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

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Speaker 1: of May in London. Coming up today, all.

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Speaker 2: Change at the top. UBS announces a new leadership team

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Speaker 2: and operating model.

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Speaker 3: Bottom of the pile.

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Speaker 1: Investors believe the UK will see the G seven's biggest

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Speaker 1: drop in living standards.

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Speaker 2: There's no secret plan. Mitch McConnell talk's debt limit deadlock,

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Speaker 2: as Bill gross urages investors to buy tea bells.

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Speaker 4: Hashtagsaltand quiet, quits, conservative descent and twisting arms. Those are

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Speaker 4: the stories we're looking at in today's papers. I'm James Wilcock.

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Speaker 1: Plus underpaying women on Wall Street. Goldbmun pays two hundred

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Speaker 1: and fifteen million dollars to settle claims that it says

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Speaker 1: are baseless.

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Speaker 5: That's all straight ahead on Bloomberg Daybreak Europe. The business

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Speaker 5: news you need to start your day in just one

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Speaker 5: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 5: and everywhere you get your podcasts.

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Speaker 2: Good morning. I'm Stephen Carroll and.

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Speaker 1: I'm Caroline Hetger. Here are the stories that we're following today.

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Speaker 2: UBS has unveiled a new leadership team as it integrates

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Speaker 2: credit Sweee into its business Credit Sweez's CEO, Earlert Kerner

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Speaker 2: will join the board of UBS. Todd Tuckner will succeed

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Speaker 2: Sarah Youngwood as chief financial Officer when the takeover closes,

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Speaker 2: while Ekbulkhan will remain as President of Global Wealth Management.

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Speaker 2: The news comes as UBS expects to close the deal

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Speaker 2: to take over Credit Swee that was arranged by the

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Speaker 2: Swiss government in March. That's due to take place in

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Speaker 2: the next few.

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Speaker 1: Weeks now a British households face the biggest hit to

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Speaker 1: living standards in the G seven. In a Bloomberg survey

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Speaker 1: or financial professionals, more than half pointed to the UK

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Speaker 1: as the country likely to suffer most this year. Christopher

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Speaker 1: Pitt reports, despite.

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Speaker 3: The city of London being a global financial hub, the

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Speaker 3: investing world is far from optimistic about Britain's future. Traders

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Speaker 3: who answered Bloomberg's survey say the country is by far

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Speaker 3: the most likely to see the largest fall in living standards.

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Speaker 3: Some said nothing could be done to improve the UK's

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Speaker 3: gloomy prospects. A third said reverse Brexit. But despite the negativity,

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Speaker 3: London is still expected to dominate other European cities as

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Speaker 3: an equity trading Hub in London. I'm Chris Pitt's Bloomberg

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Speaker 3: Daybreak Europe, where.

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Speaker 2: The downbeat assessment from investors comes as the UK government

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Speaker 2: turns up the heat on financial regulators to boost growth.

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Speaker 2: In a statement, the City Minister Andrew Griffith announced the

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Speaker 2: Treasuries now requesting proposals on how its financial regulators can

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Speaker 2: improve international competitiveness. Ministers have faced repeated criticism from business

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Speaker 2: and finance leaders over Britain's investment credentials. The chair of

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Speaker 2: the Financial Reporting Council, Jan Duplessis, added his voice to

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Speaker 2: the chorus, telling Bloomberg that quote we have been declining

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Speaker 2: as a financial capital in almost any metric. His comments

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Speaker 2: come days just days after Revelute's co founders said that

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Speaker 2: they won't consider an ip and London, adding that the

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Speaker 2: capital's appeal is on the wayne.

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Speaker 1: After bragsist Senate leader Mitch McConnell says that he doesn't

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Speaker 1: have a secret plan to resolve the debt limits standoff.

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Speaker 1: The comments poor cold water on the idea that the

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Speaker 1: Kentucky Republican famed for his deal making will somehow end

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Speaker 1: the impasse. The warning comes ahead of a meeting today

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Speaker 1: between the President and congressional leaders. But despite the deadlock,

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Speaker 1: investor Bill gros says he's not worried.

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Speaker 6: I think it's ridiculous. You know, it's always resolved, and

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Speaker 6: not that it's one hundred percent chance, but I think

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Speaker 6: it gets resolved. I would suggest for those that are

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Speaker 6: less concerned, similar to myself, that they, you know, they

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Speaker 6: buy a one month two month treasury bill out i'm

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Speaker 6: much higher rate than they get with a longer term

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Speaker 6: treasury bill.

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Speaker 1: Bill Gross, the former CEO at Pimco, also told Bloomberg

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Speaker 1: that investors should expect inflation to stay above three percent

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Speaker 1: going forwards.

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Speaker 2: Inf Inflation in the Eurozone won't to begin to cool

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Speaker 2: significantly until the end of this year. That's the assessment

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Speaker 2: of the ECB's chief economist Philip Lane. Speaking at event

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Speaker 2: in Berlin, he had this to say on the matter.

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Speaker 7: Strong belief out there and also in their own forecast

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Speaker 7: that there's a lot of disinflation coming later this year.

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Speaker 7: Not quite yet totally, so we're still with a lot

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Speaker 7: of momentum and inflation, but later this year and ongoing,

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Speaker 7: a lot of this inflation is supposed to reverse.

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Speaker 2: Lane and the ECB's latest projections forecast inflation coming back

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Speaker 2: down to the two percent target in the second half

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Speaker 2: of twenty twenty five.

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Speaker 1: Goldman Sachs has agreed to pay more than two hundred

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Speaker 1: million dollars to settle claims that the bank systematically underpaid

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Speaker 1: women with more his Bloomberg's Doug Krisna We're.

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Speaker 8: Told Goldman struck a deal with lawyers representing about twenty

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Speaker 8: eight hundred women in a class action they had claimed

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Speaker 8: the firm discriminated against them in pay and promotions. We

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Speaker 8: are told Goldman will pay two hundred and fifteen million

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Speaker 8: dollars to end the lawsuit. About a third of the

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Speaker 8: settlement is expected to be set aside for attorney fees.

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Speaker 8: The upcoming trial was scheduled for next month in New York.

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Speaker 8: It would have provided a rare public forum for testimony

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Speaker 8: about inequality inside the financial industry, in industry where all

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Speaker 8: but one of the six biggest US banks have only

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Speaker 8: ever been run by men. In New York. I'm Doug

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Speaker 8: Krisner Bloomberg day Break Europe.

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Speaker 2: So those are our top stories on the program this morning.

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Speaker 2: That is a fascinating story around Goldman Sachson, particularly the

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Speaker 2: length of time since that first complaint was lodged back

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Speaker 2: in two thousand and five. It really is an incredible

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Speaker 2: length of time to bring those that case to a conclusion.

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Speaker 6: Yeah.

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Speaker 1: Absolutely, Look, they've denied the allegations. It's not gone to court,

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Speaker 1: but it's obviously been a court case allegations that have

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Speaker 1: been very closely watched by you know, women and men

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Speaker 1: frankly on Wall Street in terms of pay and awards.

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Speaker 1: So yeah, really an interesting story. Also though all the

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Speaker 1: UK mortgage costs of course got the Bank of England

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Speaker 1: decision this week that's pretty important. A lot of lenders

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Speaker 1: started to edge up the price of home loans against

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Speaker 1: another anticipated rate rise. Yeah.

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Speaker 2: No, this is in some ways part of the rebalancing

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Speaker 2: that's happened to the market, remember because of the meltdown

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Speaker 2: and guilts back in September. That was a point that

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Speaker 2: actually pushed mortgage rates up to a level that a

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Speaker 2: lot of market partisans essentially said advance priced in a

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Speaker 2: lot of the rate rises coming from the Bank of England.

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Speaker 2: But as we're facing into another decision from the Bank,

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Speaker 2: it is kind of an interesting reflection that we are

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Speaker 2: actually seeing there is further to go when it comes

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Speaker 2: to how much people are going to be paying on

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Speaker 2: their mortgages.

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Speaker 1: Yeah, let's talk in a bit more detail than around

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Speaker 1: the UK economy because actually Bloomberg's m Live Pulse survey

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Speaker 1: is out and it also reflects investors' gloomy expectations for

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Speaker 1: the economy more broadly. Our UK correspondent Lizzie Burton joins

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Speaker 1: us this morning. Lizzie. Fifty eight percent of investors who

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Speaker 1: took part in this survey said that they expect the

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Speaker 1: UK to see the biggest client in living standards this

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Speaker 1: year of any of the G seven countries. Why are

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Speaker 1: people so gloomy about Britain?

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Speaker 9: Well, it's not just traders in the m live survey,

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Speaker 9: is it. You remember Hugh pil the Bank of England

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Speaker 9: chief economist, told us only recently, we just need to

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Speaker 9: accept that Brits are going to be poorer instead of

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Speaker 9: trying to claw back the effects of inflation. Look, it's

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Speaker 9: almost become conventional wisdom at this point. The UK's got

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Speaker 9: the worst of both worlds in terms of inflation, the

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Speaker 9: tight labor market of the US, the energy crisis of

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Speaker 9: the Eurozone. That's why we've still got the headline rate

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Speaker 9: of inflation in double digits. Still rates arising. You mentioned

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Speaker 9: the Bank of England decision on Thursday, but markets don't

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Speaker 9: expect rates to peak till September at five percent, and

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Speaker 9: that would be the highest level since two thousand and eight.

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Speaker 9: At the same time, you've got growth flatlining after years

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Speaker 9: of low productivity post austerity, post Brexit, and then in

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Speaker 9: the more recent term strikes of course weighing on services output.

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Speaker 9: But if I can give a little bit of optimism.

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Speaker 5: Lease do.

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Speaker 9: After all, that was a really fantastic note recently from

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Speaker 9: our economists at Bloomberg Economics, Dan Hansen and Anna Andrade,

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Speaker 9: and they said that the base effects mean that the

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Speaker 9: gap between UK and Eurozone inflation is soon going to

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Speaker 9: slam shut. And similarly the UK is going to follow

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Speaker 9: US inflation in falling eventually, so it's not all gloom.

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Speaker 2: What does that mean for the government, Lizzie, We know that,

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Speaker 2: you know, the government's taking a lot on being able

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Speaker 2: to grow the economy. Kris Damer, the labor leader, forecasting

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Speaker 2: the most growth in the G seven In.

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Speaker 9: Fact, yeah, you're absolutely right. Cutting inflation and growing the

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Speaker 9: economy are two of Rishisunak's top five priorities. But you

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Speaker 9: could already see the pessimism of this m Live survey.

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Speaker 9: In the local election results from last week, a bruising

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Speaker 9: defeat for the Prime Minister rishisunac The Conservatives lost more

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Speaker 9: than a thousand seats, but also Labor wasn't able to

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Speaker 9: win enough of a vote lead, a lead in the

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Speaker 9: vote share in order to secure a landslide MA at

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Speaker 9: the next general election. It's all to play for still,

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Speaker 9: and so this is the fact that people still are

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Speaker 9: feeling the impact of low growth and high inflation. And

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Speaker 9: in line with that jaded tone, several respondents in this

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Speaker 9: survey have called for a new government but this is

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Speaker 9: disheartened handful that say nothing can be done to improve

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Speaker 9: Britain's lot, and inevitably there was a handful of responses

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Speaker 9: in this survey that says reverse Brexit is all that

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Speaker 9: can be done.

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Speaker 1: Yeah. Having said that, forty eight percent of people do

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Speaker 1: still expect London to emerge as the dominant European stock exchange. Yes,

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Speaker 1: Paris is noudging higher, but it's still not anywhere near

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Speaker 1: where London is.

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Speaker 9: But book Caroline, it does depend whether you're talking about

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Speaker 9: value or volumes. Because we've of course got a weak

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Speaker 9: pound relatively even though it's been relatively positive for the

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Speaker 9: pound in recent weeks. And this is why you've got

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Speaker 9: widespread concerns that the London's losing its appeal as a

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Speaker 9: destination for new company listenings. The French stock market has

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Speaker 9: overtaken London in terms of overall market cup but that's

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Speaker 9: partly due to that week pound.

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Speaker 2: Okay, Lizzie, another point there as well in this is

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Speaker 2: something that we've heard from the UK Manufacturers Association make

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Speaker 2: UK calling for a Royal commission to counter the industrial

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Speaker 2: subsidies that we've seen from the US and the EU.

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Speaker 2: What are they hoping to achieve with this?

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Speaker 9: I mean they're not the only ones, are they. We

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Speaker 9: often hear in interviews on Bloomberg Radio and TV that

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Speaker 9: businesses want to see a response to the Inflation Reduction Act.

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Speaker 9: Make UK is saying that Britain's the only major economy

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Speaker 9: without an industrial strategy, so we're at risk in the

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Speaker 9: UK of being squeezed by the Inflation Reduction Act and

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Speaker 9: then also the European response as well. What they want

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Speaker 9: is a Royal commission. So Royal commissions historically have been

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Speaker 9: formed and appointed by the government to research and advise

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Speaker 9: on specific topics. They've been used since the nineteen sixties

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Speaker 9: and seventies when Britain's economic policy was much more interventionist.

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Speaker 9: That was reversed by Margaret Thatcher. Fundamentally, what make UK

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Speaker 9: want is some long term commitment to an economic strategy.

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Speaker 9: We've had a lot of chopping and changing over recent years,

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Speaker 9: the renaming of the Business Department, the merger with the

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Speaker 9: Trade Department, and you've had an industrial strategy changing five

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Speaker 9: times in the past fifteen years. What they want ultimately

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Speaker 9: is some consistency.

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Speaker 1: Consistency, yes, and accountability of government. I think it's absolutely fascinating.

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Speaker 1: We're going to speak to make UK on Bloomberg Radio

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Speaker 1: a little later this morning. Lizzie Burdon, thank you so

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Speaker 1: much for joining us. Our UK correspondent, Lizzie Burden.

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Speaker 2: I just want to bring a little bit more detail

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Speaker 2: on the news coming out of UBS this morning. So

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Speaker 2: this is an announcement around the new leadership team as

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Speaker 2: the bank seeks to integrate Credit Suite, so Ulrich Kerner,

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Speaker 2: the CEO, joining the UBS executive board. The real change though,

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Speaker 2: is going to be the new Chief Financial Officer, Todd Tuckner,

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Speaker 2: who's going to be joining the as group Chief financial Officer,

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Speaker 2: replacing Sarah young Wood at the close of that takeover deal.

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Speaker 2: A number of names being involved in this look. There

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Speaker 2: has been a lot of reporting over the recent days

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Speaker 2: about what exactly the new lineup of executives will look like.

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Speaker 2: We were talking yesterday about the Financial Times reports around

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Speaker 2: the CFO Dixat Joshi and the CEO Francesca McDonough from

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Speaker 2: Credit Suite going to be remaining with the new bank

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Speaker 2: as well. They're not in this announcement from UBS this morning,

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Speaker 2: but it is interesting to see the bank start to

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Speaker 2: line up the names that will take the leadership at

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Speaker 2: this new and to see this new UBS as they

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Speaker 2: integrate Credit Sue. We know that's going to be quite

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Speaker 2: a long process. We heard that from the chairman concal

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Speaker 2: at the time the takeover had been announce Yes, but

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Speaker 2: this is a little bit more meat on the bones

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Speaker 2: of that announcement.

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Speaker 1: Yeah. Also, they have made a statement only a couple

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Speaker 1: of lines. UBS confident it has the right operating model

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Speaker 1: and leadership team for a successful integration. It is committed

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Speaker 1: to providing regular updates on the integration process over time.

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Speaker 1: So that just is the statement from UBS around Yeah,

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Speaker 1: how Credit Sue is going to be integrated into the

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Speaker 1: business and in particular the personnel, the personnel changes or

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Speaker 1: the names that will be joining. So yeah, fascinating.

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Speaker 2: Up next hashtag Zultan, quiet quits, Conservative descent and twisting arms.

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Speaker 5: Now the paper review on blue Bird Daybreak Europe. The

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Speaker 5: news you need to know from today's papers.

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Speaker 1: Makes James Orcock joins us. Now for look at what

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Speaker 1: is in the newspapers a financial press. Are we all

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Speaker 1: talking about Zoltan Pozzar? James?

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Speaker 5: Who is he?

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Speaker 1: Why do we care about him?

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Speaker 4: Stan's a fascinating figure and some of us may not

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Speaker 4: have heard of him because he's a self and analyst.

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Speaker 4: He's quite esoteric. The joke in the sort of financial

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Speaker 4: world is not even Posar gets Posar, And it's all

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Speaker 4: because he writes about stuff like the reaper markets and

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Speaker 4: interest rates. He famously was working for the Fed and

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Speaker 4: New York Fed back in the factual crisis, and he

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Speaker 4: do this four foot map of how repro rates and

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Speaker 4: shadow banks all exist outside additional banking. So he hasn't

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Speaker 4: written since January. And the big bit here is he

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Speaker 4: works for Credits Swees, So this is part of a

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Speaker 4: big broader story about where the bank's talent has gone now,

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Speaker 4: unlike the story you were just talking about in ubs

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Speaker 4: Pozar suspiciously left sort of around January time, and he

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Speaker 4: was spotted at a recent conference with a name about

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Speaker 4: saying TBD for his organization. And it speaks to quite

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Speaker 4: how famous he is that the ft, Wall Street Journal, Reuters,

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Speaker 4: and even Bloomberg have written up that he has like

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Speaker 4: potentially moved on and had sources familiar confirm it. I'll

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Speaker 4: bring a quote from the ft A profile him last

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Speaker 4: July which says, finances all around the world have names

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Speaker 4: on wings, have portraits, but only one analyst have their

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Speaker 4: own hashtag, and that is hashtag Zultan now. And why

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Speaker 4: we care so much about him is that he is

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Speaker 4: a very crucial interest rate writer. So he predicted the

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Speaker 4: repo market for that back in twenty nineteen, and given

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Speaker 4: the sort of risks of the sudden jump and just rates,

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Speaker 4: given the massive questions by credit right now, there are

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Speaker 4: quite a lot of people who would quite like to

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Speaker 4: know what some posts are thinks right now, but sadly

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Speaker 4: he is not here to tell you.

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Speaker 2: Indeed, it's the Wall Street Journal, among others that are

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Speaker 2: reporting on that story this morning. Let's go to the

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Speaker 2: Financial Times next. This morning James writing about tension and

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Speaker 2: the Conservative ranks.

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Speaker 4: Now you may have forgotten all with the carnation you Steven,

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Speaker 4: but if you were listening to our UK Politics podcast,

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Speaker 4: you would have remembered that the local elections were a

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Speaker 4: big threat to Sunak because there is a risk that

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Speaker 4: it would erode his authority and people will come out

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Speaker 4: of the woodwork if bad results happened. And here they

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Speaker 4: are the FT's reporting that former Tory leader Surrian Douggart

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Speaker 4: Smith has criticized thet approach fors China, which is a

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Speaker 4: very important topic, very close to a lot of conservative

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Speaker 4: hawk's hearts. But I want to highlight a big dichostoicy

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Speaker 4: here between Simon Clark, formercount minister saying Sunac has made

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Speaker 4: a major mistake in not building houses and Trewsavillia's a

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Speaker 4: grandee in her own right saying it's still around. Is

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Speaker 4: elections showing how much people care about protecting their own

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Speaker 4: land and nimbiism. So this is the real tension the

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Speaker 4: Toy Party they have. He has to balance both.

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Speaker 1: Okay, just lastly, The Times writing about bouquets and brickbats

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Speaker 1: for sale of UK's top tech firm. What do they

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Speaker 1: mean by that?

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Speaker 4: I mean it's the first time I see brickbats anywhere

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Speaker 4: as I get to say it at all. So yes,

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Speaker 4: they are theorizing former City editor of The Evening extandared

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Speaker 4: James Ashton's book into Arm And to put it sure,

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Speaker 4: it is the story of how a company that in

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Speaker 4: other jurisdictions would never have less domestic holdings went away

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Speaker 4: and it's well with the read of how kind of

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Speaker 4: at first? This bit is all about how soft Bank

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Speaker 4: took over ARM and how in the some areas of

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Speaker 4: the city even then that was seen as a really

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Speaker 4: bad deal.

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Speaker 2: This is Bloomberg Daybreak Europe. You're a morning brief on

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Speaker 2: the stories making news from London to Wall Streets and beyond.

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Speaker 1: Look for us on your podcast feed every morning, on Apple,

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Speaker 1: Spotify and anywhere else you get your podcasts.

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Speaker 2: You can also listen live each morning on London Dab Radio,

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Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

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Speaker 2: I'm Caroline Hepka, and I'm Stephen. Carol join us again

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Speaker 2: tomorrow morning for all the news you need to start

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Speaker 2: your day right here on Bloomberg day Break.

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Speaker 8: Europe