저자: MohamedEl-Erian · 외국인
요약 보기
영국·글로벌 채권금리 상승의 원인은 하이퍼스케일러의 대규모 채권 발행(작년 2천억달러→올해 1조달러)과 인플레·중앙은행 금리인상의 결합. 영국은 재정여력 축소로 고베타 구조이며 생산성 성장 부진이 문제. 예산은 증세·지출삭감 중 혼합이 불가피하고 성장정책이 핵심. AI 버블은 '합리적 버블'로 시장이 AI 기대라는 방패를 갖고 있으나 나스닥 구성종목 절반이 올해 10% 이상 하락. 원자재(구리 등) 고점과 디젤 가격 상승이 지속될 수 있음.
다듬은 글
Borrowing costs have risen almost everywhere over the last six months or so. Give us an overview of the main factors behind that.
I think the main factor is that many borrowers are seeking financing through bonds: governments, and hyperscale providers. To give you an idea of the difference compared to last year, hyperscalers borrowed $200 billion last year. They're going to borrow a trillion this year. That's pushing up rates at a time when regular buyers aren't as reliable, because they have their own internal problems. So you have an imbalance, plus inflation and central banks raising interest rates. That's quite a potent cocktail for yields.
We talked about whether this is something specific to the UK or not. At the start of the war, the differentials widened and we became dependent on energy. That could be one reason why the spreads might be narrowing a bit right now. Is that irrelevant when analysing the specific problems of the United Kingdom? Our borrowing costs are higher. Is it almost more difficult to return to normal when everyone's costs are rising than if it were just a problem specific to the UK?
Absolutely it is. The United Kingdom competes in global markets for financing, so it cannot have low returns when everyone else has high returns. But the UK is what is known as a high-beta economy. Every time yields rise in the US, they rise much more here. The UK has recently ceded that role to France, but that is not a good thing, because what France is doing is overfeeding it. So today, for example, the reason UK 10-year yields are above 5.40 is that French yields are much higher. You talked about that early this morning.
Why do we have a high-beta reaction to all of this? Because we have a limited fiscal margin. That's the first problem. Secondly, our productivity growth is less than it could be. So if you look at the dynamics of debt, the numerator is more vulnerable and the denominator is more vulnerable. Every time there is a global shock, we are more affected.
We're obviously getting closer to the budget. What are the risks of entering into it, whether that's higher taxes, higher debt, or lower spending, which clearly impacts short-term GDP growth? What are the risks of making things worse in the short term?
This is an extremely difficult budget. The fiscal leeway, at least half, probably more like 70%, has disappeared. So the Chancellor will have to decide whether he wants to restore it and to what extent. It has to accommodate increased defence spending. There is a limit to what the three big taxes can yield. So you have two options: cut expenses, and/or raise many small taxes across the board. It's going to be an unpopular budget, but we're so far from the ideal that they have no idea. In other words, this is a really, really difficult budget.
Of those two options, which is better for the British economy?
I think it can end up being a mix. The best thing for the UK economy is to see a significant growth effort. The UK can grow much faster. There is great potential for productivity growth if a comprehensive growth programme is implemented.
What would be first on your list for that?
Well, three things. One is to continue deregulating in areas where it is clear that regulation is stifling growth. Two is to emphasise innovation. This is a country of innovation that does not scale its innovations, so the innovations go abroad. Third, regionalisation: how this concept of growth is seen in each postcode. It's possible. It only requires sustained implementation.
Whether in this budget or early next year, there are large spending items on the agenda: social care, defence spending, the list goes on. Do we have the capacity to address that within a 12-month timeframe? Or are these the things that will derail the economy given our tight position, or will they come years later, once growth has been sorted out first?
There's room for manoeuvre, but it includes things that people are going to be outraged about. They talked about a tax on banks yesterday, and that might help. There are all sorts of other taxes that can help. The main problem is that in the original manifesto, the Labour Party ruled out income tax, VAT and any other taxes on workers. As a result, the ability to manoeuvre is much more limited.
To remove those three warnings, a lot of people are talking about whether the overall tax burden in the UK is the highest it's been since the 1950s. If they could pull one of those levers instead of, getting back to the point, the hodgepodge of potential small taxes, would you be against it? Or is it simply a political decision that they can keep increasing the tax burden as long as they're the right taxes? Would it be acceptable for the economy if they applied the right taxes?
The United Kingdom needs to break out of this vicious cycle. You need to do two things. One is to raise a general tax, not many small ones that create even more distortions. Secondly, focus on growth. If you can do both, yes, you can get out of this situation.
Moving away from borrowing costs for a moment, Mohamed, I want to know your opinion on the never-ending conversation about whether we're in an AI bubble right now. It is surprising that the S&P 500 closed yesterday at an all-time high again, and yet French borrowing costs are rising aggressively. Can that balance continue for much longer?
Think of the market as if it had a shield, and that's what AI expectations are. This is an important technology that improves productivity and will be largely monetised. As long as the market believes in that shield, it will deflect everything that comes its way. The S&P is driven by technology, but look at the Nasdaq. The Nasdaq is the technology index. It's at all-time highs, and yet half of the Nasdaq's components have fallen more than 10% this year. This impressive surge is being led by a handful of companies pinning their hopes on AI. Is there too much hope at this point? Is there a lot of latent risk in those indices?
I call it a rational bubble. It's rational because if you're an investor, you recognise that AI is transformative, so you'll spread your bets across many AI companies, because you don't know who will win, but you know whoever wins will win big. It's a bit like a lottery. So it's rational. However, there will be quite a few losses, because not everyone will win. Only a few companies will win.
Finally, we've seen oil prices rise because of the war, but it's something broader than that. We've seen many commodities, from agricultural products to metals, reach new all-time highs or significant long-term highs in the last two months. Do you see any end in sight, or do we expect an extended period of high inflation even if there were some kind of peace in the Middle East?
It is a period of high commodity prices. Many of those commodity prices, copper for example, are related to the development of AI. You know, I never thought, Wilfrid, that the first price I'd check every morning would be diesel. I never thought that would be the case, but it has become the most important price economically, socially, and politically.
What will happen to diesel prices? Is that the first one you're checking?
I still check where the 10-year yield closed when I wake up here in the US. That's the second one I check. The first one now is diesel, because it has become very important economically and politically, and of course socially. Everything we buy at the store has diesel involved.
Is the UK particularly exposed? Is that a big risk there?
It is. But many countries are, because the refined products that come out of the Middle East now cost half of what they used to.
Mohamed, always a pleasure. Thank you so much for joining us. I wonder how many of our viewers also check diesel prices or 10-year borrowing costs when they wake up.
They should do it if they don't, but that's how it is. Mohamed, a pleasure. It's nice to see you.
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