Yeah, that AI CapEx, does that necessarily turn into real economic expansion, real gains for businesses and real gains for governments, rather than just a stock market story?

It's absolutely a stock market story, particularly for those companies that are making very big profits.

But globally, at the moment, you are getting some really flattering headline GDP numbers.

People are coming up with different estimates, but up to half of some estimates suggest that that's come from the CapEx side, the AI CapEx side.

Now, there are elements of that that feed into areas of the economy that employs people to build the data centers.

You need someone to build the ventilators.

You need someone to rewire or put in the copper wiring, which is pushing up demand for commodities in Latin America.

people um before we get there though you see uh some of this growth fading a little in 2027 before hitting what you're calling a soft landing in 2028. soft landing was a phrase that we used a lot in covid what could this soft landing look like

Yeah,

absolutely.

You know, what US consumers are spending in terms of diesel.

And also, if you think about where diesel is used in terms of...

Manufacturing, I guess, yeah.

Manufacturing, haulage, agriculture, agricultural machinery, as well as the lorries getting all of those goods to market.

So the good news so far on the food side is that we haven't seen it in food price inflation, but we probably will be without seeing it in kind of farm gate prices.

So what is the outlook for the fiscal story going into 2027, particularly as you often talk in your reports about government indebtedness and the need to try and curtail that? And indeed, the bond markets are very worried about that subject.

in the bank setting and so on as well.

Yeah, yeah, they have.

Um, I, I think-- Well, certainly for me, it was just macro was what I was most interested in.

A-level, it was...

So much depends when you're at school, doesn't it, on your teacher, and actually my microeconomics teacher was, was fantastic and, you know, I was really interested in the micro.

Um, but at university, I, uh, it was the macro side, and also given my political overlay, the macro was the most, most interesting to me.

But I think, you know, as, as you were saying, you know, networks certainly can be helpful.

So maybe we'll go to Janet in the middle to start with.

What are some of those other factors?

Absolutely.

I mean, the, the flow of vessels and oil and refined products and all of the other things that we've been talking about, um, from, from sulfur to helium to naphtha, um, and all these different things, um, it, it will take, you know, a few months, and obviously it does need to be sustainable, and if we [laughs] go out next year, uh, we don't know what the new normal in the strait actually looks like.

Um, but yes, cross currents.

Um, I was basically talking about all of the major influences in the global economy that are flowing in different directions and having a very uneven impact on different countries from a growth and an inflation perspective.

So the key one, it won't surprise you to know, is the whole AI boom, the export and the investment story.

And the two extremes in terms of beneficiaries, at least in terms of headline GDP, are the US, uh, it's driving more and more of US growth in terms of the enormous AI CapEx story, and, um, that's also helping in terms of the wealth gains coming through, particularly to the, um, over 55s part of the population that own most of the equities within, uh, within the US.

What do you think they're likely to do next?