WEBVTT - Bloomberg Daybreak Weekend: Retail Earnings, Banks, China 0:00:00.880 --> 0:00:03.760 This is Bloomberg Daybreak Weekend, our global look at the 0:00:03.760 --> 0:00:06.640 top stories in the coming week from our Daybreak anchors 0:00:06.640 --> 0:00:09.040 all around the world, and straight ahead on the program. 0:00:09.119 --> 0:00:12.760 A big week coming for US retailers. I'm Tom Busby 0:00:12.880 --> 0:00:13.440 in New York. 0:00:13.480 --> 0:00:16.040 I'm Stephen Carolyn London, where a major business conference could 0:00:16.040 --> 0:00:18.320 see tough questions asked of the Bank of England, governor, 0:00:18.400 --> 0:00:20.040 the government and the man who wants to be the 0:00:20.160 --> 0:00:21.320 UK's next Prime Minister. 0:00:21.520 --> 0:00:24.600 I'm Brian Curtis in Hong Kong. The Chinese economic data 0:00:24.640 --> 0:00:27.280 have been all over the map. Are we recovering there 0:00:27.640 --> 0:00:28.560 or falling back? 0:00:28.680 --> 0:00:31.240 I'm Kaylee Lyons in Washington, where we have not one 0:00:31.360 --> 0:00:34.160 but two bank failure hearings on death in the Senate. 0:00:37.000 --> 0:00:40.879 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:40.960 --> 0:00:44.400 Eleve Them free own New York, bloombergon ninety nine to one, Washington, 0:00:44.479 --> 0:00:48.120 d C Bloomberg one oh six one, Boston, Bloomberg nine sixty, 0:00:48.240 --> 0:00:52.720 San Francisco, DAB Digital Radio London, Sirius XM one nineteen 0:00:52.960 --> 0:00:55.680 and around the world on Bloomberg Radio dot com and 0:00:55.760 --> 0:00:57.360 via the Bloomberg Business App. 0:00:58.720 --> 0:01:00.680 Well, Good day to you. I'm Tom Bus. We begin 0:01:00.760 --> 0:01:03.760 today's program with the state of the US retail industry, 0:01:03.800 --> 0:01:06.720 with earnings this week from some of the sector's biggest names. 0:01:07.120 --> 0:01:09.600 Two thirds of the economy is consumer spending, and a 0:01:09.640 --> 0:01:12.760 big chunk of that is spent at retailers. But because 0:01:12.800 --> 0:01:16.160 of stubbornly high inflation, consumers are now paying the highest 0:01:16.160 --> 0:01:20.640 prices ever, as retailers pass along higher costs, also borrowing costs, 0:01:20.680 --> 0:01:23.440 including credit card rates the highest in sixteen years. And 0:01:23.560 --> 0:01:26.560 joining us now for how that is affecting those chains. 0:01:26.920 --> 0:01:30.080 Bloomberg retail reporter Brendan Case. Brendan, thank you so much 0:01:30.080 --> 0:01:30.559 for being. 0:01:30.400 --> 0:01:32.360 Here, Thanks for having me all right now, before. 0:01:32.160 --> 0:01:34.240 We look ahead at what you expect to see from 0:01:34.280 --> 0:01:38.039 those individual retailers, let's talk about the industry as a whole, 0:01:38.520 --> 0:01:41.880 its challenges, as well as what's going pretty well. You know, 0:01:41.959 --> 0:01:44.000 retail sales. They fell for a second month in a 0:01:44.080 --> 0:01:46.640 row in March. Is that an indication that those high 0:01:46.640 --> 0:01:49.800 prices and higher interest rates have really slowed spending. 0:01:50.160 --> 0:01:53.320 Yes, it is, and that's pretty much in line with 0:01:53.440 --> 0:01:57.000 what the big retailers have been expecting. Both Target and 0:01:57.080 --> 0:02:02.160 Walmart issued profit forecasts and their outlooks for comparable sales 0:02:02.200 --> 0:02:06.640 this year back in February, and both companies came in 0:02:07.600 --> 0:02:11.040 pretty well below wall streets expectations for a lot of 0:02:11.040 --> 0:02:13.680 those key metrics. And if you look at what they're 0:02:13.720 --> 0:02:19.400 expecting in terms of comparable sales and in terms of revenue, 0:02:20.240 --> 0:02:25.560 what you're seeing is a pretty muted outlook with you know, 0:02:26.440 --> 0:02:30.560 consumer spending at least as they see it, poised to 0:02:30.639 --> 0:02:33.600 sort of have trouble keeping up with inflation, and so 0:02:33.880 --> 0:02:38.200 in real terms kind of looking for flat to maybe 0:02:38.240 --> 0:02:42.639 even slightly down, and so you know, both companies are 0:02:42.720 --> 0:02:46.720 kind of setting expectations in a pretty cautious way for 0:02:46.760 --> 0:02:49.600 this year, and I do think that that reflects some 0:02:50.320 --> 0:02:52.240 weakness and consumer spending. 0:02:52.919 --> 0:02:55.799 And speaking of which a parrel sales, they fell for 0:02:56.040 --> 0:02:59.079 the first couple of weeks of April versus March five 0:02:59.080 --> 0:03:02.720 point seven percent versus six point nine percent as easter 0:03:02.840 --> 0:03:05.520 warmer weather early in the month, just not enough to 0:03:05.520 --> 0:03:08.720 boost people into the malls and into stores. Transactions down 0:03:08.760 --> 0:03:11.359 more than five percent average amount slipped. This is all 0:03:11.360 --> 0:03:14.119 five served point of sales data. But not looking good, 0:03:14.200 --> 0:03:14.440 is it? 0:03:15.000 --> 0:03:18.400 Yeah, that's exactly right. And this gets us into one 0:03:18.440 --> 0:03:22.040 of the big stories from last year that is certainly 0:03:22.080 --> 0:03:25.160 going to carry over to this year. And obviously, looking 0:03:25.160 --> 0:03:27.760 at apparel sales, you know, across the board, we're going 0:03:27.840 --> 0:03:32.040 to see varying results from the apparel specialists, depending on 0:03:32.560 --> 0:03:34.520 each particular company. But if you look at the big 0:03:34.520 --> 0:03:39.000 mass market retailers like Walmart and Target, last year, apparel 0:03:39.240 --> 0:03:42.720 was a real source spot in terms of the goods 0:03:43.120 --> 0:03:45.800 that they couldn't move and they had to discount pretty heavily. 0:03:45.840 --> 0:03:47.480 And if you just sort of take a step back, 0:03:48.040 --> 0:03:51.160 what happened last year is that both of those companies 0:03:51.200 --> 0:03:56.200 and many others misjudged a shift in demand pretty dramatically, 0:03:56.400 --> 0:04:01.560 and the shift was away from perchase of discretionary goods, 0:04:01.600 --> 0:04:07.160 including apparel, but also electronics, patio furniture, kitchen appliances. People 0:04:07.200 --> 0:04:11.840 started spending a lot less on that than before, and 0:04:12.040 --> 0:04:16.800 they started spending more on groceries, which partly reflected price increases. 0:04:16.800 --> 0:04:20.040 They were forced to spend more on the essentials, and 0:04:20.080 --> 0:04:25.120 it also partly reflected greater spending on services with restaurants 0:04:25.160 --> 0:04:28.960 and travel kind of coming back as the pandemic was abating, 0:04:29.520 --> 0:04:32.560 and so looking at apparel, that is going to be 0:04:32.720 --> 0:04:35.960 another area this year where probably a lot of consumers 0:04:36.000 --> 0:04:38.080 are going to say, you know, maybe I can wait 0:04:38.120 --> 0:04:41.720 another few months before buying that pair of genes or 0:04:41.760 --> 0:04:45.480 buying that blouse. Apparel is going to be a weak spot, 0:04:45.560 --> 0:04:50.720 and probably so will electronics and all those other kind 0:04:50.760 --> 0:04:53.880 of home goods that people spent so heavily on in 0:04:53.920 --> 0:04:57.800 the early stages of the pandemic and now they either 0:04:57.880 --> 0:05:00.960 don't need those goods as much or they're kind of 0:05:00.960 --> 0:05:04.760 willing to wait a while before before buying them. 0:05:04.800 --> 0:05:06.800 All right, well, Brenda, let's talk about some of the 0:05:06.839 --> 0:05:09.600 individual companies that are reporting this week to kick things 0:05:09.600 --> 0:05:12.400 off in the sector. And up on Tuesday is Dow 0:05:12.480 --> 0:05:16.480 Component Home Depot. Now spring the busiest season of the 0:05:16.560 --> 0:05:18.640 year for the chain, are we expecting to hear that 0:05:18.760 --> 0:05:22.440 people are still spending on those home improvement projects, upgrading 0:05:22.480 --> 0:05:25.760 their lawns, doing the driveway? I mean, are we looking 0:05:25.760 --> 0:05:26.799 good at Home Depot? 0:05:27.279 --> 0:05:29.520 You know, it's going to be a really interesting test. 0:05:29.720 --> 0:05:34.600 There were some indications in the last report that home 0:05:34.640 --> 0:05:39.240 improvement spending was showing some weakness, and so the first 0:05:39.240 --> 0:05:42.360 thing we're going to be looking for is any evidence 0:05:42.440 --> 0:05:49.479 that that trend is continuing or worsening. Now, sales themselves 0:05:49.560 --> 0:05:53.000 have actually done okay thanks to higher prices, but the 0:05:53.120 --> 0:05:55.080 unit sales have been down, and so in other words, 0:05:55.080 --> 0:05:58.360 people are buying fewer things, but they're paying more for them. 0:05:59.080 --> 0:06:02.679 And then one of the big questions to watch with 0:06:02.680 --> 0:06:06.160 with Home Depot, especially in terms of the commentary of 0:06:06.200 --> 0:06:09.280 the executives, is kind of what they're seeing in the 0:06:09.400 --> 0:06:13.960 US housing market and how that's filtering through to their results. Traditionally, 0:06:14.640 --> 0:06:17.440 their sales, at least in the eyes of many analysts, 0:06:17.520 --> 0:06:21.359 have been tied to US home sales, which have been 0:06:21.600 --> 0:06:25.760 very choppy but you know, clearly showing some signs of weakness. 0:06:26.200 --> 0:06:28.520 At the same time, the company has been at pains 0:06:28.520 --> 0:06:33.080 to emphasize recently that it's home prices that can justify 0:06:33.080 --> 0:06:34.800 a lot of spending in terms of like do it 0:06:34.839 --> 0:06:39.760 yourself home improvement projects, and so what they say about that, 0:06:40.160 --> 0:06:42.039 what the latest trends are they're seeing in terms of 0:06:42.040 --> 0:06:45.240 their drivers of sales, especially related to the housing market. 0:06:45.320 --> 0:06:47.680 That'll be a big watch item for Wall Street and 0:06:47.960 --> 0:06:48.520 for the rest of. 0:06:48.560 --> 0:06:52.320 US Wednesday is target among I think among the most 0:06:52.440 --> 0:06:55.080 nimble of retailers, and what are we expecting there, and 0:06:55.480 --> 0:06:58.719 particularly I know, the emphasis on groceries. They've moved things 0:06:58.760 --> 0:07:01.000 around in the store near you know, to really put 0:07:01.040 --> 0:07:03.839 an emphasis on that part of their business. 0:07:04.160 --> 0:07:06.120 Yeah, very much so. And what they're trying to do 0:07:06.160 --> 0:07:09.600 there is to tap into the increased spending on just 0:07:09.640 --> 0:07:13.480 the basic goods, kind of put those, put those very 0:07:13.560 --> 0:07:17.160 much front of mind for consumers, and harvest as much 0:07:17.160 --> 0:07:20.960 of that spending on the basics as they can. You know, 0:07:21.040 --> 0:07:24.280 for Target, they get about twenty percent of their sales 0:07:24.360 --> 0:07:27.840 from food and beverage. If you define grocery a little more, 0:07:28.000 --> 0:07:31.240 a little more broadly to include you know, non consumable 0:07:31.240 --> 0:07:34.120 items that were you know, constantly buying paper products, you know, 0:07:34.160 --> 0:07:37.800 cleaning supplies. You get to a higher percentage of their sales, 0:07:37.840 --> 0:07:41.080 but it's still well below fifty percent, and so they're 0:07:41.080 --> 0:07:45.400 trying to reposition themselves to serve that demand and to 0:07:45.480 --> 0:07:48.600 sort of adjust to the fact that a lot of 0:07:48.640 --> 0:07:52.960 their signature goods or sort of their signature strength over 0:07:53.000 --> 0:07:56.400 the years has been in the more discretionary items. You know, 0:07:56.440 --> 0:07:59.520 they've got the reputation for the you know, the cheap 0:07:59.640 --> 0:08:02.960 chic kind of positioning in the market. They get a 0:08:03.000 --> 0:08:05.720 lot of people into the stores looking at clothes, looking 0:08:05.760 --> 0:08:09.120 at you know, bedlinens, you name it. That's where there 0:08:09.200 --> 0:08:12.080 was a lot of weakness in sales last year, and 0:08:12.840 --> 0:08:17.680 probably that weakness will continue, especially in the earlier part 0:08:17.720 --> 0:08:21.480 of this year. It gets a little cloudier as we 0:08:21.600 --> 0:08:24.320 get into the second half of the year. We'll just 0:08:24.360 --> 0:08:28.120 have to see. But Target will certainly be wanting to 0:08:28.120 --> 0:08:32.640 emphasize it's food and beverage and grocery sales, but it'll 0:08:32.640 --> 0:08:38.439 be a big question mark what their discretionary goods sales 0:08:38.679 --> 0:08:41.439 look like. And you know, last time we heard from 0:08:41.440 --> 0:08:44.520 them in February, the CFO just came right out and 0:08:44.559 --> 0:08:46.520 said that the biggest question mark for them is just 0:08:46.640 --> 0:08:48.480 the path of the US consumer. 0:08:48.679 --> 0:08:50.760 And we could say the same thing about the biggie 0:08:51.040 --> 0:08:54.000 Walmart earnings out on Thursday. Is it going to be 0:08:54.080 --> 0:08:54.880 the same as Target? 0:08:54.960 --> 0:08:55.240 You think? 0:08:55.360 --> 0:08:57.240 And then you get the big one, and I think 0:08:57.280 --> 0:09:00.480 the dynamics there are a little different. Look at the 0:09:00.600 --> 0:09:07.480 last two really three quarters for Walmart, they're comparable sales. 0:09:07.720 --> 0:09:10.840 They've just been hitting the cover off the ball, and 0:09:10.920 --> 0:09:15.600 a big part of the demand they've been getting has 0:09:15.640 --> 0:09:18.800 been coming from wealthier consumers, people with household incomes of 0:09:18.840 --> 0:09:21.679 more than one hundred thousand dollars. And what you're seeing 0:09:21.720 --> 0:09:27.040 there is you're seeing Walmart's strength in grocery, which accounts 0:09:27.080 --> 0:09:30.800 for you know, fifty five percent of their total sales. 0:09:32.080 --> 0:09:38.840 You're seeing their lower income customers, middle income customers, you know, 0:09:38.960 --> 0:09:41.840 spending more on those goods simply because they have to 0:09:42.120 --> 0:09:45.400 prices rising, and then you're seeing some of the higher 0:09:45.440 --> 0:09:50.319 income households switching over to Walmart in search of bargains, 0:09:50.360 --> 0:09:54.320 search of lower prices. Despite that strength the last few quarters, 0:09:54.840 --> 0:09:58.920 Walmart came out with a pretty sober outlook for sales 0:09:59.120 --> 0:10:03.439 and co perable sales this year. There was some debate 0:10:04.000 --> 0:10:08.040 among analysts about, you know, are they really that worried 0:10:08.080 --> 0:10:12.560 about consumer spending after so much strength recently, you know, 0:10:12.679 --> 0:10:14.040 or could it be more a case where they just 0:10:14.080 --> 0:10:15.680 wanted to sort of err on the side of caution 0:10:16.040 --> 0:10:19.360 if you ask, If you ask the company, they kind 0:10:19.360 --> 0:10:22.640 of echo what Target said about uncertainty, And you know, 0:10:22.720 --> 0:10:25.719 they've they've said that it's really hard to predict right 0:10:25.760 --> 0:10:29.439 now and they want to be realistic with their assumptions. 0:10:29.440 --> 0:10:31.560 But what we're going to see next week will be 0:10:31.600 --> 0:10:34.000 a big update on that, and we'll also see whether 0:10:34.080 --> 0:10:38.920 their first quarter results are more in line with the 0:10:38.960 --> 0:10:41.280 strengths they've had the last few quarters, or if there's 0:10:41.280 --> 0:10:43.880 a noticeable shift and you know, you see a lot 0:10:43.920 --> 0:10:45.400 of a lot more weakness creeping in. 0:10:45.640 --> 0:10:48.160 Oh boy, a lot to look forward to. Brendan, thank 0:10:48.160 --> 0:10:51.320 you so much. That's Bloomberg Retail reporter Brendan Case. And 0:10:51.400 --> 0:10:55.000 coming up on Bloomberg day Break weekend, big annual gatherings 0:10:55.040 --> 0:10:59.400 of movers and shakers on the UK political and economic scenes. 0:10:59.480 --> 0:11:08.600 I'm Tom and this is Bloomberg. This is Bloomberg Daybreak Weekend, 0:11:08.720 --> 0:11:11.199 our global look ahead at the top stories for investors 0:11:11.200 --> 0:11:13.600 in the coming week. I'm Tom Busby in New York. 0:11:13.640 --> 0:11:16.320 And up later in our program hearings on what went 0:11:16.360 --> 0:11:19.800 wrong at US regional banks. But first, in the UK, 0:11:19.960 --> 0:11:22.679 political and business leaders will be gathering for the annual 0:11:22.679 --> 0:11:25.880 conference of the British Chambers of Commerce. They'll include the 0:11:25.880 --> 0:11:27.920 Governor of the Bank of England and the man who 0:11:27.920 --> 0:11:31.240 could be the next Prime Minister for more. Lets head 0:11:31.280 --> 0:11:34.760 to London and bring in Bloomberg Daybreak Europe banker Stephen Carroll. 0:11:35.240 --> 0:11:37.439 Tom. This event is happening at a time when the 0:11:37.520 --> 0:11:40.959 UK economy is facing all kinds of challenges. Inflation is 0:11:41.000 --> 0:11:44.120 still in double digits, growth as flatlined, and the possibility 0:11:44.280 --> 0:11:47.439 of a recession remains close. All the more reason that 0:11:47.480 --> 0:11:49.520 businesses will want to hear from the likes of Andrew 0:11:49.520 --> 0:11:51.880 Bailey from the Bank of England and the Opposition leader 0:11:52.040 --> 0:11:54.400 cair Starmer as well to discuss what we should expect 0:11:54.440 --> 0:11:57.240 from the British Chambers of Commerce event. Is our UK 0:11:57.280 --> 0:12:01.680 correspondent Lizzyburden, who'll be covering it for Bloomberg TV and Radio. Lizzie, 0:12:01.679 --> 0:12:03.840 this is an organization that represents tens of thousands of 0:12:03.840 --> 0:12:06.800 firms in Britain, all sorts of sizes. Set the scene 0:12:06.800 --> 0:12:08.839 for us about what the big issues are that they'll 0:12:08.840 --> 0:12:10.640 want to be discussing at this event. 0:12:11.240 --> 0:12:13.800 Well, Stephen, the consensus among business leaders that I speak 0:12:13.840 --> 0:12:16.200 to is that the one thing Liz trust got right 0:12:16.440 --> 0:12:19.040 is that the UK needs better growth. So part of 0:12:19.080 --> 0:12:21.240 that does come down to plugging the holes in the 0:12:21.320 --> 0:12:24.199 labor market. Of course, in the latest budget, the Chancellor 0:12:24.240 --> 0:12:28.559 announced the childcare reforms the pension reforms, both to try 0:12:28.559 --> 0:12:31.800 to entice people back into the labor market. The question 0:12:31.960 --> 0:12:35.640 is are they enough to reduce the tightness in the 0:12:35.679 --> 0:12:37.960 labor market and that to have an impact on inflation, 0:12:38.000 --> 0:12:40.280 which of course we know is still in double digits 0:12:40.280 --> 0:12:43.640 here in the UK. They may also businesses want the 0:12:43.720 --> 0:12:46.240 Chancellor to loosen immigration rules more. 0:12:46.400 --> 0:12:47.040 Of course, it's a. 0:12:47.000 --> 0:12:52.240 Toxic issue post Brexit, and at the CBI annual conference 0:12:52.679 --> 0:12:55.960 in the autumn last year, the Opposition leader Kir Starmer 0:12:56.040 --> 0:12:59.720 actually was talking tougher on immigration, so it'll be interesting 0:12:59.720 --> 0:13:04.800 to see see how the two parties frame that one. 0:13:05.360 --> 0:13:05.760 Now. 0:13:06.240 --> 0:13:08.839 The other question is how to make the UK more investible. 0:13:08.880 --> 0:13:11.959 Of course recently we've heard the Financial Conduct Authority looking 0:13:12.000 --> 0:13:16.440 at changing listing requirements for the UK. Really the question 0:13:16.559 --> 0:13:19.720 is how do you help businesses grow and then keep 0:13:19.760 --> 0:13:23.080 them here once they've reached a certain size, because it's 0:13:23.120 --> 0:13:25.280 been a real blow for the government to lose arm 0:13:25.480 --> 0:13:28.720 CRH and Flutter all to other bosses. 0:13:28.840 --> 0:13:31.040 You mentioned the CBI conference as also this question of 0:13:31.040 --> 0:13:33.640 the sort of beauty pageant that politicians have at events 0:13:33.720 --> 0:13:35.360 like this, where they want to show up and be 0:13:35.440 --> 0:13:38.439 popular and liked. And because we are in a very 0:13:38.520 --> 0:13:40.960 long countdown to a general election in the UK, that's 0:13:41.000 --> 0:13:44.680 a really important pitch for Keir Starmer, the Opposition leader, 0:13:45.160 --> 0:13:47.520 because he really wants to be able to confirm his 0:13:47.640 --> 0:13:50.480 pitch as being, you know, Labor being a party that's 0:13:50.520 --> 0:13:52.240 going to be a pro business. 0:13:52.360 --> 0:13:52.560 Yeah. 0:13:52.559 --> 0:13:55.200 We don't have a date for the next election at 0:13:55.200 --> 0:13:57.640 the moment, we're expecting it to be at the latest 0:13:57.760 --> 0:14:02.400 autumn twenty twenty four. Businesses want are specifics. They want 0:14:02.400 --> 0:14:05.520 things that are temporary to be made permanent so that 0:14:05.559 --> 0:14:09.600 they can make that investment. In particular, they want to 0:14:09.640 --> 0:14:12.480 know what's coming in terms of tax cuts. That's going 0:14:12.520 --> 0:14:14.599 to be a key battleground in the run up to 0:14:14.640 --> 0:14:18.440 the next election. Can the government afford to cut taxes? 0:14:18.559 --> 0:14:22.080 Where is it going to make tax cuts? Labor really 0:14:22.160 --> 0:14:24.240 needs to present itself, as you say, as the party 0:14:24.280 --> 0:14:27.280 of businesses. I do think as well that it's significant 0:14:27.360 --> 0:14:31.040 that Labor is sending its leader, Kir Starmer. The government 0:14:31.240 --> 0:14:34.200 so far we know, is only sending a Treasury minister. 0:14:34.320 --> 0:14:37.280 So in terms of signaling how important business is, it 0:14:37.360 --> 0:14:40.400 looks like Kiir Starmer's taking it a bit more seriously. 0:14:40.640 --> 0:14:40.880 Yeah. 0:14:40.920 --> 0:14:43.360 Interesting. Now industrial policy is something on the minds at 0:14:43.480 --> 0:14:46.720 least some of the businesses at this conference. On Bloomberg Radio, 0:14:46.760 --> 0:14:49.360 we've been discussing this with Ben Fletcher from make UK, 0:14:49.520 --> 0:14:55.320 which represents manufacturers here speaking to Caroline Hepger on Bloomberg Radio, 0:14:55.680 --> 0:14:58.960 and they're called for an independent inquiry into the British 0:14:59.000 --> 0:15:00.600 government's industrial policy. 0:15:01.160 --> 0:15:02.000 The things I think. 0:15:01.840 --> 0:15:04.320 That is really important is that we look around the 0:15:04.320 --> 0:15:06.680 world and see which countries do it better than us. 0:15:06.880 --> 0:15:08.440 And I think if you look at Germany, if you 0:15:08.480 --> 0:15:11.080 look at France, you've got a very very long term 0:15:11.080 --> 0:15:11.840 sustained plan. 0:15:11.880 --> 0:15:14.080 If you look at America, you look at a number 0:15:14.080 --> 0:15:16.520 of places in the Far East, they've all got really 0:15:16.520 --> 0:15:19.160 clear plans and they've all got a real investment in 0:15:19.240 --> 0:15:22.960 skills and a focus on what this is going to 0:15:22.960 --> 0:15:24.400 achieve over the next ten years. 0:15:24.640 --> 0:15:26.520 And if you compare that to where we are now. 0:15:26.840 --> 0:15:29.280 Jeremy Hunt made some really positive steps forward in the 0:15:29.280 --> 0:15:33.440 budget last autumn, some clearly defined areas that he wants 0:15:33.480 --> 0:15:36.400 to invest in, but we really need to scale up 0:15:36.400 --> 0:15:38.280 from that and we need a huge amount more flesh 0:15:38.280 --> 0:15:39.560 on the bone in terms of detail. 0:15:39.640 --> 0:15:41.280 What of the Labor Party, I mean, we have an 0:15:41.320 --> 0:15:45.200 election general election looming that not that long away, and 0:15:45.240 --> 0:15:48.360 that the polling is very positive for the Labor Party 0:15:48.400 --> 0:15:50.640 if they were to get in. Do you think this 0:15:50.720 --> 0:15:52.120 is something that would appeal to them. 0:15:52.560 --> 0:15:54.800 We certainly hope that both parties look at it seriously 0:15:54.840 --> 0:15:55.720 and take it seriously. 0:15:55.800 --> 0:15:58.680 To directly address your question, you know, we've had some 0:15:58.760 --> 0:16:02.240 positive signs coming up. The Sounac government and Hunt's budget 0:16:02.640 --> 0:16:05.640 set out that ambition, and we strongly welcome that. The 0:16:05.680 --> 0:16:09.600 opposition party's labor in particular has said that an industrial 0:16:09.640 --> 0:16:12.160 strategy is critical and they would want to. 0:16:12.120 --> 0:16:14.040 Produce one and deliver one in government. 0:16:14.120 --> 0:16:16.320 What we're trying to do, I think, is to be 0:16:16.360 --> 0:16:18.320 a bit of a catalyst for all of that thinking. 0:16:18.800 --> 0:16:21.040 It's really critical that we get this right. 0:16:21.600 --> 0:16:24.080 We've learned some lessons from COVID I think about the 0:16:24.120 --> 0:16:26.400 impact if we don't have a lot. 0:16:26.280 --> 0:16:27.560 Of domestic capability. 0:16:27.600 --> 0:16:30.360 We're seeing the focus on net zero, We're seeing the 0:16:30.360 --> 0:16:34.440 focus on industrial growth in our big competitors, and at 0:16:34.480 --> 0:16:38.400 the moment our plan isn't fully functional, isn't fully worked, 0:16:38.440 --> 0:16:41.600 and isn't fully resourced. So what we see is a 0:16:41.600 --> 0:16:44.480 receptive audience on both sides of the house. What really 0:16:44.680 --> 0:16:46.240 we want to do is to put a turbo charger 0:16:46.360 --> 0:16:48.880 underneath that thinking and get people to realize that this 0:16:48.960 --> 0:16:50.880 isn't something you can just talk about you really have 0:16:50.960 --> 0:16:51.240 to do. 0:16:51.400 --> 0:16:51.480 So. 0:16:51.560 --> 0:16:55.880 That was Ben Fletcher from Make UK speaking to Caroline 0:16:55.920 --> 0:16:59.600 Hepger on Bloomberg Radio. The labor market, Lizzie's also going 0:16:59.640 --> 0:17:01.400 to be in front in the coming days, we're going 0:17:01.440 --> 0:17:04.680 to get an update on wages and unemployment for the UK. 0:17:04.760 --> 0:17:05.879 What should we be watching out for. 0:17:06.240 --> 0:17:08.840 Tightness in the labor market has been driving up inflation, 0:17:08.960 --> 0:17:11.359 so that's why these numbers are so crucial for the 0:17:11.400 --> 0:17:13.639 Treasury as well as the Bank of England. In the 0:17:13.720 --> 0:17:17.280 last data it was tighter than expected. People were still 0:17:17.320 --> 0:17:20.040 demanding wage rises to try to keep up with inflation, 0:17:20.240 --> 0:17:23.520 but then inflation has been swallowing up wage rises in 0:17:23.600 --> 0:17:27.119 real terms. This data is for March and April. I 0:17:27.160 --> 0:17:29.359 would really keep an eye on the employment rate, the 0:17:29.440 --> 0:17:33.040 unemployment rate, I should say, wage growth, and the number 0:17:33.040 --> 0:17:35.639 of days that have been lost to strike action, because 0:17:35.640 --> 0:17:38.280 we know that in the latest GDP data, which of 0:17:38.320 --> 0:17:41.840 course you said, growth had flatlined. One of the big 0:17:41.880 --> 0:17:46.160 reasons was because strikes were weighing on services output. And finally, 0:17:46.400 --> 0:17:49.920 looking at economic inactivity because as I say, we've got 0:17:49.920 --> 0:17:52.760 this huge these holes in the labor market that need 0:17:52.800 --> 0:17:53.320 to be plugged. 0:17:53.440 --> 0:17:56.480 Yeah, the tightness in the labor market is helping those 0:17:56.480 --> 0:17:59.200 who are changing jobs in England, though they're securing pay 0:17:59.240 --> 0:18:01.480 rises of varient ten percent, according to data from the 0:18:01.480 --> 0:18:06.000 recruitment company Read analyzed by Bloomberg. Here's Read's CEO James 0:18:06.040 --> 0:18:07.680 Reid speaking to us on Bloomberg Radio. 0:18:07.960 --> 0:18:10.359 A lot of employers are struggling to find the people 0:18:10.400 --> 0:18:14.240 they need and so they're paying a premium. They're paying 0:18:14.280 --> 0:18:19.480 a premium to attract new applicants, so the wages have 0:18:19.560 --> 0:18:22.080 been going up. I suppose what's interesting about this data 0:18:23.160 --> 0:18:26.240 is it's a much more forensic analysis that we've done 0:18:26.280 --> 0:18:29.280 with Bloomberg than we've ever done before, over five years 0:18:29.359 --> 0:18:33.400 worth of pay data, and it's showing some very interesting 0:18:33.520 --> 0:18:37.639 variations and it does raise some interesting questions, doesn't it 0:18:37.680 --> 0:18:40.399 about the future of the labor market and what the 0:18:40.440 --> 0:18:42.880 Bank of England might do, et cetera. So I think 0:18:42.920 --> 0:18:45.960 this data is fascinating and I would urge people to 0:18:46.000 --> 0:18:46.560 have a look at it. 0:18:46.680 --> 0:18:49.880 That was James Reid, the CEO of the recruitment company 0:18:50.200 --> 0:18:53.560 Read on Bloomberg Radio. Lizzie. Another question that I wanted 0:18:53.560 --> 0:18:56.160 to circle back to in relation to the British Chambers 0:18:56.200 --> 0:18:59.400 of Commerce conference is this idea of who represents business 0:18:59.440 --> 0:19:02.320 in the UK when they're speaking to politicians. The biggest 0:19:02.359 --> 0:19:05.199 business lobby group in this country, the Confederation of British Industry, 0:19:05.240 --> 0:19:08.639 has paused operations because of allegations of sexual misconduct and 0:19:08.680 --> 0:19:13.080 harassment among staff. The CBI is effectively in limbo. Who 0:19:13.160 --> 0:19:15.879 is the government and other politicians speaking to when they 0:19:15.920 --> 0:19:17.080 want to speak to business. 0:19:17.320 --> 0:19:21.080 Well, I actually interviewed one of his Treasury ministers, the 0:19:21.119 --> 0:19:23.680 City Minister, Andrew Griffith, and I asked him this very 0:19:23.760 --> 0:19:28.159 question and he said that the Treasury is always talking 0:19:28.200 --> 0:19:30.960 to business. There's a plethora of lobby groups out there 0:19:31.200 --> 0:19:35.840 for that community. You've got the British Chambers of Commerce, 0:19:36.200 --> 0:19:39.240 who's hosting this conference. There's also the Federation of Small Business, 0:19:39.240 --> 0:19:42.960 the FSB, and the Institute of Directors the IOD. So 0:19:43.119 --> 0:19:45.639 all of them are trying to fill this void that's 0:19:45.880 --> 0:19:48.920 been left by the CBI when the government has said 0:19:49.520 --> 0:19:52.040 that it's so problematic that I think the Chancellor himself 0:19:52.080 --> 0:19:55.200 said there's no point engaging with the CBI when their 0:19:55.240 --> 0:19:58.240 own members have deserted them in droves. 0:19:58.440 --> 0:20:00.760 Okay, something to watch out for as we look ahead 0:20:00.840 --> 0:20:02.720 to the events of the coming week. Thank you to 0:20:02.720 --> 0:20:06.000 Bloomberg's UK correspondent Lizzie Burden. I'm Stephen Kroen in London. 0:20:06.040 --> 0:20:08.520 You can catch us every weekday morning here for Bloomberg 0:20:08.560 --> 0:20:11.280 Daybreak Europe, beginning at six am in London on one 0:20:11.320 --> 0:20:13.200 am on Wall Streets. Tom. 0:20:13.200 --> 0:20:16.320 Thank you, Stephen, and coming up on Bloomberg day Break weekend, 0:20:16.359 --> 0:20:19.959 some big hearings on what went wrong with US regional banks. 0:20:20.400 --> 0:20:22.400 I'm Tom Busby and this is. 0:20:22.320 --> 0:20:30.120 Bloomberg broadcasting live from the Bloomberg it aactive brokers studio 0:20:30.240 --> 0:20:33.399 in New York. Bloomberg elemon three oh to Washington d C, 0:20:33.520 --> 0:20:36.920 Bloomberg ninety nine one to Boston, Bloomberg one O six 0:20:37.000 --> 0:20:40.280 one to San Francisco, Bloomberg nine sixteen to the country, 0:20:40.320 --> 0:20:44.600 Sirius XM Channel one nineteen to London DAB Digital radio, 0:20:44.680 --> 0:20:47.760 and around the globe the Bloomberg Business app in Bloomberg 0:20:47.840 --> 0:20:51.320 Radio dot Com. This is Bloomberg Daybreak Weekend. 0:20:57.520 --> 0:20:59.639 I'm Tom Busby in New York with your global look 0:20:59.680 --> 0:21:02.200 ahead at the top stories for investors in the coming week. 0:21:02.560 --> 0:21:05.680 The regional bank turmoil still haunting us as we move 0:21:05.760 --> 0:21:07.920 into the new trading week, and for more, let's add 0:21:07.960 --> 0:21:10.440