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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: daybreakurate podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Tuesday, the eleventh of June, here in

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Speaker 1: London and I'm Caroline Hepka. Coming up today, Rishi Sunac

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Speaker 1: faces a last minute revolt from Tories over a lack

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Speaker 1: of big ticket manifesto tax cuts. Pole suggests that Marine

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Speaker 1: le Penn's far right party has a sizeable lead ahead

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Speaker 1: of the French legislative elections. Plus making a smart move,

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Speaker 1: Apple brings chat GPT to iPhones as Elon Musk warns

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Speaker 1: that he may ban the first devices. Let's start with

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Speaker 1: a round up of our top stories. Rishi Sunac's cabinet

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Speaker 1: have been lobbying him to add last minute big ticket

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Speaker 1: tax cuts to his election manifesto, which is being published today.

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Speaker 1: One of Sunac's own part has seen the document and

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Speaker 1: described it to Bloomberg as long, dense and lacking a

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Speaker 1: retail offer. Reports suggests that the Conservatives are promising to

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Speaker 1: cut a suite of taxes, including a two p cut

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Speaker 1: or national insurance. In an interview with the BBC, Richi

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Speaker 1: Sunak acknowledged that his government had taken the tax burden

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Speaker 1: in the UK to the highest level since the last

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Speaker 1: World War.

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Speaker 2: I'm not going to shy away from what happened. I

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Speaker 2: did make those difficult decisions because that's right for the

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Speaker 2: financial security of our country. But now taxes are being cut.

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Speaker 2: The average tax rate face by a typical person in

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Speaker 2: work is the lowest it has been in over half

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Speaker 2: a century. So yes, you're right about the overall tax

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Speaker 2: burden for someone in work, an ordinary average worker today

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Speaker 2: they face the lowest average tax rate that they have

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Speaker 2: faced in over half a century.

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Speaker 1: There is frustration, however, that Sunak appears set on proposing

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Speaker 1: a third national insurance cut after two who at the

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Speaker 1: last two fiscal events which failed to move opinion polls. Meanwhile,

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Speaker 1: the Liberal Democrats started the week of manifesto launches with

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Speaker 1: a promise to tax banks in order to fund care banks.

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Speaker 1: All producers and tech jards would face higher taxes as

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Speaker 1: the party plans to raise a total of twenty six

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Speaker 1: point nine billion pounds a year by twenty twenty eight

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Speaker 1: to twenty twenty nine. The party leader Ed Davey says

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Speaker 1: that he will use the money to repair the damage

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Speaker 1: caused by the previous government.

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Speaker 3: After years of conservative chaos and neglect, we are putting

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Speaker 3: forward a bold, ambitious and fully costed plan to tackle

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Speaker 3: the health and care crisis from top to bottom.

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Speaker 1: The Liberal Democrat leader has built his campaign around attention

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Speaker 1: grabbing stunts, a Lib dem staple, combined with poignant videos

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Speaker 1: about caring for his disabled son. Though it's unlikely that

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Speaker 1: the traditional third party in British politics will be able

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Speaker 1: to imply meant their idea, they could win enough seats

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Speaker 1: to influence who forms the next government if the election

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Speaker 1: is close. Meanwhile, a poll in France puts Marine le

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Speaker 1: Pen's national rally at thirty four percent of voting intentions

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Speaker 1: in the first round of the upcoming French legislative elections.

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Speaker 1: That's compared with nineteen percent for President Immanuel Macron's ruling party.

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Speaker 1: This in an online poll by to Luna Harris, Interactive

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Speaker 1: for Challenges MCC and RTL in France, Macron's surprise announcement

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Speaker 1: of a snap election followed from his party's defeat in

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Speaker 1: the European parliamentary elections. There are two rounds of voting,

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Speaker 1: due to take place on the thirtieth of June and

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Speaker 1: the seventh of July. Bill Gross has told Bloomberg that

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Speaker 1: Europe is the place to look for opportunities now. His

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Speaker 1: assessment came in the aftermath of the election results that

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Speaker 1: showed a right would shift by the region's voters. The

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Speaker 1: news shook markets with the announcement of snap election by Macross,

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Speaker 1: sending French bond yields to their highest levels this year,

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Speaker 1: But the co founder and former chief investment officer at

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Speaker 1: PIMCO says that creates opportunity.

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Speaker 4: I think in terms of an attraction, the German tenure

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Speaker 4: boons and French oates the tenure. There they are spreads

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Speaker 4: of narrowed significantly in the past month or two relative

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Speaker 4: to treasuries and today as well by eight or ten

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Speaker 4: basiness points. So there's coming a point where European bonds

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Speaker 4: are more attractive than treasury bonds in my opinion.

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Speaker 1: According to Bill Gross, the recent market reaction to other

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Speaker 1: elections in Mexico, India and South Africa also offer a

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Speaker 1: guide for how the US campaign might impact assets come November.

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Speaker 1: Christine la guard is warning that last week's rate cut

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Speaker 1: may not be followed by further rapid moves. In a

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Speaker 1: newspaper interview, the European Central Bank President cautioned that rates

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Speaker 1: are not on a quote linear declining path. The comments

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Speaker 1: come after last Thursday's widely anticipated rate reduction, which came

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Speaker 1: despite stronger than expected wage growth and consumer prices. Inflation

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Speaker 1: across the Eurozone accelerated by more than anticipated in May,

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Speaker 1: rising by two point six percent year on year, and

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Speaker 1: just lastly, Apple has announced a raft of new artificial

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Speaker 1: intelligence features as the tech jart take up ground on rivals.

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Speaker 1: Dubbed Apple Intelligence, The platform includes a partnership with OpenAIS

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Speaker 1: Chat GPT. The firm says that it's AI offering will

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Speaker 1: help summarize text, create images, and retrieve relevant data for users.

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Speaker 1: Here is Bloomberg's chief correspondent, Mark German.

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Speaker 5: I think there were a lot of expectations. I think

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Speaker 5: that Apple met the expectations. I think that Wall Street

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Speaker 5: have put a lot of pressure on Apple to deliver

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Speaker 5: a suite of new AI features, and Apple did just that.

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Speaker 5: There's nothing here that leapfrogs the competition. There's nowhere here

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Speaker 5: where Apple now can claim that it is the best.

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Speaker 1: Right.

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Speaker 5: Typically, when Apple was this late to the party, it

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Speaker 5: comes in with the best outfit that didn't happen this

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Speaker 5: time around, right. It came in with a me too

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Speaker 5: set of initiatives here for Ai, differentiated by really deep

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Speaker 5: integration and a focus on features that it believes consumers

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Speaker 5: can use on a day to day basis. But there

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Speaker 5: is nothing here that's a breakthrough.

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Speaker 1: As Mark German notes, the announcement at Apple's Worldwide Developers

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Speaker 1: Conference was met with a tepid reaction by investors, with

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Speaker 1: shares down by almost two percent. There was also a

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Speaker 1: swift reaction from Elon Musk, the Tesla boss, says that

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Speaker 1: he would ban Apple devices from his companies if OpenAIS

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Speaker 1: software is integrated at the OS level, calling the tie

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Speaker 1: up a security risk. Now in a moment, we're going

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Speaker 1: to be talking a bit more about Apple Open Ai, Chat, GPT,

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Speaker 1: and also about UK politics ahead of the labor data

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Speaker 1: that we get out later this morning. But first food.

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Speaker 1: This is the best story on the Blomberg terminal I've

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Speaker 1: written by my friend Kate Krader, who has frankly the

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Speaker 1: best job in the building, the best restaurants in the UK.

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Speaker 1: It's a list of what's been an ounce overnight. Apparently

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Speaker 1: the top honor goes to the Ledbury perhaps no surprise there.

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Speaker 1: The Australian born chef Brett Graham is now the number

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Speaker 1: one restaurant. This according to the UK's National Restaurant Awards

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Speaker 1: two hundred and twenty five pound dinner. But apparently the

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Speaker 1: thing that has captured everybody is that they have a

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Speaker 1: glass box where they grow special mushrooms, and therefore the

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Speaker 1: main dish of that menu apparently is called mushrooms from

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Speaker 1: the Cabinet. Rather nice. Number two. If you're looking for

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Speaker 1: a restaurant booking over the weekend, it's Mountain near Oxford Circus.

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Speaker 1: This is a bask inspired restaurant. Lots more to read

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Speaker 1: all about the best places if you're for your whatever

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Speaker 1: your foody heart might desire on the Bloomberg term or

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Speaker 1: this morning. It's also on the Bloomberg dot co dot

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Speaker 1: uk website. I love a restaurant review myself. Right, let's

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Speaker 1: get to the politics now, though I've if you've seen

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Speaker 1: that facing last it calls by cabinet ministers to add

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Speaker 1: a new tax cutle or specific retail offer as it's called,

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Speaker 1: and also tougher migration policy to the Conservative Manifesto, off

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Speaker 1: to an early draft provoked quite a lot of disquiet.

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Speaker 1: We're joined now by Bloomberg's UK correspondent Lizzie Burden. Good morning, Lizzie.

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Speaker 1: In terms of the manifestos, this is manifesto week the

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Speaker 1: general elections on the fourth of July. In terms of

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Speaker 1: the Conservative manifesto that is expected out later today, already

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Speaker 1: rumblings of dissatisfaction.

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Speaker 6: Yeah, I know, I say this every time I see you, Caroline,

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Speaker 6: but this is one of the Prime Minister's last chances

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Speaker 6: really to close that gap in the opinion polls before

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Speaker 6: the election, and nothing seems to have worked so far.

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Speaker 6: He appears to be losing votes to Labor on the

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Speaker 6: left and Reform on the right. Reform of course, led

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Speaker 6: by Nigel Faraj, who, let's not forget Caroline, brought down

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Speaker 6: both Sunach's predecessors, David Cameron and Theresa May. So we

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Speaker 6: understand there are going to be various tax cuts on offer,

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Speaker 6: including a stamp duty cut for first time by a

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Speaker 6: two percentage point cut to National Insurance the payroll tax,

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Speaker 6: of course. But the trouble is, like that surprise election announcement,

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Speaker 6: the drafting of this manifesto appears to have been a

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Speaker 6: closely guarded operation among tunac's top aides and outside that circle,

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Speaker 6: as you say, there is a worry that SUNAC isn't

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Speaker 6: going far enough by cutting inheritance tax for example, and

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Speaker 6: cutting national insurance for a third time when it hasn't

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Speaker 6: moved the polls the last two times. So to paraphrase Onetorio,

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Speaker 6: that is the definition of insanity. But obviously, as bond

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Speaker 6: traders know, if SUNAC goes too far with unfunded tax cuts,

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Speaker 6: it would be the same with labor spending plans. He

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Speaker 6: risks comparisons to this trust.

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Speaker 1: Okay, so that for the Conservatives. In terms of Liberal Democrats,

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Speaker 1: the manifesto out yesterday, what did they are now?

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Speaker 6: So they've pledged to tax the rich as well as

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Speaker 6: frequent business flyers and banks notably as well well all

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Speaker 6: to fund a ten billion pound nearly packaged for social

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Speaker 6: care and the National Health Service. So the other interesting

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Speaker 6: thing as well is they've reiterated this long standing policy

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Speaker 6: to try to rejoin the EU Single Market. So the

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Speaker 6: Libdem's the other threat to Sonak. I've talked about the

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Speaker 6: left and the right. This is the threat from the south.

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Speaker 6: But they're not likely to be the next government, Caroline.

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Speaker 6: The point is they could win enough seats to influence

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Speaker 6: who forms the next government if the election is as

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Speaker 6: close as it was back in twenty ten or twenty seventeen.

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Speaker 1: Yeah, I mean that's a pretty faint hope if you

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Speaker 1: look at the polling right now, isn't it? But okay?

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Speaker 1: And what about the other things that we think about

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Speaker 1: for the UK today, of course, away from the politics,

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Speaker 1: Actually about the jobs data seven am. What does it

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Speaker 1: mean for the Bank of England and for workers?

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Speaker 6: Well, this is probably likely to be for the Bank

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Speaker 6: of England uncomfortable reading, but not uncomfortable enough to stop

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Speaker 6: them cutting interest rates. So, just like in the Urio area,

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Speaker 6: the expectation is that wage growth is gon be sticky,

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Speaker 6: even if there is slower wage growth down the line.

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Speaker 6: The number we're looking for today is six point one

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Speaker 6: percent in wage growth of three months to April. April

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Speaker 6: of course being the month when the minimum wage jumped

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Speaker 6: almost ten percent. In terms of Bank of England rate cuts,

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Speaker 6: our economists reckon the first will come in August June

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Speaker 6: basically off the table because of the election. And then

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Speaker 6: if you look at the market pricing, investors are only

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Speaker 6: fully pricing in the first cut in November they've already

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Speaker 6: cut the odds of June and August, so it'd be

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Speaker 6: interesting to see whether this number actually moves that pricing

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Speaker 6: when we get the numbers at seven am in the

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Speaker 6: pricing at seven thirty.

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Speaker 1: Yeah, okay, fantastic. Well, of course we'll be back with

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Speaker 1: us in the seven am hour in order to discuss

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Speaker 1: all of that. Bloomberg's UK correspondent, Lizzie Burton, thank you

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Speaker 1: so much for being with me this morning. So let's

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Speaker 1: also think about Apple then. Apple has unwrapped its long

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Speaker 1: awaited suite of new AI features, including a partnership with

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Speaker 1: open Ai the make of chat GPT makers, betting that

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Speaker 1: a personalized and understated approach to the technology will win

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Speaker 1: over customers. Quite high stakes. Join us now has been

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Speaker 1: Big intelligence is Matt Blocks and to discuss good to

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Speaker 1: have you with me and the studio Apple integrating chat GPT.

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Speaker 1: Just explain how's going to work?

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Speaker 7: Yeah, So, I mean, there are lots of AI features,

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Speaker 7: but you know, the example here would be that if

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Speaker 7: you're using their Safari, which is their web browser, to

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Speaker 7: search for something, it will bring a pop up that says,

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Speaker 7: would you like us to use chat GPT to kind

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Speaker 7: of enhance this query yes, and if you say yes,

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Speaker 7: it'll send it off to chat GPT, and chat GPT

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Speaker 7: will come back with a kind of more curated response

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Speaker 7: rather than just you know, a list of website you know,

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Speaker 7: for example, if I mean one of the examps they

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Speaker 7: gave was like cooking some dinner with some ingredients, like

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Speaker 7: you know, typically what would happen if you put that

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Speaker 7: into like Safari to come back with a list of

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Speaker 7: links to websites that have recipes, would come back with

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Speaker 7: chat chat GPT, like here is a recipe for something,

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Speaker 7: you know that kind of combines all these ingredients together

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Speaker 7: that you might find delicious. So but I can you know,

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Speaker 7: the critical point here is that it's an opt in,

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Speaker 7: so they're not they're not kind of automatically sending you

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Speaker 7: to chat GPT. They're giving the option to enhance the

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Speaker 7: gen Ai response with it.

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Speaker 1: Overall, how impressive is it? And the other thing that

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Speaker 1: we should note is that this suite of AI tools

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Speaker 1: is not actually coming in until later on this year.

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Speaker 1: So how how kind of blown away were you buy it?

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Speaker 6: Yeah?

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Speaker 7: You know, I mean, you're right that some of these

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Speaker 7: features are going to come out later, including the chat

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Speaker 7: GPT integration. You know, overall, this is an incredibly slick,

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Speaker 7: well thought out set of tools, and the vast majority

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Speaker 7: of it is Apple's own Genetai technology. Things like the

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Speaker 7: chat GPT connection is an enhancement. On top of that,

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Speaker 7: it's integrate. If you're an Apple user, you're going to

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Speaker 7: find this integrated seamlessly into all of the tools you

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Speaker 7: typically use them very familiar with, so form messaging to email,

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Speaker 7: to notes, to Safari, to your your photos. You know,

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Speaker 7: so you're going to just find that those those apps

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Speaker 7: now just do more and help you. Yeah, and particularly

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Speaker 7: like sirih you know that they're kind of interactive voice assistant.

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Speaker 7: You know, that's going to be more sophisticating how it

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Speaker 7: helps you to kind of find things on your device,

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Speaker 7: you know, things like prompting a reply to a text

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Speaker 7: message or an email and allowing you to kind of

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Speaker 7: recut them, you know, according to different kind of styles.

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Speaker 7: All this stuff is kind of the Apple technology. So

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Speaker 7: you know, it's very.

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Speaker 1: Slick, okay slick, But then the criticism from Elon Musk,

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Speaker 1: it will be very swift, yes, criticize, and there's quite a

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Speaker 1: lot of back and forth about the criticisms that he had.

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Speaker 1: He says he won't have Apple devices in his companies.

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Speaker 1: Basically he's concerned about the privacy risk.

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Speaker 7: Yeah, so he was kind of you if if the

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Speaker 7: GPT system is integrated fully into the operating system level,

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Speaker 7: he would be very concerned yet about the overall security

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Speaker 7: and privacy risks of that, because yeah, I mean, he's

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Speaker 7: got a long standing kind of tension with Open AI,

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Speaker 7: He's got his own rival platform coming out. So, you know,

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Speaker 7: I think it's unclear whether actually the way that Apple

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Speaker 7: have set this up is reflective of his concerns, But

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Speaker 7: you know, I think it's an opportunistic commentary just to

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Speaker 7: kind of share his views on you know what's a

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Speaker 7: kind of big topic for the day.

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