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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Day bake At podcast. Good morning,

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Speaker 2: It's finday, the fourteenth of November. I'm Caroline Hepcitt in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today, the UK's

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Speaker 3: Chancellor Rachel Reeves considers abandoning plans to hike income tax

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Speaker 3: in her upcoming budget.

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Speaker 2: An unprecedented slump in investment highlights China's filtering economy.

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Speaker 3: Plus from watchdog to top dog, the EU prepares to

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Speaker 3: unveil plans for a major transfer of powers to its

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Speaker 3: markets regulator.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 4: And what could be a major U turn.

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Speaker 3: The British Chancellor Rachel Reeves is considering dropping plans to

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Speaker 3: raise the headline rates of income tax and several other

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Speaker 3: levies and the upcoming budget. The pound has weakened against

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Speaker 3: the dollar and the euro on the reports. The development

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Speaker 3: comes just days after the government lurched into a new

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Speaker 3: political crisis amid allegations the Prime Minister was about to

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Speaker 3: face a leadership challenge with Mura. Here's Bloomberg's Chrispas.

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Speaker 5: Ten days ago, Rachel Reeves delivered what was a highly

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Speaker 5: unusual pre budget speech in which she declined to reiterate

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Speaker 5: Labour's manifesto commitment against broad based tax hikes, and just

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Speaker 5: this week she doubled down on those comments in this

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Speaker 5: BBC Radio interview.

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Speaker 6: We are having to look at taxes and spending and

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Speaker 6: it's got to be both of those things. And the

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Speaker 6: speech I made last week was about setting the context

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Speaker 6: for the budget, which is a difficult one.

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Speaker 5: But now, sources tell Bloomberg the Chancellor is considering not

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Speaker 5: going ahead with increases in either the basic or higher

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Speaker 5: income rates of tax, after internal concerns that such a

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Speaker 5: move would break a manifesto promise not to raise taxes

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Speaker 5: on working people. She's also understood to be reconsidering whether

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Speaker 5: to proceed with an exit tax on wealthy individuals leaving

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Speaker 5: the UK, all of which raises the question of hol

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Speaker 5: Reeves now plans to fill a black hole of as

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Speaker 5: much as thirty five billion pounds in her November twenty

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Speaker 5: sixth budget in London, Crispit Bloomberg Radio.

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Speaker 2: Well now to China, where economic activity cooled more than

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Speaker 2: expected at the start of the fourth quarter. Data shows

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Speaker 2: an unprecedented slump in investment and slower growth in industrial output,

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Speaker 2: adding to a drag from sluggish consumption. Industrial production climbed

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Speaker 2: four point nine percent last month from a year earlier.

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Speaker 2: That was down from six and a half percent in September.

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Speaker 2: But City's CEO Jane Fraser has told Bloomberg that the

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Speaker 2: deals struck by Presidents Trump and Ji Jinping should now

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Speaker 2: help to ease economic relations between the world's two largest economies.

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Speaker 1: I think the recent truth has brought some much needed

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Speaker 1: and welcome stability here. I think we're in a position

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Speaker 1: now are both sides that wanted to have a period

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Speaker 1: now where we can just we can move ahead and

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Speaker 1: have a more stable relationship between both of them. Is transactional,

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Speaker 1: but it's in both both sides interests.

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Speaker 2: Cities CEO Jane Fraser also told Bloomberg that the bank

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Speaker 2: is now growing rapidly in China with reviving interest on

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Speaker 2: both investors and companies.

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Speaker 3: US President Donald Trump is readying substantial tariff cuts as

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Speaker 3: he seeks to address voter concerns over high food prices

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Speaker 3: and the cost of goods. He's announced framework trade deals

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Speaker 3: with countries including Argentina, Guatemala, and Ecuador aimed at cutting

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Speaker 3: trade barriers on products like bananas and coffee beans. Stubbornly

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Speaker 3: high inflation, as well as weak labor data, has driven

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Speaker 3: a growing divide among Federal Reserve policymakers on the path

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Speaker 3: ahead for interest rates. Cleveland FED President Beth Hammock thinks

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Speaker 3: the US Center Bank should hold rates steady.

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Speaker 4: When I look at both of those things on balance,

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Speaker 4: I think we need to remain somewhat restrictive to.

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Speaker 7: Continue putting pressure to bring inflation.

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Speaker 4: Down towards our target.

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Speaker 3: Cleveland' f HAED President Beth Hammock there adding that businesses

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Speaker 3: have absorbed much of the tariff induced inflations so far,

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Speaker 3: but are now looking for ways to pass on casts

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Speaker 3: to consumers.

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Speaker 2: The BBC says it has apologized to US President Donald

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Speaker 2: Trump for a misleading documentary edit of his January sixth,

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Speaker 2: twenty twenty one speech. Chairman Samir Shah wrote to the

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Speaker 2: White House expressing remorse, but separately, the broadcaster had challenged

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Speaker 2: President Trump's legal threats and rejected demands for compensation. BBC

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Speaker 2: former director Jamie Angus says a payout is unlikely.

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Speaker 8: I'd be very surprised if the President ever got a

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Speaker 8: significant payment out of the BBC, and I don't think

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Speaker 8: you're appropriate really for the BBC to pay public money

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Speaker 8: to the President of the United States.

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Speaker 2: Former BBC director Jamie Angus speaking there their apology comes off.

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Speaker 2: Trump's attorney gave the network a deadline of five pm

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Speaker 2: New York time today to apologize with track the documentary

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Speaker 2: and compensate the president, all face legal action. The BBC

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Speaker 2: says that it won't rebroadcast the documentary in question, which

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Speaker 2: is titled Trump a Second Chance, on any of its platforms.

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Speaker 3: The European Union is finalizing plans for a major transfer

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Speaker 3: of national powers to its markets regulator. You officials are

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Speaker 3: looking at how to transform the European Securities and Markets

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Speaker 3: Authority into a more sweeping watchdog like the SEC in

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Speaker 3: the United States. Brooks Freddie Filstone has more.

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Speaker 8: ESMA, the EU's market regulator, was founded after the financial

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Speaker 8: crisis to expand regional supervision. Now Europe is centralizing its

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Speaker 8: powers in a drive to boost growth. The EU Commission

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Speaker 8: wants it to be one empowered authority. Under the plans,

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Speaker 8: it will have powers to supervise crypto firms, trading venues

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Speaker 8: and clearing houses in London.

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Speaker 4: Freddie Fulston Blue Radio.

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Speaker 2: Franklin Templeton CEO Jenny Johnson says artificial intelligence is moving

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Speaker 2: quicker than she expected in the finance industry. Speaking to

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Speaker 2: Bloomberg's Fancy and lackwa the asset management boss said the

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Speaker 2: technology will make the investment process more efficient and more effective.

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Speaker 7: It's going to have agenic AI al only does because

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Speaker 7: we have a first development of it where it'll go

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Speaker 7: out and kind of learn itself and.

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Speaker 4: Say, hey, is this interesting data for you?

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Speaker 8: Right?

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Speaker 7: And so if you can do that well such that

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Speaker 7: that advisor says, I love meeting with Franklin Templeton because

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Speaker 7: those meetings are so.

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Speaker 4: Valuable to me. That's going to be a win.

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Speaker 2: Jenny Johnson speaking there. You can hear that full conversation

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Speaker 2: on the latest episode of Leaders with Laqua, available now

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Speaker 2: on the Bloomberg website and on the Terminal. Jenny Johnson's

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Speaker 2: comments come after Franklin Templeton partnered with Microsoft to build

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Speaker 2: a financial AI platform last year. According to Johnson, the firm,

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Speaker 2: which oversees more than one point six trillion dollars, is

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Speaker 2: also developing an AI tool to scan data and I

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Speaker 2: identify themes without human interference.

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Speaker 3: To some breaking earnings news this hour. The Swiss luxury

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Speaker 3: giant Richma has reported a much stronger rise than expected

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Speaker 3: in sales in the first half of its financial year.

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Speaker 3: Sales at constant exchange rates rows by ten percent, analysted

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Speaker 3: forecasts again of just under seven percent. Richmark Keith saw

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Speaker 3: a return to growth in the most recent quarter in

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Speaker 3: the Key China, Hong Kong and Macau regions, while other

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Speaker 3: regions maintained their solid sales momentum.

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Speaker 2: Those are top stories in the markets. Asian stocks stumbling.

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Speaker 2: The MSCI ASHA Pacific index is down one point four percent.

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Speaker 2: Tech firms leading the declines. A real shifting sentiment after

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Speaker 2: FED officials including Beth Hammock that you heard earlier and

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Speaker 2: Neil Kashkari dampened expectations for a December rate cut. In

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Speaker 2: the US, your Stock's fifty futures this morning are down

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Speaker 2: by three tenths of one percent. It's mixed also for

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Speaker 2: US futures. Remember, European shares closed at a record high

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Speaker 2: just on Wednesday. The pound is down currently three tenths

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Speaker 2: low against the dollar. The foots you one hundred also

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Speaker 2: closed down one percent yesterday. With the political uncertainty, bigcoin

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Speaker 2: is notable because it's a slumped below ninety eight thousand dollars,

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Speaker 2: down twenty percent since the beginning of October, and oil

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Speaker 2: prices brank Freud features at one point six percent. The

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Speaker 2: risks to rush and flows are mounting, and that seems

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Speaker 2: to be outweighing concerns about a global oil glot those

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Speaker 2: the markets.

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Speaker 3: In a moment, we'll bring you the latest on the

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Speaker 3: UK's budget, plus the weekening picture for China's economy. But

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Speaker 3: something else I've learned from a Bloomberg story this morning

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Speaker 3: how difficult it can be to get an old watch fixed.

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Speaker 3: Now I have alluded to before that I have no

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Speaker 3: interest in watchers, but I actually think I'm becoming interested

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Speaker 3: because of Chris Wamsara and his writing on the Watch

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Speaker 3: Club newsletter as well. He has this great story about

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Speaker 3: getting he's a nineteen fifties watch Jerarperugo triple calendar model,

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Speaker 3: but the day and date indicators were jammed, so he

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Speaker 3: went on this journey to try and find somebody to

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Speaker 3: fix it, to a watchmaker friend who contacted the manufacturer,

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Speaker 3: who basically said, good luck, I can't believe one of

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Speaker 3: those still exists. He went to a local watch repair

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Speaker 3: shop in New York and then went eventually to a

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Speaker 3: digital company who he sent away first of all pictures

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Speaker 3: of the watch. They gave him an estimate, he sent

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Speaker 3: it away. They updated him throughout the repair about the

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Speaker 3: things that they found that had to be changed and

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Speaker 3: parts that you know, when they open the watch up,

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Speaker 3: the fan needs to be worked as well. And he

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Speaker 3: got it sent back as well. He's delighted with the

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Speaker 3: repair too. This is you know, people really do love

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Speaker 3: their watches, as we know, Caroline, and the extent that

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Speaker 3: you can go to to try and find that the

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Speaker 3: you know, the precise piece is to repair something, even

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Speaker 3: something small. You know, if the day isn't changing over

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Speaker 3: on your watch, does it ruin the start of your day?

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Speaker 4: It does.

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Speaker 2: Look I'm not a watch nerd as Chris Dubbs himself,

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Speaker 2: but I am actually, weirdly someone who quit likes watches.

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Speaker 2: I love wearing a watch all the time, and actually,

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Speaker 2: over the years I understand the appeal. They can become

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Speaker 2: so strangely meaningful, like I can't imagine my dad without

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Speaker 2: his watch now. So I absolutely love the repair story,

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Speaker 2: to be honest, And yes it's maybe not about I

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Speaker 2: mean He also went to the Watch Awards, you know,

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Speaker 2: which is like an industry event, and the time pieces

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Speaker 2: are gorgeous and obviously fabulously expensive, but I think even

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Speaker 2: the run of the mill time piece, you know, when

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Speaker 2: you wear it for a long long time, it just

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Speaker 2: does become part of you.

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Speaker 3: Chris, he has a feature in the newsletter where he

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Speaker 3: asked people to take photos of their watches, so this time

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Speaker 3: it was his barista that he got a photo of

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Speaker 3: his watch as well.

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Speaker 4: It's a great story.

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Speaker 3: While we're at signing up to the Watch Club newsletter

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Speaker 3: to get the latest from Chris on the watch World too.

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Speaker 3: You'll find it linked to it in our podcast show

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Speaker 3: notes as well.

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Speaker 2: Now, let's bring more on the UK budget and are

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Speaker 2: reporting that the Chancellor is considering dropping plans to raise

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Speaker 2: income taxes are reported. Tima Atabaya joins us now with

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Speaker 2: more on this. Good morning, Tia. What is the latest

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Speaker 2: then that we actually know? So, given the tremendous amount

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Speaker 2: of budget speculation, there's been.

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Speaker 9: Yeah, Karen, this has been something of an ongoing saga,

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Speaker 9: and up until now most of the market and the

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Speaker 9: media have been operating under this sort of working assumption

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Speaker 9: that the Chancellor will be raising taxes in some way

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Speaker 9: in her upcoming budget announcement. Those hikes were heavily thought

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Speaker 9: to perhaps include plans to raise the headline rates of

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Speaker 9: income tax. That's something that was alluded to, if not confirmed,

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Speaker 9: in a pre budget speech last week from the Chancellor,

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Speaker 9: where she essentially set out her economic thesis statement. She

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Speaker 9: said that she has to deal with the world as

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Speaker 9: it is and not as she would like it to be,

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Speaker 9: a sort of foreboding tone which many took to mean

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Speaker 9: that she was abandoning the Labor Party's manifesto, pledged not

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Speaker 9: to raise taxes on working people. But late last night

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Speaker 9: we got some exclusive reporting from our Bloombo Politics team

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Speaker 9: that says that essentially Reeves might not be so sure

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Speaker 9: about increasing income tax after all. That's after the Ft

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Speaker 9: first reported that she was way on that point. So

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Speaker 9: Bloomberg are citing sources saying that essentially the Chancellor has

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Speaker 9: prepared two budgets, so one with and one without the

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Speaker 9: more controversial tax rises, so namely income tax, and in

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Speaker 9: the alternative we've got lots of smaller hikes. It's worth

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Speaker 9: mentioning that the pound and foot zero one hundred futures

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Speaker 9: fell on these reports, and so we've really been left

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Speaker 9: in this quite unusual situation where less than two weeks

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Speaker 9: away from the budget, and after a big speech which

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Speaker 9: was meant to sort of lay the foundations and perhaps

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Speaker 9: achieve clarity, it looks like the Chancellor is still deciding

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Speaker 9: between two quite different economic paths for the country.

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Speaker 3: So what are the alternatives then, if it's not income

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Speaker 3: tax that would go up in the budgets.

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Speaker 9: Well, according to the sources, that second budget plan, if you,

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Speaker 9: includes quite a lot of smaller tax hikes as I mentioned,

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Speaker 9: instead of those big increases to headlining rates of income tax.

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Speaker 9: But there are also perhaps some more creative measures, like

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Speaker 9: other changes to the tax tax code. But our reporting

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Speaker 9: says that Treasury officials are really still considering dozens of

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Speaker 9: potential policy reforms. It seems like at this point there

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Speaker 9: is still so much more on the table at quite

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Speaker 9: a late stage than there usually is in terms of

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Speaker 9: previous budgets, and so according to Treasury sources in our

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Speaker 9: Bloomberg stories, it seems that no one is really exactly

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Speaker 9: sure what's in either of the budget plans, and also

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Speaker 9: what exactly is going to be announced on November the

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Speaker 9: twenty sixth.

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Speaker 2: Is it's also important politically for the government not to

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Speaker 2: break the manifesto pledge over income tax because you mentioned,

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Speaker 2: you know that it's the chance's choice. It is ultimately,

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Speaker 2: but obviously it needs MPs. It's about cabinet agreement and

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Speaker 2: agreement with the Prime Minister too. This is so deeply

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Speaker 2: political and it involves you know, the Manifesto pledge.

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Speaker 9: Yeah, you're right, Caron, it's very political and it's coming

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Speaker 9: out of politically precarious time for the government. It's important,

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Speaker 9: I think in this to look back at the context

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Speaker 9: just of this week we've seen a media storm over

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Speaker 9: reports at the Health Secretary where Streeting was mounting a

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Speaker 9: leadership challenge to the Prime Minister. Kis Darma even had

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Speaker 9: to apologize to Streeting for media briefings on that supposedly

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Speaker 9: from his allies. And the government does seem to be

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Speaker 9: slightly insecure, and much of it is in relation to

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Speaker 9: this budget and crucially the potential dropping of that manifesto

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Speaker 9: pledge not to raise taxes on working people, which it

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Speaker 9: seems would be very unpopular amongst the elector at at least.

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Speaker 9: But the Bloomberg reporting is saying that there is ongoing

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Speaker 9: conflict in the cabinet about these budget plans. So it's

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Speaker 9: being reported that Reeves favors her first plan, which is

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Speaker 9: the income tax hike option, but she's facing political pressure

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Speaker 9: to find the alternativesens It seems that's where this second

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Speaker 9: budget plan has come from, and it will likely be

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Speaker 9: on the mind of the government and Prime Minister that

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Speaker 9: they need to keep not only the public but also

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Speaker 9: their own party on side. Here going back to that

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Speaker 9: leadership challenge, We've got a story on Bloombag saying that

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Speaker 9: Where's Streeting on the latest odds is now overtaken Nigel

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Speaker 9: Farage as the favorite for Prime Minister, So that's really significant.

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Speaker 9: It shows that there's a lot riding on this budget.

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Speaker 9: They are credible opposers, perhaps the Starmer's position, but there's

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Speaker 9: a lot riding on this, not just for Reeves but

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Speaker 9: also for the future of Kiir Starmer and his government.

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Speaker 3: Yeah, a week as a long time in politics too. Adebaia,

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Speaker 3: thank you very much for joining us with the latest

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Speaker 3: reporting on what to expect from the budget in the UK.

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Speaker 4: Stay with us.

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Speaker 2: More from Bloomberg Day BAQUB coming up after this. Now

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Speaker 2: to China, where the economic data shows activity cooling more

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Speaker 2: than expected. Our China Economy Government editor Alan Wong joins

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Speaker 2: us Now, Alan, hello, talk us through the data. Is

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Speaker 2: a big data dump from China today. Where did we

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Speaker 2: see particular weakness?

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Speaker 10: Yeah, the weakness was really across the board this time,

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Speaker 10: and frankly worse than what most people were expecting. The

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Speaker 10: biggest shock is in investment. A fixed asset investment saw

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Speaker 10: a record decline for October, and bloomber Economics actually estimates

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Speaker 10: that it plunged as much as twelve percent in October alone,

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Speaker 10: that just one month. But it wasn't just investment. We're

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Speaker 10: also seeing that factory output hit its slowest growth since

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Speaker 10: the start of the year, and crucially, the consumer is

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Speaker 10: still pulling back. A retail sales slowed for a fifth month.

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Speaker 10: So when you add that to the surprise contraction that

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Speaker 10: we already saw in exports earlier this month, it really

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Speaker 10: shows weakness in investment, in industry, and consumption. These are

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Speaker 10: all the main components of the economy.

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Speaker 3: Is it enough, though, Allan to provoke more stimulus from Beijing?

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Speaker 4: Yeah, you would think so.

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Speaker 10: So the signals that we're getting immediately in the immediate

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Speaker 10: aftermath of the release suggests not yet. A Beijing statement

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Speaker 10: talked about actively facilitating the implementation of existing policies, which

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Speaker 10: one could recently read as we're not rolling out new

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Speaker 10: stimulus right now. So the feeling is that while these

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Speaker 10: numbers are soft and soft than expected in most cases,

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Speaker 10: they just aren't bad enough to trigger any sort of

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Speaker 10: a panic response. Beijing seems to be just saving its

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Speaker 10: policy options for next year, especially because achieving the twenty

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Speaker 10: twenty five growth target, which is about five percent growth,

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Speaker 10: still seems pretty much doable without intervening right now.

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Speaker 4: That's interesting. What's the outlook then from here?

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Speaker 2: Because Beijing's next five year plan starts from next year,

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Speaker 2: do you think that will tackle any of these issues?

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Speaker 10: In a short term, the attention will be on the

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Speaker 10: stimulus that Beijing already approved.

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Speaker 4: There's a total one.

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Speaker 10: Trillion yuan since the end of September that should really

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Speaker 10: start to kick in in the coming weeks. They're also

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Speaker 10: hoping that the trade truths with the US struck lay

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Speaker 10: last month will give China's exports some boost. Now about

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Speaker 10: the five year plan, that plan is really about the

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Speaker 10: longer term fix for the economy. It's expected to tackle

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Speaker 10: the structural issues that we've been talking about, for example,

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Speaker 10: getting people to spend again, So their proposals like better

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Speaker 10: distribute income across the population and strengthening the social security

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Speaker 10: system that makes people feel more secure financially and encourage

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Speaker 10: them to spend more. That's a long game, but for

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Speaker 10: now they are relying on the stimulus debt. It's already

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Speaker 10: been announced and in the pipeline. So China in a

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Speaker 10: longer term, also has increasingly emphasized the quality of growth,

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Speaker 10: not just the sheer quantity. So I think we can

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Speaker 10: expect some sort of a transition period, but in the meantime,

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Speaker 10: China feels pretty comfortable about reaching the immediate growth target

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Speaker 10: for the year.

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