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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Dabac podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Friday, the first of March in London.

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Speaker 1: I'm Caroline Hepkit.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Left wing disruptor

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Speaker 2: George Galloway becomes a British MP once again after a

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Speaker 2: by election dominated by Gaza.

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Speaker 1: In China, slowing factory activity raises new questions over the

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Speaker 1: health of the world's second biggest economy.

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Speaker 2: And taking it in their stride, FED officials worn against

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Speaker 2: over analyzing the latest sticky inflation data.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: George Galloway has won a seat in Parliament in the

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Speaker 2: Rochdale by election with a campaign calling for the end

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Speaker 2: for an end to the conflict in Gaza. The left

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Speaker 2: wing disruptor says voters wanted to send the Labor Party

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Speaker 2: a message.

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Speaker 3: This Gaza.

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Speaker 4: Andrew Wilbe high Price.

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Speaker 2: Galloway is a former Labor MP who was kicked out

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Speaker 2: of the party in two thousand and three for rebelling

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Speaker 2: over the Iraq War. He won the election by a

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Speaker 2: landslide James Walcock has more now on the results.

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Speaker 5: It is a major headache for Kiss Starmer. George Galloway

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Speaker 5: won double the votes of Labour and the Conservative candidates

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Speaker 5: put together. The result will add to the sense of

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Speaker 5: disarray in British politics as tensions over the war in

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Speaker 5: Gaza spillover Rochdale, where the substantial Muslim population had been

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Speaker 5: held by Labour since twenty ten. But Starmer has owned

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Speaker 5: his own candidate in the race after they accused Israel

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Speaker 5: at being complicit in the October seventh attacks. The scale

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Speaker 5: of Galloway's win raises questions about how Labor lost a

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Speaker 5: safe seat to a one man rebuke of their party

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Speaker 5: in London. James Walcock Bloomberg Radio.

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Speaker 1: The United Nations Security Council has called an urgent meeting

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Speaker 1: after one hundred and twelve people were reportedly killed during

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Speaker 1: an aid delivery in girls Up. The hamas Ran Health

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Speaker 1: Ministry says that Israeli troops opened fire at people trying

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Speaker 1: to lift food from trucks. Israel's chief military spokesperson, Daniel Hagari,

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Speaker 1: insists they did not target civilians. These reel defense forces

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Speaker 1: operate according to the rules of engagement and the international law.

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Speaker 1: No IDF strike was conducted towards the eight convoy. The

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Speaker 1: IDEF says most of the victims were trampled or hit

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Speaker 1: as the truck sought to escape the chaos, but the

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Speaker 1: facts remain in dispute. President Joe Biden warned that the

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Speaker 1: deadly incident threatens to further set back efforts to negotiate

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Speaker 1: a cease fire.

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Speaker 2: Factory activity in China has slowed for the fifth month

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Speaker 2: in a row, as weak demand stunt's growth. Official PMI

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Speaker 2: data for February dropped to forty nine point one, down

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Speaker 2: from January, but still slightly above the median forecast of

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Speaker 2: forty nine by from economists surveyed by Bloomberg. The news

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Speaker 2: comes after appliance maker Bosch's CEO Stefan Hartung told Bloomberg

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Speaker 2: that his sector is feeling the effects of the slowdown

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Speaker 2: in China.

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Speaker 6: In general, the economy, you know, is not growing as

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Speaker 6: fast as it was anticipated some years ago, so we're

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Speaker 6: talking about a lower growth number, and that's what we

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Speaker 6: feel specifically, also in the home appliance business, also in

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Speaker 6: the construction related business, because you all know the construction

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Speaker 6: business and the real estate business. In China is in

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Speaker 6: a trough.

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Speaker 2: That's BOSH CEO Stephan Hartung speaking to Bloomberg. Chinese non

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Speaker 2: manufacturing activity beat estimates, highlighting an uneven recovery in the

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Speaker 2: world's second largest economy. Economists expect President Chiotingping's government to

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Speaker 2: announce a fairly ambitious twenty twenty four growth goal when

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Speaker 2: the legislature meet meets next week.

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Speaker 1: The Federal Reserves preferred inflation metric has risen at its

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Speaker 1: fastest pace in nearly a year. Recent data shows the

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Speaker 1: core Personal consumption Expenditures price index rose by zero point

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Speaker 1: four percent from December to two and a half percent,

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Speaker 1: so above the FEDS two percent target. Despite the jump,

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Speaker 1: the Bank of San Francisco President Mary Daily says that

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Speaker 1: policy makers are ready to lower US interest rates.

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Speaker 4: We want to avoid holding on all the way to

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Speaker 4: two percent. They're putting policy very tight and then cause

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Speaker 4: an unnecessary downturn. We are agile, and we're sitting in

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Speaker 4: what I call the ready position. We are ready to

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Speaker 4: make moves and adjust as the data demand us to do,

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Speaker 4: and I think right now the economy and policy you

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Speaker 4: are in a good place to do that.

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Speaker 1: The Fed's Mary Daily, speaking to Bloomberg. Then the inflation

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Speaker 1: news comes as US consumer spending dropped for the first

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Speaker 1: time in five months. According to the Bureau of Economic Analysis.

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Speaker 2: Shows in New York Community Bank Orp have plunged by

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Speaker 2: twenty two percent in extended trading. The massive drop comes

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Speaker 2: after the American lender took a two point four billion

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Speaker 2: dollar hit to earning as it identified weakness with its

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Speaker 2: loan review process. The story from Gloomberg's Charlie Palace.

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Speaker 7: The bank also said it needs more time to file

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Speaker 7: its annual report to regulators as it shores up its

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Speaker 7: internal controls. In a separate filing, NYCB said Quote management

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Speaker 7: identified material weaknesses in the company's internal controls related to

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Speaker 7: internal loan review resulting from ineffective oversight, risk management, and

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Speaker 7: monitoring activities. The announcement reignites a drama that erupted at

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Speaker 7: the end of January when the bank slashed its dividend

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Speaker 7: and stockpiled cash to cover troubled loans in New York.

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Speaker 7: Charlie Pellett Bloomberg Radio.

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Speaker 1: UK consumers are tightening their belts as the country navigates

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Speaker 1: a technical recession. Bloomberg's teama Ada Bayer has the details.

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Speaker 8: One of the wettest februaries on record, seems to have

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Speaker 8: also dampened the spirits of the country shoppers. According to

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Speaker 8: new data from the British Retail Consortium, the number of

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Speaker 8: Uky's store visitors dropped six point two percent from last year,

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Speaker 8: with London among the worst performing regents. Even the usual

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Speaker 8: profit driving holidays such as Valentine's Day failed to woo customers,

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Speaker 8: casting doubt on hopes of an economic revival bolstered after

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Speaker 8: retail sales rebounded in January. The latest figures put the

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Speaker 8: UK behind its European peers and underscore the challenge facing

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Speaker 8: Richie Sunak, who hopes to turn the economy around before

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Speaker 8: this year's general election in London. Tiwa Adabayo Bloomberg Radio.

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Speaker 1: Now in a moment, we'll bring you more on the

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Speaker 1: Rochdale election result for a new MP and also look

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Speaker 1: at what the latest US economic data means for the

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Speaker 1: Federal Reserve. But then this also caught Onia. We've been

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Speaker 1: thinking about this because next week in China got the

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Speaker 1: National People's Congress taking place. This is one of the

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Speaker 1: most sort of significant gatherings. Reading the latest piece from

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Speaker 1: our opinion Colomist Karishma Vesuani on this about really the

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Speaker 1: direction of China. The Chinese parliament has given this unprecedented

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Speaker 1: amount of control to she that he's sort of exerted

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Speaker 1: over the political system over people in China. Kishima Veswani

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Speaker 1: is saying, you know, this is quite a significant event,

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Speaker 1: talking about you know, strong men often squeezing countries, but

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Speaker 1: squeezing them too far, and she's putting Sijinping in that camp.

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Speaker 2: Yeah, And it's kind of saying, this is a moment

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Speaker 2: also for Hijinping to perhaps demonstrate a shift in his

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Speaker 2: leadership if he wants to try and inspire the confidence

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Speaker 2: not only in his management of the economy, but also

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Speaker 2: more importantly in consumers, which would help the economic situation too.

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Speaker 1: Yes, so political legitimacy resting on economic accomplishments, you know,

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Speaker 1: and trying to raise the living standards nearly one point

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Speaker 1: four billion people, But how do you do that? In fact,

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Speaker 1: the meeting next week has been delayed for quite some time,

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Speaker 1: so that's also been underline perhaps is problematic.

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Speaker 2: That's one of the events we're watching out for in

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Speaker 2: the coming days. But let's get more now on the

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Speaker 2: overnight BI election results here in the UK. They left

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Speaker 2: wing candidate, former Labor MP, George Galloway was elected after

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Speaker 2: a campaign that focused on calling for an end to

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Speaker 2: the conflict in Gaza. Our UK correspondent Lizzie Burden is

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Speaker 2: with us from More this morning. Lizzie, good morning to you.

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Speaker 2: Take us through the results then, and what led to

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Speaker 2: George Galloway being elected.

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Speaker 9: Well, the run of Labor by election victories is over.

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Speaker 9: George Galloway won thirty nine percent of the vote for

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Speaker 9: the Workers Party, second place as an independent candidate, third

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Speaker 9: place the Conservatives and in sixth place the Reform Party,

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Speaker 9: which of course has been something of a threat to

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Speaker 9: the Conservatives recently. But you'll remember the Labor candidate had

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Speaker 9: to be dropped over his comments over the Israel Hamas war.

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Speaker 9: He came in fourth and it adds to the sense

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Speaker 9: of chaos over the situation in the Middle East and

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Speaker 9: the sense of chaos about Islamophobia and anti Semitism here

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Speaker 9: in Britain. Rochdale is a former mill town. It's near Manchester,

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Speaker 9: It's got a big Muslim population, had been Labors. But

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Speaker 9: this sort of chaos is exactly the environment that a

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Speaker 9: character like George Galloway thrives in. He was expelled as

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Speaker 9: a Labor MP in two thousand and three over comments

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Speaker 9: over the Iraq War. He's made a career out of

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Speaker 9: whipping up anger in Muslim communities. And his argument was

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Speaker 9: that Starmer hadn't taken a strong enough line on Israel.

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Speaker 9: You heard him in the headlines there. This is for

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Speaker 9: Gaza was what he said when he won.

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Speaker 1: Yeah, and so the question how relevant is this then

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Speaker 1: at a national level, because it perhaps seems to have

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Speaker 1: been driven so much by one foreign policy issue.

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Speaker 9: Yeah, We're always trying to see whether by election results

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Speaker 9: can be used as some sort of barometer for the

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Speaker 9: general election. The idea is this isn't likely to affect that,

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Speaker 9: and actually Labour's going to fancy its chances taking the

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Speaker 9: seat back when it comes to the general election. But

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Speaker 9: it gives George Galloway a few months in Parliament to

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Speaker 9: pour salt in the gaping wounds in Starmer's party over

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Speaker 9: and in this particular case, Starmer was accused of acting

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Speaker 9: too late to withdraw support for Azar Ali, the candidate

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Speaker 9: for Labor there, for implementing double standards since he took

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Speaker 9: over as leader from Jeremy Corbyn by being harsh on

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Speaker 9: the left wingers associated with anti Semitism, but more lenient

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Speaker 9: with the Centrists in the same boat. So the difficulties

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Speaker 9: on this continued for Kirsedtarmer.

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Speaker 2: Meanwhile, the Conservatives came in third Lizzie in this by election.

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Speaker 2: This as Rishi Sinak is facing a very different problem,

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Speaker 2: and this is accusations of Islamophobia.

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Speaker 9: Yeah, the former Deputy party chairman of the Conservative Party

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Speaker 9: said that Islamists have got control of London and that

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Speaker 9: the Muslim labor mayor Sadik Khan had given control of

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Speaker 9: the capital to his mates. And after that you had

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Speaker 9: ministers falling over themselves on the airwaves, simply unable to

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Speaker 9: say that this was Islamophobic rather than wrong. And it

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Speaker 9: plays into a bigger battle for the leadership of the

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Speaker 9: Conservative Party. A threat to Rishie Sunak is Suella Bradham

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Speaker 9: and the former Home Secretary. She says that Islam is

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Speaker 9: a threat to the British way of life. And indeed

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Speaker 9: you heard Liz Trust, the former Prime Minister, stateside last

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Speaker 9: week speaking to Steve Bannon, saying that her premiership was

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Speaker 9: sabotaged by the deep state, and she says a radical

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Speaker 9: Islamic Party could win in Rochdale, by which she supposedly

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Speaker 9: meant George Galloway.

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Speaker 1: Yeah, so that aside, then we still have to think

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Speaker 1: about the budget next Wednesday. The latest that we're hearing

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Speaker 1: on Jeremy Hunt's plan.

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Speaker 9: I'll start with the obvious. He's thought to be planning

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Speaker 9: an extension to the fuel duty cut. That was kind

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Speaker 9: of a given given it's perennially framed as a temporary

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Speaker 9: measure so that the long term sums add up, and

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Speaker 9: yet it keeps coming back. So perhaps more interestingly, we

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Speaker 9: are hearing that Jeremy Hunt's considering extending the windfall the

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Speaker 9: energy profits levy on oil and gas companies that was

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Speaker 9: due to expire in March twenty twenty eight. He's also

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Speaker 9: thought to be looking to scrap the Non Doms policy,

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Speaker 9: so basically measures that raise money, so he's got space

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Speaker 9: to cut personal taxes pre election, but also steal Labour's

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Speaker 9: clothes so that they can't spend the money on whatever

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Speaker 9: they want because the government's already allocated, so it'd leave

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Speaker 9: labor hamstrung for cash to spend. Because they've also said

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Speaker 9: they won't raise the three main rates of income tax,

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Speaker 9: National insurance and value added tax.

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Speaker 2: Okay, Lizzie Burden, thank you very much, are UK correspondent.

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Speaker 1: Now from the UK to the US, stocks hit record

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Speaker 1: highs after the Federal reserves preferred measure of inflation came

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Speaker 1: in as estimated for the fourth month of January. The

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Speaker 1: core pceedflate of rose by four tenths of one percent

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Speaker 1: in January, the fastest pace since early twenty twenty three.

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Speaker 1: Jobless claims data showed a slight softening in the labor

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Speaker 1: market from the previous month. Our senior editor Bill Ferries

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Speaker 1: joins us out for more so Marcus Chid these data releases.

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Speaker 1: Why though, if inflation is still there, does it make

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Speaker 1: the Fed's path ahead clearer?

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Speaker 3: Markets are happy that there's no bad surprises. That's really

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Speaker 3: That's really kind of the bar we're looking at at

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Speaker 3: this point. You're right, the you know, some of these

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Speaker 3: numbers came in a little bit higher than expected, but

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Speaker 3: the job market was a little softer. Uh it does

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Speaker 3: you know, it's been a it's been a rock a

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Speaker 3: few months when it comes to people's expectations about when

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Speaker 3: rate cuts would happen. At one point it was almost

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Speaker 3: one hundred percent at a March cut that is appears

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Speaker 3: to be clearly off the table. But the numbers we

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Speaker 3: saw make June a possibility, and that's what I think

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Speaker 3: markets were rallying around. That's what they wanted to hear.

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Speaker 2: At this point, we've been hearing from a few FAT

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Speaker 2: officials as well, underlining again the importance of data for

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Speaker 2: their decision making. So so what are the next key

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Speaker 2: data points we need to be watching for?

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Speaker 3: Well, you're right, I think that's you know, that's been

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Speaker 3: their message throughout. You know, we'll get more data even

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Speaker 3: later today if you if if depending on you know,

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Speaker 3: how to let you stay up for it. We've got

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Speaker 3: University of Michigan inflation expectations, consumer sentiment that will be

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Speaker 3: something markets are looking at. H. We've got ism manufacturing

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Speaker 3: coming in uh, and there's there's more similar data coming

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Speaker 3: next week. So UH, the FED is going to be

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Speaker 3: looking at all of that. I think, you know, we're

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Speaker 3: already in March at this point. And the big question,

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Speaker 3: and you hear this from the the from a lot

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Speaker 3: of the FED speakers who have been speaking out recently, Uh,

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Speaker 3: there does seem to be a consensus that, uh, there's

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Speaker 3: going to be a rate cut or rate cuts this year,

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Speaker 3: and it's just a matter of you know, will that

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Speaker 3: happen on June or will you know, we will we

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Speaker 3: see data in the coming weeks that makes uh, that

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Speaker 3: makes policy makers and the markets think that it gets

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Speaker 3: pushed back a little bit further again.

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Speaker 1: Yeah. Meanwhile, we've also had this warning from PIMCO over

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Speaker 1: the US budget deficit and the risk of bond vigilantes.

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Speaker 1: What are they worried about.

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Speaker 3: It's a little bit of a back to the nineteen eighties,

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Speaker 3: I think with PEMCO and some of their concerns, and frankly,

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Speaker 3: they've been flagging their doubts about the US fiscal policy

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Speaker 3: for quite a long time now. Their concern is that

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Speaker 3: holders of longer term treasuries are going to start to

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Speaker 3: demand a higher premium to not switch into shorter term

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Speaker 3: notes given how sticky inflation could be, and frankly, the

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Speaker 3: US government's inability to really have a process for creating

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Speaker 3: a budget. We just saw the US Congress now passing

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Speaker 3: an additional one week extension to try to keep to

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Speaker 3: try to prevent a shutdown, but it's literally it's a

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Speaker 3: one week extension. At this point, it's highly likely we'll

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Speaker 3: get another one. The whole process for putting together the

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Speaker 3: US budget has become very much broken and dysfunctional, and

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Speaker 3: there's with elections later this year, there's no sign that

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Speaker 3: that's going to be changing anytime soon.

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