WEBVTT - Bloomberg Daybreak Weekend: Speaker Battle, CPI, China 0:00:00.240 --> 0:00:03.760 Bloomberg Radio on demand and in your podcast feed. 0:00:04.040 --> 0:00:06.520 This is Bloomberg day Break Weekend, our global look at 0:00:06.519 --> 0:00:09.040 the top stories in the coming week from our Daybreak 0:00:09.039 --> 0:00:12.160 anchors all around the world. I'm Tom Busby in New York. 0:00:12.400 --> 0:00:14.440 We begin today's program with a look ahead to the 0:00:14.560 --> 0:00:18.360 latest inflation data in the wake of that September jobs 0:00:18.400 --> 0:00:21.760 report out last week. For more, we're joined by Bloomberg 0:00:21.800 --> 0:00:25.440 International Economic and Policy correspondent Michael McKee. Michael, thanks for 0:00:25.480 --> 0:00:27.000 being here again, Always. 0:00:26.680 --> 0:00:27.440 Happy to be here. 0:00:28.040 --> 0:00:31.440 Well, let's talk first about this past Friday September jobs report. 0:00:31.480 --> 0:00:34.960 Would you I've described as quote the mother of all 0:00:35.120 --> 0:00:36.360 upside surprises. 0:00:36.479 --> 0:00:40.640 Not bad, you know, we had a kind of unusually 0:00:40.800 --> 0:00:45.279 high jobs report with for the month three hundred and 0:00:45.320 --> 0:00:47.960 thirty six thousand jobs being created. Were also one hundred 0:00:47.960 --> 0:00:51.920 and nineteen thousand added for July and August, so you're 0:00:52.000 --> 0:00:55.360 well over four hundred thousand. The labor market has not 0:00:55.680 --> 0:00:59.320 gone away, at least not through September. Now, there's a 0:00:59.320 --> 0:01:02.360 lot of caveat to this, but it just tells you 0:01:02.440 --> 0:01:07.200 that the economy still remained strong or remained strong through September. 0:01:07.600 --> 0:01:12.080 And so the question is now, is that inflationary. See, 0:01:12.080 --> 0:01:13.080 I'm setting you up for. 0:01:13.040 --> 0:01:15.640 Your next question. For the next question, well, well we 0:01:15.680 --> 0:01:21.480 did see wages rose again. That is inflationary, you know, 0:01:21.600 --> 0:01:24.880 So that is the question. This is a good news 0:01:24.959 --> 0:01:25.800 bad news situation. 0:01:26.040 --> 0:01:28.640 But well, let's talk about the wages. They rose two 0:01:28.720 --> 0:01:31.520 tenths of a percent. The forecast was for a three 0:01:31.600 --> 0:01:36.440 tenths rise, and some economists had forecast a four tenths rise. 0:01:36.560 --> 0:01:41.039 Because this all relates to the survey week, the week 0:01:41.040 --> 0:01:44.720 that includes the twelfth and then the day. The months 0:01:44.760 --> 0:01:48.120 and weeks between the two surveys, and there was a 0:01:48.160 --> 0:01:50.640 longer time between the surveys, so people thought maybe we 0:01:50.680 --> 0:01:54.440 would see higher wages this time. Instead, we saw a 0:01:54.480 --> 0:01:56.840 lower than expected wage gain and that pushed the year 0:01:56.960 --> 0:01:59.760 a year number down to four point two percent. That 0:01:59.880 --> 0:02:03.320 is still higher than the feds three to three and 0:02:03.320 --> 0:02:07.120 a half percent they'd like to see, but it is progress. 0:02:07.360 --> 0:02:11.360 So it's hard to argue that the three hundred and 0:02:11.480 --> 0:02:18.080 thirty six thousand jobs created was a inflationary event in 0:02:18.120 --> 0:02:19.400 and of itself. 0:02:19.440 --> 0:02:22.280 But it was a surprise, and we also saw a 0:02:22.320 --> 0:02:25.520 revision one hundred and nineteen thousand jobs added July. In August, 0:02:26.800 --> 0:02:30.640 ADP predicted just eighty nine thousand private sector jobs. Boy 0:02:30.680 --> 0:02:31.280 were they wrong. 0:02:32.120 --> 0:02:35.960 Yeah, they were quite different. They would argue they're not 0:02:36.000 --> 0:02:40.480 wrong because they they're not predicting, but the economists were 0:02:40.520 --> 0:02:43.320 wrong too, in the sense that the change in private 0:02:43.360 --> 0:02:46.120 payrolls forecast was one hundred and sixty thousand and we 0:02:46.200 --> 0:02:50.600 got two hundred and sixty three thousand. So nobody has 0:02:50.639 --> 0:02:53.799 covered in glory with the forecast this time. 0:02:53.960 --> 0:02:57.440 Yeah, real surprise. Now you brought up inflation this week. 0:02:57.480 --> 0:03:00.560 We'll be looking at inflation PPI for some Tember out 0:03:00.560 --> 0:03:04.320 on Wednesday, CPI for the same month out on Thursday. 0:03:04.840 --> 0:03:07.640 What do you expect to see, Well, the forecasts are 0:03:07.720 --> 0:03:10.000 we're going to see a real slowing in inflation. With 0:03:10.080 --> 0:03:12.919 the PPI for final demand that's kind of the main 0:03:12.960 --> 0:03:15.880 figure that people look at up just three tenths that's 0:03:15.960 --> 0:03:17.920 less than half of what it was the prior month 0:03:18.160 --> 0:03:22.120 because we saw energy prices sort of flatten out. Oil 0:03:22.160 --> 0:03:25.239 prices didn't start to go down until October. But we're 0:03:25.240 --> 0:03:27.400 not going to get the same upward pressure that we did. 0:03:27.600 --> 0:03:30.079 If you look at the core PPI just up two 0:03:30.160 --> 0:03:33.040 tenths of eight percent, which is also lower than the 0:03:33.080 --> 0:03:36.880 previous month, so it would suggest that progress is still 0:03:36.920 --> 0:03:42.840 being made in the pipeline. CPI is also expected to 0:03:42.840 --> 0:03:46.000 be good news. The headline up only three tenths. It 0:03:46.040 --> 0:03:49.160 was up six tenths in August and that was largely 0:03:49.200 --> 0:03:52.840 because of energy, so hopefully the drop in energy is 0:03:52.880 --> 0:03:55.200 going to be good news. The core rate up is 0:03:55.240 --> 0:03:58.600 expected to be up three tenths, which is unchanged from 0:03:58.720 --> 0:04:03.040 the prior but both the year over year CPI and 0:04:03.160 --> 0:04:07.120 the CPI core will go down and they keep moving 0:04:07.200 --> 0:04:11.800 towards two percent, not at an enormously fast pace, but 0:04:12.000 --> 0:04:17.200 fast enough that it suggests we are still seeing progress. 0:04:16.920 --> 0:04:18.919 And we could see more. As you said, in October, 0:04:19.000 --> 0:04:22.279 just the first week, oil down ten percent West Texas. 0:04:21.960 --> 0:04:25.920 And gasoline prices never really went up when oil went up, 0:04:25.960 --> 0:04:29.479 and they're going down still, so that will really register 0:04:29.560 --> 0:04:32.320 in the October CPI if that trend continues. 0:04:33.000 --> 0:04:35.920 Now, also on Wednesday, we get minutes from the fed's 0:04:35.960 --> 0:04:39.800 latest meeting, and obviously this is leading into the next 0:04:40.040 --> 0:04:43.520 meeting October thirty first, November first, so let's talk about 0:04:43.520 --> 0:04:46.200 the minutes, what we should expect, what we should look for, 0:04:46.400 --> 0:04:48.960 what the FED was thinking, because I'm sure they're all 0:04:49.000 --> 0:04:52.159 as surprised as anybody else about that September jobs report. 0:04:52.360 --> 0:04:56.240 Well, most of the fedspeak that we've had since their 0:04:56.360 --> 0:04:58.839 last meeting has been on the order of, we could 0:04:58.920 --> 0:05:02.240 do one more if we need to. So how do 0:05:02.279 --> 0:05:04.360 you define if we need to? And that's what people 0:05:04.400 --> 0:05:06.360 are going to be looking to in the minutes is 0:05:06.760 --> 0:05:10.599 what kind of economy would cause them to raise rates 0:05:10.640 --> 0:05:13.960 another time? Is it the three hundred and thirty six 0:05:14.000 --> 0:05:19.599 thousand jobs created in September or does the average hourly 0:05:19.680 --> 0:05:23.800 earnings take some of the edge off of that. Is 0:05:23.839 --> 0:05:28.560 it something to do with retail sales or the outlook 0:05:28.720 --> 0:05:33.600 for GDP growth which in the third quarter is very 0:05:33.680 --> 0:05:38.160 very strong, somewhere between three and five percent. So that's 0:05:38.200 --> 0:05:41.760 I think what people in the bond market especially, and 0:05:41.839 --> 0:05:43.480 in the stock market are going to want to look 0:05:43.520 --> 0:05:46.800 at is what would be the trigger for the Fed. 0:05:48.080 --> 0:05:50.440 And we still have a couple of weeks before the 0:05:50.480 --> 0:05:53.240 Fed had to make this decision. But what is it 0:05:53.279 --> 0:05:56.200 looking like all these You know, as far as I 0:05:56.200 --> 0:05:58.760 can remember that past year, we've been calling for a recession. 0:05:58.960 --> 0:06:02.400 Before now we've been calling for There were economists saying 0:06:02.480 --> 0:06:05.000 this will be the last good Jobs report before things, 0:06:05.080 --> 0:06:06.240 you know, take a nose dive. 0:06:07.200 --> 0:06:09.440 I think what we're likely to see in terms of 0:06:09.440 --> 0:06:13.480 the recession forecasts is keep the forecast, just push the 0:06:13.560 --> 0:06:18.320 date out. Because the feeling is, with rates where they 0:06:18.320 --> 0:06:21.520 are and the economy as hot as it is, that 0:06:21.760 --> 0:06:25.880 this can't continue. They call that Stein's law after Herbstein, 0:06:26.000 --> 0:06:30.560 is that which cannot continue will stop. And there's a 0:06:30.600 --> 0:06:33.279 feeling and maybe that has to happen, but a growing 0:06:33.320 --> 0:06:36.960 feeling that maybe not. This is not what you would 0:06:36.960 --> 0:06:40.080 call a sustainable level of hiring that we saw this 0:06:40.160 --> 0:06:44.279 past week. But if we can continue to see job 0:06:44.360 --> 0:06:48.960 growth that will continue to power consumer spending, if prices 0:06:49.000 --> 0:06:52.880 are coming down, then the G word comes into play goldilocks, 0:06:53.400 --> 0:06:57.799 and so we'll see. And you saw in the reaction 0:06:58.120 --> 0:07:02.880 to this the jobs report on Friday, we saw the 0:07:03.000 --> 0:07:07.880 Fed Funds futures only price in a thirty two percent 0:07:07.960 --> 0:07:10.840 chance of a rate increase on November first. Now that's 0:07:10.920 --> 0:07:13.720 up from twenty two percent, but it's still only you know, 0:07:13.760 --> 0:07:16.760 a one third chance that the Fed will raise rates again. 0:07:17.240 --> 0:07:20.600 So the markets are waiting for additional data as well. 0:07:20.640 --> 0:07:21.840 Everybody's data dependent. 0:07:22.000 --> 0:07:25.040 Yeah, yeah, Now, speaking of data, let's talk more about 0:07:25.040 --> 0:07:28.720 the rates, because in housing now we have a seven 0:07:28.760 --> 0:07:33.520 point five percent rate, and even that is not affecting 0:07:33.920 --> 0:07:36.280 housing like it should. It's more that there are not 0:07:36.440 --> 0:07:39.440 enough houses for sale. So you're right, the consumer is 0:07:39.440 --> 0:07:42.239 still strong, Consumers still spending. People still have this demand. 0:07:42.720 --> 0:07:45.600 We saw autos and we know those auto loan rates 0:07:45.640 --> 0:07:50.440 have gone up Toyota and GM fifteen percent increase in 0:07:50.440 --> 0:07:53.280 the last three years in auto sales leading up to 0:07:53.360 --> 0:07:57.480 last month. So you're right. The consumer keeps spending, keep 0:07:57.560 --> 0:08:00.760 making more money. Who knows when it could end? 0:08:01.320 --> 0:08:04.840 Well, you know, the old saying is it doesn't have to. 0:08:04.880 --> 0:08:08.000 And the expansions don't die of natural causes. The FED 0:08:08.080 --> 0:08:12.040 kills them. And so that's kind of the playbook people 0:08:12.080 --> 0:08:14.200 are working from that. If the FED gets rates up 0:08:14.200 --> 0:08:16.920 too high, it will kill the economy. But we don't 0:08:16.960 --> 0:08:21.200 see signs of that happening necessarily right now. The neutral rate, 0:08:21.880 --> 0:08:24.800 the rate the Fed funds rate would be at that 0:08:24.960 --> 0:08:29.120 doesn't stimulate or hold back the economy is obviously higher 0:08:29.520 --> 0:08:32.760 than the Fed or anybody thought at this point. For 0:08:32.840 --> 0:08:36.240 a year, I think, yeah, if you're looking at housing, 0:08:36.800 --> 0:08:38.960 they are having an impact because there's no houses for 0:08:39.000 --> 0:08:40.920 sale because people don't want to trade in their three 0:08:40.960 --> 0:08:43.959 percent mortgages for seven percent mortgages, and that's going to 0:08:44.000 --> 0:08:45.840 be a problem down the road. It is going to 0:08:45.840 --> 0:08:46.319 be an issue. 0:08:46.320 --> 0:08:46.839 And how's the. 0:08:46.760 --> 0:08:49.720 FED get out of that? Because if they don't bring 0:08:50.080 --> 0:08:53.480 mortgage rates down significantly, people won't go back into the market. 0:08:53.920 --> 0:08:58.080 The new homes are selling like hotcakes because you don't 0:08:58.080 --> 0:09:00.520 have anybody in them, so you don't have to worry 0:09:00.520 --> 0:09:02.760 about selling it, and a lot of the all builders 0:09:02.880 --> 0:09:06.559 are offering credits or financing that brings that mortgage rate 0:09:06.600 --> 0:09:10.520 down some. So we're still seeing strong growth in that, 0:09:10.679 --> 0:09:15.080 which actually has They both have a big Existing homes 0:09:15.080 --> 0:09:16.880 and new home sales have a big impact on the 0:09:16.920 --> 0:09:20.640 economy in different ways. The new home sales a lot 0:09:20.720 --> 0:09:25.120 of construction materials obviously, and new appliances things like that, 0:09:25.400 --> 0:09:28.720 whereas the new homes the existing homes, people tend to 0:09:28.720 --> 0:09:32.160 replace the carpets and buy furniture, and that's our thing. 0:09:32.240 --> 0:09:36.679 So we lose one, we gain the other. 0:09:37.320 --> 0:09:39.559 And you build it, someone will buy it no matter 0:09:39.640 --> 0:09:42.280 where it is, where you put it, how big, how small, 0:09:42.600 --> 0:09:46.360 someone's going to buy that house. Bloomberg's International Economic and 0:09:46.400 --> 0:09:50.000 Policy correspondent Michael McKee. Coming up on Bloomberg day Break weekend, 0:09:50.000 --> 0:09:52.679 we head across the Pond and look at Ireland's upcoming 0:09:52.720 --> 0:09:56.640 budget with the country's Financial Services Minister. I'm Tom Busby, 0:09:56.760 --> 0:10:03.560 and this is Bloomberg. This is Bloomberg Daybreak weekend, our 0:10:03.559 --> 0:10:06.080 global look ahead at the top stories for investors in 0:10:06.120 --> 0:10:09.200 the coming week. I'm Tom Busby in New York. Up 0:10:09.280 --> 0:10:12.280 later in our program, the race for House speakers heating up. 0:10:12.600 --> 0:10:15.280 But first, while many countries in Europe are struggling with 0:10:15.480 --> 0:10:20.240 large budget deficits, Ireland is forecasting a run of big surpluses. 0:10:20.600 --> 0:10:24.000 That's thanks to buoyant corporate tax revenues. The Irish government 0:10:24.040 --> 0:10:26.240 unveiling its budget for next year in the coming days 0:10:26.240 --> 0:10:28.520 and for more, let's go to London and bring in 0:10:28.520 --> 0:10:32.040 Bloomberg Daybreak Europe Banker Stephen Carroll, Tom. 0:10:31.760 --> 0:10:34.560 It's an enviable position for any government to be and 0:10:34.640 --> 0:10:37.160 to have a surplus of income to spend on tax 0:10:37.200 --> 0:10:40.720 cuts or increased public spending. Across Europe, It's a pretty 0:10:40.800 --> 0:10:45.040 unusual occurrence. In Ireland. It's sparked massive political debate about 0:10:45.080 --> 0:10:47.960 how the money should be spent, especially as the country 0:10:48.000 --> 0:10:52.440 faces issues including an acute shortage of housing. The Finance 0:10:52.480 --> 0:10:54.839 Ministry in Dublin is expected to see a surplus of 0:10:54.880 --> 0:10:57.200 billions of euros this year and as much as sixty 0:10:57.280 --> 0:11:01.040 five billion by twenty twenty seven. The government, though, is 0:11:01.160 --> 0:11:04.400 conscious that the boom in corporate tax receipts, a big 0:11:04.480 --> 0:11:08.439 driver of that extra income, won't last. In fact, figures 0:11:08.480 --> 0:11:11.400 released in recent days showed the tax take from companies 0:11:11.679 --> 0:11:14.760 was twenty three percent lower in the first nine months 0:11:14.760 --> 0:11:17.800 of this year compared to last year. Add to that 0:11:17.920 --> 0:11:20.720 a warning from the ESRI think tank that the Irish 0:11:20.760 --> 0:11:23.840 economy will contract for the first time this year since 0:11:23.880 --> 0:11:27.760 twenty twelve. Now, while the domestic economy is growing, Ireland's 0:11:27.800 --> 0:11:31.520 headline GDP figures are distorted by the outsized nature of 0:11:31.640 --> 0:11:34.240 major international companies that operate there. 0:11:34.679 --> 0:11:34.800 Now. 0:11:34.800 --> 0:11:37.280 I've been discussing all of these issues with Ireland's Financial 0:11:37.320 --> 0:11:41.240 Services Minister Jennifer Carroll McNeil. We started by talking about 0:11:41.280 --> 0:11:44.760 the much debated choices the government is making in its 0:11:44.840 --> 0:11:45.720 upcoming budget. 0:11:46.040 --> 0:11:48.559 We're very curful about managing the projections there. We're very 0:11:48.559 --> 0:11:50.920 careful about how we may use that. We've obviously a 0:11:50.920 --> 0:11:53.079 commitment to put quite a bit of that aside for 0:11:53.360 --> 0:11:56.760 a pension reserve fund, for sovereign Wealth fund, different types 0:11:56.800 --> 0:11:59.280 of longer term investment in infrastructure, which is a really 0:11:59.320 --> 0:12:02.240 important piece for Ireland. At the same time, recognizing that 0:12:02.320 --> 0:12:05.839 our construction unemployment is two percent, our unemployment generally is 0:12:06.080 --> 0:12:08.600 four percent, we're absolutely at full employment. We've never had 0:12:08.640 --> 0:12:11.160 more people working in Ireland. So we have this very 0:12:11.160 --> 0:12:13.360 strong domestic economy from which a lot of our tax 0:12:13.400 --> 0:12:17.400 receipts are being generated, also corporation tax. But we're mindful 0:12:17.480 --> 0:12:20.200 that you look, Ireland has been through the mill in 0:12:20.280 --> 0:12:22.160 fifteen years. We've been up and we've been down, and 0:12:22.200 --> 0:12:25.319 we've worked very very hard to recover our economy make 0:12:25.360 --> 0:12:30.319 it resilient and strong. Yes, we're benefiting from significant surpluses 0:12:30.360 --> 0:12:31.880 at the moment, but I think we take a very 0:12:31.880 --> 0:12:34.560 curful view about how we may invest that we don't 0:12:34.559 --> 0:12:37.040 want to do anything that's inflationary, and we're very careful 0:12:37.040 --> 0:12:39.920 about protecting ourselves for the future. So we feel that 0:12:39.960 --> 0:12:41.800 it's the product of a lot of hard work, but 0:12:41.840 --> 0:12:44.040 we're very careful to try to manage that for the future. 0:12:44.120 --> 0:12:46.240 So when the conversations running up to the budget, then 0:12:46.320 --> 0:12:48.760 how much of the surplus is going to go to 0:12:48.840 --> 0:12:51.280 those sort of precautionary measures, or how much we'll go 0:12:51.320 --> 0:12:52.640 to other measures like tax cuts. 0:12:52.800 --> 0:12:55.240 It has been very significant already. We've put four billion 0:12:55.280 --> 0:12:57.440 across into one fund. We may very well put it 0:12:57.480 --> 0:13:00.640 put a great deal more. We've identified a billion for 0:13:00.720 --> 0:13:02.800 tax cuts, and I think at a time of full 0:13:02.840 --> 0:13:06.079 employment that's particularly important. I think in Ireland we hit 0:13:06.080 --> 0:13:08.200 the higher rate of tax too soon and I think 0:13:08.200 --> 0:13:10.120 we're a bit of an outlier on that. And when 0:13:10.120 --> 0:13:12.680 you're looking at marginal decisions in relation to going back 0:13:12.720 --> 0:13:15.520 to work or perhaps working more in a very tight 0:13:15.600 --> 0:13:19.559 labor market, those sorts of decisions around tax policies, they 0:13:19.559 --> 0:13:22.080 become quite important. And so we are trying to make 0:13:22.160 --> 0:13:24.440 sure that our very very skilled workforce is able to 0:13:24.480 --> 0:13:26.640 work as much as it can, as much as it 0:13:26.679 --> 0:13:28.480 wants to. You might recognize that there's a lot of 0:13:28.480 --> 0:13:31.120 people taking a step back from work for a period, 0:13:31.120 --> 0:13:34.080 potentially with childcare costs, and so we're trying to adopt 0:13:34.120 --> 0:13:36.480 an approach of putting money back in people's pockets through 0:13:36.520 --> 0:13:39.440 tax cuts, but reducing a lot of structural costs in Ireland, 0:13:39.600 --> 0:13:42.160 So reducing the cost of childcare by twenty five percent 0:13:42.240 --> 0:13:44.880 last year and hopefully more this year. Reducing the cost 0:13:44.880 --> 0:13:48.160 of a child going to college, reducing upfront structural costs 0:13:48.160 --> 0:13:51.320 and health and making it easier to access services more 0:13:51.400 --> 0:13:54.040 cheaply transport costs. What can you do at a time 0:13:54.040 --> 0:13:56.480 of inflation. You can cut the costs that you can control, 0:13:56.679 --> 0:13:58.840 and you can give people back money back to a 0:13:59.000 --> 0:14:01.640 point with at being inflationary, and so we're trying to 0:14:01.640 --> 0:14:04.000 approach it from those perspectives. We also have a very 0:14:04.040 --> 0:14:06.440 significant capital and you know, investment project. We have a 0:14:06.440 --> 0:14:10.559 lot of infrastructure that needs upgrading. But we do face constraints, 0:14:10.600 --> 0:14:13.240 employment constraints, particularly in the construction sector, which I think 0:14:13.400 --> 0:14:16.120 are reflected right across Western Europe. But are you know 0:14:16.160 --> 0:14:18.400 they are as acute in Ireland as anywhere else. 0:14:18.520 --> 0:14:20.720 What is the concern about what the drop off and 0:14:20.760 --> 0:14:23.360 the tax receipts could be given that so much of 0:14:23.400 --> 0:14:26.000 that corporate tax money comes from a very limited number 0:14:26.040 --> 0:14:27.000 of companies in Ireland. 0:14:27.040 --> 0:14:28.840 Well, look, I think it's fair to say that any 0:14:28.880 --> 0:14:32.840 sort of sexual specific challenge could have a very significant yeah, 0:14:32.960 --> 0:14:36.040 tech or even an individual company. And of course you 0:14:36.080 --> 0:14:39.600 know there are different intellectual property issues. You know about 0:14:39.640 --> 0:14:42.600 about derogations running out and so on, and so we 0:14:42.680 --> 0:14:45.320 are very fortunate to have this position, but we are 0:14:45.440 --> 0:14:48.160 very careful to manage it. Obviously, Ireland is part of 0:14:48.160 --> 0:14:50.760 the OECD, the new tax framework. Ate please to be 0:14:50.840 --> 0:14:52.840 part of that looking forward to that, and we have 0:14:52.920 --> 0:14:55.160 to manage that transition now over the next period. But 0:14:55.360 --> 0:14:57.360 you know, I'm looking at my tax tax receipts just 0:14:57.400 --> 0:15:00.840 this year. You know, income taxes up, the at receipts 0:15:00.880 --> 0:15:02.840 are up all of your domestic you know, all of 0:15:02.840 --> 0:15:05.160 the indicators of a really strong domestic economy. So we're 0:15:05.200 --> 0:15:07.880 generating very significant receipts from that as well. It's not 0:15:07.960 --> 0:15:11.400 just corporation tax, it's income tax, it's that it's activity 0:15:11.440 --> 0:15:13.720 in the employment sector. We have never had more people 0:15:13.720 --> 0:15:15.680 at work in Ireland and we have a very highly 0:15:15.680 --> 0:15:18.000 skilled labor force. So it's a good time for us 0:15:18.040 --> 0:15:20.480 considering where we were ten years ago. We're very excited 0:15:20.480 --> 0:15:23.120 to be here, but we take a careful pause in 0:15:23.120 --> 0:15:25.520 our approach to it. You know, we recognize that we 0:15:25.560 --> 0:15:28.120 want to be in as resilient a position ten years 0:15:28.160 --> 0:15:30.360 from now, and of course there's going to be ups 0:15:30.360 --> 0:15:32.200 and downs. Of course, there's going to be retrenchments in 0:15:32.200 --> 0:15:34.920 different sectors. Earlier this year, for example, there was a 0:15:34.960 --> 0:15:38.040 slight retrenchment in tech in employment. We have a very 0:15:38.080 --> 0:15:41.000 strong financial services sector, as you're aware, and we found 0:15:41.000 --> 0:15:44.280 that a lot of that skill was absorbed immediately by 0:15:44.280 --> 0:15:48.040 financial services in fintech, in sure tech. Great innovation that's 0:15:48.080 --> 0:15:50.880 coming out of Ireland because we have this juxtaposition of 0:15:50.920 --> 0:15:53.920 tech and financial services right beside each other. We're doing 0:15:53.920 --> 0:15:56.640 a lot of very interesting, exciting things there. So I 0:15:56.640 --> 0:15:58.680 think it's a good moment. But I think in Ireland 0:15:58.720 --> 0:16:00.960 we will always adopt a sort of curfl pause. We've 0:16:00.960 --> 0:16:04.440 come back from a really disastrous financial crash to a 0:16:04.480 --> 0:16:06.880 balanced budget to an interesting surplus. 0:16:07.120 --> 0:16:08.960 Some of the changes that we've seen post Brexit in 0:16:09.000 --> 0:16:11.440 the UK has been to move away from some of 0:16:11.480 --> 0:16:15.480 the mifit to regulations, particularly around funding for research. Is 0:16:15.520 --> 0:16:18.640 that giving the UK a competitive edge when it comes 0:16:18.680 --> 0:16:21.600 to attracting financial services companies versus Ireland. 0:16:21.760 --> 0:16:23.520 It's not what I'm hearing. I think what I would 0:16:23.600 --> 0:16:26.600 reflect is that I think we're at a point where, 0:16:26.920 --> 0:16:29.360 you know, I became Minister for Financial Services in December 0:16:29.560 --> 0:16:31.840 when we hadn't the Windsor Framework agreed and we were 0:16:31.840 --> 0:16:34.640 in a very different place in terms of our conversations 0:16:34.640 --> 0:16:36.960 in our dialogue. It's now the beginning of October, and 0:16:37.000 --> 0:16:38.760 I'm so pleased that that has been agreed and that 0:16:38.800 --> 0:16:42.680 we can have really constructive conversations about what we do 0:16:42.760 --> 0:16:44.800 together in the future. And I don't think that we 0:16:44.840 --> 0:16:48.520 need to approach it in an overly competitive sort of way. Obviously, 0:16:48.560 --> 0:16:50.320 Ireland is at the center of Europe is going to 0:16:50.360 --> 0:16:52.720 continue to do everything it can to protect and develop 0:16:52.960 --> 0:16:56.040 the Single Market and the opportunities within that. But we're 0:16:56.080 --> 0:16:58.360 so very pleased to have this closural close relationship with 0:16:58.400 --> 0:17:01.720 London as financials are services. You know, Okay, find. 0:17:01.520 --> 0:17:03.480 There's some frantation competitors, friendly. 0:17:03.160 --> 0:17:04.960 Competitors, and do you know what, there's nothing wrong with that. 0:17:05.040 --> 0:17:07.159 It does both of us well. London has been and 0:17:07.240 --> 0:17:10.159 always will be a major financial center of for the world, 0:17:10.440 --> 0:17:13.120 and you know, we benefit very strongly by London doing 0:17:13.119 --> 0:17:15.280 well and we will do well from that. So I 0:17:15.320 --> 0:17:16.680 approach it in a very collaborative way. 0:17:16.840 --> 0:17:19.400 You mentioned the Windsor framework. Are you disappointed there hasn't 0:17:19.400 --> 0:17:22.359 been restoration of the executive since the winds Are Framework agreed? 0:17:22.359 --> 0:17:24.359 I should point out you also used to be a 0:17:24.359 --> 0:17:26.480 member of the Parliamentary committee that looked at the implementation 0:17:26.520 --> 0:17:27.480 of the Good Variety Agreement. 0:17:27.480 --> 0:17:31.080 I am really disappointed. I am really disappointed because, you know, 0:17:31.160 --> 0:17:34.080 for so many reasons, it's a major democratic gap to 0:17:34.240 --> 0:17:37.080 have political institutions that were voted in by the people, 0:17:37.359 --> 0:17:39.960 where you have free and fair elections, which is, you know, 0:17:40.240 --> 0:17:42.440 a privilege and a luxury that most people around the world, 0:17:42.560 --> 0:17:44.440 you know, do not. In fact, have you free and 0:17:44.480 --> 0:17:47.440 fair elections in the opportunity to represent your community and government, 0:17:47.640 --> 0:17:50.600 it's an extraordinary privilege and an extraordinary opportunity. And nowhere 0:17:50.640 --> 0:17:53.600 is that more important than trying to build a reconciled 0:17:54.000 --> 0:17:57.440 society in Northern Ireland. Northern Ireland has the most exceptional 0:17:57.440 --> 0:18:00.400 opportunity being both part of the UK and in many 0:18:00.440 --> 0:18:03.040 ways the access to the Single Market. Also, we want 0:18:03.040 --> 0:18:05.200 to see Northern Ireland doing well. We want to see 0:18:05.359 --> 0:18:08.200 the ministers in place making decisions. We want to see 0:18:08.240 --> 0:18:10.960 collaboration in the way that we can between Dublin and Belfast. 0:18:11.080 --> 0:18:13.480 We want nothing but good things for Northern Ireland. But 0:18:13.640 --> 0:18:15.560 you know, the political institutions have to run. And I 0:18:15.600 --> 0:18:17.480 would say that of the twenty five years of the 0:18:17.480 --> 0:18:20.840 Good Friday Agreement, Stormant hasn't been an operation for I 0:18:20.880 --> 0:18:23.320 think close to ten of those, if not slightly more, 0:18:23.560 --> 0:18:25.400 and that's a major gap and I think that that's 0:18:25.440 --> 0:18:28.280 going to require reflection over the next period. 0:18:28.440 --> 0:18:32.120 That was Ireland's Financial Services Minister Jennifer Carol McNeil speaking 0:18:32.119 --> 0:18:35.840 to me here on Bloomberg Radio ahead of the budget 0:18:35.840 --> 0:18:38.679 announcement coming in the coming days. Also very interesting to 0:18:38.680 --> 0:18:42.119 get her views on the political stalemate in Northern Ireland, 0:18:42.200 --> 0:18:45.240 where an executive hasn't functioned for well over a year 0:18:45.280 --> 0:18:48.320 and a half at this stage due to political disagreements 0:18:48.640 --> 0:18:52.960 over Northern Ireland's post Brexit trade rules, so good to 0:18:53.000 --> 0:18:56.679 get her perspective on those issues too. I'm Stephen Carroll 0:18:56.800 --> 0:18:59.440 in London. You can catch us every weekday morning here 0:18:59.440 --> 0:19:02.720 for Bloomberg Daybreak. You're beginning at six am in London 0:19:02.800 --> 0:19:04.560 and one am on Wall Streets. 0:19:04.760 --> 0:19:07.439 Tom, thank you, Steven. And coming up on Bloomberg day 0:19:07.440 --> 0:19:09.600 Break weekend, we head to the nation's capital and look 0:19:09.600 --> 0:19:12.960 at the race for Speaker of the House. I'm Tom Busby. 0:19:13.320 --> 0:19:25.800 This is Bloomberg Bloomberg Radio on demand and in your 0:19:25.840 --> 0:19:28.480 podcast feed. I'm Tom Busby in New York with your 0:19:28.520 --> 0:19:30.840 global look ahead at the top stories for investors in 0:19:30.880 --> 0:19:33.480 the coming week. One of the biggest political stories we're 0:19:33.520 --> 0:19:36.359 watching this week is the race for Speaker of the House. 0:19:36.520 --> 0:19:40.080 Republicans will host a candidate forum on Tuesday, and the 0:19:40.160 --> 0:19:43.040 closed party election will take place on Wednesday. There's no 0:19:43.200 --> 0:19:46.240 timeline for electing a speaker on the House floor. Now 0:19:46.240 --> 0:19:48.199 for more, let's head to our Bloomberg ninety nine one 0:19:48.280 --> 0:19:51.200 News from in Washington and Bloomberg Sound On co host 0:19:51.480 --> 0:19:52.720 Kaylee Lines. 0:19:52.640 --> 0:19:55.119 Yeah, Tom, that's right. After an historic week in the 0:19:55.119 --> 0:19:58.360 House of Representatives that saw the ousting of Kevin McCarthy 0:19:58.359 --> 0:20:01.880 as speaker through a motion to brought by Republican Congressman 0:20:01.920 --> 0:20:05.320 from Florida Matt Gates, this coming week promises to bring 0:20:05.400 --> 0:20:08.320 drama all its own as the House attempts to decide 0:20:08.359 --> 0:20:11.320 on who the next speaker will be. Here with me 0:20:11.400 --> 0:20:14.399 for more is Megan's scully, who leads Bloomberg's Congress coverage 0:20:14.440 --> 0:20:19.480 here in Washington. So, Megan, this is promising to be 0:20:19.720 --> 0:20:22.199 kind of chaotic. Chaotics seems to be the status quo 0:20:22.320 --> 0:20:24.920 in the House of Representatives at the moment, and there's 0:20:24.920 --> 0:20:26.760 a lot of individuals to talk about, so I'd like 0:20:26.840 --> 0:20:29.440 to take them kind of just one by one, beginning 0:20:29.560 --> 0:20:33.320 with one individual who this past week got the endorsement 0:20:33.680 --> 0:20:37.119