1
00:00:02,560 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:09,640 --> 00:00:12,840
Speaker 2: This is the Bloomberg daybec podcast. Good morning, It's Wednesday,

3
00:00:12,880 --> 00:00:15,920
Speaker 2: the twenty fourth of December. I'm Caroline Hepga in London.

4
00:00:16,000 --> 00:00:20,079
Speaker 2: Coming up today. France passes a stopgap bill to keep

5
00:00:20,120 --> 00:00:23,960
Speaker 2: the state running. Debate on the budget resumes in January.

6
00:00:24,440 --> 00:00:28,479
Speaker 2: The US sanction's former EU officials in an escalating clash

7
00:00:28,600 --> 00:00:32,000
Speaker 2: over free speech and big tech, and the co founder

8
00:00:32,040 --> 00:00:35,680
Speaker 2: of Brevan Howard, billionaire Alan Howard has left the UK

9
00:00:36,200 --> 00:00:39,159
Speaker 2: to live in Switzerland. Let's start with a roundup of

10
00:00:39,159 --> 00:00:43,840
Speaker 2: our top stories. France has adopted a stopgap budget bill

11
00:00:43,880 --> 00:00:47,279
Speaker 2: for twenty twenty six to avoid a government shutdown. The

12
00:00:47,280 --> 00:00:51,600
Speaker 2: so called spiciale or special law, allows the state to

13
00:00:51,760 --> 00:00:55,600
Speaker 2: continue collecting taxes and borrowing money despite the lack of

14
00:00:55,640 --> 00:00:59,040
Speaker 2: a full budget. Effectively, it rolls over fiscal plans into

15
00:00:59,080 --> 00:01:02,200
Speaker 2: the new year. Addressing the Nation or French television, Prime

16
00:01:02,200 --> 00:01:05,119
Speaker 2: Minister Sebastia Locornu explained the situation.

17
00:01:08,319 --> 00:01:10,640
Speaker 1: Taking the time to discuss a budget in a democracy

18
00:01:10,760 --> 00:01:13,560
Speaker 1: like France is not a weakness. In the meantime, a

19
00:01:13,600 --> 00:01:16,920
Speaker 1: special law is being discussed in parliament. It will allow

20
00:01:17,000 --> 00:01:20,560
Speaker 1: us to continue to collect taxes and keep public services

21
00:01:20,600 --> 00:01:24,560
Speaker 1: going from January first. That doesn't mean it's a budget

22
00:01:24,959 --> 00:01:27,840
Speaker 1: and there will be a number of negative consequences if

23
00:01:27,840 --> 00:01:29,280
Speaker 1: the situation continues.

24
00:01:30,480 --> 00:01:33,880
Speaker 2: That was the French Prime Minister Sebastia Lecornu speaking Vira

25
00:01:34,000 --> 00:01:38,720
Speaker 2: translator ahead of the National Assembly's decision. The temporary legislation

26
00:01:38,840 --> 00:01:41,440
Speaker 2: comes after the government warned that the parts of the

27
00:01:41,440 --> 00:01:43,960
Speaker 2: finance bill that had been agreed so far would only

28
00:01:44,000 --> 00:01:47,960
Speaker 2: bring down France's deficit to five point three percent of

29
00:01:48,000 --> 00:01:51,640
Speaker 2: economic output in twenty twenty six, so lowering it a

30
00:01:51,720 --> 00:01:55,040
Speaker 2: tenth of one percent versus this year. The National Assembly

31
00:01:55,120 --> 00:01:57,720
Speaker 2: is set to assume debate on the full French budget

32
00:01:57,840 --> 00:02:03,320
Speaker 2: in early January. Now, the Trump administration has imposed visa

33
00:02:03,440 --> 00:02:07,760
Speaker 2: sanctions on former EU Commissioner Tierre Breton as a punishment

34
00:02:08,080 --> 00:02:11,840
Speaker 2: for his work regulating big tech. The US Sector of

35
00:02:11,840 --> 00:02:16,000
Speaker 2: State Marco Rubio announced the move on social media, accusing

36
00:02:16,080 --> 00:02:18,880
Speaker 2: Briton of extra territorial censorship.

37
00:02:19,240 --> 00:02:20,119
Speaker 3: The US State.

38
00:02:19,880 --> 00:02:24,320
Speaker 2: Department is also targeted for other people leading organizations that

39
00:02:24,360 --> 00:02:28,880
Speaker 2: are focused on digital hate speech encountering extremism. The Global

40
00:02:28,919 --> 00:02:33,320
Speaker 2: Disinformation Index, in a statement, called the US sanctions an

41
00:02:33,360 --> 00:02:38,000
Speaker 2: authoritarian attack on free speech and an egregious act of

42
00:02:38,120 --> 00:02:41,560
Speaker 2: government censorship. In a social media post, Breha, who was

43
00:02:41,720 --> 00:02:47,040
Speaker 2: also the former CEO of Orange and Atos, responded by

44
00:02:47,080 --> 00:02:51,400
Speaker 2: asking whether the US is returning to McCarthyism of the

45
00:02:51,480 --> 00:02:55,560
Speaker 2: nineteen fifties. Now gold has risen above four thousand, five

46
00:02:55,639 --> 00:02:58,080
Speaker 2: hundred dollars and ounce for the first time, while silver

47
00:02:58,200 --> 00:03:02,720
Speaker 2: and platinum also advances to two records. Precious metals are

48
00:03:02,840 --> 00:03:06,680
Speaker 2: ending this year with gains not seen in decades. Blueberg's

49
00:03:06,800 --> 00:03:11,600
Speaker 2: Metals reporter Martin Richie says global uncertainty has helped to

50
00:03:11,760 --> 00:03:12,720
Speaker 2: drive the rally.

51
00:03:13,680 --> 00:03:16,320
Speaker 4: You know, you can never imagine prices at this level

52
00:03:16,360 --> 00:03:18,400
Speaker 4: even two years ago, but here we are. And I

53
00:03:18,400 --> 00:03:21,760
Speaker 4: think this December rally that you've seen in gold and

54
00:03:21,760 --> 00:03:25,520
Speaker 4: in the precious metals is really king a continuation of

55
00:03:25,720 --> 00:03:30,000
Speaker 4: the same themes we've seen throughout this year. It's about

56
00:03:30,080 --> 00:03:35,600
Speaker 4: the debasement trade, growing sort of mistrust in traditional assets

57
00:03:35,600 --> 00:03:38,280
Speaker 4: a sovereign bonds and currencies. It's a bit the weaker dollar.

58
00:03:38,840 --> 00:03:42,360
Speaker 4: It's about central banks buying gold because of those things.

59
00:03:43,240 --> 00:03:47,200
Speaker 2: Richie adds that traders are now betting the US Federal

60
00:03:47,240 --> 00:03:49,840
Speaker 2: Reserve will lower the cost of borrowing again next year,

61
00:03:49,880 --> 00:03:53,800
Speaker 2: which would be a tailwind for non yielding precious metals.

62
00:03:54,120 --> 00:03:57,240
Speaker 2: Gold spot price this morning four four hundred and eighty

63
00:03:57,360 --> 00:04:02,200
Speaker 2: four dollars flat. Currently, the US economy expanded at the

64
00:04:02,200 --> 00:04:06,120
Speaker 2: fastest pace in two years. According to data release on Tuesday,

65
00:04:06,600 --> 00:04:09,680
Speaker 2: a real GDP increased at a four point three percent

66
00:04:09,720 --> 00:04:13,360
Speaker 2: annualized pace in the third quarter. Economists had expected growth

67
00:04:13,400 --> 00:04:16,560
Speaker 2: of just three point three percent. The surprise has pushed

68
00:04:16,640 --> 00:04:21,479
Speaker 2: up treasury yields as traders factor in the resilient consumer spending.

69
00:04:22,080 --> 00:04:26,800
Speaker 2: The data had been delayed due to the US government shutdown. Now,

70
00:04:26,839 --> 00:04:29,640
Speaker 2: BP has agreed to sell a majority stake in its

71
00:04:29,680 --> 00:04:33,719
Speaker 2: Castro unit to the investment firm Stone Peak Partners. Under

72
00:04:33,720 --> 00:04:36,680
Speaker 2: the deal, BP will get about six billion dollars for

73
00:04:36,720 --> 00:04:39,880
Speaker 2: a sixty five percent stake in the lubricants business. The

74
00:04:39,960 --> 00:04:42,440
Speaker 2: all major had planned to divest twenty billion dollars of

75
00:04:42,520 --> 00:04:45,400
Speaker 2: assets by the end of twenty twenty seven to improve

76
00:04:45,440 --> 00:04:48,760
Speaker 2: its balance sheet. It comes as Meg O'Neal prepares to

77
00:04:48,760 --> 00:04:52,240
Speaker 2: take the helm of BP in April after running Australia's

78
00:04:52,279 --> 00:04:56,520
Speaker 2: Woodside Energy. One of the co founders of Brevan Howard

79
00:04:56,560 --> 00:05:00,520
Speaker 2: Asset Management has left the UK, adding to concern about

80
00:05:00,560 --> 00:05:05,000
Speaker 2: the exodus of Britain's wealthy. Alan Howard has a net

81
00:05:05,120 --> 00:05:07,760
Speaker 2: worth of roughly four point three billion dollars and, according

82
00:05:07,800 --> 00:05:12,800
Speaker 2: to a Bloomberg analysis of regulatory filings, now lives in Switzerland.

83
00:05:13,000 --> 00:05:14,840
Speaker 2: Bloomberg's James Walcock has more.

84
00:05:16,040 --> 00:05:19,800
Speaker 5: This year, Switzerland voted to reject a fifty percent inheritance tax,

85
00:05:20,000 --> 00:05:24,320
Speaker 5: while Britain expanded its version of the levy. Alan Howard

86
00:05:24,480 --> 00:05:27,960
Speaker 5: may have followed the incentives. The Brevan Howard co founder

87
00:05:28,040 --> 00:05:30,760
Speaker 5: declined to comment to Bloomberg for the story, but the

88
00:05:30,839 --> 00:05:34,480
Speaker 5: billionaire now joins the ranks of many of the financial elite.

89
00:05:34,600 --> 00:05:38,240
Speaker 5: We have reported on Leaving the UK that exodus is

90
00:05:38,240 --> 00:05:41,279
Speaker 5: a worrying trend for the government as it is banking

91
00:05:41,320 --> 00:05:44,479
Speaker 5: on higher tax revenue and growth from the wealthy for

92
00:05:44,640 --> 00:05:47,000
Speaker 5: its economic agenda in London.

93
00:05:47,120 --> 00:05:48,880
Speaker 6: James Walcock, Bloomberg Radio.

94
00:05:49,480 --> 00:05:52,440
Speaker 2: The release of the so called EBSTCEN files has so

95
00:05:52,520 --> 00:05:55,599
Speaker 2: far failed to satisfy the US public. The US Department

96
00:05:55,600 --> 00:05:58,680
Speaker 2: of Justice has released thousands of pages of heavily redacted

97
00:05:58,720 --> 00:06:02,400
Speaker 2: records and photos related to the convicted sex offender in

98
00:06:02,440 --> 00:06:06,800
Speaker 2: the past week, but the document dump has drawn criticism

99
00:06:06,880 --> 00:06:10,880
Speaker 2: for missing a December nineteenth deadline and for the heavy redactions.

100
00:06:11,279 --> 00:06:15,600
Speaker 2: President Trump says the saga is unfairly tarnishing individuals.

101
00:06:16,480 --> 00:06:19,200
Speaker 7: A lot of people are very angry that pictures are

102
00:06:19,240 --> 00:06:21,440
Speaker 7: being released of other people that really had nothing to

103
00:06:21,480 --> 00:06:23,400
Speaker 7: do with Epstein, but they're a picture with him because

104
00:06:23,400 --> 00:06:25,720
Speaker 7: he was at a party, and you ruin a reputation

105
00:06:25,839 --> 00:06:26,520
Speaker 7: of somebody.

106
00:06:26,720 --> 00:06:28,719
Speaker 6: But I never went there, but a lot of people did.

107
00:06:28,600 --> 00:06:32,120
Speaker 2: Go there, President Trump speaking, They're doing a news conference

108
00:06:32,240 --> 00:06:35,880
Speaker 2: last night. Included in the late dispatch of release fars

109
00:06:35,920 --> 00:06:38,840
Speaker 2: As an email sent from an individual named AA saying

110
00:06:39,200 --> 00:06:42,520
Speaker 2: they are at the British War Family's Balmoral residents and

111
00:06:42,600 --> 00:06:49,360
Speaker 2: asking Epstein associate Gilaine Maxwell for quote inappropriate friends. In October,

112
00:06:49,480 --> 00:06:53,239
Speaker 2: Andrew Mountbatten Windsor, formerly a Prince and the Duke of York,

113
00:06:53,640 --> 00:06:57,520
Speaker 2: lost his titles following scrutiny over his links with Epstein.

114
00:06:58,400 --> 00:07:01,559
Speaker 2: Those are some of our top news stories today. Let's

115
00:07:01,560 --> 00:07:05,240
Speaker 2: look at the markets. So it's a shorter trading day.

116
00:07:05,440 --> 00:07:09,200
Speaker 2: Fewer markets are open across at Europe, but London is

117
00:07:09,240 --> 00:07:11,840
Speaker 2: trading forty one hundred is down two tenths of one percent.

118
00:07:12,320 --> 00:07:15,880
Speaker 2: The US socks at six hundred overall just about in

119
00:07:16,040 --> 00:07:20,400
Speaker 2: positive territory. US DOOP futures, though fading down a tenth

120
00:07:20,400 --> 00:07:23,520
Speaker 2: of one percent, very light trading volumes at the end

121
00:07:23,600 --> 00:07:26,360
Speaker 2: of what has been a really stelly year for US

122
00:07:26,360 --> 00:07:29,320
Speaker 2: and European stocks. Third year of US SOOX six hundred

123
00:07:29,320 --> 00:07:33,960
Speaker 2: gains up sixteen percent over all, so global stocks climbing

124
00:07:33,960 --> 00:07:35,880
Speaker 2: to a record high at the end of this year.

125
00:07:36,440 --> 00:07:40,680
Speaker 2: Ten year treasury yields have been consolidating around four sixteen,

126
00:07:41,680 --> 00:07:45,200
Speaker 2: so UK yields at four point fifty two. As for

127
00:07:45,520 --> 00:07:48,760
Speaker 2: those precious metal prices, gold four thousand, four hundred and

128
00:07:48,800 --> 00:07:52,240
Speaker 2: eighty six dollars, Bitcoin is down a percent and breakthrough

129
00:07:52,320 --> 00:07:55,120
Speaker 2: at sixty two dollars forty five. So that's a look

130
00:07:55,120 --> 00:07:58,080
Speaker 2: at the markets. In a moment, we'll get into the

131
00:07:58,240 --> 00:08:01,559
Speaker 2: story about France's budget and what to expect from central

132
00:08:01,600 --> 00:08:04,400
Speaker 2: banks next year and other stories caught my eye. Though

133
00:08:04,440 --> 00:08:08,880
Speaker 2: today I wonder whether you'll read this five top tables.

134
00:08:09,280 --> 00:08:13,160
Speaker 2: It's a column from Bloomberg Pursuits. And we may not

135
00:08:13,200 --> 00:08:16,240
Speaker 2: have even eaten pigs in blankets yet for Christmas in

136
00:08:16,280 --> 00:08:19,280
Speaker 2: the UK, but already there are lots of ideas about

137
00:08:19,280 --> 00:08:22,000
Speaker 2: how you can eat well in the city that prides

138
00:08:22,040 --> 00:08:25,920
Speaker 2: itself on doing hogmanat that is New Ye's Eve to you,

139
00:08:25,960 --> 00:08:28,840
Speaker 2: and I really like nowhere else is Edinburgh, of course,

140
00:08:29,200 --> 00:08:31,960
Speaker 2: and among the lists that the team have compiled, I'll

141
00:08:32,000 --> 00:08:37,600
Speaker 2: mention a few Cafe Carlton Dults in Leith and makers

142
00:08:37,880 --> 00:08:39,480
Speaker 2: Mash in the Old Town.

143
00:08:39,520 --> 00:08:40,920
Speaker 3: In Edinburgh.

144
00:08:40,960 --> 00:08:44,000
Speaker 2: The food scene, especially in the Port of Leath near Edinburgh,

145
00:08:44,040 --> 00:08:48,199
Speaker 2: is really growing because of quality seafood availability, our own

146
00:08:48,240 --> 00:08:51,560
Speaker 2: spoil the rest of what is revealed about the best

147
00:08:51,600 --> 00:08:53,920
Speaker 2: places to eat in Edinburgh. But perhaps if you're headed

148
00:08:54,200 --> 00:08:57,679
Speaker 2: to the raw Marles sometime soon, maybe you'll take a look,

149
00:08:57,880 --> 00:08:59,760
Speaker 2: maybe perhaps for a New Year's Eve.

150
00:08:59,840 --> 00:09:03,520
Speaker 3: Care who knows. But let's think about what's happening in France.

151
00:09:03,559 --> 00:09:07,760
Speaker 2: First, the National Assembly voted on this special law on Tuesday,

152
00:09:08,200 --> 00:09:11,520
Speaker 2: so this is to roll over the twenty twenty five budgets.

153
00:09:11,640 --> 00:09:15,800
Speaker 2: President Macro's putting pressure on Prome Minister Saci Corney to

154
00:09:15,920 --> 00:09:19,320
Speaker 2: have a budget by the end of January. Joining us now,

155
00:09:19,360 --> 00:09:22,800
Speaker 2: it's Blimberg's economist Jehan dalbar Jean. Thank you so much

156
00:09:22,840 --> 00:09:25,960
Speaker 2: for speaking to us today in terms of this emergency law.

157
00:09:26,040 --> 00:09:29,520
Speaker 2: So you know, the last bit of decision making by

158
00:09:29,640 --> 00:09:31,600
Speaker 2: lawmakers what does it actually do.

159
00:09:32,200 --> 00:09:36,240
Speaker 8: So, yes, a special is basically a temporary, narrow version

160
00:09:36,400 --> 00:09:39,040
Speaker 8: of the budget, not to have a kind of U

161
00:09:39,160 --> 00:09:43,640
Speaker 8: style government shutdown in France. Basically, a special let allows

162
00:09:43,640 --> 00:09:48,160
Speaker 8: the public administration to run basic operational expenditures and to

163
00:09:48,360 --> 00:09:51,000
Speaker 8: borrow in the market, which is quite important.

164
00:09:51,679 --> 00:09:54,000
Speaker 6: Altho, it's quite complicated to be.

165
00:09:54,280 --> 00:09:58,480
Speaker 8: Very precise on its cop but just because it's the

166
00:09:58,600 --> 00:10:01,120
Speaker 8: third time in a French history such a specialot is

167
00:10:01,160 --> 00:10:03,000
Speaker 8: actually implemented, so it's.

168
00:10:02,760 --> 00:10:03,600
Speaker 6: Quite a rare event.

169
00:10:04,360 --> 00:10:07,439
Speaker 8: What we understand for sure is that the government cannot

170
00:10:07,840 --> 00:10:12,439
Speaker 8: launch like new investments or for example, increase musy spending.

171
00:10:13,920 --> 00:10:16,400
Speaker 2: Yes, it's unusual, but then again it was used last

172
00:10:16,480 --> 00:10:19,480
Speaker 2: year because of the difficulties of getting a budget passed,

173
00:10:19,720 --> 00:10:22,880
Speaker 2: and so that remains the main question for the divided

174
00:10:22,920 --> 00:10:23,720
Speaker 2: government in France.

175
00:10:23,720 --> 00:10:24,640
Speaker 3: How are they going to do it?

176
00:10:25,120 --> 00:10:29,280
Speaker 8: Absolutely well, the Specialty series is another good illustration of

177
00:10:29,320 --> 00:10:32,839
Speaker 8: how fragmented is parliament in France and how little the

178
00:10:32,880 --> 00:10:36,200
Speaker 8: culture of compromise is in the countries in the country.

179
00:10:37,160 --> 00:10:39,560
Speaker 8: But in practice, if you look at the budget, we

180
00:10:39,679 --> 00:10:44,280
Speaker 8: understand that a compromise is within rich we are missing

181
00:10:44,320 --> 00:10:47,120
Speaker 8: some ten billion euros of spending cuts or tax heights

182
00:10:47,400 --> 00:10:50,840
Speaker 8: which are something feasible to get in the early weeks

183
00:10:50,880 --> 00:10:54,360
Speaker 8: of January. The objective remains to have a deficeit close

184
00:10:54,440 --> 00:10:57,760
Speaker 8: to five percent of the twenty twenty six GIDP, and

185
00:10:57,840 --> 00:11:00,400
Speaker 8: we would ark that that the king Maker Socialist Party

186
00:11:00,960 --> 00:11:03,440
Speaker 8: will be willing to find a compromise in order not

187
00:11:03,600 --> 00:11:05,760
Speaker 8: to run the risk of slap elections.

188
00:11:06,559 --> 00:11:10,240
Speaker 2: Yes, absolutely, which is the thing that has caused so

189
00:11:10,320 --> 00:11:13,480
Speaker 2: much difficulty for Manuel Marco, isn't it when he did

190
00:11:13,480 --> 00:11:16,480
Speaker 2: that in twenty four But look, France has still got

191
00:11:17,240 --> 00:11:20,720
Speaker 2: the eurzon it's highest budget deficit, and they've been trying

192
00:11:20,720 --> 00:11:25,480
Speaker 2: to fund that with using shorter maturities in terms of

193
00:11:25,520 --> 00:11:28,920
Speaker 2: the brow of borrowing. That in and of itself poses

194
00:11:28,960 --> 00:11:31,480
Speaker 2: some difficulties, doesn't it further down the line.

195
00:11:31,600 --> 00:11:32,440
Speaker 6: Yes absolutely.

196
00:11:32,559 --> 00:11:34,560
Speaker 8: I mean, if we take a step back the big

197
00:11:34,559 --> 00:11:38,079
Speaker 8: picture that France is indeed like lagging its supen piers

198
00:11:38,160 --> 00:11:42,360
Speaker 8: and substantial fiscal consolidation is required over four years to

199
00:11:42,679 --> 00:11:44,479
Speaker 8: just meet its commitments.

200
00:11:44,840 --> 00:11:45,760
Speaker 6: So in order to do.

201
00:11:45,760 --> 00:11:49,480
Speaker 8: That, France needs to increase taxes obviously, but also to

202
00:11:49,600 --> 00:11:53,040
Speaker 8: cut expenditures, and that will be through a pension reform

203
00:11:53,120 --> 00:11:55,640
Speaker 8: in the in the coming years, that's something that the

204
00:11:55,640 --> 00:11:58,880
Speaker 8: presidential election will will look at obviously in the future,

205
00:11:59,200 --> 00:12:03,160
Speaker 8: but it's also through some technical adjustment to the issuance policy,

206
00:12:03,720 --> 00:12:06,920
Speaker 8: you could shorten you can shorten the maturity at issuance

207
00:12:07,000 --> 00:12:10,400
Speaker 8: to decrease the interest payments over time.

208
00:12:10,880 --> 00:12:13,040
Speaker 6: But that's something which is risky as.

209
00:12:12,960 --> 00:12:16,520
Speaker 8: Well because you basically increase the worl over risk, and

210
00:12:16,600 --> 00:12:20,080
Speaker 8: so it's a basic trade off between lowering the cost

211
00:12:20,080 --> 00:12:24,400
Speaker 8: of funding but also increasing the refinancing risk over time.

212
00:12:24,920 --> 00:12:27,439
Speaker 2: When you think about the last year in France of

213
00:12:27,520 --> 00:12:31,960
Speaker 2: this kind of political uncertainty, the economic pressures, how would

214
00:12:32,000 --> 00:12:36,000
Speaker 2: you describe the year in economics and politics in France?

215
00:12:36,800 --> 00:12:37,720
Speaker 6: So that the.

216
00:12:38,040 --> 00:12:42,960
Speaker 8: Political situation has been obviously pretty messy, but the economy

217
00:12:42,960 --> 00:12:46,600
Speaker 8: has been pretty resilient, and quite surprisingly, the economy has

218
00:12:46,640 --> 00:12:49,320
Speaker 8: been growing pretty fast in the third quarter with open

219
00:12:49,400 --> 00:12:53,360
Speaker 8: five GP growth, which was ahead of most of its

220
00:12:53,600 --> 00:12:54,440
Speaker 8: European peers.

221
00:12:54,440 --> 00:12:55,839
Speaker 6: So residence of.

222
00:12:55,800 --> 00:13:00,000
Speaker 8: The economy political mess, and we would wait for twenty

223
00:13:00,200 --> 00:13:03,959
Speaker 8: six to get a sense of how consumers we'll respond

224
00:13:03,960 --> 00:13:05,960
Speaker 8: to that political mess at the end of the year,

225
00:13:06,200 --> 00:13:10,640
Speaker 8: and how films will keep on or not investing and benefit.

226
00:13:10,320 --> 00:13:13,079
Speaker 6: Or not from the lowering of the of.

227
00:13:13,040 --> 00:13:17,280
Speaker 8: The financing conditions thanks to the ECB easing policy over

228
00:13:17,320 --> 00:13:18,520
Speaker 8: the past quarters.

229
00:13:18,760 --> 00:13:21,040
Speaker 3: Okay, so that is interesting.

230
00:13:21,120 --> 00:13:23,720
Speaker 2: And there are also local elections due in March twenty

231
00:13:23,760 --> 00:13:26,240
Speaker 2: twenty six, so as well as the budget, there's also

232
00:13:27,520 --> 00:13:30,880
Speaker 2: that vote to consider too in the coming few months.

233
00:13:31,080 --> 00:13:33,280
Speaker 2: Jan thank you so much for your reflections on what's

234
00:13:33,440 --> 00:13:37,720
Speaker 2: happening in France, including that special law past just this week,

235
00:13:37,720 --> 00:13:41,840
Speaker 2: Bloomberg economist Jean Dalbar stay with us.

236
00:13:42,040 --> 00:13:44,560
Speaker 3: More from Bloomberg Daybakeube coming up after this.

237
00:13:45,960 --> 00:13:49,719
Speaker 2: Now for a word on the interest rate picture, then

238
00:13:49,800 --> 00:13:52,960
Speaker 2: for the year ahead, our m live currency rate stretches.

239
00:13:53,040 --> 00:13:56,360
Speaker 2: Ven Ram joins me this morning. Then, good to speak

240
00:13:56,400 --> 00:14:00,280
Speaker 2: to you. I think it's really important to understand the

241
00:14:00,320 --> 00:14:05,840
Speaker 2: shifting sands when it comes to interest rate policy. Reflect

242
00:14:05,960 --> 00:14:08,679
Speaker 2: on twenty twenty five first and how things have changed

243
00:14:08,720 --> 00:14:10,560
Speaker 2: this year morning, Caitlin.

244
00:14:10,640 --> 00:14:12,600
Speaker 9: So I think that you know, we have gone from

245
00:14:12,640 --> 00:14:16,559
Speaker 9: a position where major where the major global central banks

246
00:14:16,559 --> 00:14:18,679
Speaker 9: were saying, you know what, we need to cut through

247
00:14:18,720 --> 00:14:21,680
Speaker 9: interstates and then inflation is going to converge to two

248
00:14:21,680 --> 00:14:24,960
Speaker 9: percent this year. That of course hasn't happened with most

249
00:14:25,000 --> 00:14:28,080
Speaker 9: of the major central banks. We've got inflation that is

250
00:14:28,160 --> 00:14:32,040
Speaker 9: pretty sticky, holding either around two and a half or three,

251
00:14:32,600 --> 00:14:36,400
Speaker 9: and so you know, the suddenly the central banks are

252
00:14:36,400 --> 00:14:39,600
Speaker 9: having to turn around and ask themselves the question, a

253
00:14:39,760 --> 00:14:43,960
Speaker 9: hang on our our assumptions? Right, we don't see inflation

254
00:14:44,120 --> 00:14:48,000
Speaker 9: converging to two percent anytime soon, not definitely, not next

255
00:14:48,080 --> 00:14:50,160
Speaker 9: year according to even their own projections.

256
00:14:50,640 --> 00:14:52,720
Speaker 10: So there's been a bit of rethink.

257
00:14:52,760 --> 00:14:56,080
Speaker 9: And if you think back, you know the one currency episode,

258
00:14:56,120 --> 00:14:59,080
Speaker 9: in fact, interlinked to interestates of course, is the one

259
00:14:59,120 --> 00:15:02,520
Speaker 9: that sticks out to me most is the what happened

260
00:15:02,520 --> 00:15:02,840
Speaker 9: to the.

261
00:15:02,760 --> 00:15:04,560
Speaker 10: Euro at this point last year?

262
00:15:04,560 --> 00:15:08,120
Speaker 9: I remember calls were for the euro dollar to reach parity,

263
00:15:08,160 --> 00:15:10,440
Speaker 9: and look at where we are now going at one

264
00:15:10,560 --> 00:15:14,720
Speaker 9: eighteen against the dollars. So you know, if there's anything

265
00:15:14,800 --> 00:15:18,200
Speaker 9: that the markets have taught central banks and investors this year,

266
00:15:18,600 --> 00:15:19,720
Speaker 9: it's about humility.

267
00:15:19,840 --> 00:15:24,640
Speaker 2: I think, yeah, okay, a huge change. Briefly, then, what

268
00:15:24,680 --> 00:15:26,640
Speaker 2: do you think is the most important thing to watch

269
00:15:26,680 --> 00:15:28,160
Speaker 2: out for for twenty twenty six?

270
00:15:29,640 --> 00:15:33,560
Speaker 9: Well, I think that you know, one factor that I'll

271
00:15:33,600 --> 00:15:37,400
Speaker 9: be watching deffinitely is for our fast central banks are

272
00:15:37,440 --> 00:15:40,960
Speaker 9: going to turn around and raise rates if needed, for instance,

273
00:15:41,040 --> 00:15:43,920
Speaker 9: but the Bank of Japan or they already, of course

274
00:15:43,960 --> 00:15:47,480
Speaker 9: in a rate hiking cycle. But you know, the tailor

275
00:15:47,560 --> 00:15:50,200
Speaker 9: rule rate shows that they need to be at one

276
00:15:50,200 --> 00:15:55,840
Speaker 9: point five given their own inflation projections and growth projections.

277
00:15:56,200 --> 00:15:58,920
Speaker 9: But you know, the Bank of Japan is kind of

278
00:15:59,280 --> 00:16:01,840
Speaker 9: going at a gay She'll bease thirty five basis.

279
00:16:01,440 --> 00:16:03,680
Speaker 10: Points a year. I don't think that's going to cut it.

280
00:16:05,840 --> 00:16:08,600
Speaker 11: This is Bloomberg Daybreak Europe, your morning brief on the

281
00:16:08,680 --> 00:16:11,720
Speaker 11: stories making news from London to Wall Street and beyond.

282
00:16:12,040 --> 00:16:16,000
Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify,

283
00:16:16,120 --> 00:16:18,120
Speaker 2: and anywhere else you get your podcasts.

284
00:16:18,200 --> 00:16:21,280
Speaker 11: You can also listen live each morning on London Dab Radio,

285
00:16:21,320 --> 00:16:23,800
Speaker 11: the Bloomberg Business app, and Bloomberg dot Com.

286
00:16:24,040 --> 00:16:26,800
Speaker 2: Our flagship New York station is also available on your

287
00:16:26,840 --> 00:16:31,560
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

288
00:16:31,800 --> 00:16:33,080
Speaker 3: I'm Caroline Hepka and.

289
00:16:33,040 --> 00:16:33,840
Speaker 6: I'm Stephen Carroll.

290
00:16:33,880 --> 00:16:36,240
Speaker 11: Join us again tomorrow morning for all the news you

291
00:16:36,320 --> 00:16:39,000
Speaker 11: need to start your day right here on Bloomberg day

292
00:16:39,000 --> 00:16:43,400
Speaker 11: Break Europe