Podcast Summary: Intelligence Squared – Is it Game Over for Keir Starmer? Martin Wolf for The Intelligence Squared Economic Outlook 2026 (Part One)

Date: February 15, 2026
Host: Johnny Diamond
Guest: Martin Wolf (Chief Economics Commentator, Financial Times)

Overview

This episode dives deep into the tumultuous political and economic landscape of early 2026, with a special focus on the UK’s political crisis and the global implications of Donald Trump’s renewed, unpredictable leadership. Johnny Diamond and Martin Wolf discuss whether UK Labour leader and Prime Minister Keir Starmer can survive politically, what destabilized global politics—especially American actions—mean for economic stability, and how the rise of populism is shaping Western economies. The discussion, held at Smith Square Hall in Westminster with an engaged live audience, is insightful, candid, and at times witty, capturing the anxieties and opportunities of this uncertain era.

Main Discussion Points & Insights

1. The UK Political Crisis & Economic Fallout

[04:59–09:20]

• Political instability: Starmer's position as Prime Minister is widely seen as untenable.
  • Martin Wolf: “When prime ministers get into the sort of situation in which they insist they're not going or the people around them insist they're not going. That means they are.” [04:59]
• Orthodox economic policy: The current government has been small-c conservative, steered heavily by the Treasury and prioritizing fiscal orthodoxy.
• Risks of Labour spending: If Labour or a similar leftist government increases spending—even with increased taxation—the UK’s high public debt (nearly 100% of GDP) and chronic current account deficit could spark market disruption, force interest rate hikes, and deepen instability.
  • Memorable quote: “Britain is pretty vulnerable… If you add those things together with a government that might look leftish, irresponsible, populist, I think that raises significantly the chances of disruptions in debt markets.” – Martin Wolf [08:15]

2. The New, Unpredictable America

[09:20–15:50]

• Trump’s erratic leadership: Wolf notes America is now guided more by Trump’s personal interests than any consistent policy or principle.
  • Quote: “There certainly is one guiding principle which is unambiguous: that which benefits Donald Trump and his family is very clearly a guiding principle.” – Martin Wolf [09:50]
• Uncertain world order: Shifts such as the US “takeover” of Venezuela and threats toward Greenland underscore the unpredictability of American foreign policy.
• Economic impact:
  • Tariffs’ effects have been less dire than predicted due to the US’s closed economy and a domestic investment boom, especially in AI, supported by fiscal expansion.
  • US demand remains an engine for the global economy, and global trade hasn’t suffered as much as many feared.
  • “The short run impact of those negative effects… more modest than we expected.” – Martin Wolf [13:49]
• Long-term concern: Expect less global trade and vulnerability for trade-reliant economies like the UK.

3. The Dollar’s Dominance and Potential Shifts

[15:50–18:45]

• Multi-currency future? China and Europe are trying to diversify away from the dollar, but the greenback’s dominance—due to its vast incumbent advantages—remains hard to dislodge.
• Stablecoins & digital currencies: US policy increasingly embraces stablecoins—a “digital twin” for the dollar—potentially cementing its primacy, even as it tries to fund persistent deficits.
  • Quote: “Stablecoins are…a digital version of fiat currencies. And the US is pushing this harder than anyone else… a digital twin… of US dollars.” – Martin Wolf [17:08]

4. Economic Volatility and US Fiscal Confidence

[18:45–22:03]

• Expect continual unpredictability: Martin Wolf expects monthly “excitement” from Trump, though not necessarily catastrophe.
• Erosion of trust: Even as the US dollar stays dominant, creditors’ confidence is wavering, especially given mounting deficits.
  • Quote: “You shouldn’t go to war with your creditors. So he’s got away with it because the creditors see no alternative. But you can see the wobbles…” — Martin Wolf [20:28]

5. The UK’s Potential Advantages in an Unstable World

[26:14–31:35]

• Audience poll: UK audience favored “trusted institutions and the rule of law” as the nation’s greatest advantage (37%), over science/AI, finance, or new trade deals.
• Wolf’s perspective:
  • He’s skeptical about enduring trust but recognizes institutional integrity as vital.
  • He is most “excited” by the UK’s potential to capitalize on its strengths in science, technology, and academia—as the US undermines its own institutions.
  • Quote: “If we had any imagination and any fiscal flexibility, we would have doubled what we spend in these areas…” [30:14]

6. The Budget Squeeze: Defence, Ageing & Climate

[31:35–34:21]

• Drivers of spending: Wolf points to defence, demography, and climate change as inexorable drivers of higher government expenditure—even as weak economic growth means higher taxes may not yield perceptible public improvement.
• Vicious circle: Slow growth begets more tax and spending pressure, which further erodes living standards and sustains stagnation.

7. The Rise of Populism: Causes and Economic Style

[34:21–39:11]

• Economic roots: Wolf links the rise of populism to stagnating living standards and economic dissatisfaction.
• What is populism?
  • Wolf defines it as anti-elitism, with left and right variants blaming different groups but sharing the promise: “Give us limitless power, get rid of the constraints upon our action imposed by these elites… and we will solve all these problems.” [36:17]
• Populist economics: It is fiscally and monetarily unconstrained, dismissive of orthodoxies, frequently nationalist/protectionist, and demands near-absolute power to “fix” economic grievances.
  • Quote: “Donald Trump is a perfect expression of this complete indifference to fiscal balances, fiscal policy, and a belief that the central bank is his piggy bank.” – Martin Wolf [38:01]

Notable Quotes & Memorable Moments

• “You can't insist you're credible. You either are credible or you're not.” – Martin Wolf on political leadership [05:16]
• “His most stable relations right now is with China. I don’t think anyone a year ago could even imagine that would be the outcome.” – Martin Wolf on Trump’s foreign policy reversals [11:37]
• “If the economy is stagnant or near stagnant. That means a lot of people are actually falling behind one way or the other, almost by definition.” – Martin Wolf on the vicious circle in UK public spending [33:07]
• “The essential art of the demagogue is to say… you are suffering because predatory, corrupt, vicious elites are exploiting you.” – Martin Wolf defining populism [36:45]

Timestamps for Key Segments

• UK Political situation & Starmer’s fate: [04:59–09:20]
• Trump’s US & global unpredictability: [09:20–12:59]
• Trade, tariffs, and the US economy: [12:16–15:50]
• Dollar dominance, stablecoins & global finance: [15:50–18:45]
• Economic volatility & fiscal confidence: [18:45–22:03]
• Audience poll: UK’s greatest advantage: [26:14–31:35]
• The budget squeeze & public dissatisfaction: [31:35–34:21]
• Populism: definitions & economic style: [34:21–39:11]

Episode Tone and Style

The episode is intellectually rich, brisk, and occasionally dry-witted, reflecting Martin Wolf’s characteristic skepticism and analytical sharpness. Johnny Diamond’s hosting is warm and direct, encouraging candid reflections and audience engagement.

Useful for listeners who want:

• Sharp economic and political analysis of 2026’s challenges
• Insight into what’s next for the UK, the US, and global finance
• A clear-eyed explanation of the interplay between stagnation, populism, and the fragility of Western democracies

This summary is based on the main discussion content and omits advertisements, sponsorship messages, and non-content sections.