A close election for Gordon Brown

TEXT OF INTERVIEW

Bill Radke: British Prime Minister Gordon Brown today has launched his campaign for re-election. The vote will take place in one month, and just as in the United States, the economy is issue number one. From London, Marketplace’s Stephen Beard joins us live. Good morning, Stephen.

Stephen Beard: Hello, Bill.

Radke: How will the economy play into the election over there?

Beard: Well especially one issue in particular, which will be a familiar one in the U.S.: deficit-cutting versus stimulating the economy. The conservative opposition here wants to start reducing Britain’s budget deficit now — it’s more than 11 percent of GDP — while the labor government under Gordon Brown says it’s too early to start making deep cuts in public spending. That would threaten the U.K.’s fragile economic recovery.

Radke: So with this going on, how closely are investors watching the campaign?

Beard: Very closely. And in fact, they’re already sending a pretty clear signal: they want the conservative opposition to win. Here’s David Buick of the BGC brokers:

David Buick: It’s generally felt that the conservatives will deal with the budget deficit, which is horrendous, more aggressive than labor will. But in the same breath, they understand business, and therefore they will not allow tax that could damage business.

Radke: So much for the markets, Stephen. What about about voters?

Beard: Well, they seem much less decided. The opinion polls suggest this could be a very close election indeed, with no one party winning absolute control of Parliament. Now investors would hate that, the uncertainty of it. So U.K. markets could be in for a nerve-wracking four weeks in the run-up to the election.

Radke: Marketplace’s Stephen Beard in London. Stephen, thank you.

Beard: OK, Bill.