Speaker 1: This is Bloomberg Daybreak here for this Monday of February
Speaker 1: in London. Coming up today, tensions ratchet higher, US fighters
Speaker 1: shoot down a forth flying our object uprated. Economists believe
Speaker 1: UK data will push the Bank of England towards for
Speaker 1: the hikes bidding for investor confidence. The Daney Conglamorate cuts
Speaker 1: its growth targets in her Goldman Chief on job cuts,
Speaker 1: CEOs returned to China and a call for UK pension reform.
Speaker 1: Those are the stories we're looking at in today's papers.
Speaker 1: And I'm Leanne Gern's plus a crude instrument. Oil prices
Speaker 1: retreat as slowdown concerns vy with Russian supply cuts. That's
Speaker 1: all straight ahead on Bloomberg Daybreak Europe. The business news
Speaker 1: you need to start your day in just one fifteen
Speaker 1: minute podcast on Apple, Spotify, the Bloomberg Business App and
Speaker 1: everywhere you get your podcasts. Good morning, I'm Stephen Carroll
Speaker 1: and I'm Caroline Heck. Here all the stories that we're
Speaker 1: following today. Three objects have been shot down over North
Speaker 1: American airspace, and as many days in the wake of
Speaker 1: the downing of an alleged Chinese spy balloon over US territory.
Speaker 1: American aircraft shot down the latest object above like uron
Speaker 1: in Michigan on Sunday night. US Assistant Secretary of Defense
Speaker 1: Melissa Dalton says it's not yet clear what the latest
Speaker 1: objects are. We have been more closely scrutinizing our airspace
Speaker 1: at these altitudes, including enhancing our radar, which may at
Speaker 1: least poorly explain the increase in objects that we've detected
Speaker 1: over the past week. One thing Dalton's department are clear
Speaker 1: on the first balloon spot It was a Chinese spy device,
Speaker 1: provoking a new round of tensions with baiging the incidents
Speaker 1: shining a spotlight on China's surveillance programs. Now Here in
Speaker 1: the UK, wage and inflation data are set to fuel
Speaker 1: further Bank of England rate rises. Bloom Begs You and
Speaker 1: Pots report it's a key week for data on the
Speaker 1: UK economy. Two separate reports are expected to highlight the
Speaker 1: consumer prices are still rising at a double digit pace
Speaker 1: and the companies are increasing pay at the quickest pace
Speaker 1: on records. The data will likely support hawkish policymakers at
Speaker 1: the Bank of England who want to keep their foot
Speaker 1: on the monetary break Elsewhere, Two separate surveys out today
Speaker 1: suggest businesses plan to cut hiring as the economic outlook darkens,
Speaker 1: but staff shortages mean they will pay record rates for
Speaker 1: the staff that they do need. The Chartered Institutes of
Speaker 1: Personnel and Development says that planned pay rises are running
Speaker 1: at the highest since the data started ten years ago.
Speaker 1: Video's Business Trends survey reports that output fell for a
Speaker 1: second month, reaching levels associated with a shrinking economy. In London,
Speaker 1: immun Parts bloom Berg Daybreak Europe gave with Don's Conglomerates,
Speaker 1: has had its revenue growth targets and plans to hold
Speaker 1: off fresh capital expenditure. Bloomberg's Anabel Drulers says the group
Speaker 1: will now aim to grow by up to twenty for
Speaker 1: the next fun Until year earlier assumption had been for
Speaker 1: revenue growth of capital expenditure. That's also saying is going
Speaker 1: to be scaled down now. So the priority is really
Speaker 1: just focusing on conserving cash or paying debt and also
Speaker 1: retrieving those pledge shares. Because even though Adning Group has
Speaker 1: denied those allegations in the Hindenburg research report, we still
Speaker 1: had that huge market reaction in turn, and the losses
Speaker 1: here north of a hundred billion dollars still off market
Speaker 1: cap raised. Annabel Drulia says the retreat as the marked
Speaker 1: turnaround for the tycoon and reflects the significant impact that
Speaker 1: Hindenburg researchers report has had on the conglomorous. Now, the
Speaker 1: death toll across Syria and Turkey has risen to thirty
Speaker 1: five thousand people, with many more still unaccounted for. The
Speaker 1: head of the World Health Organization ted ross Adnam Gabrieus's
Speaker 1: has visited Syria's capital, Damascus and issued this appeal. We
Speaker 1: need to take response to the next level to reach
Speaker 1: both I thinks populations in areas. Dr ted Draw spoke
Speaker 1: about the disaster as Turkish authorities have stepped up their
Speaker 1: investigation into the impact of potentially shod deconstruction work. A
Speaker 1: hundred and thirty four contractors have been investigated and at
Speaker 1: least three people have been arrested so far. A Turkish
Speaker 1: business group says that the economic losses from the quake
Speaker 1: could top eighty four billion dollars. Oil prices have retreated
Speaker 1: as concerns about slowing growth continue to offset Russia's plan
Speaker 1: to cut supply. Investors remain wary that the federal reserve
Speaker 1: needs to keep pushing interest rates higher detained inflation. That's
Speaker 1: in spite of OPEC plus confirming that it won't boost
Speaker 1: production to fill in the outbook gap left by Moscow.
Speaker 1: Our top stories this morning, Yeah, absolutely, look more on
Speaker 1: the story around those floating objects not really even sure
Speaker 1: whether they're flying objects actually, and it follows, of course,
Speaker 1: the very first spy balloon that was shot down by
Speaker 1: the u US, alleged Chinese spy balloon. These objects, of course,
Speaker 1: have got a lot of attention because I've been shut
Speaker 1: down on a series of days over the weekend the
Speaker 1: US though, and I find this perhaps extraordinary, should I?
Speaker 1: The U S is not ruled out that these objects
Speaker 1: that have been shot down over North America were aliens
Speaker 1: or extraterrestrials. Admiss good. Yes, it's nice to start the
Speaker 1: week with something like that, isn't well. Look, the question
Speaker 1: was put to the General and he basically said, I'm
Speaker 1: not ruling it out, So it's it's not as if
Speaker 1: he used those terms. It was a reporter asking the questions,
Speaker 1: but you know, keeping an open mind was their view. Indeed,
Speaker 1: And sure, why not? I have to say my eye
Speaker 1: was cut by this piece by rocolleagu Philipaldric about as
Speaker 1: he calls it, the UK seventeen billion pound bank of
Speaker 1: Mom and Dad, which is, you know, a kind of
Speaker 1: flippant way to talk about something that is very serious
Speaker 1: in terms of the inequality of how wealth is being
Speaker 1: transmitted between parents and children. When people are helping out
Speaker 1: there it's buying houses or the southeast of England. I mean,
Speaker 1: you know, you just fall over people who have needed
Speaker 1: the help of the older generation to get on the
Speaker 1: property market. Only a you know, swift look at the
Speaker 1: property prices as shows you that. But I thought it
Speaker 1: was very interesting that Philip Aldrick crunched the numbers reported
Speaker 1: on the i f S that was looking at this
Speaker 1: twenty grand is apparently the kind of average that's going
Speaker 1: from parents to adults kids. Let's not go there, No,
Speaker 1: But the other thing is it's inequality. But it's also
Speaker 1: that it's um that it's white kids that are much
Speaker 1: more likely to get this money. You know, children from
Speaker 1: other ethnic backgrounds are far far less likely to get
Speaker 1: that kind of financial help. Very important when we talk
Speaker 1: about inequality in Britain. Yeah, white young adults more than
Speaker 1: twice as likely to receive a gift than a black
Speaker 1: adults and three times more likely than a Pakistani or Bangladeshia.
Speaker 1: That's according to the last figures from the Institute for
Speaker 1: Fiscal Studies. Okay, up next, we will have the Goldman
Speaker 1: chief on job cut CEO returning to China and a
Speaker 1: call for UK pension reform. Now the paper Review on
Speaker 1: Bluebirddaybreak Europe, the news you need to know from today's
Speaker 1: papers and basic. Leanne Gans is with us this morning
Speaker 1: to discuss the headline in the Financial Times. Leanne says
Speaker 1: Golden Sacks chief tells partners he should have cut jobs earlier. Yes, indeed, Caroline,
Speaker 1: good morning to you so, but of a revelation today
Speaker 1: in the FT. Now, speaking to about four hundred Goldman
Speaker 1: executives at a closed door meeting over in Miami, David
Speaker 1: Solomon said he had made this big mistake by not
Speaker 1: cutting jobs in twenty twenty two. The chief executive actually
Speaker 1: took full responsibility for being slow to reduce headcount and
Speaker 1: also investment, and he says this was when it became
Speaker 1: clear a significant business slowdown was going to happen or
Speaker 1: would happen. According to the FT, Goldman waited until January.
Speaker 1: We obviously found that out last month to cut three thousand,
Speaker 1: two hundred jobs, but it would have not been so
Speaker 1: aggressive if action was taken earlier. According to the newspaper, Now,
Speaker 1: Goldman's net profits in two thousand and twenty two fell
Speaker 1: almost fifty percent from record earnings in one Now this
Speaker 1: was due to lower investment banking fees, markdown at its
Speaker 1: asset management business, and also losses in its financial tech division,
Speaker 1: So a whole host of problems there. And Solomon also
Speaker 1: told partners that the number of leaks to the media
Speaker 1: was actually also damaging to the bank, so somewhat taking
Speaker 1: some responsibility for not reducing headcounts sooner, but also saying,
Speaker 1: you know, the media did play a part in damaging
Speaker 1: the reputation. Okay in the Wall Street journally and the
Speaker 1: headline app from Apple t vw CEO is gradually returning
Speaker 1: to China after it's reopening. Yes, indeed, Stephen, good morning
Speaker 1: to you. So top executives from these big multinational companies
Speaker 1: are now returning to China, and this is as the
Speaker 1: country emerges from COVID zero and says it's open for
Speaker 1: business as its economy struggles. We know it's almost been
Speaker 1: three years that China has been pretty much closed, and
Speaker 1: this move comes despite tensions following the appearance of the
Speaker 1: suspected Chinese surveillance balloon over America. And as you and
Speaker 1: Caroline were just discussing in the top stories there, we
Speaker 1: also know that other incidences have happened since that one,
Speaker 1: and the first visit, according to the Wall Street Journal,
Speaker 1: was from the Volkswagen chief executive and the Apple CEO,
Speaker 1: Tim Cook and fights the CEO are also expected to
Speaker 1: visit China next month, and then the Mercedes Bends group
Speaker 1: chairman it's also planning on going over. So lots of
Speaker 1: them heading over to China now that things are starting
Speaker 1: to open. But despite these bilateral tensions, US commerce with
Speaker 1: China has actually been on the rise, and policy and
Speaker 1: business experts said major trade and investment ties do tend
Speaker 1: to with stand political ups and downs. So that's why
Speaker 1: all of these big executives are heading over really to
Speaker 1: China as things they do ea slightly must be two
Speaker 1: or three years right that those exects have not been
Speaker 1: over to China obviously because the plandemic. Anyway, last story,
Speaker 1: this is also quite interesting because we're talking about inequality.
Speaker 1: This is another thread of that story. The Times has
Speaker 1: an opinion piece about the changes to taxing pensions needing
Speaker 1: to be sensitive, but that they should happen. So what's
Speaker 1: this piece in the Time? Yes, indeed so Paul Johnson.
Speaker 1: He's the director of the Institute for Fiscal Studies and
Speaker 1: says private pensance are the biggest component of household wealth
Speaker 1: here in the UK. Now that's even more than your
Speaker 1: own homes. And writing The Times, he makes the point
Speaker 1: that they need to be taxed appropriately, but that any
Speaker 1: change has been met with a wall of harsh criticism.
Speaker 1: He says that means we bake in injustice forever. So
Speaker 1: pretty cash words their record, really, and he gives this
Speaker 1: number of examples Caroline of why the system is unfairly
Speaker 1: generous to the wealthiest and the oldest. He says that
Speaker 1: favors those with big employee contributions and it can be
Speaker 1: an effective vehicle for avoiding inheritance tax too. And Johnson
Speaker 1: says the tax systems for pension is costly, unfair, complex,
Speaker 1: and he also calls it an unholy mess, and he
Speaker 1: says changes need to be both careful and gradual. Yeah,
Speaker 1: I think it's so interesting because Obviously, Johnson is well
Speaker 1: known for kind of making this sort of statement that
Speaker 1: around inequality, but that he's picking up on the pushback
Speaker 1: against any changes the pension reform, and he's saying, look,
Speaker 1: you can't kind of protect the older generation forever because
Speaker 1: it is at the expense of younger people. I thought
Speaker 1: it was a very interesting piece thing, yes, saying that
Speaker 1: the younger generation has to come up with the cash, right, Okay,
Speaker 1: and thank you very much that review of the newspapers
Speaker 1: this morning. Now, the US has down three objects in
Speaker 1: the air of a North America in the past three days.
Speaker 1: Another was reportedly spotted over a Chinese ports city. The
Speaker 1: unidentified aerial phenomena have heightened US China tensions off The
Speaker 1: Biden administration dubbed the first a spy balloon and sanctioned
Speaker 1: several Chinese aviation companies. For more on the story, we're
Speaker 1: joined at by Bloomberg Senior editor Bill Ferries. Bill, good
Speaker 1: morning to you. And what do we know then about
Speaker 1: these latest objects that have been downed over over North
Speaker 1: American airspace? We actually know very little at this point.
Speaker 1: We don't know the US isn't really describing them in
Speaker 1: great detail. Uh, And they're certainly not saying where they
Speaker 1: think they came from. One thing they do seem to
Speaker 1: be admitting or saying is that they are reviewing airspace
Speaker 1: more carefully and they're noticing things that may have perhaps
Speaker 1: slipped by them in the past. But in terms of
Speaker 1: whether these are similar to that first balloon that was
Speaker 1: shot down off the coast of South Carolina, we're not
Speaker 1: getting enough information to be able to say that at all.
Speaker 1: We don't know that they're even military or spycraft of
Speaker 1: any kind at this point. Okay, the US has blacklisted
Speaker 1: the entity is involved though in the first balloon. What
Speaker 1: has been China's response, Well, China, You know, China's response
Speaker 1: has been all over If you go back to the
Speaker 1: early days where they just said this was this was
Speaker 1: a weather a climate research balloon that that got a
Speaker 1: little bit off track and the winds uh to turning
Speaker 1: around and saying that the US response has been kind
Speaker 1: of over the top, and as in the US is
Speaker 1: hyping the incident, China is now saying, um, they will
Speaker 1: respond militarily if they see any incursions in their airspace,
Speaker 1: and they've at least a local paper in Northeast China
Speaker 1: has now identified some sort of balloon or object it
Speaker 1: says is off the off the coast of ching Dao
Speaker 1: and uh and that it may have to scramble its
Speaker 1: military to take care of it. We don't know what
Speaker 1: that object is the government Chinese government so far hasn't
Speaker 1: said much to confirm that report. Uh, And we certainly
Speaker 1: don't know if it would be a US US balloon,
Speaker 1: Japanese balloon, or something entirely different. Belly. You alluded to
Speaker 1: this already, but it does seem like they're not Billions
Speaker 1: are not uncommon historically, but it seems like we're hearing
Speaker 1: it off a lot more about them. Now. What is
Speaker 1: contributing to that? And and I sup was what what
Speaker 1: can we deduce from the fact that we're talking a
Speaker 1: lot more about spotting them now we've learned, We've all
Speaker 1: learned a tremendous amount in the last week or two.
Speaker 1: I think about these, Yes, I think. I think. On
Speaker 1: the one hand, yes, it's true, there are there are
Speaker 1: things floating up there that maybe the militaries and all
Speaker 1: these countries weren't paying that much intention to. We do know,
Speaker 1: you know, universities, NGO's research groups, they do all kinds
Speaker 1: of all kinds of studies of the upper atmosphere, and
Speaker 1: they launch balloons and related uh things like drones h
Speaker 1: to study this all the time. UM, so we don't
Speaker 1: know if we're just noticing something in a level of
Speaker 1: the airspace that wasn't getting paid much attention to before,
Speaker 1: what it means. I think the bigger picture is it
Speaker 1: just shows with the US and China how fragile this
Speaker 1: relationship is. A Secretary Blanken canceled his trip to Beijing,
Speaker 1: and I think both sides had looked at that as
Speaker 1: an opportunity to maybe restart relations that have been frosty
Speaker 1: going back into the Trump administration that was easily put
Speaker 1: off and uh, and we don't know when that's going
Speaker 1: to restart. And I think um politicians on both sides
Speaker 1: are are kind of taking advantage of this situation, uh
Speaker 1: to sort of hammer the hammer China from the U
Speaker 1: s side and hammer the US from the Chinese side.
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 1: stories making news from London to Wall Streets and beyond.
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