Speaker 1: This is Bloomberg Daybreak. You for this Tuesday, the thirty
Speaker 1: one of January in London. Coming up today, Banking a
Speaker 1: bigger profits, ubs goes on a share buying binge just
Speaker 1: earnings beat estimates an unwanted Brexit dividend. Bloomberg Economics says
Speaker 1: that leaving the EU is costing the UK a hundred
Speaker 1: billion pounds a year a brighter global picture. The i
Speaker 1: m F raises its growth forecast for the first time
Speaker 1: in a year, scrapping EU legislation, counting the cost of
Speaker 1: a new build, and the London Mayor presses ahead with
Speaker 1: U les. Those are the stories we're looking at in
Speaker 1: today's papers and I'm leanne Garin's plus the high price
Speaker 1: of Musque's Twitter interests social media firm makes its first
Speaker 1: three hundred million dollar payment after Elon's debt fueled buy out.
Speaker 1: That's all straight Ahead on Bloomberg Daybreak Europe on DAB
Speaker 1: Digital Radio London, Bloomberg eleven three oh New York, Bloomberg
Speaker 1: on Washington d C, Bloomberg one, Boston, Bloomberg six, San Francisco,
Speaker 1: syrus XM Channel one nineteen and around the world on
Speaker 1: Blueberg Radio dot Com. And var the Blueberg Business. Good morning,
Speaker 1: I'm Stephen Carroll and I'm Caroline Heitke. Here are the
Speaker 1: stories that we're following today this morning. UBS says it
Speaker 1: plans to buy back more than five billion dollars in
Speaker 1: stock this year. After posting better than expected results for
Speaker 1: the final three months of twenty two, the bank reported
Speaker 1: net income for the fourth quarter of one point six
Speaker 1: five billion. That's a beat on the analyst estimate of
Speaker 1: just under one point three billion dollars. In a bullish
Speaker 1: assessment of the results, UBS CEO Ralph Harmer has said
Speaker 1: the bank's performance proves that their strategy is the right
Speaker 1: one and they're not the only bank reporting today. Car No, absolutely,
Speaker 1: We're just we've had our results from Swedbank fourth quarter
Speaker 1: net interest incomes a beat ten point nine to billion
Speaker 1: Swedish kroner. Estimates had been for nine point four eight
Speaker 1: billion Sweedbanks a full year dividend per share at nine
Speaker 1: point seven five Swedish chronas, so that's actually slightly below estimates.
Speaker 1: And then UniCredit boosting two investor returns to five point
Speaker 1: two billion euros their fourth quarter net income two point
Speaker 1: four six billion euros. That is a big beat on
Speaker 1: the estimated one point zero three billion. Of course, that
Speaker 1: UNI credit had been in focus. The chief executive officer,
Speaker 1: Andrea or Cell had told Bloomberg just earlier this month
Speaker 1: that investors could expect higher payouts, So those results from
Speaker 1: UniCredit for now. The i m F latest economic forecast
Speaker 1: there's only one G seven economy in recession this year, Britain,
Speaker 1: human parts has more. The International Monetary Fund says the
Speaker 1: UK will be bottom of the class this year, and
Speaker 1: his latest forecast, the IMF says Britain will be the
Speaker 1: only G seven economy to shrink in twenty twenty three,
Speaker 1: contracting by no point six percent. It says higher taxes
Speaker 1: and interest rates, along with government spending the strate will
Speaker 1: exacerbate pressures on the cost of living. Taken together that
Speaker 1: saw the IMF downgrade is outlooked by a massive nine
Speaker 1: tenths of apsentage points from its forecast just three months ago. Separately,
Speaker 1: new analysis has found the Brexit it's costing the UK
Speaker 1: economy a hundred billion pounds a year, some four percent
Speaker 1: of g d P. The report by Bloomberg Economics says
Speaker 1: the effects span everything from business investments to the ability
Speaker 1: of companies to hire workers in London immune parts of
Speaker 1: Bloomberg day break Europe. Well, that may be the picture
Speaker 1: in the UK, but there's better news globally. The International
Speaker 1: Monetary Fund has raised its economic outlook for the first
Speaker 1: time in a year. The IMF is now forecasting global
Speaker 1: growth of two point nine percent for the year. That's
Speaker 1: up two tenths of one percent on previous expectations, but
Speaker 1: chief economist Pierre Olivier Garinchas says that inflation is still
Speaker 1: a major concern. The worry is more with what we
Speaker 1: call core inflation that excludes energy and food prices are
Speaker 1: typically more volatile, and this core inflation measures have shown
Speaker 1: more precise and they have not picked yet in many countries,
Speaker 1: and they are still far away from settle bank targets.
Speaker 1: So the job is not done. So the job not done.
Speaker 1: The i m F s cautious optimism, contrast with a
Speaker 1: more die view from the World Bank. The Development Lender
Speaker 1: slashed its growth forecast for most countries and regions earlier
Speaker 1: this month. The sell off and the Danne Group shares
Speaker 1: has continued today, amid allegations of market manipulation. The embattled
Speaker 1: group has now seen some seventy four billion dollars wiped
Speaker 1: off its value in a single week. The route comes
Speaker 1: as a Danne seats to complete a multibillion dollar share
Speaker 1: sale as flagship firm. Bloomberg Markets reporter Annabel Drewler says,
Speaker 1: there are signs it's not going as planned. A Danni
Speaker 1: Group has really been stuck relying on its existing investors,
Speaker 1: and a big portion of that is actually coming from
Speaker 1: the U a E. Because we have International Holding Co,
Speaker 1: which is controlled by a key member of the Emirates
Speaker 1: Royal family. It's going to be investing about four hundred
Speaker 1: million dollars in the share sales that represent about six
Speaker 1: percent of the offering. Annibal drew says that all eyes
Speaker 1: are now on the final outcome of this fundraising Gamdany
Speaker 1: has now slipped out of the world's top ten richest
Speaker 1: people according to Bloomberg's Billionaires Index. And finally, Twitter has
Speaker 1: made its first interest payment of the twelve and a
Speaker 1: half billion dollar alone that was taken out by Elon
Speaker 1: Musk to help with the takeover of the social media firm.
Speaker 1: Paying the estimated three hundred million dollar alone installment was
Speaker 1: seen as a key test for the firm after owner
Speaker 1: Elon Musk warned that the company could go bankrupt since
Speaker 1: his purchase. Twitter has failed to pay millions of dollars
Speaker 1: in rent though, and has been sued by multiple contractors
Speaker 1: over on paid services. So those are top stories this morning.
Speaker 1: Have to say. Looking around, the economic news is money.
Speaker 1: It's not a great day to be Britain as it
Speaker 1: no the only G seven country to shrink this year. Terrible. Also,
Speaker 1: not only is the outlook slashed a massive nine tenths
Speaker 1: of one percent from the October forecast, but also the
Speaker 1: rm fcs are slow recovery in so basically two really
Speaker 1: bleak years for Britain overall stagnation. Jeremy Hunt, who is
Speaker 1: in this building on Friday to deliver a kind of
Speaker 1: big economic address, he suggested that the UK is going
Speaker 1: to do better than the MF expectations, but no, it's not.
Speaker 1: It's not a particularly strong picture for Britain. And then
Speaker 1: to look add to that the Bloomberg Economics report about
Speaker 1: the cost of Briggs at a hundred billion pounds a year.
Speaker 1: It's a very stark figure. You know, four percent the
Speaker 1: economy's four percent. Our economists estimate that it might have
Speaker 1: been that's due to business investment, lagging worker or lagging
Speaker 1: supply of workers in the UK as well. So I mean, look,
Speaker 1: it's it's not it's not a great picture to be
Speaker 1: waking up to this morning, certainly from the economic point
Speaker 1: of view. However, if you are looking to go on holidays,
Speaker 1: things are looking a bit brighter because there are more airlines.
Speaker 1: Airlines are now being told they have to use their
Speaker 1: their slots, the lad slots they have at airports in
Speaker 1: the UK. They had been given some flexibility on the
Speaker 1: rules during the endemic. That means that there will be
Speaker 1: the possibility for airlines to schedule more flights this summer,
Speaker 1: perhaps will avoid travel chaos this summer. Yeah, well maybe
Speaker 1: you need to get away after that. Term what news
Speaker 1: we've just delivered to But look the other thing that
Speaker 1: I've picked out on the Rumberg Ternel this morning that
Speaker 1: you must read. I learned so much from Mehir Sharma,
Speaker 1: Bloomberg opinion columnist senior fellow at the Observer Research Foundation
Speaker 1: in New Delhi about what is happening in India with
Speaker 1: the Adani issue. His columns, he points out that for
Speaker 1: many in India, it's actually less about where the money
Speaker 1: for a Danni investments comes from and much more whether
Speaker 1: they succeed in building these ports and airports and roads
Speaker 1: and railways that a Dani group has sort of specialized in.
Speaker 1: I do encourage you to read the columns that he's
Speaker 1: got out on the Terminal. They'll give you great insight
Speaker 1: into what's happening in India. Yeah, and certainly and where
Speaker 1: a Dannie sits within the sort of Indian psyche as
Speaker 1: well as being this great hope for for so many
Speaker 1: areas of the economy. So yeah, definitely a fascinating read
Speaker 1: on the Terminal. Coming up next, scrapping EU legislation, counting
Speaker 1: the cast of a new build and London's Mayor presses
Speaker 1: ahead with you les now. The paper review on bluebirdday
Speaker 1: Break Europe, the news you need to know from today's
Speaker 1: papers and joining us now has been based Lean Garin's
Speaker 1: to go through the newspapers, starting with the Financial Times,
Speaker 1: which has the headline the UK Review of EU Laws
Speaker 1: expanded after a thousand pieces of legislation added. So this
Speaker 1: is about this phrase bonfar of legislation, isn't it? Yes,
Speaker 1: it is indeed, Caroline, And three years on from Brexit
Speaker 1: and the government's plan to review and revoke all these
Speaker 1: EU laws by the end of this year. Has now
Speaker 1: clearly become even tougher. The Ft says a discovery of
Speaker 1: another one thousand pieces of EU legislation that were found
Speaker 1: in the National archives have now been added to this
Speaker 1: massive pie that needs to be looked over and analyze.
Speaker 1: The plan is to review so much law so quickly.
Speaker 1: This is attracting fierce, fierce criticism, but from lots of
Speaker 1: different places, so from business groups, legal experts, trade unions
Speaker 1: and even environmental groups, so widespread criticism there. However, the
Speaker 1: government standing firm says the review process will maximize the
Speaker 1: benefits of Brexit and test opportunities for reform. And I
Speaker 1: just want to point to one thing in the paper
Speaker 1: article to date, says a new Ipsos Mori pole found
Speaker 1: that forty five cent of people across Britain thought Brexit
Speaker 1: was going to be worse than they expected. Now that's
Speaker 1: up from twenty eight percent in June twenty one, So
Speaker 1: it looks like attitudes are changing too. Yeah, certainly, that's
Speaker 1: something we've seen bearing out and polling for for months now,
Speaker 1: and a really interesting aspect of the attitudes to Brexit
Speaker 1: at the moment let's turn to the Telegraph next. Then
Speaker 1: it says homeowners is twenty two tho pounds as one
Speaker 1: in eight new build homes re sold for a loss.
Speaker 1: I'm sorry if you're listening to this and you did
Speaker 1: buy a new home, but homeowners are twice as likely
Speaker 1: to resell new build homes at a loss, and that's
Speaker 1: compared with older homes. And this is all according to
Speaker 1: data from the estate agents. Hampton's data shows that eighty
Speaker 1: one percent of new build owners who made a loss
Speaker 1: were actually selling a flat and the average loss was
Speaker 1: twenty two thousand pounds. And I hear everyone out there
Speaker 1: asking why, And that's because, as Paula Higgins, founder of
Speaker 1: the Homeowners Alliance lobby group, says, developers sell new builds
Speaker 1: at a massive premium and then all of a sudden
Speaker 1: they become in line with the area. Plus the government's
Speaker 1: helped a buy scheme clearly also inflated the price of flats.
Speaker 1: Hampton says new build flats sold fifty five percent. That's
Speaker 1: a half since the scheme came in back in twenty
Speaker 1: And it wasn't as if people didn't warn that actually
Speaker 1: tinkering again with kind of an incentive to buy support
Speaker 1: for first time buyers. Wasn't just going to put prices up.
Speaker 1: There's the evidence, I thought. I think that's a really
Speaker 1: interesting piece from the Telegraph. Just finally, this is so
Speaker 1: controversial in London, I dare not speak its name. Eulers
Speaker 1: the Guardian. The London Mayor vows suppress ahead with l
Speaker 1: as the Ultra Low Emission Zone plan at the launch
Speaker 1: of a scrappage scheme and it's also divisive in office
Speaker 1: today we mentioned it and I feel like the debate
Speaker 1: went on and on. So Sadi Khan is insisting this
Speaker 1: plan will go ahead in August despite opposition. Caroline and
Speaker 1: Stephen from councils and the public for London Boroughs have
Speaker 1: actually threatened illegal action. Yesterday, the London Mayor said he
Speaker 1: was confident of defending any court case brought against the
Speaker 1: U LESS plans as he launched the scrappage scheme for
Speaker 1: poleting vehicles. The Ultra Low EMISSI next zone is going
Speaker 1: to be expanded to the Greater London boundary and that's
Speaker 1: going to be happening in August. The battle for cleaning continuous.
Speaker 1: Garran's thank you very much. Now there are encouraging signs
Speaker 1: and much of the global economy according to the I
Speaker 1: m F. Bloomberg's Richards Salamash caught up with the Funds
Speaker 1: chief economist Pierre Olivier goren Shah to ask them about
Speaker 1: their forecast. We are looking at is what effectively is
Speaker 1: going to be still a challenging here. I mean, what
Speaker 1: we're projecting for three is two point nine percent growth
Speaker 1: and then rebounding to three point one. These are still
Speaker 1: relatively low growth numbers for the global economy, well below
Speaker 1: what we averaged from two thousand to twenty nineteen, for instance,
Speaker 1: but still it's an upgrade compared to what we were
Speaker 1: expecting back in October. And this is due to resilience. Resilience, resilience.
Speaker 1: We've had more resilient households in the US and businesses
Speaker 1: as well. We've had resilience to the energy crisis in Europe.
Speaker 1: A lot of economies have done better than was initially expected.
Speaker 1: Labor markets have been very very tight in many emerging
Speaker 1: and advanced economies as well. And then in addition to
Speaker 1: all this, you have the reopening of the Chinese economy
Speaker 1: that is promising to give a boost to global activity.
Speaker 1: In h now that resilience Olivier it is making the
Speaker 1: job of center bank is perversely harder here And what's
Speaker 1: your take, Well, there is a little bit of good
Speaker 1: news on the inflation front, but we should not exaggerate it.
Speaker 1: So what we are seeing is that global inflation headline
Speaker 1: inflation has peaked already in and is coming down in
Speaker 1: the vast majority of countries. The worry is more with
Speaker 1: what we call core inflation that excludes energy and food
Speaker 1: prices are typically more volatile, and this core inflation measures
Speaker 1: have shown more persistent and they have not picked yet
Speaker 1: in many countries, and they are still far away from
Speaker 1: settle bank targets. So the job is not done. And
Speaker 1: you are right a point out that more resilience on
Speaker 1: activity could mean more price pressures, could mean that it's
Speaker 1: harder for centle banks to bring down inflation to target,
Speaker 1: and therefore they might need to do more. I think
Speaker 1: that your Busschristina Cristalina Georgieva said. Of course, the the
Speaker 1: COVID which I said, the post COVID zero China is
Speaker 1: going to perhaps to be one of the impetus is
Speaker 1: for growth, as you've just alluded to. But it's also
Speaker 1: could be the next sort of inflation headache as well well. Certainly,
Speaker 1: as the Chinese economy reopens, that's going to put pressure
Speaker 1: on a number of primary commodities markets, energy markets, etcetera.
Speaker 1: But let's keep in mind that even with that China's reopening,
Speaker 1: we are grading China quite a bit. We're projecting five
Speaker 1: point two percent growth in that's Zual point eight percentage
Speaker 1: point upward revision for China for for this year. It's
Speaker 1: still the global economy is slowing down and and in
Speaker 1: terms of the overall demand demand for energy and UH
Speaker 1: and commodities, that is really what is going to be
Speaker 1: the driving force. So China is doing better, but the
Speaker 1: global economy is still cooling off, and in our projections
Speaker 1: we are factoring in that we anticipate we expect prices
Speaker 1: of energy and UH and other commodities to actually decline
Speaker 1: through the year. Now if also highlighted that the risks
Speaker 1: do remain to the downside, Why well, I've mentioned already
Speaker 1: that we are far from having won the fight against inflation.
Speaker 1: There could be a lot more persistence in inflation. We
Speaker 1: have had a few good prints. It's encouraging, it's in
Speaker 1: the right direction. But let's not think that somehow the
Speaker 1: job is done. Far from it. There could be price
Speaker 1: pressures that could be wage pressures. There could be an
Speaker 1: escalation of the war in in in Ukraine that again
Speaker 1: sends energy and commodity prices through the roof. So there
Speaker 1: are a number of factors that could complicate the outlook
Speaker 1: in and I would make potentially a recession more likely.
Speaker 1: Global recession more likely, may require more tightening by central bank.
Speaker 1: We could have also a tightening of financial conditions. So
Speaker 1: far this has not happened too much, but this is
Speaker 1: a new environment. We have to be very vigilant in
Speaker 1: terms of the vulnerabilities in the financial markets, in the
Speaker 1: non bank financial institutions and housing sector. This tightening of
Speaker 1: policy rates by centle bank is something that is really
Speaker 1: changing the environment here and we have to be very careful.
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 1: story is making news from London to Wall streets and beyond.
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