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

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Speaker 1: Daybreak Europe podcast, available every morning on Apple, Spotify or

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Speaker 1: wherever you listen. It's Wednesday, the thirtieth of October in London.

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Speaker 1: I'm Stephen Carroll. Coming up today. Rachel Reeves gets set

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Speaker 1: to hike taxes and spending and what's being billed as

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Speaker 1: an era defining UK budget ubs results beat expectations as

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Speaker 1: the Swiss Bank warns of US election risks plus politically

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Speaker 1: charged the EU risks retaliation as it imposes bigger tariffs

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Speaker 1: on Chinese made electric vehicles. Let's start with a roundup

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Speaker 1: of our top stories. The UK's Chancellor, Rachel Reeves will

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Speaker 1: today pledge to rebuild Britain with her first budget. She

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Speaker 1: will say quote the only way to drive economic growth

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Speaker 1: is to invest, invest, invest. Reeves is expected to set

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Speaker 1: out about thirty five billion pounds in tax rises and

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Speaker 1: spending cuts in her House of Commons address. Treasury Minister

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Speaker 1: Darren Jones says to despite the revenue raising measures, it

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Speaker 1: will be a pro growth budget.

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Speaker 2: We're all clear that a pro worker, pro business approach

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Speaker 2: the economy is the right approach, and investing in your

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Speaker 2: workforce is a great way to improve your productivity, not

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Speaker 2: least because you'll have more people across the country with

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Speaker 2: more money in their pocket being able to spend it

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Speaker 2: in the economy.

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Speaker 1: The Chief Secretary of the Treasury, Darren Jones, speaking there,

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Speaker 1: Bloomberg understands the budget will include a reshaping of fiscal

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Speaker 1: rules to give the government space to borrow for more investment.

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Speaker 1: Rachel Reeves is the first woman to deliver a budget

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Speaker 1: as Chancellor in the eight hundred year history of the role.

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Speaker 1: Her e statement is expected to include more money for

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Speaker 1: the NHS, with reports of a three billion pound funding

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Speaker 1: boost for the armed forces. UBS has posted profits of

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Speaker 1: one point four billion dollars in the third quarter. That's

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Speaker 1: nearly double what analysts had predicted. Both the lender's key

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Speaker 1: wealth management unit and its investment bank outperformed. Switzerland's largest

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Speaker 1: bank is currently working through the integration of its former rival,

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Speaker 1: Credit Suitee, which it took over in an emergency rescue

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Speaker 1: last year. Standard Charters pledged to return at least eight

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Speaker 1: billion dollars to investors by twenty twenty six. That's more

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Speaker 1: than the five billion previously pledged and comes as the

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Speaker 1: bank reported better than expected pre tax profits of one

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Speaker 1: point eight one billion dollars for the third quarter. Standard

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Speaker 1: Charter was able to offset the impact of falling interest

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Speaker 1: rates by a strong performance in its wealth management and

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Speaker 1: global markets businesses. The lender also upgraded its twenty twenty

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Speaker 1: four operating guidance to grow near ten percent from above

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Speaker 1: seven percent. The European Union has imposed higher tariffs on

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Speaker 1: electric vehicles from China. The move, which will see levies

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Speaker 1: peaking at forty five percent, is ratcheting up trade tensions

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Speaker 1: between the world's leading export powers after months of negotiations.

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Speaker 1: The regulation was published in the EU's official journal yesterday

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Speaker 1: amid threats of Chinese retaliation and industry please to avoid escalation.

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Speaker 1: It's a big setback for Chinese producers already effectively shut

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Speaker 1: out of the US, which quadrupled its duty to more

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Speaker 1: than one hundred percent. This year. Alphabet has reported healthy

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Speaker 1: gains in both revenue and profit as the company's big

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Speaker 1: bet on AI shows signs of paying off. Revenue excluding

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Speaker 1: partner payouts increase to seventy four point six billion dollars.

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Speaker 1: That's up around sixteen percent a year on year and

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Speaker 1: ahead of average analysts expectations. CEOs und Our, pitch Ey says,

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Speaker 1: the numbers are encouraging.

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Speaker 3: I'm very pleased with our growth. This business is real

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Speaker 3: momentum and the overall opportunity is increasing as customers embraced

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Speaker 3: jen Ai. We generated Q three revenues of eleven point

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Speaker 3: four billion dollars, up thirty five percent over last year,

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Speaker 3: with operating margins of seventeen percent.

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Speaker 1: Half about CEO s under pitch Eye there speaking as

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Speaker 1: the company reported a rise in net income to two

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Speaker 1: dollars and twelve per share. Shares rose by more than

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Speaker 1: five percent and after ours trading. Following the results, and

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Speaker 1: Democratic presidential nominee Kamala Harris as a second Donald Trump

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Speaker 1: presidency would be steeped in chaos and division, she chose

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Speaker 1: to make her closing pitch to voters on the same

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Speaker 1: spot where a publican nomany Trump had rallied supporters on

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Speaker 1: the sixth of January twenty twenty two, ahead of the

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Speaker 1: attack on the Capitol. Speaking to an estimated crowd of

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Speaker 1: more than seventy thousand, Harris called Donald Trump a petty,

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Speaker 1: tyrant and wanna be dictator America.

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Speaker 4: We know what Donald Trump has in mind. More chaos,

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Speaker 4: more division, and policies that help those at the very

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Speaker 4: top and hurt everyone else. I offer a different path,

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Speaker 4: and I ask for your vote.

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Speaker 1: Harris's speech came as former President Donald Trump sought to

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Speaker 1: move past controversy over racist remarks made by a comedian

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Speaker 1: at his Madison Square Garden rally on Sunday. Speaking at

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Speaker 1: an event at his mar Lago home, Trump vowed to

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Speaker 1: seize the assets of drug cartels and gangs to provide

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Speaker 1: compensation to victims. The New York Yankees still have a

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Speaker 1: shot of winning the Major League Baseball World Series with

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Speaker 1: a game four victory in the best of seven series.

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Speaker 1: After losing the first three games to the LA Dodgers,

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Speaker 1: the Yankees secured an eleven four win to avoid the

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Speaker 1: embarrassment of a clean sweep. The victory was in large

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Speaker 1: part thanks to the work of shortstop Anthony Valpi and

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Speaker 1: his grand Slam This is Ordered two out quite a

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Speaker 1: broad stopper Redens. The victory, broadcast on Fox Sports, came

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Speaker 1: despite LA Dodgers Freddie Freeman continuing to make baseball history,

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Speaker 1: becoming the first player ever to hit a home run

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Speaker 1: in each of the first four games of a World Series.

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Speaker 1: Came five except for Wednesday night in New York time

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Speaker 1: in the Bronx, with the Dodgers still needing just one

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Speaker 1: more win to take the title. Those are our top

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Speaker 1: stories this morning on the markets, and we saw on

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Speaker 1: Wall Street the Nastak closing at an all time high

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Speaker 1: after the moves we've seen two in after our shares

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Speaker 1: for Alphabet and for AMD, the chipmaker sinking seven percent

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Speaker 1: after hours after its results. Bitcoin rowse by nearly four

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Speaker 1: percent yesterday, a whisker away from all time highs US

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Speaker 1: Treasury ended lower, down three basis points to four point

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Speaker 1: to five percent, goal climbing to a fresh record, closing

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Speaker 1: over one percent hurry yesterday and rising another three tenths today.

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Speaker 1: In Asia, the Nike and Tokyo up by one percent,

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Speaker 1: the Hangsang down by one point eight percent. In a moment,

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Speaker 1: we will bring you more details on those results from UBS,

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Speaker 1: plus what to watch in today's budget in the UK.

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Speaker 1: But another story that caught my eye today to deal

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Speaker 1: with the potential future of online dating, our opinion columnist

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Speaker 1: Dave Lee has been writing about comments from the founder

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Speaker 1: of Bumble earlier this year that one day AI concierges

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Speaker 1: might date for us. David MITSI found this remark controversial

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Speaker 1: at the time, as I think many of us would,

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Speaker 1: but on reflection he does see some application for the

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Speaker 1: technology to take the monotony out of matches. Based on

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Speaker 1: what he describes as a mostly dumb algorithm. This is

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Speaker 1: being put in place by Hinge among others, to try

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Speaker 1: and use AI to improve people's dating profiles, not getting

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Speaker 1: quite involved in the process, but encouraging people to respond

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Speaker 1: to their answers to try to make them, I suppose

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Speaker 1: more likely to result in actual dates. So interesting to

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Speaker 1: see how that technology rolls out on how users respond

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Speaker 1: to it. A helpful hand perhaps that better understands your preferences.

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Speaker 1: Will a I start getting thanked in wedding speeches? We

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Speaker 1: shall see well right to Reeve's well, today become the

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Speaker 1: first woman to ever deliver a UK budget in the

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Speaker 1: eight hundred years of the role of the Chancellor of

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Speaker 1: the Exchequer has existed. But it's not the only potentially

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Speaker 1: historic thing about this budget. For more now, and for

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Speaker 1: what's at stake for both the new Labor government and

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Speaker 1: the country more broadly, we turn to our UK correspond

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Speaker 1: at Lizzie Burden ahead of the Chancellor's statement at twelve

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Speaker 1: thirty today.

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Speaker 5: Well seven, this is politically huge. It's the first labor

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Speaker 5: budget in fourteen years. It's going to define UK politics

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Speaker 5: for the rest of the decade. And Rachel Reaves herself

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Speaker 5: has pointed to the historical significance of this. She's compared

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Speaker 5: it to previous famous labor budgets in nineteen forty five,

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Speaker 5: when they, as she put it, rebuilt up after the war,

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Speaker 5: in nineteen sixty four when they rebuilt with the white

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Speaker 5: heat of technology, and in nineteen ninety seven, when she

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Speaker 5: says they rebuilt public services. She says they need to

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Speaker 5: do all of that now. So this is the chance

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Speaker 5: to really set out spending plans that will make people

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Speaker 5: feel better off by the next election. The change they

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Speaker 5: need to deliver to pay voters back for lending labor

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Speaker 5: their votes and getting them into office. They also need

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Speaker 5: to balance the books so that trust is restored in

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Speaker 5: labour's economic credibility. And that brings me on to why

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Speaker 5: this is significant for markets, because remember it was only

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Speaker 5: two years ago that Liz Trift's had that mini budget,

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Speaker 5: so there is this big question of whether markets will

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Speaker 5: accept one of the UK's biggest borrowing plans on record,

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Speaker 5: we expect. Finally, it's also huge for business because, as

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Speaker 5: you know, Stephen, the Labor Party has been courting the

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Speaker 5: business community with this smoke salmon and scrambled eggs offensive.

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Speaker 5: It looks like actually business could get whacked with tax hikes.

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Speaker 5: So can they keep business on side after today?

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Speaker 1: And of course there's been so much reporting in advance

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Speaker 1: of today. Remind us of some of the key changes

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Speaker 1: that we are expecting Rachel Reeves to announce.

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Speaker 5: Well, let me frame it this way. Ever since they

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Speaker 5: got into office, Labor have emphasized this twenty two billion

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Speaker 5: pound black hole in the public finances that they inherited

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Speaker 5: from the Conservatives. So today the budget's expected to include

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Speaker 5: forty billion pounds of revenue raising measures to make sure

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Speaker 5: that they close that gap, and then some because the

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Speaker 5: golden rule for Rachel Reeves is that day to day

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Speaker 5: spending is covered by tax and she also wants a

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Speaker 5: buffer on top of that. So what could these tax

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Speaker 5: hikes include. Well, national insurance contributions for employers could be something. Interestingly,

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Speaker 5: it's not employees because they told us working people wouldn't

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Speaker 5: have their taxes raised.

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Speaker 1: Yes, famously, a promise that's come back to haunt them

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Speaker 1: in some ways.

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Speaker 5: Indeed, and they've been struggling to define what a working

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Speaker 5: person is, so looking at potential tax rises for capital

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Speaker 5: gains and inheritance. And this is also controversial because Labour

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Speaker 5: said before the election it had no plans to raise

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Speaker 5: taxes beyond a limited few in the manifesto. So really

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Speaker 5: Rachel Read is going to have to frame this as

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Speaker 5: a budget for growth, which of course is Labour's top priority.

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Speaker 5: In addition, we're looking at her potentially changing the fiscal

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Speaker 5: rules to borrow for investment. This is something that she

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Speaker 5: confirmed in Washington at the IMF meeting, so that she

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Speaker 5: can let the UK borrow as much as seventy billion

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Speaker 5: pounds over the next five years. And as I say,

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Speaker 5: there's been so much pitt rolling expectations management precisely to

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Speaker 5: avoid a Liz Trust moment. However, we already saw Gilts

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Speaker 5: get hammered last week because of the changes to the

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Speaker 5: fiscal rules that we're expecting. It'll be interesting to see

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Speaker 5: whether there's even more market reaction today. But the point

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Speaker 5: of the tax rises is to increase spending, particularly on

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Speaker 5: the NHS and childcare, so that they can grow the

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Speaker 5: economy and provide better public services in general.

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Speaker 1: Now, one of the features of budgets of recent years

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Speaker 1: has been the surprise. Not I'm talking about Liz Trust

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Speaker 1: but some other chancellors who have trailed some things in

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Speaker 1: advance they're going to do, and at their last minute

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Speaker 1: they pull a rabbit out of a hat. If you

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Speaker 1: were looking for surprises, where would you be looking today.

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Speaker 5: I think a better comparison to than the mini budget

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Speaker 5: would be the Bank of England independence. That's the sort

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Speaker 5: of move, the scale of move that would show that

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Speaker 5: this really is a change in government. But I don't

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Speaker 5: expect that big of a move from Rachel Reeves because

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Speaker 5: this is a woman who really wants to show that

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Speaker 5: labor is delivering stability. Hence hold the pitch rolling. What

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Speaker 5: she has emphasized as Britain's first female chancellor is her

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Speaker 5: ambitions to make the economy work for women. She's emphasized

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Speaker 5: that she's passionate about education. She says that Tony Blair's

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Speaker 5: focus on education is what who inspired her to get

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Speaker 5: into politics. So this is why at the heart of

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Speaker 5: that ven diagram, I expect something on childcare. And this

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Speaker 5: is something that Bloomberg reported last month that one point

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Speaker 5: eight billion pounds will be pumped into expanding childcare services,

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Speaker 5: including increasing the number of nurseries. And that has multiple benefits,

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Speaker 5: whether it's closing the gender pay gap, whether it's reducing

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Speaker 5: economic inactivity which is at the moment contributing to wage

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Speaker 5: pressures and inflation, whether it's growing productivity and economic growth

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Speaker 5: in general. So it has multiple benefits. But remember the

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Speaker 5: Tories already did a childcare package, so they really if

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Speaker 5: they're going to go for it, need to put serious

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Speaker 5: money into it to make a real difference.

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Speaker 1: Thanks for a UK correspond at Lizzie Burden or full

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Speaker 1: live analysis of the budget here on Bloomberg Radio. Our

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Speaker 1: coverage starts at twelve London time. Let's bring you more

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Speaker 1: now in the third quarter earnings from ubs which broadly

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Speaker 1: beat expectations. Spank's net income of one point four billion

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Speaker 1: dollars for the quarter was almost double what analysts had protected.

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Speaker 1: Our Switzerland bureach if Alessandro's speciale joins us now for more. Alessandra,

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Speaker 1: great to have you on. Where did the strength and

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Speaker 1: these ubs earnings come from?

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Speaker 6: It was pretty much across the board. The investment bank

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Speaker 6: beat expectations, the key well management unit posted better than

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Speaker 6: expected profit and which is also important net new assets.

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Speaker 6: New assets are keeping coming in for UBS twenty five billions,

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Speaker 6: slightly less than the previous quarter, but they are on

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Speaker 6: target to reach their target of one hundred billion net

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Speaker 6: new assets by the end of the year. Overall, UBS

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Speaker 6: has been show with it it can deliver solid progress

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Speaker 6: as it integrates credit suites. It's all business the giant

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Speaker 6: bank that it's both the the end of last year

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Speaker 6: when it was about to collapse, and at the same

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Speaker 6: time it's also managing uncertainty because Switzerland is reviewing its

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Speaker 6: capital requirements it might impose higher capital requirements early next year.

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Speaker 6: UBS said that it aims to keep cet one ratio

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Speaker 6: at about fourteen percent more or less stable, even as

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Speaker 6: it has started giving back a buyback problem of about

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Speaker 6: one billion and this is on track, so overall solid results.

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Speaker 6: Integration continues and it's preparing for the next stage, which

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Speaker 6: is when the two banks will actually be merged. Clients

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Speaker 6: are being slowly migrated from old credit stee systems to

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Speaker 6: UBS and this will be the main task for twenty

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Speaker 6: twenty five for the bank.

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Speaker 1: Some concerns though in the commentary from the lender about

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Speaker 1: some upcoming risks, including the US election.

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Speaker 6: Yes, yes, absolutely so it's been overall a solid quarter

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Speaker 6: for banks overall with higher rate but of course rates

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Speaker 6: are falling, and of course there is a lot of volatility,

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Speaker 6: a lot of uncertainty politically, and of course the main

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Speaker 6: risk event here is the US elections. UBS has also

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Speaker 6: warned that costs will see a bit of a seasonal

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Speaker 6: uptick in the next quarter. So it has been a

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Speaker 6: strong quarter, but don't expect growth to continue at this

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Speaker 6: pace in the next quarter.

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Speaker 1: The bank has been warning, okay, And we did also

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Speaker 1: hear some comments from the UBS chairman column callaher about

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Speaker 1: some of their more future ambitions focused on wealth management.

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Speaker 6: I mean, UBS is the world's largest wealth manager, but

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Speaker 6: the point of weakness, if you want, the point where

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Speaker 6: it needs to grow, is the US. It is less

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Speaker 6: strong than it's US peers.

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Speaker 2: There.

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Speaker 6: It has this model of independent wealth advisors which are

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Speaker 6: not hundred percent link to the bank. They sell its products,

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Speaker 6: but they are not working for the bank. It needs

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Speaker 6: to expand. One way to do that, and caliber had

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Speaker 6: already been clear in doing this, and it's been more

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Speaker 6: explicity yesterday is that it might need to buy some

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Speaker 6: to buy some other banks, some other wealth manager in

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Speaker 6: the US, to accelerate this expansion, to get a stronger foothold,

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Speaker 6: and especially also to integrate, to make sure that the

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Speaker 6: people who work for UBS sell the whole camerat of

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Speaker 6: banking products, which would of course help integration and help

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Speaker 6: also clients at the retention.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 1: stories making news from London to Wall Street and beyond.

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Speaker 1: I'm Stephen Carroll. Join us again tomorrow morning for all

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