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Speaker 1: This is Bloomberg Daybreak here for this Tuesday, the seventh

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Speaker 1: of February in London. Coming up today, a growing tragedy.

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Speaker 1: More than four thousand people have died after earthquakes hit Turkey.

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Speaker 1: In Syria, the French Connection BNP Parry Bear reports results

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Speaker 1: as higher interest rates lift European banks back on the table.

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Speaker 1: The Fed's Bostic says rates could now be headed for

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Speaker 1: a higher peak. The UK must get on an economic

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Speaker 1: war footing brick Coyn is coming, and the British vault

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Speaker 1: rescuer may need a recharge. Those other stories we're looking

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Speaker 1: at in today's papers, and I'm leanne Gern's plus pretty incoherent.

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Speaker 1: Danny Blanche Blower pulls no punches in his assessment of

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Speaker 1: Bank of England rate setters. That's all straight ahead. On

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Speaker 1: Bloomberg Daybreak Europe on DAB Digital Radio, London, Bloomberg eleven

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Speaker 1: three oh New York, Bloomberg Washington, d C, Bloomberg one

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Speaker 1: oh six one, Boston, Bloomberg nine sixties, San Francisco, Syrus

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Speaker 1: XM Channel one nineteen and around the world on Bloomberg Radio,

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Speaker 1: dot Com and var the Bloomberg Business Set. Good Morning,

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Speaker 1: I'm Stephen Carroll and I'm Caroline Hike. Here are the

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Speaker 1: stories that we're following today. Rescue teams are continuing the

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Speaker 1: search for survivors from toppled buildings in Turkey and neighboring Syria.

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Speaker 1: At least four thousand people have died after an earthquake

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Speaker 1: with a magnitude of seven points seven hit the border

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Speaker 1: between the countries. Mark Locock is the u n's former

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Speaker 1: under Secretary General for Humanitarian Affairs. He's concerned about help

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Speaker 1: reaching affected parts of Syria. Millions who have fled the

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Speaker 1: fighting during the civil war away from the Syrian military

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Speaker 1: authorities are basically encamped in very rudimentary conditions, which may

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Speaker 1: be the place is worth worst affected in Syria by

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Speaker 1: deserve play. That was the former UN under Secretary General

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Speaker 1: for Humanitarian Affairs, Mark Locock. Rescue teams from overseas have

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Speaker 1: begun arriving in Turkey today as millions are without power

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Speaker 1: or heat in freezing temperatures. Turkeys President redp tibe Urduan

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Speaker 1: says his country is facing the strongest disaster in a century.

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Speaker 1: And now let's get two results from France's BMP Parry

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Speaker 1: bus So they've reported a fix sales and trading revenue

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Speaker 1: for the fourth quarter that beat average analysts estimates. BMP

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Speaker 1: parry Bus fourth quarter thick sales and trading revenue coming

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Speaker 1: in at one point zero nine billion euros, well above

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Speaker 1: the estimated eight hundred and fifty five million, and they're

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Speaker 1: also planning a five billion euro buy back for twenty three,

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Speaker 1: raising the five targets. BNP Paribus fourth quarter net income

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Speaker 1: is two point one five billion euros. That there is

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Speaker 1: a miss on the estimated two point to nine billion.

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Speaker 1: Just to go to the latest results next from soft Bank,

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Speaker 1: their third quarter vision funds loss is six hundred and

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Speaker 1: sixty into one billion year. That was versus a profit

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Speaker 1: of fifty point four billion year on years. That is

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Speaker 1: the latest that we're getting from soft Bank. Now. Atlanta

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Speaker 1: Fed President Raphael Bostic has told Bloomberg that the terminal

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Speaker 1: rates could be headed higher. The Atlanta Fed president doesn't

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Speaker 1: vote on policy this year and says that the base

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Speaker 1: case is still for rates to peak at five point

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Speaker 1: one percent. Meanwhile, the US Treasury Secretary Janet Yellen says

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Speaker 1: that JANUS read hot jobs reports shows the US economy

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Speaker 1: is still on track for a soft landing. Here's what

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Speaker 1: she's told ABC is good morning America. You don't have

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Speaker 1: a recession when you have five hundred thousand jobs and

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Speaker 1: the lowest unemployment rate in more than fifty years. So

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Speaker 1: what I see is a path in which inflation is

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Speaker 1: declining significantly and the economy is remaining strong. That was

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Speaker 1: the former U. S. Tregury Secretary and former FED Chief

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Speaker 1: Janet Yellen. Bloomberg will be speaking at to the current

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Speaker 1: Fed chief later today. You'll be able to listen to

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Speaker 1: that interview from five pm at London time for a

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Speaker 1: Bank of England policymaker Danny blanch Flaire says collapsing house

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Speaker 1: prices will push the UK Center Bank towards rapid rate cuts.

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Speaker 1: Speaking to us here on Bloomberg Daybreak, euro blanch Flaire

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Speaker 1: didn't mince his words. What people should see is a

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Speaker 1: collapsing housing market, a slowing economy. And the reason is

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Speaker 1: that these interest rate hypes that have been going crazily

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Speaker 1: haven't actually impacted the economy yet. So what you have

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Speaker 1: is shot schools by COVID, shot caused by the Ukraine War,

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Speaker 1: shots caused by energy price rises. And then the central

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Speaker 1: bank goes and goes and makes it worse. We're bringing

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Speaker 1: you more of that interview with the former NPC rates

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Speaker 1: enter Danny blanche Flaire, now at Dartmouth College in a

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Speaker 1: few minutes time. His comments come less than twenty four

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Speaker 1: hours after the Bank of England policymaker Katherine managed her

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Speaker 1: fellow rates enters to quote, stay the course and carry

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Speaker 1: on raising rates. It's understood that the Prime Minister is

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Speaker 1: going to announce a reshuffle of his cabinet today and

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Speaker 1: is considering major changes to a government department. Bloomberg Samuel

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Speaker 1: Etien reports Richie Sunak is trying to reset his premiership

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Speaker 1: after a rocky first hundred days in office. The Prime

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Speaker 1: Minister needs to appoint a new Conservative Party chair after

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Speaker 1: he sacked Nadeem Zahawi over a tax scandal more than

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Speaker 1: a week ago. Now, Bloomberg has learned that a wider

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Speaker 1: overhaul is being planned. This as officials have held talks

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Speaker 1: with ministers in recent days on breaking up the Department

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Speaker 1: for Business, Energy and Industrial Strategy. Sunak is said to

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Speaker 1: be unimpressed with the department's focus on energy, which has

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Speaker 1: left little capacity to produce significant pro business policies. One

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Speaker 1: option being discussed is creating a stand alone department of

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Speaker 1: Energy and a separate office for Business and Trade in London.

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Speaker 1: I'm Samuel Etien Bloomberg Daybreak Europe Credit See is delaying

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Speaker 1: a much anticipated compensation day for some of its bankers. Sources.

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Speaker 1: The same meetings about bonuses due to be held on

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Speaker 1: Tuesday have been canceled. Bloomberg understands the change mainly effects

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Speaker 1: bankers and the managing director or director level, and that

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Speaker 1: talks could be rescheduled in the weeks ahead. The news

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Speaker 1: comes after the lender announced that it will pay senior

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Speaker 1: bankers an upfront cash award this year to incentivize staff

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Speaker 1: to stick with the lender. Okay, there are a few

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Speaker 1: of our top stories this morning, just in terms of

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Speaker 1: a bit more detail around BMP Parry Bar. Yes, they're

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Speaker 1: going to do this share buy back. Also, they seem

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Speaker 1: to have done particularly well in their fit trading business.

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Speaker 1: This of course has been an area of real strength

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Speaker 1: in terms of fixed income for the lender, so they

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Speaker 1: made one point one billion euros there, but they also

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Speaker 1: setting up a bigger goals for the year ahead, so

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Speaker 1: it does seem to be a pretty strong showing in

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Speaker 1: terms of BNP PIB and their fourth quarter earnings. Yeah,

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Speaker 1: and in terms of soft Bank, we're getting more details

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Speaker 1: there as well. Their third quarter net loss so over

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Speaker 1: seven and eighty billion, and they had been estimated to

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Speaker 1: make a profit in the third quarter of over two

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Speaker 1: hundred billion yen, so a really big miss from there.

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Speaker 1: And as we were telling you the Vision funds last

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Speaker 1: there of six hundred and sixty billion yen for the

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Speaker 1: third quarter that had been versus a profit year on year.

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Speaker 1: So that is the latest from soft Bank as well.

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Speaker 1: Carline was also just interested to see the latest number

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Speaker 1: of on retail sales out for the British Retail Consortium

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Speaker 1: this morning. So disappointing last month, retail sales rising by

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Speaker 1: just four point two percent year on year in January.

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Speaker 1: That's around half of the pace of December, down from

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Speaker 1: growth of almost twelve percent year previously. I did notice

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Speaker 1: that one of the areas that spending was up strongest Cafgreys,

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Speaker 1: men's outfits and shoes. I read this as I discovered

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Speaker 1: that I have a whole in the elbow of my jacket,

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Speaker 1: so perhaps I have not been spending enough nightfits. Well,

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Speaker 1: I yeah, I think it's just notable isn't it that

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Speaker 1: there was a splurge for Christmas and then come January

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Speaker 1: the consumer and bitness under a lot more pressure. Yeah,

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Speaker 1: maybe you need to buy your new jackets. Seven right,

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Speaker 1: the UK must get onto an economic quote war footing.

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Speaker 1: Brit Coin apparently is coming and British role to the rescuer.

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Speaker 1: There may need a recharge. Now the paper review on

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Speaker 1: Blue birdday break Europe the news you need to know

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Speaker 1: from today's papers Blue basically and go and joins us

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Speaker 1: now for the newspaper review. Then, so the headline in

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Speaker 1: the Telegraph, only an economic war footing can beat Biden's

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Speaker 1: subsidy blitz. That word should be used advisedly, of course,

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Speaker 1: but one of the details around this, Yes, indeed, Caroline,

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Speaker 1: good morning to you. So the Telegraph is reporting business

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Speaker 1: leaders are now urging Richie's Sunac to unveil these radical

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Speaker 1: reforms and this comes as a US races to attract

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Speaker 1: foreign investments with subsidies. In a letter to the Prime Minister,

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Speaker 1: the chief executives of Virgin Atlantic, Coots, Heathrow Airport and

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Speaker 1: also Rolls Royce's nuclear power projects are demanding a UK

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Speaker 1: plan and this is really to counteract the US Inflation

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Speaker 1: Reduction Act. Joe Biden's three hundred sixty nine billion subsidies

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Speaker 1: package has already apparently, according to The Telegraph, attracted investment

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Speaker 1: away from the UK as they do plan to go

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Speaker 1: to the US instead. Later today, business leaders are going

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Speaker 1: to warn that the UK needs to move to this

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Speaker 1: economic war footing pretty strong words there, Caroline, and exploit

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Speaker 1: its existing advantage in energy industries connected to nuclear, wind,

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Speaker 1: hydrogen and also bio fuels. And it's also important to

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Speaker 1: note the EU is currently preparing its very own financial

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Speaker 1: incentives package, so this is really a warning that we

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Speaker 1: could be left behind unless we do make some radical changes. Okay,

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Speaker 1: let's change to The Guardian next has a story on

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Speaker 1: b coin, digital currency could be in use by the

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Speaker 1: end of the decade. I know we could go completely

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Speaker 1: cash less, but we could be using a new digital

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Speaker 1: pound by the end of the decade too. And this

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Speaker 1: comes as a Bank of England and the Treasury begin

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Speaker 1: drawing up these new plans. According to the Guardian, the

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Speaker 1: government is really speeding up its response and this is

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Speaker 1: because of the rise of privately issue you cryptocurrencies and

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Speaker 1: stable coins. We do know that they can be volatile,

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Speaker 1: and this will be with a public consultation process on

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Speaker 1: brit Coin, which is going to start today. It's also

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Speaker 1: gonna last for four months. The Bank and the Treasury

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Speaker 1: are really going to try and reassure the public that

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Speaker 1: the state back digital currency dubbed brit Coin is going

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Speaker 1: to be as safe as cash. And this is really

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Speaker 1: following the collapse of FTX that we have seen. But

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Speaker 1: the Chancellor, Jeremy Hunt says that the government could still

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Speaker 1: decide against going ahead with this, but momentum behind the

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Speaker 1: idea it's really building. So Stephen and Carol, I wonder Caroline,

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Speaker 1: not Carol, Stephen is Carol all in one word? I

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Speaker 1: wonder how you feel about going completely cash less because

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Speaker 1: this would work much like paper money. So what's the

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Speaker 1: point is my question? Like, if it's very similar to

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Speaker 1: you know, just having a digital bank out, I don't

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Speaker 1: get it. I mean, it's been a very criticized. Actually

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Speaker 1: this it's not Bitcoin. The whole point of bitcoin and

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Speaker 1: other cryptocurrencies is that they are untethered to the nation state, right,

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Speaker 1: That's the whole kind of advantage of them. This would

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Speaker 1: be the absolute opposite. Loads of people have pulled cold

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Speaker 1: water on it. Um a solution in search of a problem, apparently,

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Speaker 1: according to the Lord's Economic Affairs Committee. Sorry I'm being

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Speaker 1: very negative. No, it's okay, but I just want to

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Speaker 1: say that I've lost my bank card again so I

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Speaker 1: can't get up daily. This is a daily occurrence in

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Speaker 1: my life. So sometimes if I just feel that we

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Speaker 1: can't have any cards or any forget. This is not

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Speaker 1: it's not a solution. It's asia to this problem. But

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Speaker 1: hopefully this will we come something that helps people like me. Actually,

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Speaker 1: and let's turn to The Times next. It has the

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Speaker 1: headline British Vault rescuer needs a recharge. Yes, indeed, so

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Speaker 1: e Y is hopeful of completing the sale of British Vault.

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Speaker 1: Now we have spoken about this before on the program

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Speaker 1: and it's this failed project to build this big giga

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Speaker 1: factory to make electric car batteries on the Northumberland Northumbrian coast.

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Speaker 1: This week now an Australian company, Recharged, has really won

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Speaker 1: the bid to revive this failed project. But according to

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Speaker 1: Alistair Osborne, he's been writing a comment piece for The

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Speaker 1: Times now he's questioning if the startup will really actually

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Speaker 1: be successful and if it is what the project needs

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Speaker 1: to be revived and have a new life. In the article,

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Speaker 1: Osborne points out that Recharges backed by New York based

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Speaker 1: investment outfit, which has led by the former p WC

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Speaker 1: partner David Collard. He points out Collard's first key venture

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Speaker 1: was actually supplying Ppe during COVID, and he questions how

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Speaker 1: his AI and medical technology fronts have any links to

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Speaker 1: electric cars. Colleague's interest in British well was facilitated by

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Speaker 1: none other than Beefy. Now, if you're a cricket fan,

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Speaker 1: you know who beef he is. That's Ian both them

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Speaker 1: and now he's not just a cricketer, he is a

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Speaker 1: trade envoy to Australia. He's really helped coordinate this whole

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Speaker 1: bird but no one has disclosed what Collard is actually

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Speaker 1: paying for this. But this, on a serious note, is

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Speaker 1: really important, as Alistair points out that building this battery

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Speaker 1: plant is seen as an absolutely vital part of securing

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Speaker 1: the future for UK car manufacturing. But he is questioning

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Speaker 1: is this the right company going ahead? Is the startup

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Speaker 1: going to make things happen for you know, is in

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Speaker 1: admit iustrations. So that's the issue. So this whole thing

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Speaker 1: could be could happen in the next seven days. In fact,

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Speaker 1: Bloomberg's Saiddar Philip has also a kind of piece on this,

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Speaker 1: less opinion, a bit more factual, but he says, yeah,

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Speaker 1: it's going to be wrapped up in the next seven days,

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Speaker 1: so very nice. And also two hundred jobs Caroline were

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Speaker 1: lost when I went into administration, because could we see

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Speaker 1: those people coming back to work if this has taken over.

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Speaker 1: So there's lots of questions around British fault at the moment.

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Speaker 1: All right, Leaneran's thank you very much. That look at

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Speaker 1: the newspapers. Now the Bank of England is getting it

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Speaker 1: totally wrong by continuing to increase interest rates despite forecasting

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Speaker 1: a dramatic drop in inflation over the medium term and

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Speaker 1: a long recession for Britain. Now that is the view

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Speaker 1: of Danny blanche Flower, professor of economics at Dartmouth College

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Speaker 1: and former Monetary Policy Committee member at the Bank of England.

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Speaker 1: We spoke to him after Catherine Man's comments on the

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Speaker 1: need for higher rates on Monday, and he was typically

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Speaker 1: colorful and pointed in his criticism of the bank policy incoherence,

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Speaker 1: he says, and the damage ahead for the UK economy.

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Speaker 1: Some of the story at the Bank of England is

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Speaker 1: that they can be less folki ish. I think what

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Speaker 1: you're going to see in the UK is you're going

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Speaker 1: to see the central bank having to respond to really

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Speaker 1: bad data and so you're going to start to see

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Speaker 1: more than we're seeing house prices tumbling. You're going to

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Speaker 1: start to see really bad stuff appearing as these economies

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Speaker 1: slow fast, and the central bank and the markets are

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Speaker 1: then going to respond to that. So I'm sitting here

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Speaker 1: waiting and central banks are sitting there thinking, oh goodness,

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Speaker 1: let's hope this idea of a soft landing is fine

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Speaker 1: and we're not going to see a shoes rock. And

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Speaker 1: my bet to the listeners here is that shoes will drop.

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Speaker 1: What does that mean for jobs? Recession of the UK

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Speaker 1: economy generally then in the next six months, well, I mean,

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Speaker 1: if you think of the UK economy clearly the central

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Speaker 1: bankers forecast and a recession lasting longer, think of it

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Speaker 1: a recession lasting longer than have in the Great Recession

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Speaker 1: at the State in two thousand age and nine. Um

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Speaker 1: Jeremy Hunt has actually imposed a huge austerity budget, so

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Speaker 1: that austerity bites, the raising of rates bites, but it

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Speaker 1: hasn't been yet they take a time to have an effect.

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Speaker 1: As so listeners understand, as I sat at the Bank

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Speaker 1: of even my job was to think about what inflation

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Speaker 1: was going to be at about eighteen months to two

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Speaker 1: years down the road, and you change rates now because

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Speaker 1: it has it takes time to have an effect. So

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Speaker 1: what was going to see. What people should see is

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Speaker 1: a collapsing housing market, a slowing economy. And the reason

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Speaker 1: is that these interest rate hikes that have been going

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Speaker 1: crazily haven't actually impacted the economy yet. So what you

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Speaker 1: have is shots caused by COVID, shot caused by the

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Speaker 1: Ukraine War, shots caused by by energy price rises, and

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Speaker 1: then the central bank goes and goes and makes it worse.

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Speaker 1: So slowing is coming. The only issue then is what

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Speaker 1: will politicy makers do and will they respond pretty quickly

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Speaker 1: as they say at the Bank of England, we already

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Speaker 1: have de Diner and ten Rairo's saying we shouldn't be

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Speaker 1: doing this and that that's going to move rates. The

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Speaker 1: idea that Catherine Man has, who represents the interest of

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Speaker 1: banks not that of ordinary people, is that we're going

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Speaker 1: to see rapid u turns as economies slow, and we

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Speaker 1: saw today. We just got numbers out this morning. P M. I.

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Speaker 1: In construction in the UK today is horrible, shows rapid slowing.

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Speaker 1: Look at the European ones similarly. So you're likely to

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Speaker 1: see collapses in construction coming. And that's the first thing

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Speaker 1: we're seeing, because that's what it rises in interest rates.

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Speaker 1: Do they slow the mortgage markets, slow the housing market,

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Speaker 1: and then it feeds through two jobs and other things.

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Speaker 1: Is there something uniquely British about these issues though? I

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Speaker 1: mean you've drawn comparisons and parallels between the Third and

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Speaker 1: the Bank of England. But the UK economy, as as

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Speaker 1: you will though, is very different to the US economy.

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Speaker 1: Is there an aspect that is going to be a

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Speaker 1: uniquely British properly, it's called Brexit. I mean, Brexit is

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Speaker 1: obviously your uniquely bad thing. I mean I I have

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Speaker 1: opposed it to the nail from the very beginning. Here's

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Speaker 1: another thing which people forget. When I sat on the

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Speaker 1: Bank of England, Northern Rock collapsed and there were thousands

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Speaker 1: of people out in the streets queuing up outside banks.

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Speaker 1: That didn't happen in the United States when Layman Brothers

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Speaker 1: failed it on. So the UK had a bank collapse

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Speaker 1: where people were out in the streets. The ability of

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Speaker 1: the government to control things, I think is is weaker

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Speaker 1: here because we saw them crash. The stockmen crashed, the

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Speaker 1: foreign exchange market, crashed, the bond market, and we have

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Speaker 1: three prime ministers in a short time. So I think

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Speaker 1: the UK economy sits much much more on a knife

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Speaker 1: edge than the US economy does, which is much more

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Speaker 1: bounced back ability um and more credibly can make institutions

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Speaker 1: and policy makers. I think that's I think it's like

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Speaker 1: in aerably true. This is Bloomberg Daybreak Europe, your morning

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Speaker 1: brief on the stories making news from London to Wall

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