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Quest Means Business
Labor Market Robust In November Despite Recession Fears; EU Set to Cap Russian Oil Prices At $60.00 A Barrel; Slow Return Of Visitors Post- COVID At The National Gallery; Letter Bombs, Bloody Packages Sent To Ukrainian Embassies; Right-Wing Conspiracist Alex Jones Files For Bankruptcy; Uruguay Going Home Despite 2-0 Win Against Ghana. Aired 3-4p ET
Aired December 02, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: An hour to go before trading finishes on Wall Street at the end of a long week, and the Holiday season
starts. We're into December. And where a better place for us to be tonight than at the National Gallery in Trafalgar Square in London, a perfect place
for us to start to get into what is going to be a great evening on QUEST MEANS BUSINESS.
The markets, let me show you how now trading at the moment. They are doing virtually nothing, bits and bobs and bits in between is how the Dow is.
Little changes, up seven points. It had been very sharply lower as you can see, but it has now rallied back up again.
The markets and the main events of the day: US strong wage growth. It is giving a worrying sign for inflation. If wages are going up, can inflation
be far behind?
Europe is agreeing Russian oil price caps at some $60.00 a barrel.
And the World Cup Group Stage is coming to an end. Now, is it going to be Serbia or Switzerland that will proceed?
Live from London's National Gallery in Trafalgar Square on Friday. It's December the 2nd. I'm Richard Quest. And in London, I definitely mean
As I say, we are tonight in Trafalgar Square. I suppose you could say QUEST MEANS BUSINESS, Quest means the start of the Holiday season. We are here,
and to give you an idea, of course you'll be very familiar with this. There you have the Christmas market, Big Ben off in the distance. There is Nelson
on top of his column in the middle and the Christmas tree, which in London always looks a little skinny. But that is the National Christmas Tree in a
sense, and that is what we're going to be talking about, not Christmas trees as such, but we're going to be talking about the economy.
And we're also here, of course, at one of the world's great art galleries and museums, London's National Gallery, whom we're very grateful for having
let us interlope onto their balcony overlooking.
We begin tonight, though, with very interesting economic numbers from the United States. The US added some 263K, more than a quarter of a million
jobs last month, more than expected even though the unemployment rate stayed steady at 3.7 percent.
There were high-profile layoffs in a variety of industries across the board, if you will. You can think of those layoffs rather like this
splendid artwork, which is on display here at the National Gallery, The Great Ruston Railway, it is.
And so the labor market is very similar. It is chugging along in its own slow way, but reminiscent of many times moving forward, despite hazards on
Uncertainty is all around, but it's getting there nonetheless.
Matt Egan is with me. Matt, this number is interesting, because what does it suggest when it comes to the next interest rate rise in December, later
MATT EGAN, CNN REPORTER: Richard, it suggests that the Fed has a lot more work to do. If you're sitting in the Federal Reserve this morning, you were
hoping for a Goldilocks number here, right? You don't want it to be too hot because that would fan inflation. You don't have to be too cold because
that would suggest an imminent recession, but we really didn't get Goldilocks.
This number is hot, right, 263,000 jobs being added much stronger than expected, and the Fed is not going to be happy with the wage numbers, up
5.1 percent year-over-year for wages. Now, for some context, that is twice the pre-COVID pace.
The expectation was that wages would cool off, they did not They heated it up and so Richard, this is going to keep pressure on the Federal Reserve to
continue to raise interest rates. They've been slamming the brakes on the economy.
It is possible they take their foot off the brake just a little bit by going with a 50-basis point hike instead of 75, but still, they're going to
have a lot more work to do here.
QUEST: You know, you talk about thinking about when, earlier in the week with Jay Powell's speech, he made it clear the work wasn't done. He
probably had a good idea, this number was going to be hot. He also made it clear they would do whatever it takes.
In that scenario, there is that argument for three quarters of a percent, really to show because anything less than that could suggest weakness.
EGAN: Right, Richard. You know, the market is still pricing in about a one in four chance of going with 75 basis points at the upcoming meeting. I
mean, keep in mind, that would be the fifth straight time of going with 75 basis points, pretty unthinkable.
But markets are still leaning towards 50 basis points right now, because Fed officials have signaled that they do want to slow the pace of these
hikes because they are moving very quickly right now.
But the question is, you know, what is this due to the risk of a recession? Because there is nothing about today's numbers that speaks to an imminent
recession, right? We saw across the border demand for hiring. These are really strong numbers.
But it does mean that the Fed may have to keep raising interest rates and may have to go higher, and may have to keep them at a high level for
longer. And all of that raises the risk of a recession. Not right now, maybe not even in the first half of next year, but perhaps in the second
half of 2023 or 2024.
QUEST: Matt Egan in New York. Thank you.
Vincent Reinhart is with me, Chief Economist, BNY Mellon Asset Management arm joins me from Boston via Skype.
So, Vincent, when you look at this number, which camp are you in? Fifty or seventy-five basis points in December?
VINCENT REINHART, CHIEF ECONOMIST AND MACRO STRATEGIST, MELLON: Well, today's numbers just worsened a preexisting problem for the Federal
Reserve. Whenever markets are too taut, cost pressures are feeding into inflation, but I still think they'll do 50 basis points, because they are
past the first stage of the policy firming process, make a lot of loss ground up.
They've done that with their for three-quarter point hikes. The next stage is the Battle of 2023, get rates to a level you're sure is tight, and then
hold them there.
They can make up for a smaller increase on December 14th by just staying there longer when they ultimately get to that plateau next year.
QUEST: So why is employment growth still so strong when, you know, to all intents and purposes, the break has been stomped on? What is driving,
in your opinion, this employment growth?
REINHART: Well, I think the brakes may be soft. That's a problem for the Federal Reserve. They've tightened financial conditions, but not all that
much, because in part, market, participants are still hopeful that the Fed will not go to that higher level of rates and could very well reverse
course in the second half of next year. That's what's the term structure is telling us.
So part of it is about financial conditions. They've got to be tighter.
Part of it is that there is a lot of retained saving from all of that government largess 2020-2021, and even into 2022. Households have about
one-and-a-quarter-trillion dollars stocked away, States and municipalities probably have close to two-thirds of trillion dollars that allows them to
keep spending even as the termites do their work in the basement.
QUEST: And as we forecast forward, the scenario at the moment, higher rates for longer. I guess we are looking at a recession mid to late next
year, because it is starting.
REINHART: Next 12 months, recession is quite likely.
QUEST: . to seem, Vincent that if we don't -- yes, yes. Because what it is starting to seem like is, if you don't push that hard, you're not going
to get inflation down.
REINHART: And here is the problem, if you put it in economist speak, the business cycle is nonlinear. The good times tend to be small net increments
to spending and jobs.
But when the bad times come, it's sharp, it's sudden, and it's large. So, we can turn the corner and find out we are in recession anytime in the next
QUEST: Are you satisfied with what you see at the moment by way of the either Fed policy on the rate or in which they are talking the
communication strategy? Do we know, bearing in mind what we heard from Powell this week, does the market know enough of where the Fed's mind is at
REINHART: I don't think the market is quite convinced that Jay Powell is willing to stay the course even as paying starts accumulating. Now, if
you're talking about Fed policy from a bigger picture, we start complaining about them starting too late and too slow.
But four three-quarter point hikes later shows a certain amount of resolve. They have to continue that resolve next year by willing to stay at that
plateau, and Powell's main job and you'll hear it a lot at the December FOMC meeting is convincing market participants that they will hold at that
plateau, regardless of incoming data turning adverse.
QUEST: Vincent Reinhart, we're here in London, I'm grateful to you talking to us in New York. Thank you, sir. We'll talk more as things have
The EU has finally reached a consensus on its oil price cap, $60.00 a barrel is the number they have gone for. They managed to get an agreement
after Poland dropped its objections. Now, it's all to be adopted on Monday if things go according to plan. That's when new import ban takes effect.
It's only going to affect Russians seaborne oil. Ursula von der Leyen announced the deal and says it will help Europeans whilst hurting the
Kremlin at the same time.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: This price cap has three objectives. First, it strengthens the effect of our sanction. Second,
it will further diminish Russia's revenues. And thirdly, at the same time, it will stabilize global energy markets because it allows some Russian
seaborne oil to be traded, brokered, transported by EU operators to third countries, as long as it is sold below the cap.
(END VIDEO CLIP)
QUEST: Marc Stewart is with me in New York.
Marc, it would be torturous to get a deal, but they have of sorts. Poland and Hungary going along with it. What was the price for that?
MARC STEWART, CNN CORRESPONDENT: Look, Richard. Not everyone was happy about this price and there was a lot of negotiation in place, but at the
end of the day, this is something that the EU, the G7 nations seem to be happy with, and this is basically an attempt to punch out Russia from all
different sides possible, not necessarily to topple Russia, because it does control about 10 percent of the global oil supply, but to leave some kind
Now, as you mentioned, there has been a lot of debate among member nations as to how much was enough. You mentioned Poland, I believe. We heard from
Estonia's Foreign Minister today, who said that the intent was right, but the delivery may not have been on target.
Earlier, when this discussion began, we heard from Ukraine's President Volodymyr Zelenskyy who said $30.00 a barrel. So, it is this type of
balancing act, but it is one that at the end, they feel that the $60.00 price cap, if you will, it is one that everyone can agree with.
It is also getting the approval of the United States. So, we'll have to see as far as the sting or the impact, likely come Monday, but it will still
take several days to see if this is going to have some kind of broader ramification.
QUEST: Right, and of course, the logistics of the way it operates in the secondary market and also in terms of third party and third countries makes
it highly unusual.
It is by no means clear, it is going to be that effective.
STEWART: Right. This is really a targeted effort to try and help out developing countries, smaller nations that are now part of this bloc, so
that they could still get oil supply, but also to let Russia know that the rest of the world isn't too happy with it.
And as you mentioned, there are a lot of issues about transport of oil and that's really what this boils down to.
A lot of smaller nations depend on European resources to move their oil supply from Point A to Point B, and this is what this is specifically
QUEST: Marc Stewart in New York. Marc, thank you.
So as we continue tonight, after the break, the National Gallery, which are my kind hosts tonight, we are on the balcony just outside the Gallery in
this Special Edition of QUEST MEANS BUSINESS.
Behind me, I think if I turn this way, you get perhaps the best view. There is Trafalgar Square, Big Ben off in the distance, Nelson's Column, and the
magnificent -- just the Christmas market. And interestingly, these Christmas markets are relatively new tradition here in Trafalgar Square.
I think for the first time, oh, it is the beginning of December, I'll grant you, I'm feeling just a little bit festive.
We'll have more after the break.
QUEST: The National Gallery are our hosts tonight.
You can see I'm on the magnificent -- I am sure it has got an official name. I'm just going to call it the balcony, but I'll be put right before
we're finished. But it is the heart of London and it's the heart of London in more than just geographical and physical presence.
In two years, it celebrates its bicentenary, and the National Gallery is very much at the heart of the cultural life of Britain, too.
QUEST (voice over): Its mission is simple, free art for all.
The National Gallery houses one of the world's foremost art collections in the beating heart of London, and getting in, admission won't cost you a
The building is flanked by iconic landmarks. Big Ben over there, Buckingham Palace down the road, Trafalgar Square on its doorstep.
This central location chosen so that all classes of Victorian London could admire the wonders of paintings from the most consequential artists of
Through the delicate pastels of Van Gogh's "Sunflowers" to the serenity of Monet's "Water Lilies."
And those Baroque masterpieces of Rembrandt.
It was also, too, the home of the most expensive painting ever to be sold at auction. Leonardo da Vinci's "Salvator Mundi" hung proudly in the
Gallery in 2011. It was sold for more than $450 million at Christie's in New York in 2017.
UNIDENTIFIED MALE: And the piece is sold.
QUEST (voice over): World class art all under one roof, standing the test of time.
At war time, the Gallery was bombed nine times during the Blitz. Several priceless pieces had to be evacuated to Wales. And most recently, during
COVID, the Gallery's Director, Gabriele Finaldi joined me in 2020 as one of our voices of the crisis.
GABRIELE FINALDI, DIRECTOR, NATIONAL GALLERY: It's a big question for all the cultural sector because we've all been very hard hit. We depend on
audiences. If you're a small theater, you're in great difficulty, you're living hand-to-mouth anyway; if you're a big museum, your financial model
depends on large numbers of people coming through the door, and we're not going to see that for quite a while.
QUEST (voice over): Looking forward, the Gallery celebrates its bicentenary in 2024. Future projects include a new research center, which will be
dedicated to educating future art historians.
Everywhere you look, it shows a longstanding commitment to illuminating art, and educating us all.
Richer Quest, CNN, London.
QUEST (on camera): That Monet in the second to last picture there, that's my favorite. I was having a quick look. It's a little bit big for my living
room, but I'll take a poster any day.
I'm so glad that we're able to come back here to the National Gallery. As a voice of the crisis, as you know, I was -- I'm slowly working my way
through all the places that I've promised we would visit.
And now the National Gallery's post-COVID recovery is really quite remarkable. They had 1.1 million visitors in '21-'22. Five million
beforehand, but that's okay. That's okay.
If you think about it, barely a quarter of a million during the pandemic. So slowly, but surely. This is the tale, slowly but surely, people are
Christine Riding is with me, the Head of Curatorial Department at the National Gallery. And thank you for the tour.
CHRISTINE RIDING, HEAD OF CURATORIAL DEPARTMENT, THE NATIONAL GALLERY: My pleasure.
QUEST: I assure you, I've left everything on the walls.
RIDING: Very good. Thank you very much.
QUEST: It's wonderful just to feel with the Christmas spirit, and I'm amazed, you're open late on a Friday.
RIDING: Which is quite normal for museums in London, and we've been doing it for some years now, but it has become a real feature of people's Friday
night, because we often have free events and we've got the exhibitions on.
At the moment we have Lucian Freud, where we've actually said to the public that they can pay what they like, pay what they can afford, and come to the
QUEST: For the first time, I'm thinking with so much economic woes and all of that, but there is a feeling of things are getting better. I mean,
the people are here. The Holiday season is upon us.
RIDING: I know, and it is certainly behind us. You and I wandering around earlier on and the galleries are really packed, aren't they? Lots of people
milling around, looking at art and having, you know, a fan or a moment of contemplation, I think it's a really great thing for the Gallery.
But also obviously, we are free to get into, which is very important in terms of the access to the collections that we look after, and an important
part of our exhibition program, too.
QUEST: How do you manage that? To be free. You're part of the national institution. There are other galleries worldwide. Look, our viewers will
remember, we were at The Met earlier in the summer, who talks about the same sort of things.
It's very difficult for museums and galleries like you to compete today. Deeper pockets elsewhere.
RIDING: Well, as a national institution, we do actually get grants and aid from government, so that's a crucial financial support. We're also
supported through the public going into our commercial army, to our restaurants, our shops and so on paying tickets to go to exhibitions. But
we're also very grateful for the support that we get from private donations and foundations and so on, especially as we're going into a fundraising
campaign for our 200th anniversary in 2024.
So, we just have to be very agile, very proactive, but also just remain relevant to the public, to people who want to support what we do are, very
excited by what we do.
QUEST: And you are still adding to the collection. I think people often -- you look somewhat aghast when I suggested this earlier, that you're at
it. I mean, people think that older institutions sort of just rest on the famous picks that they've already got on the wall.
RIDING: Now again, we're very fortunate we actually have funding that's restricted funding specifically for the acquisitions works of art. We're
always looking to expand the collection, both to build on the depth and breadth of certain areas of excellence.
You know, for example, Dutch and Flemish and Italian renaissance, but also actually plug the gaps, you know, because actually, the collecting history
of the National Gallery sometimes has been quite patchy.
So we sort of, you know, are acquiring masterpieces, but just trying to tell that story of Western art as this comprehensive way as we can.
QUEST: And you've still got to be attractive to younger a generation.
RIDING: Yes, that's right.
QUEST: What's the best way so this doesn't become a museum?
RIDING: Well, I think attracting younger audiences is to basically create platforms and content that they actually engage with and are excited by. I
mean, we really expanded our digital offer during COVID.
I mean, if there was something positive that came out of the COVID period, it was the way we expanded that content. Online talks, most of which were
free, all our learning content went online.
We did conferences online, and so on; but also, it is also about exhibition programming. Our contemporary art program, for example. We had Kehinde
Wiley who was with us. He is obviously a very famous American artist, not so well known in the UK. But the audience that came to that show, which was
free was 160,000 people and a very young and a very diverse audience.
QUEST: The National Gallery has some very famous works.
QUEST: The Monet's that you showed me.
RIDING: Well, Van Gogh --
QUEST: Van Gogh, and by the way, the "Sunflowers" are looking okay.
RIDING: They are all fine.
QUEST: After being attacked. The Rembrandt's -- do you -- people like me like to come-- I'm afraid I'm a bit of a heathen. I like to come to look at
the famous pictures.
RIDING: No, absolutely. And actually, people should come to the Gallery and really do what really suits them. They might pop in just to see one of
their favorite works of art, they might wander around on one of our art tours and follow a route that actually is about landscape, you know, which
is a lot about, you know, slow looking and healthy well-being.
I think, really, because it's free to get into, we really want people to use it for whatever really, you know, excites them and gives them pleasure.
QUEST: Final question and it is Christmas, you know.
RIDING: I know it's Christmas.
QUEST: And I've been given permission to say, you can have one work of art, which one is it going to be?
RIDING: Oh, well, I think you showed earlier on, I'm particularly fond of "The Fighting Temeraire."
QUEST: "The Fighting Temeraire."
RIDING: Yes. And as you know, I'm a British art specialist, so I'm afraid I'm going to take that home with me this evening.
QUEST: Wrap it. She will pay the 10 pence for the bag. as well.
It was very kind of you for joining us. Thank you so much for joining us tonight.
As we continue tonight, World Cup high drama on the pitch.
South Korea has beaten Portugal, but what does that mean?
In a moment, QUEST MEANS BUSINESS live tonight from London.
QUEST: Hello, I'm Richard Quest in London. There's a very good street musician playing and I'm tapping along (INAUDIBLE) at the moment. But we'll
get to him and we'll get to everything else and more QUEST MEANS BUSINESS. We're also going to be talking about the upsets in the World Cup. Don
Riddell is in Doha where it's warm. I'm in London where it's raining and cold, but South Korea has beaten Portugal and Uruguay has gotten knocked
And U.K. hospitality sector, we'll speak to the founder of Cobra Beer and about parties and celebrations and the British economy. We'll get to all of
that in just a moment. Only after I've updated you because this is CNN and on this network the news always comes first.
Ukraine says it's tightening security at all of its embassies and consulates to deal with a wave of suspicious mail (INAUDIBLE) embassies in
Europe receive blood-soaked deliveries this week, some contained animal eyes. Ukraine's foreign minister says the packages are meant to intimidate
Infowars host Alex Jones has filed for personal bankruptcy in the U.S. The right-wing conspiracy theorist was found liable for claiming the Sandy Hook
School shooting was fake. He owes the victim's families more than $1.4 billion. A lawyer for the families has called the bankruptcy filing a
cowardly move. Excuse me.
Indonesia may outlaw extramarital sex as part of a sweeping Criminal Code reform. The new code would also have been insulting the president or
expressing views counter to state ideology or form is expected to pass parliament and would apply to citizens and foreigners alike. And Sir Elton
John's very last U.K. performance is going to take place at the famed Glastonbury Festival. The legendary musician will headline the festivals
final night. He's in the middle of a monumental 300 concert tour that he says will be his last
It is the last day of the group stage at the World Cup. So, get your abacus out because we need to work out to the final lot going through. We know
South Korea's through after they beat Rinaldo's Portugal two-one. There are two games at the moment. Serbia versus Switzerland, Brazil versus Cameroon
who are fighting for the last spot. Don Riddell is toasting in Doha. I won't hold that against you, Don, compared to rainy London. But where do we
stand in the games?
DON RIDDELL, CNN SPORTS ANCHOR: All right. So, as you say, Richard, it's the last round of group matches. And let's just show you the -- as it
stands, group table in group G and then we can kind of figure it out from there. Richard, last night, you and I were all over the place trying to
figure what was going out, figure on what was -- figuring out what was going on. So far, this could be a little bit more straightforward.
Brazil had already qualified as -- and they are currently in a goalless draw with Cameroon with about 15 minutes to go. Switzerland are beating
Serbia. Switzerland are the only other team in this group apart from Brazil who are already through who if they win, then they don't need to worry
about anything else. So, as it stands, Switzerland are doing everything.
They need to do Cameroon and Serbia going home. But let's show you what happened earlier Group H because this was just extraordinary. I need to
kind of get my ducks in a row to figure out how I'm going to tell the story. But we'll start with Ghana-Uruguay. Bit of a grudge match these two
go way back to 2010. Ghana had a penalty saved early on Andre Ayew and then Uruguay scored twice in the span of just seven minutes.
Giorgian de Arrascaeta with both those goals. Meaning that Uruguay took a two-nil lead. And so, at about this point, they were thinking it was all
going pretty sweet especially since in the other game, which we can show you now. Portugal had taken an early lead. Portugal already through. They
were a goal up against South Korea. But then Kim Young-gwon equalized for the Koreans. And as this game headed to its conclusion, it was one all.
South Korea were going out until Hwang Hee Chan scored that extraordinary goal. So, they now were in a position to go through but they had to wait
for the Uruguay-Ghana game to end because if Uruguay scored a third goal, Korea would be out but that didn't happen. So, Korea went through and
you're now seeing their amazing reaction. Absolutely wonderful to see the scenes. But of course, for every winner there's a loser, so now let's go
back to the Uruguay game because then they realized what had happened.
And Uruguay and their players were absolutely devastated. That's Uruguay star striker Luis Suarez. Imagine that, I mean, this has just been one of
those World Cups, Richard, when you think is one thing and it turns out to be something else. Uruguay thought they done it all. And then right at the
end, South Korea snatch that away from them. Here is the group. Portugal, Cristiano Ronaldo's Portugal winning group H with six points, Korea second
place with four, Uruguay and Ghana going home.
And it was all about goals scored in the end, and it was a nail biter to say the least.
QUEST: Don, do you make of the group stage? I mean, it's sort of the next stage as we go to knockout always seems perhaps a little bit fairer. But
when your ability to proceed relies on so many variables, of which you have no control over whatsoever, but I can't think of a different way of doing
RIDDELL: Well, you do have control over it because it's decided over three games. And it might seem as though it's decided over the last 45 seconds in
the third game. But actually, if you go out and win all your games, and you've got nothing to worry about if you go out and not ambitious or
adventurous or frankly, if you're just not good enough, then it is going to come down to these very, very fine margins. But I have to say, it's highly
And this is being debated right now, Richard, the next World Cup in four years' time has more teams in it. And the plan is to have groups of three,
which means you're not going to have all this drama in the last game. And there's an awful lot of talk now, especially over the last couple of
nights, which have been so entertaining that it's going to be a crime if we don't have this kind of setup in the next World Cup in North America and
So, I think it's a great system. The drama is what we all love, and that's why we enjoy live sport. But it can be a little bit confusing at times.
There's no doubt about that.
QUEST: Don Riddell, thank you, sir. You're a hard man. I'm much more -- I'm much more lenient on these matters, but good for you, sir. Thank you. Don
Riddell in Doha.
Now, tonight, as you can see, I am in front of the Christmas tree here in Trafalgar Square in London. Would you want to know a little bit about it?
Well, this Christmas tree has been donated by Norway, which has been donating Christmas trees to London every year since 1947. However, when it
arrived, it caused a bit of a stir. People chimed in on Twitter. They said it looked threadbare. Some called it half a tree, not for the first time
has it been criticized.
In fact, the truth is -- the truth is this tree gets criticized every year because unlike the one in the Rockefeller Center, which is big and bushy,
the one that Norway gives to London is always a nice, slender, thin little thing. And as a result, people say, that looks pretty anyway. I'll be back
after the break. Let's make (INAUDIBLE)
QUEST: To the United States now where President Biden is meeting Prince William. They are in Boston at the John F. Kennedy Library. And now the
Prince of Wales is not attending. That talk continues with the earth shot ceremony tonight which Prince William founded initiative. However, of
course, the controversy back home over racism continues to simmer on regardless. Priscilla Alvarez is with me from Boston. You know they can't
get away from it, can they?
The events back home just won't leave them alone and they're trying to set a different agenda on this tour. This well publicized a much look forward
PRISCILLA ALVAREZ, CNN REPORTER: Well, as you mentioned, Richard, this was a multiday visit and it was controversy at home that brought -- found it --
found themselves here as you mentioned that racism controversy happening over back at home where a senior royal aide had said to a black guest at
Buckingham Palace. Where are you from? Now the palace has condemned that and the aid has resigned but while they were here in the United States, the
Prince and Princess of Wales were followed by that controversy.
Now today in the building behind me the JFK Library. Prince William met with President Biden it was a brief meeting and the president has already
left the building. But they were expected to talk about climate change and mental health and it is climate change as you mentioned there in the
beginning that brought Prince William and Princess Kate here to Boston. They have the Earthshot Prize award ceremony tonight.
That is an initiative founded by William to tackle environmental challenges and it is one that will be headlined by singers like Billy Eilish and Ellie
Goulding. Now, of course, President Biden's visit coincided with the royals here. But he is actually here to shore up support for democrats and to
attend a key fundraiser as the democrats tried to clinch another U.S. Senate seat down in Georgia. He is at a fundraiser later tonight and before
then meeting with union member. So, a busy day here in Boston, Richard.
QUEST: Thank you, Priscilla Alvarez joining me from Massachusetts. Just a moment, parties are back. This is probably the first full occasion we've
been able to celebrate the holiday season post-COVID.
With me is -- will be the founder of Cobra Beer, Lord Karan Bilimoria after the break. They kindly coming out into the cold.
QUEST: The pictures I've shown you tonight from Trafalgar Square certainly show a festive atmosphere at the moment but we mustn't let that cloud the
fact and the reality that there are some very serious economic times about to hit Britain which is already most certainly in recession. A recent
survey shows nearly half of consumers said they will spend less this holiday season with two-thirds concerned about rising costs of living.
Inflation is over 10 percent, in many cases mortgages have doubled. And a third will cut back on holiday gifts. Now into that Maelstrom, you have to
factor on hospitality industry that is also hoping for a good time because people want to relax, they want to enjoy and they want to celebrate. This
being the first proper holiday season since the pandemic. There's the World Cup excitement. The British Beer and Pub Association expects 15 million
pints to be sold on Sunday when England plays Senegal and the holiday parties (INAUDIBLE)
Lord Bilimoria is with me. The vice chair of the Confederation of British Industry. Founder of Cobra Beer. Good to have you, Lord. Thank you.
LORD KARAN BILIMORIA, FOUNDER, COBRA BEER: Very good to see you, Richard.
QUEST: You know, when we've spoken in the past over the last few months and years. It's been a down message. And this is clearly going to be a
recession if we're not already. So as a hospital -- in terms of hospitality and beer. Are you optimistic?
BILIMORIA: You just look back to exactly a year ago, we were looking forward to coming out of the pandemic and suddenly this Omicron variant was
discovered. And we had a diktat here in the U.K. and advice to work from home. The whole of Christmas was destroyed. For the hospitality industry.
December is disproportionately the most important month in the whole calendar. So compared with a year ago, when so much better position that we
have no restrictions, look at this in Trafalgar Square, the festive spirit that we have over here.
So, we're in a much better position than a year ago. So, we've got to be optimistic in that sense. The but is this, we have stagflation. We have
inflation that is so high, the highest in living memory, over 11 percent. Input costs, my own business came up at 25 percent.
You can't pass that on to consumers and then on the other hand you've got wages it -- and wanting to go up and up. And we're in danger of a wage
spiral inflation. So, stagflation in a recession, high inflation is hugely challenging.
QUEST: You and I both old enough to remember stagflation in different years, maybe well, sort of.
BILIMORIA: Well, it's one thing, the challenge of dealing with inflation, so now they encounter dealing with a recession but to deal with both of
them together is a nightmare. And what's also really -- what is really driving all this is a wretched war in Ukraine. I spoke in the House of
Lords yesterday in a debate on Ukraine. If only that war would stop, I tell you, the whole picture will change. The good news is compared with where
Britain was in September, when we have that many budgets when the pound nearly went down to parity with the dollar. Today, the pound is over 1.2.
QUEST: Now, let me ask you, what do you now make of that fiasco, that fiscal fiasco?
BILIMORIA: Well, it -- the whole -- the pipeline because the dollar is now 1.2 versus a pound, it was almost parity then. What happened was irrational
exuberance. Liz Truss and Kwasi Kwarteng, prime minister and chancellor wanted growth, wants to encourage investment, wanted to put down taxes,
That's all good news. Business was rejoicing, but they went about it the wrong way. It's not just what you do, but how you do it.
And they were -- it was done in completely the wrong way, not getting the Office of Budget Responsibility to back up their plans. They just did the
wrong thing at the wrong time, and it really caused a huge problem.
QUEST: But the fact that that could happen in a -- in an extremely mature governmental system. They didn't asak o to the Bank of England, they didn't
ask the OPR. They didn't even ask the cabinet. Isn't this almost malfeasance?
BILIMORIA: Well, if you think about it at that time, sadly, Her Majesty, the Queen passed away on the 8th of September. From the 8th of September on
to the funeral on the 19th of September, the whole world was looking up to this great country because of that great woman, that great lady, seven
decades of service, the most respected, the most famous monarch in the world. We were right up there. And then we came crashing down.
And from that mini budget until the 24th of October when Rishi Sunak became prime minister, we became almost a laughingstock in the world saying, what
is this great country doing to itself? Now we're back on track. That's stability. We've had an autumn statement, we've had a budget that has
brought in the stability, signified by the dollar-pound at the moment. I think we're in a much better position. But --
QUEST: There will be a recession.
BILIMORIA: There is. We almost definitely in a recession now. There's no question about that. On the other hand, I see optimism, the grain is
flowing from Ukraine, the port of Odessa was blocked. But thanks to Turkey and the United Nations, that grain spilling over 47 million people and
threat of starvation around the world if the chips hadn't started to go, they're going. So that gives me a little bit of hope, but of Russia agreed
to that, then we can have peace.
And Prime Minister Modi, India's taken over the G20 now. He has made a huge statement yesterday, the official taking of G20 that he wants peace.
QUEST: What do you want as a business leader? I'm thinking of the CBI and all the business organizations. What do you need now? You've got stability
back again. But the, you know, many of your workers will have seen their mortgages double.
BILIMORIA: Yes. So, what you've got now is people. Every consumer has seen food prices go up by 14 percent. Inflation by 11 percent. Mortgage is going
up. Interest rates are going up at three percent. So, workers are being squeezed, businesses are being squeezed. What we're seeing in the CBI is
allow businesses. There's a labor shortage in this country. We have job vacancies of 1.3 million, we need to be allowed to bring in workers from
abroad for the sectors of the economy that need the workforce. That's --
QUEST: A guest worker and range mentor. I mean, join a deal with the E.U., what would you do?
BILIMORIA: A deal with the E.U. definitely needs to be done. But that can't be done until we resolve the Northern Ireland protocol. So, we're saying to
QUEST: That's not going to be resolved anytime soon.
BILIMORIA: And it should be resolved. It can be resolved with this. Pragmatism and businesses want it resolved. Let's resolve the northern
protocol. Let's have a much better deal with the E.U. than we have at the moment, including movement of people. And let's allow businesses to bring
in the workforce from around the world that we need on a sector-by-sector basis. For one-year, two-year, three-year visas. That's what needed.
I mean, students, look at this, we now have over 600,000 international students in this country. We're one of the best countries in the world when
university is a concern. And that's something to be celebrated.
QUEST: I'll happily celebrate with you, sir, any day. We need to come and do QUEST MEANS BUSSINESS from the House of Lords at some point or somewhere
similar. I'm sure you'll find somebody at home to come and do it. Thank you very much for joining us. Now, Lord Bilimoria and his beer. But beer is
what Britons are going to be drinking in great numbers as we've told you. 15 million before on Sunday, the next England match.
So, our real inflation as we always show you. Inflation when you look at the pint of beer.
Draft Lager is up five percent since January. I'm going to be careful when I'm saying it because his lordship is still next to me, you know, clock me
(INAUDIBLE) this one. Draft Lager is at five percent since January. Alcohol and tobacco as a whole, up over six percent. Still lower than other
categories. And there's hope there's no increase in alcohol prices in October. Quick look at the markets and how they are trading today as we go
towards the end.
Job growth is too hot wage growth shows higher than expected and the Fed has more work to do. The Dow though interestingly is just tottering about
the zero level same for the triple stack, just literally bouncing around very -- this is an indication of wait and see. They know what's likely
point five that's concerned about a point seven five, but people are basically taking time just to factor in what might happen next.
What will happen next, I can tell you is a profitable moment after the break. QUEST MEANS BUSSINESS tonight from Trafalgar Square and the National
Gallery in London.
QUEST: Tonight's profitable moment from the National Gallery in Trafalgar Square in London. All the bad economic news that we've told you about and
the difficulties, nothing we say now or I say now should minimize that. But it is worth and the reason we're here tonight, firstly, of course to see
the latest position from our voices of the crisis. But also, to just enjoy, to just reflect, to just take a moment. You've got people over there
getting their dinner.
I was at the -- I was at the Christmas markets in Vienna last week and over here in London. You've got the tree, the (INAUDIBLE) a bit. A bit -- sorry
for itself. But a tree nonetheless. And you have a museum and an art gallery here at the National which is absolutely heaving with people who
are just glad to be out and enjoying themselves. How different as Lord Bilimoria said, how different it was from a few years ago.
And that's all you have to hold on to as we get through the holiday season in difficult economic times. But still looking forward to the future with a
World Cup finals still to come. There is still much to celebrate.
And that's QUEST MEANS BUSSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. I'll be
in Seattle next week.