Russia lacks
manpower and Ukraine's President Zelenskyy says his army plans to liberate more territory.
Clare Sebastian is in London with a look at how the battle lines have been redrawn in recent weeks. And I know Clare, it helps to visualize this,
SEBASTIAN: Yes, really important, Alison. What we know is that Ukraine is advancing on two fronts here in the south around Kherson as you showed and
up in the East in the Kharkiv, and Donetsk and Luhansk regions in the Donbas.
What I want to hone in on though, is this is actually a Russian produced map. This was an Administrative Defense briefing on Monday, October 3rd.
Have a look at this part of the map here, I'll circle it here. This is currently shaded orange, which means it's in Russian control.
Here we have the Dnipro River, running through Kherson is down there in the south, that strategically important city.
Now, one day later, take a look at a very similar map, dated October 4th. This is that same region. But then, one day later, this is now shown in
white, which means it is back in Ukrainian control, again, the same place down the Dnipro River and here is Kherson down there, just to locate you.
So that shows that Russia even though the spokesperson for the Ministry of Defense that conducted this briefing is not -- is having to acknowledge
this, it cannot ignore the fact that it is losing this territory, very telling that you heard today, the Kremlin spokesperson Dmitry Peskov saying
that he couldn't really confirm the actual borders of the regions that Russia has now annexed. President Putin signing that into law today, but he
did say that there are certain territories that still need to be returned.
And I'm going to take you over to the eastern front now. This is the battlefield overview, as you see, and we're going to go over Alison to the
eastern front if we can. Here it is, because very significantly as well, today we are seeing Ukrainian forces, social media pictures are showing
moving into the Luhansk region, very strategically important for Russia, again, one of those regions that they claim to have annexed illegally, of
course, on international law, but it has been fully in Russian hands. They claimed at the beginning of July.
We know they've been losing territory down here in Donetsk and of course, there is massive counteroffensive by Ukraine up in Kharkiv, so very
significant that they are moving into Luhansk and a pro-Kremlin journalist embedded with Russian forces there said that he doesn't think that they
have the manpower to hold off a Ukrainian advance -- Alison.
KOSIK: All right, Clare Sebastian, thanks for all of that great context.
The US is accusing the world's biggest oil producers of aligning with Russia after announcing a major production cut. Higher oil prices threaten
to erase any progress that's been made on curbing global inflation.
This summer's warm weather brought along with it falling oil prices and some relief from rising inflation. Brent crude steadily dropped from a June
peak, but now the weather and the downward trend are changing. Crude oil is up almost 13 percent over the last week alone. OPEC's cut looks at to push
it even higher.
A strong US dollar is contributing to inflation in other countries -- oil, food, metals are all dollar denominated commodities and that is making them
even more expensive on the global market.
Let's talk more about this. I want to bring in Elsa Lignos. She is a foreign exchange strategist at RBC and she joins us now from London. Great
to see you.
ELSA LIGNOS, FOREIGN EXCHANGE STRATEGIST, RBC: Great to see you, too.
KOSIK: Let's talk about these higher oil prices, Elsa and how they contribute to inflation directly. How is what OPEC+ is doing going to make
the Federal Reserve's job even more challenging?
LIGNOS: Well, the challenge as you rightly highlighted is that so many of these commodities priced in dollars and form a big part of headline
inflation, not so much core inflation, but the second round effects also matter to consumers.
It puts political pressure on governments and it puts pressure on Central Banks that then have to respond with higher rates, even as economic
activity is slowing down.
KOSIK: Yes, this is certainly going to make, you know, because oil is traded in dollars, it's going to make it really difficult to keep inflation
in check globally, isn't it?
LIGNOS: Absolutely. And I think beyond that, it also tightens financial conditions for a lot of countries outside the US. Now, the Federal Reserve
is the Central Bank for the US, but of course, the actions they take have an impact on the rest of the world. We see that effect in an emerging
market, we also see it in a lot of G10 markets.
And so the strength that we've seen in the US dollar year-to-date, has this flipside, the weakness in a lot of emerging markets and G10 currencies.
Let's put a lot of pressure on, for example, borrowers that had borrowed in US dollars, and now have to pay that back in much more expensive terms.
KOSIK: What do higher oil prices mean, Elsa, for your expectations about, you know, about the Fed's rate path going forward? Could this cause the Fed
to pursue an even more aggressive path? I mean, many would say that it is already being aggressive, but now that its job is becoming more difficult.
LIGNOS: Right, so, I think the really interesting conversation at the moment, the one that's been dominating markets, certainly in the last few
days, if not weeks, is the question of a Fed pivot again, you know, will the Fed switch up its approach take a slightly softer approach, given the
slowdown in economic activity, when oil prices move higher, it becomes a lot harder to envisage that Fed pivot, you know, even if economic activity
is slowing down when higher oil prices are putting pressure on inflation.
The Federal Reserve really has to keep rate hikes going until they are absolutely sure and convinced that inflation is moving lower, and sadly,
that it is premature at the moment in their eyes to make that call.
KOSIK: And focusing on raising rates to cool inflation, do you think that Central Banks have overlooked the importance of maintaining stable
LIGNOS: Well, when it comes to, for example, the US, because so many commodities are priced in US dollars and because actually a lot of US
exporters sell their goods in US dollars, the strength of the currency doesn't pose the same kind of problem it might for other currency for other
And so yes, Central Banks have to take into account you know, the strength of the currency or the weakness of the currency when looking at the
inflation outlook, but outside of the Federal Reserve, the tools that the Central Banks have in order to affect the currency are actually fairly
You look at the Bank of Japan trying to intervene to support the yen, and you still see a lot of weakening pressure on the Japanese yen because they
just can't keep pace with the interest rate rises in the US.
KOSIK: All right, Elsa Lignos with RBC. Thanks so much for your perspective today.
After the break, Norwegian Cruise Line is adding to its fleet as its COVID restrictions come down. We will be talking with CEO, Frank Del Rio aboard
its newest ship.
KOSIK: Welcome back, I'm Alison Kosik. Wall Street is trying to extend its two-day winning streak. The major averages have just turned positive after
opening the day lower.
It hasn't been a great day for Norwegian Cruise Lines. It is down just under 1 percent. The stock has been pummeled this year. It's losing 40
percent of its value. That reflects a broad decline for the cruise line stocks as the industry tries to bounce back from the pandemic.
Norwegian Cruise Line is trying to turn that around. This week, it ended its COVID rules for passengers. It is also expanding its fleet. In August,
it christened the Norwegian Prima, the first of six vessels of this class.
These are live pictures now of the ship docked in New York Harbor. It is right near Hudson Yards, CNN's offices. The company reported a 65 percent
occupancy rate in the second quarter. That is up from 48 percent in the first quarter.
Frank Del Rio is the president and CEO of Norwegian Cruise Lines. He joins me from aboard the new ship.
So glad you can join us today.
FRANK DEL RIO, PRESIDENT AND CEO, NORWEGIAN CRUISE LINES: Thank you for having me, Alison.
How are you?
KOSIK: I am doing well. I bet you're doing better, sitting on a beautiful cruise ship. I want to hear more about it. I know it was christened in
Iceland last month. It made its transatlantic journey to dock right here in New York. Talk us through why the ship is such a standout for you.
DEL RIO: I wish you were here to see it for yourself. We are very excited to have Prima here in the U.S. today, making her American debut in New York
City, of all places. This is a special vessel, given her size. No vessel of this size has ever been built to this height standard.
It is part of the strategy of Norwegian Cruise Lines to elevate the product, to be in a class of its own. If you are on board and you walk
around and you saw the staterooms, her suites and the public spaces, the bars, the restaurants and all the fun things to do on board, think of a
three-decker 1,200-foot-long racetrack.
The Galaxy Pavilion has every virtual reality and AI assisted game that you could think of. You will get the idea of why this ship is so special. And
frankly, why it's selling out at a rapid rate.
KOSIK: I know you need that. I know the cruise industry as a whole was hit hard because of the pandemic. Ships stopped sailing.
Is Norwegian Cruise Lines still working to recover?
DEL RIO: I think the whole industry is -- look, we were shut down not a little bit but for 500 days, zero revenue. It takes quite a while to put
Humpty Dumpty back together again, if you. Will
But we were the first major cruise company to bring back our entire fleet of all 29 vessels. We are operating now with full capacity. You mentioned
earlier 65 percent load factor in Q2. We will do a lot better than that in Q3.
And as we look forward, each successive quarter is getting better and better. We think we will get back to pre-COVID levels of occupancy in 2023.
We think we have a very good opportunity to have a record financial year in terms of profitability.
So things are looking up for the cruise industry. It has been a long haul. But we are resilient. We are a resilient company. With new assets, new
ships like Norwegian Prima and three additional vessels coming online next, year one for each of our brands, we feel highly confident that we will be
KOSIK: Just like other cruise lines, they are dealing with carrying a lot of debt because of the pandemic.
Billions of dollars in debt.
How much debt is Norwegian Cruise Line carrying?
How much of a concern is that as the Fed aggressively raises rates that debt to carry is becoming more expensive. Investors are certainly
concerned. We did see the stock drop a bit after the Fed made its most recent rate hike.
DEL RIO: Look, we did add a lot of debt. We also floated chairs and our shareholder base came through. We think we will be able to delever by about
a point per year for the next three years to get back to where we were.
It was near investment grade about three times. Our cash flow is strong. As long as we continue to fill our vessels at the highest prices in the
industry, by a very wide margin, we are going to generate that cash flow needed to delever the balance sheet.
DEL RIO: By the way, you mentioned, the vast majority of our debt is fixed. We are not suffering from the additional high interest rates that
we're seeing today. Our rates are fixed over a 12-year period.
KOSIK: There is also inflation to contend with along with higher diesel prices. Talk me through how those rising costs are cutting into Norwegian's
DEL RIO: Rising costs are a double edged sword. Inflation is a dirty word. The positive word is pricing strength. We have pricing strength.
As I mentioned earlier, we have the highest prices in the industry. We continue to raise prices. We command a premium because of our products like
Norwegian Prima. Yes, there is pressure on the cost side. Fuel is up.
Your prior guest was talking about fuel. The cost of every commodity you can think of is up. But we think that our pricing strength will overcome
those pressures. And I don't think those cost pressures are forever. I already see, as we look into the horizon, how costs are coming down,
especially in commodities, food costs, et cetera.
So while we think there might be some near term deterioration of margins, we feel very confident that, over the next year or two, the pre-COVID
margins will return.
KOSIK: Frank Del Rio, CEO and president of Norwegian Cruise Lines, the ship looks beautiful.
DEL RIO: I heard you're a cruise aficionado. You will have to come cruise with us soon.
KOSIK: I am, straight from Miami. Cruise all the time. I will think about. It
KOSIK: You got it. Thanks again.
It needed to be the speech of her life after a chaotic start to her premiership. Today's on from a stunning new turn over a tax cut for the
wealthy. British prime minister Liz Truss holds her party's annual conference, she has the plan to get the economy firing.
(BEGIN VIDEO CLIP)
LIZ TRUSS, U.K. PRIME MINISTER: I have three priorities for our economy, growth, growth and growth. The fact, is that the abolition of the 45 p tax
rates became a distraction from the major parts of our growth plan. That is why we are no longer proceeding with it. I get it and I have listened.
(END VIDEO CLIP)
KOSIK: Right now, British growth is in short supply. This is how the G7 nations stack up when you compare their second quarter GDP to pre-pandemic
levels. The U.K. is trailing the pack. The U.S. and the Eurozone are both growing faster. Bianca Nobilo is in Birmingham, where the conference was
So what is the reaction here?
Did she deliver it in her speech?
Has this become, it's better to have a fifth prime minister in six years or just stick with the damaged one?
BIANCA NOBILO, CNN ANCHOR AND CORRESPONDENT: That is a very difficult question for a lot of Conservative MPs at the moment. I characterized her
speech as a qualified success, that because she managed to inspire and allay some concerns that were emerging in her own supporters.
They felt like they were impressed by her personal overtures. She spoke about the sexism she endured as she was growing up and wanting to have
opportunities and being one of the working people herself.
That she was a grafter and not a member of the elite. And that went down well with some people. But her detractors would say that there was no
substance to the speech.
There was definitely no news lines or new policy agendas. She stuck firm to her economic principles of low tax and high growth, wanting to expand that
economic pie in her favor.
And talking about how important it is that she wants to get the country through this tempest, as she described it. She did note, Alison, that
disruption was a natural part of change and adjustment. I don't think that is something that would be received particularly enthusiastically by the
Indeed, by some of her own party and probably the public at large acknowledging that there is probably is going to be more instability and
more turbulence as she moves forward with her plan.
She wants to do something different. She wants to change the status quo. But generally, I think the expectations were met. The prime minister has
low expectations in terms of her communications skills. She's not known for being particularly charismatic and being able to wow a room with her
So most people were pleased by this. But I should caveat that by saying a lot of MPs weren't in the room and weren't even watching the speech. Those
who were far away, and she has got herself into a particularly different political situation not only because she's eroded some trust in her
But also because political power is a relative thing and the Labour opposition party has gained a huge amount of momentum in recent weeks and
clawing that back for Liz Truss, who is now on the shaky political ground just a month in, having questions about her own leadership, is going to be
a monumental task.
KOSIK: Bianca Nobilo, thank you for all that.
That's QUEST MEANS BUSINESS, I'm Alison Kosik, on Instagram and Twitter at Alison Kosik. I'll be back at the top of the hour.
KOSIK: Hello, I'm Alison Kosik. It's the dash to the closing bell. We're just two minutes away.
Wall Street has been trying to eke out some gains. The Dow was down around over 400 points, now down around 68 points. The S&P 500 and the Nasdaq
briefly climbed into positive territory. But in the last few minutes of trade, we've seen them slip back into the red.
OPEC's planned oil cuts are now clouding the economic picture. I spoke to a foreign exchange strategist for RBC, Elsa Lignos earlier. She told me the
one question she says is defining markets.
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ELSA LIGNOS, MANAGING DIRECTOR OF FX STRATEGY, RBC: Will the Fed switch up its approach, take a slightly softer approach, given the slowdown in
When oil prices move higher, it becomes a lot harder to envisage that Fed pivot. Even if economic activity has slowed down, when higher oil prices
are putting pressure on inflation, the Federal Reserve really has to keep rate hikes going until they're absolutely sure and convinced that inflation
is moving lower.
And sadly, it is premature at the moment in their eyes to make that call.
KOSIK: That is your dash to the bell. The bell is ringing here on Wall Street.