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Speaker 1: Good morning. It's Tuesday, the twelfth, fifth September here in London.

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Speaker 1: This is the pm bak Debatu podcast. I'm Caroline Hetke

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Speaker 1: and I'm Kreatigoupda. Coming up today.

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Speaker 2: UK wade growth outstrips in place for the first time

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Speaker 2: in more than a year.

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Speaker 1: JP Morgan boss Jamie Diamond calls for more humidity from

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Speaker 1: regulators as he criticizes their capital plans.

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Speaker 2: And Apple gears up for a high stakes iPhone launcher

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Speaker 2: spares of a China backlash grow.

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

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Speaker 2: UK wage growth remained at a record high in the

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Speaker 2: three months to the end of July, adding to the

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Speaker 2: pressure on the Bank of England to opt for a

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Speaker 2: fifteenth straight hike. Average earnings excluding bonuses for seven point

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Speaker 2: eight percent from a year earlier. Manpower Group director Chris

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Speaker 2: Gray says many employers are reluctant to let go of staff.

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Speaker 3: The vacancies from last quarter remain unfilled and therefore they

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Speaker 3: still need to hire for this next quarter, and there's

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Speaker 3: still ongoing demand for niche skills or critical roles. Also,

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Speaker 3: there's an anticipation of a bounce back and I think

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Speaker 3: a lot of employers remember how hard it was to

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Speaker 3: rehire when it came out of COVID. So you've got

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Speaker 3: all that in the mix which drives the demand for gray.

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Speaker 2: The big unknown is when Britain will return to regular

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Speaker 2: economic growth. Unemployment takes hire for a third month of

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Speaker 2: four point three percent, while vacancies continued.

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Speaker 1: To fall JP Morgan CEO Jamie Diamond has taken aim

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Speaker 1: at US regulators, calling plans to have banks hold more

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Speaker 1: capital than international competitors a quote huge negative, and Diarmond

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Speaker 1: didn't stop there, pointing out that the Fed needs to

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Speaker 1: be more aware of its own mistakes.

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Speaker 4: The Fellow Reserve shabal humility. They're the ones that called

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Speaker 4: the world rachon going up. It wasn't the Fellow Reserve

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Speaker 4: in general. Is each one of them independently factors each

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Speaker 4: central bank, but buy with them. Might have a little

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Speaker 4: more humility over stuff like this.

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Speaker 1: Jamie Diamond's comments come as federal agencies push ahead with

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Speaker 1: plans to require banks to add billions of dollars to

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Speaker 1: their capital cushions after a number of smaller lenders collapsed

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Speaker 1: earlier this year.

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Speaker 2: The Federal Reserve is done raising interest rates and will

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Speaker 2: likely cut them by roughly one percentage point next year.

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Speaker 2: That's according to chief economist, as some of North America's

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Speaker 2: largest banks. Bloomberg's Charlie Palette reports.

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Speaker 5: The latest forecast from the American Bankers Association's Economic Advisory

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Speaker 5: Committee shows while the US will probably dodge a recession,

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Speaker 5: economic growth looks set to slow markedly in coming quarters,

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Speaker 5: pushing up unemployment while reducing inflation. According to their median forecasts,

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Speaker 5: the committee sees economic growth slowing to less than an

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Speaker 5: annualized one percent rate in the coming three quarters in

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Speaker 5: response to the Fed's past interest rate increases and a

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Speaker 5: tightening of credit conditions in New York, Charlie Pellett Bloomberg Radio, So.

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Speaker 1: That's the US central Bank. Here in the UK, the

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Speaker 1: Bank of England policymaker Catherin Mann says that more rate

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Speaker 1: hikes should be on the cards. The most hawkish member

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Speaker 1: of the Monetary Policy Committee warned that it's easier to

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Speaker 1: fix a flagging economy than persistently high inflation. The Chancellor,

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Speaker 1: Jeremy Hunt told Bloomberg that price rises our weighing on

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Speaker 1: fiscal decisions too.

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Speaker 6: And when you're trying to bring down inflation, you have

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Speaker 6: to be really careful not to pump extra money into

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Speaker 6: the economy, much as you would like to not to

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Speaker 6: pump extra money into people's pockets, because that can push

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Speaker 6: up prices and keep inflation higher for longer. So the

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Speaker 6: one thing I can absolutely say is that our focus

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Speaker 6: at the autumnce statement will be on bringing down inflation.

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Speaker 1: Hunt added that if the UK doesn't improve its economic growth,

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Speaker 1: taxes will rise. You can hear the full interview with

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Speaker 1: the Chancellor on the UK Politics podcast.

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Speaker 2: Apple will attempt to regain the narrative later today with

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Speaker 2: the launch of a new iPhone, updated Apple Watch and AirPods.

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Speaker 2: The launch comes of the Californian company confronts fears of

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Speaker 2: a consumer backlash in China after Beijing banded government employees

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Speaker 2: from using iPhones at work. Hayman Capital Management founder and

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Speaker 2: CIO Kyle Bass says he thinks Apple faces a rough

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Speaker 2: ride in the country.

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Speaker 7: I think Apple is in for, let's just say, a

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Speaker 7: much much longer period of distress in China. And I

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Speaker 7: think you've seen Apple try to move to India on

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Speaker 7: the production side, and they've been successful in moving a

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Speaker 7: very large portion of their production in a very short

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Speaker 7: period of time. I just think that's going to be

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Speaker 7: something we're going to have to do.

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Speaker 2: Kyle Bass spoke to Bloomberg as a tech giant renewed

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Speaker 2: a contract to get modem chips from Qualcomm. The deal

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Speaker 2: is a sign that Apple's efforts to build their own

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Speaker 2: components are taking much longer than expected.

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Speaker 1: Now, the former head of six says that the UK

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Speaker 1: needs to maintain a dialogue with China. Richard deal Love's

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Speaker 1: intervention comes after parliamentary researcher was arrested on suspicion of

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Speaker 1: spying for Beijing, something he denies. Britain's former spy chief

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Speaker 1: says that the situation needs to be handled delicately.

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Speaker 8: This issue is not black and white. You can be

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Speaker 8: tough with China and you can show China that you

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Speaker 8: mean business when they interfere in your internal affairs, but

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Speaker 8: you can also trade with them. Look, this is not

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Speaker 8: a cold war with China.

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Speaker 1: The former head of MI six's comments come as senior

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Speaker 1: Tory MPs lined up in the House of Commons the

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Speaker 1: pressure the Prime Minister to designate China as a threat

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Speaker 1: to the UK the UK wage and employment figures. Bloomberg's

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Speaker 1: UK correspondent Lizzie Burden joins us now to discuss the

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Speaker 1: average earnings. That's the thing that stands out. Excluding bonuses,

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Speaker 1: they rose by seven point eight percent from a year earlier.

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Speaker 1: This does not look like the inflation headache is going anywhere.

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Speaker 9: No, but it is in line with economists expectations. Hence,

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Speaker 9: as you say, not merely much move in markets, not

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Speaker 9: for the power, not for guilts either, because it doesn't

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Speaker 9: really move the dial. For the Bank of England this data,

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Speaker 9: Unemployment also came in line with expectations, arise to four

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Speaker 9: point three percent, so it seems that we're still going

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Speaker 9: to get a quarter point hike from the Bank of England.

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Speaker 9: On September the twenty first, as economists were expecting. We

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Speaker 9: heard from NPC member Catherine Hawk, the Catherine Hawk, huh,

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Speaker 9: that would be an app name. Catherine Mann, the Hawk

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Speaker 9: of the committee yesterday signaling that she reckons more hikes

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Speaker 9: are going to be necessary. But I do think it's

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Speaker 9: important to point out that as we get towards the

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Speaker 9: peak of Table Mountain, as the chief Economists of the

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Speaker 9: Boe Hugh Pill would put it, it seems that economists

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Speaker 9: are turning their attention to other data whereas we've had

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Speaker 9: months and months of the BOE emphasizing that they're watching

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Speaker 9: wage growth because that's a signal of domestically driven inflation.

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Speaker 9: Swatty Inger, the dove of the committee, said last week

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Speaker 9: in Parliament that it's a lagging indicator, so perhaps they're

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Speaker 9: looking more towards things like the pmi's forward looking data.

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Speaker 2: How does the fiscal policy factor into all of this, Well.

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Speaker 9: Reckon that this data is more important politically than economically,

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Speaker 9: because one of the big surprises was the figure for

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Speaker 9: average weekly earnings including bonuses, that came in above expectations

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Speaker 9: at eight point five percent, up from eight point two percent.

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Speaker 9: Economists thought it was just going to stay on hold,

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Speaker 9: and that number feeds into the triple lock, which is

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Speaker 9: the guarantee that the state pension rises with the highest

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Speaker 9: of wage growth, wage growth, inflation, or two point five percent. Now,

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Speaker 9: because of this increase in average weekly earnings, the Institute

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Speaker 9: for Fiscal Studies says that it's going to add another

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Speaker 9: two billion pounds to state pension spending in tw twenty

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Speaker 9: twenty four to twenty twenty five compared to the previous

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Speaker 9: official forecast. So it comes back to our interview that

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Speaker 9: you played earlier with the Chancellor Jeremy Hunt, where he

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Speaker 9: was saying it doesn't necessarily look like tax cuts are affordable.

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Speaker 9: It raises the importance of growing the economy, otherwise taxes

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Speaker 9: may have to arise. If anything, it looks from this

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Speaker 9: data like the government might have to tweak the triple

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Speaker 9: lock to make it affordable. We've already reported that the

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Speaker 9: government's considering cutting benefits in real terms. It raises the

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Speaker 9: question whether the government keeps the triple lock but bases

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Speaker 9: it on a different month of data to make it

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Speaker 9: more affordable. But that's going to be politically tricky if

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Speaker 9: you're whacking the poor but saving the pension as the

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Speaker 9: Tory base.

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Speaker 1: Christy, Welcome to UK politics. You're coming at an exciting

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Speaker 1: time though, because we've got to have an election by

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Speaker 1: January twenty twenty five. This does seem like the big

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Speaker 1: policy leavers are suddenly being talked about. You know, pensions

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Speaker 1: and benefits are two of the biggest costs of the

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Speaker 1: UK government, so that's absolutely huge, I think and very significant.

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Speaker 1: And what else stood out to you from that very

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Speaker 1: big interview. You've got a long time, a big sit

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Speaker 1: down with Jeremy Hunt only a few weeks ahead of

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Speaker 1: the autumn statement.

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Speaker 9: Well, of course probably didn't really want to be talking

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Speaker 9: about the matters domestic because he was out on the

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Speaker 9: world stage there in India. He was speaking to our

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Speaker 9: colleague Haslinda, I mean, and he was also talking about

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Speaker 9: potential trade with India and hopes for a trade deal there.

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Speaker 9: Of course, Rishie s soun like the Prime Minister described

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Speaker 9: I think in the Indian press as India's son in

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Speaker 9: law because of his wife being the daughter of the

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Speaker 9: founder of Emphasis, one of India's most proud businesses.

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Speaker 5: Look.

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Speaker 9: He says that the reason he was in India was partly

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Speaker 9: to improve that relationship boost business investment, which of course

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Speaker 9: is going to be crucial to the growth story.

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Speaker 1: Okay, Lizzie, thank you so much for your time for

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Speaker 1: being with us. That's Bloomberg's UK corresponded at Lizzie Burden

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Speaker 1: with the latest when it comes the employment wage picture,

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Speaker 1: and of course our interview with the chance that Jeremy Hunt.

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Speaker 1: Let's move on though. Apple's also got a big announcement today.

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Speaker 1: I mean a lot of time is devoted this usually

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Speaker 1: the annual iPhone unveiling, but it has more actually than usual.

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Speaker 1: Riding on the outcome of today, the iPhone fifteen will

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Speaker 1: be unveiled in California and joining us now quick takes

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Speaker 1: alex Web. Welcome back to the studio, Alex Thanks for

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Speaker 1: being with us. What are we expecting in terms of

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Speaker 1: the new products, and especially I suppose the pricing and

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Speaker 1: the sales numbers that they make goarer.

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Speaker 10: So they are going to be four new iPhones with

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Speaker 10: essentially there's two base models with larger sizes for each,

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Speaker 10: and a new Apple Watch lineup as well. The upgrades

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Speaker 10: to them, you know, compared to things we might have

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Speaker 10: seen five, eight, ten years ago, a pretty incremental. It's

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Speaker 10: a slightly thinner bezel around the edge of your phone.

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Speaker 10: The so called dynamic island, which is in the Pro

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Speaker 10: lineup at the moment, was going to go into all

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Speaker 10: of the new iPhones. That reduces the notch at the

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Speaker 10: top of your phone where the camera sits, and just

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Speaker 10: makes it to sort of sit there as a island

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Speaker 10: with animated things that go around the edges. And in

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Speaker 10: the Pro there's going to be a titanium shell rather

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Speaker 10: than stainless steel. Now that's significant because it might let

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Speaker 10: them charge more.

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Speaker 3: So I guess.

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Speaker 10: But to your point on pricing, ultimately, then Apple's not

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Speaker 10: selling as many units as it might have done in

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Speaker 10: the past. Instead, what it tries to do is eke

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Speaker 10: more spend out of the units that it does sell.

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Speaker 10: So we're going to likely see some price increases the

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Speaker 10: top line there, and again that gets them to the

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Speaker 10: sales point. You know, sales for this year and the

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Speaker 10: smartphone insurry as a whole look pretty pessimistic. Nonetheless, Apple

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Speaker 10: has managed to gain market share in that time. It's

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Speaker 10: up versus twenty twenty two numbers. It's gained just over

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Speaker 10: a percentage point. Samsung is down two percentage points. So

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Speaker 10: it has because perhaps there's price resiliency and Apple's target

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Speaker 10: customer base. As others suffer from declinate sales, Apple is

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Speaker 10: able to hold it up a little bit better. So

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Speaker 10: that's why they charged the higher prices as well.

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Speaker 2: Alex I read a really interesting kind of piece over

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Speaker 2: the weekend that said that each incremental Apple iPhone design

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Speaker 2: actually had fewer and fewer new features. It wasn't kind

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Speaker 2: of this redone model as it was, say five six

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Speaker 2: years ago, where they'd almost unveil a completely different product.

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Speaker 2: These advancements are much much smaller, but the price tag

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Speaker 2: getting much much higher. What do sales look like in

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Speaker 2: an environment where the upgrades aren't that upgrady for a

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Speaker 2: better term, there's a.

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Speaker 10: Technical term, I suppose. The thing that you've got to

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Speaker 10: remember is that the fastest growing part of Apple business

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Speaker 10: for much of the past five years has been its

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Speaker 10: its services business. You know, that's iCloud, that's Apple Music,

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Speaker 10: it's Apple TV plus all these things are sort of

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Speaker 10: higher margin on the whole, I should say crucially, though,

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Speaker 10: the more you buy into those services, the more you download,

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Speaker 10: the more apps you download, the harder it is to

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Speaker 10: trade in your iPhone for an Android device or a

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Speaker 10: competing device, because it's it's a pain in the neck,

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Speaker 10: you know, having to get you know, re download things

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Speaker 10: from the Google play Store, move your photos, over all

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Speaker 10: your contacts. It's a real nuisance. So it means then

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Speaker 10: that Apple can, like it, innovate a bit less on

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Speaker 10: the hardware because on the software side it is tying

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Speaker 10: you more closely to those devices.

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Speaker 1: And yet, of course, does Apple have a problem with

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Speaker 1: China in terms of sales and production. I mean that

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Speaker 1: could be the you know, the new really big story

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Speaker 1: for the firm, So.

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Speaker 10: We don't quite know yet, right. So what we've known

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Speaker 10: and I've heard in the past few weeks is some

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Speaker 10: reporting that China's state owned companies and of course the

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Speaker 10: agencies themselves have are introducing a band on iPhones in

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Speaker 10: iPhone use by their employees. That in and of itself

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Speaker 10: may not be that significant from a unit perspective. The

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Speaker 10: question is whether there is a broader rise of Chinese nationalism,

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Speaker 10: which in the past has hurt Apple's sales in that

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Speaker 10: part of the world. It's something we won't hear about today.

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Speaker 10: Of course, we'll hear about it in in earning schools

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Speaker 10: over the next few quarters. But Apple has been trying

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Speaker 10: to get ahead of the problem by pivoting more towards India.

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Speaker 10: Not something you could do in a year or two, five, eight,

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Speaker 10: ten year project, but that project has started.

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Speaker 2: Well, when you think about China or India really any

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Speaker 2: kind of em country, I think it's I think fair.

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Speaker 1: To call it.

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Speaker 2: Samsung is the predominant player there and alex.

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Speaker 10: But not in China. I would say Sam soon not

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Speaker 10: the predominant player in China.

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Speaker 2: Sorry, no, no fair point. But Apple, I think has

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Speaker 2: tried to gain to your point gain that market share

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Speaker 2: by offering some sort of lower value, lower price point

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Speaker 2: model unsuccessfully, I might add, is it making any progress

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Speaker 2: in terms of capturing market share from some of its rivals?

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Speaker 10: So in India it is really starting to grow faster.

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Speaker 10: They wreck Bloomberg Reporter. They had six billion in training

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Speaker 10: twelve month revenue through March. They have opened their first

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Speaker 10: retail stores in India. They are bringing more production there,

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Speaker 10: but they sort of suspicion as Indias where China was

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Speaker 10: maybe twenty years ago, you know, not even ten years ago,

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Speaker 10: so it's a long way to catch up.