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Speaker 1: This is Bloomberg Daybreak Europe for this Wednesday, the fourteenth

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Speaker 1: of June in London.

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Speaker 2: Coming up today, back to the future of UK. GDP

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Speaker 2: finally exceeds pre pandemic levels.

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Speaker 1: Bailey on the back bus Boe Governor laments slowly cooling inflation.

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Speaker 2: Stop right now, thank you very much. FED prepares for

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Speaker 2: a pause, but have rates also peaked?

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Speaker 3: Cracks in Goldman Sachs and the most successful head fund

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Speaker 3: ever bets on China. Those are the stories we're looking

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Speaker 3: at in today's papers. I'm James Wilcott.

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Speaker 1: Plus the top job glass ceiling report finds a startling

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Speaker 1: lack of female CEOs in retail.

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Speaker 4: That's all straight ahead on Bloomberg Daybreak Europe. The business

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Speaker 4: news you need to start your day in just one

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Speaker 4: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 4: and everywhere you get your podcasts.

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Speaker 1: Good burning from London. I'm Stephen Carroll and.

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Speaker 2: I Mana Edwards. You're listening to Daybreak Europe. Now let's

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Speaker 2: get to our top stories. The UK has finally joined

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Speaker 2: other G seven economies in regaining the GDP lost during

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Speaker 2: the pandemic. Output rows by zero point two percent in March,

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Speaker 2: leaving the economy zero point three percent bigger than pre

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Speaker 2: pandemic levels. Our UK correspondent Lizzie Burden broke down the

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Speaker 2: numbers for US.

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Speaker 5: It's up from a zero point three percent contraction in

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Speaker 5: the previous month and it's driven by services. They grew

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Speaker 5: zero point three percent after a zero point five percent

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Speaker 5: fall in March, and they had of course been hit

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Speaker 5: hard by the wettest March in England and Wales for

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Speaker 5: over forty years in that last reading, and the strikes

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Speaker 5: holding back services output too.

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Speaker 2: Lizzie Burden also points out that the latest Bloomberg survey

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Speaker 2: has Britain on cause for growth of just zero point

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Speaker 2: two percent this year. That would put the country close

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Speaker 2: to the bottom of the pile of G seven economies.

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Speaker 1: The UK jobs market has so few available workers that

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Speaker 1: employers are having to hoard labor. That's the stark assessment

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Speaker 1: of Bank of England Governor Andrew Bailey, who made the

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Speaker 1: comments after official data showed a surprise rise in wages

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Speaker 1: and drop in unemployment. Here's what he told the Economic

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Speaker 1: Affairs Committee.

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Speaker 6: One of the things that firms pretty much universally say

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Speaker 6: to me and have been signed to me for a

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Speaker 6: little while. Is that they find it so hard to

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Speaker 6: recruit labor in the current market that they are not

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Speaker 6: going to release labor. There's labour hoarding going on now.

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Speaker 1: Bailey's comments come on the same day the Bank of

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Speaker 1: England's chief economist, Hugh pill said balance has needed between

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Speaker 1: fighting inflation and damaging the economy. Traders New se a

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Speaker 1: fifty percent chance the Central Bank will raise rates to

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Speaker 1: six percent by February.

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Speaker 2: Donald Trump has told supporters he had every right to

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Speaker 2: keep the classified documents found at his Florida estate. The

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Speaker 2: former US president appeared in court in Miami, where he

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Speaker 2: pleaded not guilty to thirty seven charges related to mishandling

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Speaker 2: sensitive files. Speaking to supporters after the court appearance, Trump

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Speaker 2: called the prosecution a sham.

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Speaker 7: Threatening me with four hundred years in prison for possessing

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Speaker 7: my own presidential papers, which just about every other president

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Speaker 7: has done, is one of the most outrageous and vicious

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Speaker 7: legal theories ever put forward in an American.

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Speaker 8: Court of law.

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Speaker 2: Trump is trying to turn his second indictment in ten

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Speaker 2: weeks into a fresh opportunity to garner support for a

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Speaker 2: White House comeback. The former president currently leads his nearest

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Speaker 2: Republican primary challenger Ron de Santis by over thirty points.

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Speaker 1: Ireland's enterprising trade minister has told us that the European

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Speaker 1: Union in the United States are moving closer together on

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Speaker 1: tech regulation. This is the European Union is expected to

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Speaker 1: hit Google with the formal anti trust complaint over its

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Speaker 1: advertising tech business as soon as today. Simon Coveny told

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Speaker 1: us on Bloomberg Daybreak Europe that countries need a common

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Speaker 1: approach on tech regulation.

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Speaker 8: You know, there's a really improving relationship between the US

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Speaker 8: and the EU and this space. You know, we do have,

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Speaker 8: you know, an approach to technology now on both sides

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Speaker 8: of the Atlantic that I think is moving closer together

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Speaker 8: rather than further apart in terms of some of these

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Speaker 8: regulatary challenges.

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Speaker 1: Ireland's Trade Minister Simon Coveney speaking to us there from Paris,

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Speaker 1: where he's attending the VIVATEC startup events.

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Speaker 2: Od Asset Management is shotting its Swan Fund and gating

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Speaker 2: two other funds after redemption requests surged. The Hedge Fund

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Speaker 2: made the decision as it moves to contain a crisis

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Speaker 2: triggered by the publication of sexual assault allegations against his founder,

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Speaker 2: Crispin od He denies all the allegations against him. Odio

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Speaker 2: Asset Management says it will redeem those who had invested

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Speaker 2: in its SWAN fund by the fourth of September.

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Speaker 1: Chip maker AMD has given a preview of an AI

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Speaker 1: accelerator that it believes will rival the offering from market

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Speaker 1: leader in Vidia. Blinburg's Charlie Palett has the story.

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Speaker 9: Out of presentation in San Francisco, AMD showcased its upcoming

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Speaker 9: line of artificial intelligence processors, aiming to help data centers

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Speaker 9: handle a crush of AI traffic and challenging video's dominance

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Speaker 9: in the market with companies Instinct MI I three hundred

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Speaker 9: series will include an accelerator that can speed processing for

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Speaker 9: generative AI, the technology used by chat GPT and other chatbots.

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Speaker 9: Like much of the chip industry, am D is racing

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Speaker 9: to meet booming demand for AI computing in New York.

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Speaker 9: Charlie Palette Bloomberg Daybreak Europe.

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Speaker 2: British retailers need to go further to improve diversity in

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Speaker 2: their leadership. That is according to a new report co

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Speaker 2: authored by the British Retail Consortium, which found women are

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Speaker 2: still underrepresented in senior roles. Out of more than two

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Speaker 2: hundred businesses surveyed, only thirteen were found to have female chairs,

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Speaker 2: while less than twenty five percent have female CEOs or CFOs.

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Speaker 2: Retail is one of the largest employers in the UK

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Speaker 2: and women make up more than half the workforce in

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Speaker 2: the sector.

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Speaker 1: So as are our top stories on the program this morning.

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Speaker 1: And I don't know, I think that had a chance

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Speaker 1: to read Adrian Wildertter's column this morning about living in

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Speaker 1: an age of goodie goodie business? Have you every ready

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Speaker 1: keyserving a goodie goody anna not for some decades? Reading

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Speaker 1: out his face over that, I suggest that perhaps perhaps not. Look,

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Speaker 1: it's a very interesting argument that he makes, is that

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Speaker 1: being bad quote unquote can confer competitive advantage, and perhaps

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Speaker 1: businesses can put their money or put their approach into

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Speaker 1: being bad and not necessarily the following the kind of

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Speaker 1: the idea of you know, shared value capitalism, conscious capitalism,

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Speaker 1: compassionate capitalism, all these sort of terms that we see

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Speaker 1: bandied about, the alternative approach being the perhaps a bit

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Speaker 1: more brash, you know, the Elon Musk types, the Michael

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Speaker 1: o'learies of this world, that perhaps they can they can

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Speaker 1: be more provocateur and do better businesses.

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Speaker 2: That makes a distinction, doesn't he, between running very established,

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Speaker 2: long history stable businesses and entrepreneurial culture, doesn't he? And

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Speaker 2: he suggests that being bad is good in the latter sense.

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Speaker 2: But what what does bad mean in this context?

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Speaker 1: Well, it's the idea that companies can can relish their

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Speaker 1: bad boy image and be able to Oh this curiously

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Speaker 1: be about girl image, not generous specific either, but the

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Speaker 1: idea that people make their business decisions based on the

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Speaker 1: fundamentals of the business and not necessarily comments that they

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Speaker 1: make around inclusives, Which is interesting about a conversation we're

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Speaker 1: going to have later in the program actually as well,

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Speaker 1: because Ian Anderson is going to join us, who is

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Speaker 1: the founder and executive chairman of Hate Advisor CISRO, and

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Speaker 1: he's actually someone who's a very good voice to have

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Speaker 1: on this, and we're talking about Pride Month and representation

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Speaker 1: and how actually companies should be behaving at this time

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Speaker 1: of year and how exactly they can use this to

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Speaker 1: their advantage as well. So that's the conversation we'll have

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Speaker 1: coming up for you a little bit later.

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Speaker 2: Okay, right now, though, we need to get back to

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Speaker 2: the macro story. The Bank of England Governor Andrew Bailey

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Speaker 2: says it's taking a lot longer than expected for inflation

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Speaker 2: to come down after data out yesterday showed continued tightness

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Speaker 2: in the UK's labor market. Our colleague, senior UK economist

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Speaker 2: Dan Hansen, joins us now with analysis. So we had

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Speaker 2: the labor market data yesterday, Dan, which I imagine is still

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Speaker 2: shaking markets a little. I'm just looking at guilt yields.

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Speaker 2: Actually no standout rising guilt eiels to but certainly we

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Speaker 2: sawt of standout rising guilty eels yesterday. The GDP data.

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Speaker 2: Did it sort of add a little calmness to the

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Speaker 2: UK narrative this morning? What was your assessment?

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Speaker 10: I mean, I think it came in broadly as expected.

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Speaker 10: It was a little bit weaker than we thought it

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Speaker 10: would be, but I think it's broadly in line. I mean,

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Speaker 10: the big picture from the GDP data is that it's

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Speaker 10: just holding up much better than anyone i'd expected, even

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Speaker 10: sort of six months ago. And there are sort of

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Speaker 10: lots of reasons for that. One is the labor market,

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Speaker 10: which you've just mentioned. There's energy, lower energy prices that's

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Speaker 10: helping the global economy generally is probably doing a little

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Speaker 10: bit better than people have expected. So all those things

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Speaker 10: are adding to this picture of GDP resilience. And this

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Speaker 10: is sort of I'm saying resilience here relative to a

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Speaker 10: picture where we're expecting a sort of nineteen nineties recession

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Speaker 10: just six months ago. Instead we're having it, we're dodging recession,

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Speaker 10: and we're in a sort of period of broad stagnation.

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Speaker 10: And what that's doing is it's feeding through to the

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Speaker 10: labor market, which is what we saw in the data yesterday,

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Speaker 10: and it's ensuring that inflation is staying stickier than the

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Speaker 10: Bank of England would like, which is what Andrew Bailey

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Speaker 10: said yesterday. So all these all this story is all linked,

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Speaker 10: and I think the GDP data today just sort of

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Speaker 10: confirmed what we what we've been seeing, which is this

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Speaker 10: picture of broad resilience and sticky inflation.

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Speaker 1: So if we're thinking about where the trajectory for GDP

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Speaker 1: goes from here, we shouldn't be popping champagne quirks. Yes,

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Speaker 1: although that did actually help in boosting the GDP.

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Speaker 2: In April, even if it was apparently raining, I've forgotten

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Speaker 2: it's so hot, right, I can't remember rain. My garden

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Speaker 2: doesn't remember rain and.

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Speaker 10: Not it doesn't it's really hot. But look, I think Stephen,

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Speaker 10: you're you're right that what we've we've had this picture

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Speaker 10: of resilience. But going forward, I think this there's this

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Speaker 10: real tension now between what Anna mentioned at the start,

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Speaker 10: which is this massive rise in borrowing cost that we've

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Speaker 10: seen off the back of not only April's CPI number

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Speaker 10: but also the laid market data yesterday, and this picture

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Speaker 10: coming out from forecasters where there appears to be this

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Speaker 10: narrative of the UK moving away from reset, but actually

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Speaker 10: it feels to me that we're moving back towards it.

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Speaker 10: And actually not only that, it feels like that sort

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Speaker 10: of level of weakness might be what's necessary if the

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Speaker 10: Bank of England's going to have any hope of getting

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Speaker 10: inflation back under control over a reasonable timeframe. So I think,

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Speaker 10: you know, a picture of resilience now moving into the

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Speaker 10: second half of the year, there is this big risk

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Speaker 10: hanging over the economy.

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Speaker 2: So what is your expectation for how the Bank of

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Speaker 2: England navigates this?

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Speaker 10: Then, Dan, Well, look, I mean you look at if

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Speaker 10: you look at if you look at the market market pricing.

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Speaker 10: Now you've got a peak of five seventy five. I

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Speaker 10: think it's by December or potentially February of next year.

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Speaker 10: We've got a peak of five now. Clearly then the

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Speaker 10: risks to our call are to the upside, and that

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Speaker 10: is definitely the case given what we saw with the

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Speaker 10: LAIB market data yesterday. I think the bank will be

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Speaker 10: cognizant of the impact of what it's done on the economy.

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Speaker 10: We know mortgage rates well, we've seen mortgage rates go up,

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Speaker 10: but a lot of people haven't.

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Speaker 2: Yeah, there's a lag.

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Speaker 10: There is a big lag there and it's going to

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Speaker 10: hit the economy. And there are some and it sounds

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Speaker 10: crazy to say it probably given the context, but there

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Speaker 10: are points in the over the course of the remainder

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Speaker 10: of the year where the inflation data will look a

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Speaker 10: little bit better. And that's purely because of energy prices.

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Speaker 10: It's not about an underlying picture, but it's just the

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Speaker 10: narrative around inflation will become a little bit easier because

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Speaker 10: of falling wholesale energy prices will get into the numbers.

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Speaker 10: There'll be base effects as well, So that's that's why

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Speaker 10: we think September is the time that they might look

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Speaker 10: to pause. That said, if we get continue this data

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Speaker 10: raft of data continues as it has done, where the

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Speaker 10: market is just won't look like an unreasonable place whatsoever.

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Speaker 1: I said at you for not using sporting mataphors and

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Speaker 1: saying that it's old to play for it. But it

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Speaker 1: feels a little bit like it might be in your

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Speaker 1: UK A kind of us at Pomberg Economics, Dan Hansen,

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Speaker 1: thanks so much for joining us for year analysis on that.

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Speaker 2: Next most successful hedge fund ever, bets on China and

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Speaker 2: cracks at Golden Sacks.

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Speaker 4: Now the paper review on Bluebird, Daybreak Europe, the news

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Speaker 4: you need to know from today's papers.

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Speaker 1: And Bloombergs Names. Wilcot joins us now for more and

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Speaker 1: what's in the paper is James, good morning to you.

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Speaker 1: Let's start with the Financial Times. They've got an interview

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Speaker 1: with Citadel's Ken Griffin.

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Speaker 3: Good morning to you Tuesday. Yes, and it's been a

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Speaker 3: fascinating trend. We've seen Jamie Diamond, El Musk I all

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Speaker 3: made that trip to China recently, part of a trend

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Speaker 3: of American executives making the journey. And now Ken Griffin

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Speaker 3: is there and the Ft have interviewed the sort of

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Speaker 3: head of the fifty four billion dollar asset manager, and

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Speaker 3: we call the most successful head for never. That was

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Speaker 3: because of the sixteen billion dollars they made for investors

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Speaker 3: last year after fees. Now, when he says that if

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Speaker 3: China were growth were not to fulfill its promise, that

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Speaker 3: would be a major speed bump to the US not

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Speaker 3: having a recession, we should take it really seriously. But

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Speaker 3: the flip side is he says that there in health

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Speaker 3: the economic view is that actually they are more optimistic

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Speaker 3: than most people on China. They think China will accelerate

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Speaker 3: beyond their fort the average forecast because, as he puts it,

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Speaker 3: the politbureau and Chinese sort of political class now have

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Speaker 3: growth clearly on their priority list.

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Speaker 2: Again, Okay, that's really interesting, isn't it his interpretation of

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Speaker 2: what we heard from China this week. Now, Goldman has

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Speaker 2: a partner problem this according to the Wall Street Journal.

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Speaker 2: What's the reporting there.

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Speaker 3: Well, so they've got all the gossip anner. They have

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Speaker 3: found out that the formerst ZEO Looyd Blanca Flyn recently

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Speaker 3: held court and was complaining about the current CEO, David Solomon,

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Speaker 3: who he says was spending too much time away from

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Speaker 3: his day job jetting around a goblin's private planes and

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Speaker 3: DJing at nightclubs and festivals. I mean, it's like Stephen here,

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Speaker 3: all the all the private jets and DJing coming on.

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Speaker 3: But there is a big, big nugget of truth buried

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Speaker 3: inside of this, which is Solomon is the first CEO

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Speaker 3: who didn't work at the bank point it was a

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Speaker 3: private partnership. And the story of how Goldman in the

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Speaker 3: eighteen hundreds was run majority by the partners, went public

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Speaker 3: in the early sort of two thousands, and then looking

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Speaker 3: at the ownership of the shares there in two thousand,

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Speaker 3: a year after it went public, the partners had sixty

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Speaker 3: two percent of the shares. By the time Solomon took

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Speaker 3: over in twenty eighteen, the partner's owned four percent. And

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Speaker 3: he has tried to revolutionize the way the bank runs

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Speaker 3: as him as a cd AT CEO rather than various

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Speaker 3: sort of fiefdoms, and that has led to discontent over

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Speaker 3: things like when he then takes the bank into sort

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Speaker 3: of more of a consumer direction and has had to

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Speaker 3: row back on that. Partners feel they can't have a

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Speaker 3: conversation with him like before in the way that they

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Speaker 3: would say blank, fine, And so all this tension is

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Speaker 3: playing out over things like say does he do over DJing,

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Speaker 3: does he do these kind of small things. But the

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Speaker 3: Wall Sea Journal is sort of put in this big

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Speaker 3: long read that actually it speaks to a wider decade

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Speaker 3: long transition that's happened at the bank and the tensions

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Speaker 3: around how it runs in the modern era.

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Speaker 1: Okay, so that's in the Wall Street Journal. Let's go

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Speaker 1: to the Times next, James. They're tracking a growing uproar

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Speaker 1: over libor.

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Speaker 3: Yes, now we covered this a few weeks back. It's

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Speaker 3: all about the former BUC journalist Andy Verity, who is

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Speaker 3: serializing a book in the Times called rig which is

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Speaker 3: all about how for the Great Financial Crash, there was

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Speaker 3: a big inquiry into librar the interbank rates, and there

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Speaker 3: was this argument that banks had, especially the individual bankers,

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Speaker 3: had artificially kept it low, which obviously is fraud. And

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Speaker 3: then a lot of bankers went to jail. Now rigged

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Speaker 3: the reporting alleges that senior figures at the BOE in

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Speaker 3: the UK government put pressure on some of these bankers

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Speaker 3: in places like Barclays to keep the rate low because

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Speaker 3: the idea being is if the government had intervened and

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Speaker 3: there is less risk that should then have an impact

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Speaker 3: on librar and if libel was remaining high, that might

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Speaker 3: suggest the interventions weren't working. Now, the latest story in

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Speaker 3: this in The Times, with that being said, is Lord Tyree,

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Speaker 3: who ran the inquiry in the Treasury Selec Committee at

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Speaker 3: the time, has written a joint letter with no one

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Speaker 3: but David Davis, the form of Brexit Secretary and John McDonnell,

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Speaker 3: the Exit Shadow Chancellor, who were very different figures politically,

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Speaker 3: all saying that they think that there was crucial evidence

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Speaker 3: withheld from Parliament at the time over the alleged involvement

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Speaker 3: and expressing concern parliamentaries were misled over the inquiry and

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Speaker 3: so that adds a serious amount of weight to some

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Speaker 3: of varities reporting, although obviously the thing is conclusive yet

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Speaker 3: and so they're arguing that this should be reopened and

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Speaker 3: re look at again, which is again a fascinating story

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Speaker 3: that will keep you updated on