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Speaker 1: This is Bloomberg Daybreak here for this Wednesday, the fifteenth

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Speaker 1: of March in London. Coming up today, Going for growth,

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Speaker 1: the Chancellor gets set to announce a budget plan for

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Speaker 1: business investment. Escalating tensions, a US drone collides with a

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Speaker 1: Russian fighter jet over the Black Sea. Salary sacrifice hsbccot's

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Speaker 1: base pay for newly promoted bankers as the UK prepares

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Speaker 1: to scrap its bonus Cap three childcare for under three,

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Speaker 1: SUNAC warned against relaxing city rules and the us mel's

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Speaker 1: tougher bank regulations. Those other stories we're looking at in

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Speaker 1: today's papers, and I'm Leanne Gerons Plus Tech tightens its belt,

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Speaker 1: Apple bites down on bonuses as Meta sheds thousands more jobs.

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Speaker 1: That's all straight ahead on Bloomberg Daybreak Europe, the business

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Speaker 1: news you need to start your day in just one

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Speaker 1: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 1: and everywhere you get your podcasts. Good morning. I'm Stephen

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Speaker 1: Carroll and I'm Caroline Hitker. Here are the stories that

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Speaker 1: we're following today. The Chancellor, Jeremy Hunt will use today's

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Speaker 1: budget to try to unblock business investment in the UK.

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Speaker 1: It's going to be a tricky balancing act. Decades high inflation,

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Speaker 1: weak growth and a persistent cost of living crisis have

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Speaker 1: all limited his room for maneuver. Speaking ahead of the budget,

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Speaker 1: Hunt said he would focus on tackling the UK's chronic

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Speaker 1: labor shortage. This is a budget in which I will

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Speaker 1: be systematically going through all the areas where there are

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Speaker 1: barriers that stop people working who want to, so that

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Speaker 1: we can help people get back to work fill those

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Speaker 1: vacancies for our businesses. The Chancellor's first full budget comes

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Speaker 1: as hundreds of thousands of workers go on strike. Junior doctors,

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Speaker 1: civil servants, tube drivers and teachers are all walking out

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Speaker 1: in disputes over paying conditions on Northern Ireland trade. The

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Speaker 1: Democratic Unionist Party leader Jeffrey Donaldson has called for more

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Speaker 1: clarity on VISI sunac's deal with the EU. In his

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Speaker 1: first detailed response since the deal was announced in February,

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Speaker 1: Donaldson said that there were still key areas that need changes.

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Speaker 1: The UK Foreign Secretary James Cleverly told our correspondent Lizzie

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Speaker 1: Burden he hopes the Unionist Party will support the winds

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Speaker 1: of framework. I really hope that the DUP and other

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Speaker 1: politicians in Northern Ireland recognize that we have focused very

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Speaker 1: much on their concerns that this is good news for

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Speaker 1: the economic future of Northern Ireland. It protects Northern Ireland's

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Speaker 1: place within the Union of the United Kingdom, an incredibly

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Speaker 1: valued part of the United Kingdom. The foreign sectary James

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Speaker 1: cleverly they're speaking to Bloomberg. The winds of framework has

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Speaker 1: been seen as one of a number of successes for

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Speaker 1: the Prime Minister. A Russian fighter jet has collided with

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Speaker 1: the US surveillance drone above the Black Sea. Incident in

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Speaker 1: international airspace is set to strain relations between the two

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Speaker 1: superpowers even further. Russia's ambassador to the US and A

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Speaker 1: toy Antonov, denies the country's jet struck the drone. So

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Speaker 1: we don't want to any confrontation between the United States

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Speaker 1: and Russian Federation. We are in fever of pragmatic relations

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Speaker 1: for the sick for the interest of the people of

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Speaker 1: the United States and Russian Federation. But US officials have

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Speaker 1: a very different story, saying two Russian planes flew close

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Speaker 1: to the drone for half an hour before the crash.

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Speaker 1: The Pentagon is now working to declassify video of the incident.

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Speaker 1: In terms of data, US inflation rose by the most

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Speaker 1: in five months in February, course, CPI went hot by

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Speaker 1: half of one percent for the month as the cost

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Speaker 1: of living continued to surge. In America, Fed policymakers will

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Speaker 1: now have to balance future rate rises against the growing

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Speaker 1: financial stability risks following the collapse of Silicon Valley Bank.

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Speaker 1: China's economy picked up strength in the first two months

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Speaker 1: of the year. Bloomberg's Brian Curtis has the details from

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Speaker 1: Hong Kong. Investment gained and consumer spending recovered after COVID

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Speaker 1: zero policies were dropped. Retail sales rising three and a

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Speaker 1: half percent from the same period past year, matching estimates

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Speaker 1: but much better than a drop of one point eight

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Speaker 1: percent back in December, Industrial output up two point four percent,

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Speaker 1: and fixed asset investment rising five and a half percent.

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Speaker 1: All told, the rebound will please officials, but two challenges

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Speaker 1: loom external demand and does this local recovery train keep

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Speaker 1: on chugging in Hong Kong. Bran Curtis, Bloomberg Daybreak, euro

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Speaker 1: The jobst rate edged up to five point six percent

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Speaker 1: in China. For the rate for young people jumped to

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Speaker 1: eighteen point one percent, a six month high. In corporate news,

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Speaker 1: HSBC is slashing the base pay for some newly promoted

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Speaker 1: investment bankers here in the UK by a quarter. New

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Speaker 1: managing directors will now get a salary of about two

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Speaker 1: hundred and twenty five thousand pounds, compared with three hundred

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Speaker 1: thousand pounds for those already holding that same position. The

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Speaker 1: move comes as the UK government is planning to abandon

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Speaker 1: the cap on bank of bonuses as part of post

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Speaker 1: breaks it changes to city rules, and the world's most

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Speaker 1: valuable company is delaying bonus pausing hiring and checking how

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Speaker 1: often it's staff come into the office. Source say, Apple

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Speaker 1: is joining Meta and other tech giants cutting custs. Bloomberg

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Speaker 1: Check reporter Ed Ludlow points out even the methods are similar.

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Speaker 1: The company is freezing hiring for additional jobs and leaving

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Speaker 1: positions open when employees depart, which is a strategy Meta

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Speaker 1: has itself implemented in the past, just not backfill anyone

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Speaker 1: that leaves, but not to the level when Apple's case

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Speaker 1: that we saw Meta announced this morning. Bloomberg's ad Ludlow

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Speaker 1: there in San Francisco, comparing the Apple news to Meta's

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Speaker 1: announcement that it plans to lay off ten thousand employees,

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Speaker 1: on top of course of the previous job cuts already

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Speaker 1: announced after social media giant. Okay, those are top stories

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Speaker 1: for you this morning. So Jeremy Hunt the Chancellor. He

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Speaker 1: delivers his spring budget today. We'll have full coverage, will

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Speaker 1: play it out for you live here on Bloomberg Radio

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Speaker 1: at lunchtime. His main job, obviously is stability after the

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Speaker 1: November autumn statement that was so disastrous for the UK

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Speaker 1: that led to a rapid raptures up in terms of

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Speaker 1: interest rates for mortgage holders. But he's got other pressing issues,

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Speaker 1: so many of them, high inflation, weak growth, this cost

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Speaker 1: of living crisis, the strike action. He has a lot

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Speaker 1: on his plate and not allowed money with which to

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Speaker 1: do it. Yeah. Having said that, the situation is so

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Speaker 1: much better than the last time that he stood up

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Speaker 1: to make a fiscal statement in the House of Commons.

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Speaker 1: So from one point of view, the Chancellor has achieved

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Speaker 1: his early aims of providing stability in terms of the

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Speaker 1: UK economy, but the room for maneuver is so limited.

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Speaker 1: We have some clues about what policies is going to announced.

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Speaker 1: I think there's a lot of really great Bloomberg reporting

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Speaker 1: out there on the childcare issue at the moment to

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Speaker 1: see how that could that be the key measure that

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Speaker 1: could help to unlock the tight labor market in the UK. Yeah,

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Speaker 1: we already know about the energy price guarantee, but there's

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Speaker 1: the idea that maybe fuel duty will be frozen. Yes,

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Speaker 1: more childcare support in terms of childcare for younger children

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Speaker 1: under the age of also replacing the super deduction for

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Speaker 1: business investment could be really important. I love this piece

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Speaker 1: on the terminal though, from Aimon Farhart and Arena Angel,

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Speaker 1: which is about junior doctors. Now they're striking this week,

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Speaker 1: so this is also the government of the sharp end

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Speaker 1: of certain workers wanting more pay. Now they've done this

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Speaker 1: research looking at newly qualified medics who are switching to

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Speaker 1: lots of other jobs management, consultancy and other careers in

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Speaker 1: business because they're not being paid enough. Yeah, I mean

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Speaker 1: a poll from the British Medical Association last year found

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Speaker 1: that two and five junior doctor has planned to leave

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Speaker 1: the NHS once they're offered another job, and that almost

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Speaker 1: eighty percent of them often think about leaving the NHS.

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Speaker 1: There's no denying this is a very difficult job. It

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Speaker 1: always has been. I think many people can argue it's

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Speaker 1: always been underpaid compared to the other opportunities that are

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Speaker 1: out there. But is that situation worse now than it's

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Speaker 1: ever been because the cost of living has gone up

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Speaker 1: by so much and comparatively NHS pay not keeping pace

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Speaker 1: what the private sectors are. Yeah, absolutely right. Well, we're

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Speaker 1: expecting many announcements then, potentially today, from investment zones to childcare.

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Speaker 1: Also an updated economic forecast from the Office for Budget Responsibility.

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Speaker 1: So our chief europe but Economy is Jamie Rush. It's

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Speaker 1: been speaking to us about how much money the Chancellor

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Speaker 1: has to work with, so things look a lot better

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Speaker 1: now than they did back in November. He's probably got

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Speaker 1: about forty billion pounds extra and the next year or

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Speaker 1: so to spend relative to that. That's the fiscal news,

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Speaker 1: basically an extra forty billion, but that kind of dies

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Speaker 1: away until we'll only actually have ten by the end.

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Speaker 1: So he's got basically lots of scope for temporary stuff,

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Speaker 1: not much room to do things that are permanent. What's

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Speaker 1: the outlook for the UK economy now? Then? Is recession

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Speaker 1: still likely? So it's fifty fifty the OBI might actually

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Speaker 1: not have any recession in the forecast whatsoever. The main

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Speaker 1: thing that's changed has been the energy prices has just

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Speaker 1: fallen through the floor. They're seventy percent down relative to

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Speaker 1: what was previously expected. That creates a lot more scope

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Speaker 1: for orowth and so that's what we're going to see

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Speaker 1: in the numbers. What's going to be the most important

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Speaker 1: priority for the Chancellor? Is he going to be trying

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Speaker 1: to make sure that UK doesn't fall into that recession.

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Speaker 1: I think it's less about that and more about trying

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Speaker 1: to make some temporary measures which will kind of ease

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Speaker 1: some pain where it's most needed. So household bills that's

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Speaker 1: publicly caps where we're going to stay at two and

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Speaker 1: a half thousand pounds, that won't cost very much. He'll

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Speaker 1: probably he may feel he needs to do something on

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Speaker 1: public sector pay but again maybe it's just like one

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Speaker 1: off payments, cost of living payments. So I imagine those

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Speaker 1: the priorities if if you're looking at long term policies,

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Speaker 1: I think he may also introduce a kind of a

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Speaker 1: tax giveaway for investment spending by corporates because there's something

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Speaker 1: expiring and he needs to replace it with something, okay.

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Speaker 1: Do you think that there'll be word on other issues

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Speaker 1: and lots has been floated ahead of the budget. Do

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Speaker 1: you expect anything on childcare or on trying to keep

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Speaker 1: people in the workforce. There's this idea around making pensions

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Speaker 1: more generous of people who are putting away quite a

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Speaker 1: lot money. Yeah, that's what we've heard on the pension side.

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Speaker 1: I mean that strikes me that's going to have absolutely

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Speaker 1: no impact tool really on people people's decisions to work

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Speaker 1: or not. It's only affects the people extremely well off,

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Speaker 1: so that's pretty marginal. Childcare that would that could move

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Speaker 1: the dial, but it's extremely expensive, so I have to

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Speaker 1: think about what they can afford. One of the ideas

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Speaker 1: we were told is being discussed as this idea for

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Speaker 1: investment zones. This isn't a new idea. Do they work?

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Speaker 1: I think the evidence is pretty mixed, whether you actually

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Speaker 1: get a new investment or whether it just diverts investment

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Speaker 1: from other places to within these zones. I mean, the

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Speaker 1: juries out on that, but I think generally speaking, the

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Speaker 1: evidence is that it doesn't do a huge amount. In

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Speaker 1: terms of inflation, you mentioned energy costs, they're starting to

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Speaker 1: come down rapidly. Goldman Sachs really moved the conversation and

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Speaker 1: talking about hitting below two percent inflation at the end

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Speaker 1: of this year. So that promise by Rishi soon actor

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Speaker 1: half inflation looks pretty easy. Yeah, it was. It was

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Speaker 1: an open goal really, and they've set themselves a target

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Speaker 1: which could have been achieved in almost all circumstances. So yeah,

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Speaker 1: I think they'll they'll they'll get they'll succeed on that one. Jamie.

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Speaker 1: We had three prime ministers in a year. Last year,

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Speaker 1: we had a meltdown around pension funds after the mini

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Speaker 1: budget last year. This is the spring budget very important

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Speaker 1: in how it goes for both chances of Jeremy Hunt

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Speaker 1: but also the Prime minister. Yes, it is important. I mean,

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Speaker 1: I think there's like a general air of competence floating

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Speaker 1: about in the sense that, you know, the fallout from

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Speaker 1: the Silicon Valley Bank debarcle has been very contained and

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Speaker 1: the UK is actually kind of winning plaudits for doing

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Speaker 1: a decent job of it, perhaps even better than the

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Speaker 1: Fed has done. So that's all positive. But yeah, there's

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Speaker 1: not a there's not the sense of panic about the

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Speaker 1: budget this time around because they're not planning to do

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Speaker 1: huge fiscal giveaways, so that was been in Begg's chief

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Speaker 1: Europe Economists Jamie Rush. I think the Prime Minister and

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Speaker 1: the chance will be very pleased if they emerged from

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Speaker 1: this budget with a general air of competence, as as

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Speaker 1: Jay Rushbood. No, I'm not a sinner. I think that

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Speaker 1: would be a very good score, you know. And of

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Speaker 1: course we're going to bring you the budget live from

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Speaker 1: twelve thirty today. Up next, Free Childcare fore hundred three

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Speaker 1: SINNAC warned against relaxing city rules and the US molds

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Speaker 1: tougher regulation from mid sized banks. Now the paper review

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Speaker 1: on Blue Birthday Break Europe. The news you need to

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Speaker 1: know from today's papers. The Guardian headline this morning Hunter

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Speaker 1: announced four billion pound boost for childcare in England. Blue Boys.

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Speaker 1: Leanne Gerns is here with more on the newspapers, so

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Speaker 1: let's start there then, with the childcare issue. Leanne Well, Caroline,

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Speaker 1: this was on the front page of many of the

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Speaker 1: newspapers today and yesterday. If you're watching the news anywhere,

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Speaker 1: people were leaking the story left, right and center. And

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Speaker 1: according to the Guardian, childcare is really emerging as this

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Speaker 1: key political battle ground in the run up to the

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Speaker 1: next election between the Conservatives and between the Labor Party. Now,

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Speaker 1: what is expected today, so a four billion pound expansion

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Speaker 1: of free childcare for one and two year olds. Right

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Speaker 1: here in England, parents who work can currently claim for

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Speaker 1: thirty three hours a week for three and four year olds. Caroline,

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Speaker 1: I know you know more about this than I do,

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Speaker 1: as you are a parent. No, I was only going

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Speaker 1: to inject I hate calling it free because it's not

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Speaker 1: really always free. It's basically usually subsidized. The government doesn't

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Speaker 1: pay the same rate as the nurseries usually have to

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Speaker 1: pay their staff, so actually ends up being a subsidy

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Speaker 1: rather than free. That's all I was going to add. No,

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Speaker 1: you know what, and that's something I had a good

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Speaker 1: look at today. And childcare providers they're the key to this,

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Speaker 1: aren't they, Caroline and Stephen, And they're really welcoming this proposal.

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Speaker 1: But what they're saying is it crucial that the Chancellor

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Speaker 1: increases the funding per hour or house providers won't be

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Speaker 1: able to support these government plans and they'll be losing money.

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Speaker 1: And this is something that's really important and we need

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Speaker 1: to watch out in the budget today, how Jeremy Hunt

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Speaker 1: does set this funding out and Bloomberg's Ellen Milligan, she's

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Speaker 1: been doing some great reporting and something that truly stuck

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Speaker 1: out to me is the UK's one of the most

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Speaker 1: unaffordable childcare systems in the OECD, pricing a growing number

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Speaker 1: of women out of the workforce, and as you and

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Speaker 1: Stephen said earlier, this budget is all about getting people

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Speaker 1: back into the workforce. All the people off the golf

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Speaker 1: course is one thing that Jeremy Hunt has also said. Yes,

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Speaker 1: I'm not sure that quite the same groups of people

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Speaker 1: that we're talking about, but who knows. Perhaps that is

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Speaker 1: there is no LAUP there somewhere Lea. Let's go next

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Speaker 1: to the Financial Times, Ritchie Senac warned against relaxing City

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Speaker 1: of London rules. Yes, indeed, so we've been talking about

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Speaker 1: Silicon Valley Bank, haven't we, Stephen, And the collapse of

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Speaker 1: this bank is really calling for rethink of regulatory overhaul

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Speaker 1: right here in the UK, and as the US is

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Speaker 1: come cosidering this closely, Joe Biden has vowed a stiffer

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Speaker 1: bank regulation. Now, Rishi Sunak and Jeremy Hunter push for

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Speaker 1: looser post Brexit regulations of the city under the so

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Speaker 1: called Edinburgh reforms to make things more competitive. Here is

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Speaker 1: what they're thinking and what they're looking at. But according

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Speaker 1: to the Ft, the Prime Minister has been warned not

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Speaker 1: to weaken regulation following the UK arm and the collapse

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Speaker 1: of that regarding s AVB. So once again this is

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Speaker 1: another interesting take. If the US sneezes, do we follow,

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Speaker 1: but this is what's been warned against. And I thought

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Speaker 1: this was interesting. Caroline and Stephen Lord Nick McPherson's been

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Speaker 1: talking says the Treasury must be careful not to follow

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Speaker 1: the US example and weaken regulation in the name of competition.

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Speaker 1: But Andrew Griffith, the City Minister, insisted that the rescue

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Speaker 1: operation showed the system has worked as intend did. And

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Speaker 1: I think that HSBC bailed out in many respects if

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Speaker 1: you want to call that, were swift and quick and

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Speaker 1: happened before markets opened on Monday. Absolutely the purchase of SVB. Look,

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Speaker 1: I think there is a debate and it's hard to

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Speaker 1: say now whether the regulatory framework is really what contributed

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Speaker 1: to SVB failing. In the US. A lot of people

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Speaker 1: say no, it was simply a run on the bank,

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Speaker 1: a traditional sort of liquidity crunch. Anyway, just lastly, fed

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Speaker 1: considering tougher rules for midsize banks. After SBB, this basically

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Speaker 1: follows on from that. Sorry, it's the Wall Street Journal heading. Yes,

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Speaker 1: it's linked very well together. I didn't think of a segue,

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Speaker 1: but you just did it for me. Now, the FED

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Speaker 1: is considering changes to its rules governing mid size banks

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Speaker 1: that may include tougher capital and liquidity requirements and steps

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Speaker 1: to strengthen annual stress tests. And that's all according to

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Speaker 1: reporting from The Wall Street Journal. This is Bloomberg Daybreak Europe.

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Speaker 1: You're morning brief on the stories making news from London

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Speaker 1: to Wall Streets and b and look for us on

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Speaker 1: play Bloomberg eleven thirty. I'm Caroline Hitka and I'm Stephen Carroll.

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Speaker 1: Join us again tomorrow morning for all the news you

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Speaker 1: need to start your day right here on Bloomberg Daybreak Europe.