Blair Versus Starmer - Can the Government Get Out of Britain's Way?

May 29, 2026

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5 min read

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The UK economy is caught between two unyielding forces: the arithmetic of the bond market and the political constraints of a Labour Party that may soon produce its next leader. In a wide-ranging conversation, Simon French of Panmure Liberum and John Stepek of Bloomberg walk through the immediate inflation outlook, the message sent by rising gilt yields, and the surprisingly centrist—and politically difficult—prescriptions Tony Blair has just offered his party. The throughline is that the next government, whoever leads it, will have almost no room to maneuver, and the question is whether that restraint is a blessing or a trap.

The Energy Cap and the Bank of England’s New Calculus

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What you'll learn

1 (01:31) **Introduction & Host Switch** - Joan Stavrik fills in for Merryn, introduces Simon French; agenda set: UK energy cap, gilt markets, and Labour leadership battle.
2 (02:01) **UK Energy Cap Impact on Inflation** - Discussion on the July energy price cap rise (£1,640 average) and its effect on CPI and Bank of England policy.
3 (05:36) **Gilt Markets & "Bad News is Good News"** - Soft jobs data limits second-order inflation, reducing urgency for rate hikes; market doing the Bank's work.
4 (08:39) **Gulf Tensions & Price Signals** - Role of markets in adjusting supply/demand during geopolitical disruptions; praise for flexible supply chains.
5 (11:52) **Labour Leadership & Tony Blair's Intervention** - Andy Burnham leads likely next PM race; Blair's letter challenges Labour on tough policy trade-offs.
6 (14:23) **Blair's Policy Points: Immigration, Energy, Defense** - Blair calls for stopping illegal immigration, prioritizing cheap over clean energy, and more NATO spending.
7 (18:27) **Labour's Struggle to Change Course** - MPs' fixed stances on net zero and immigration make reversal politically difficult.

+ Full timestamped outline available in the app

Show Notes

How can Keir Starmer - or whoever leads the country next - help to turn the UK’s fortunes around? Simon French, Managing Director, Chief Economist and Head of Research at Panmure Liberum joins co-host John Stepek to discuss former UK Prime Minister Tony Blair’s 5000-word prescription for the UK economy, the growing backlash towards Net-Zero policies and why the UK is at risk of sliding towards another “Liz Truss Moment”.

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