Speaker 1: This is Bloomberg Daybreak here for this Friday, the twenty
Speaker 1: seventh of January in London. Coming up this hour on
Speaker 1: the hunt for growth, the UK's Chancellor was set out
Speaker 1: his economic blueprint at Bloomberg's London headquarters. Goldilocks would be
Speaker 1: proud US GDP slows at a perfect pace for the FED,
Speaker 1: chipping in Japan and the Netherlands to join the US,
Speaker 1: and limiting China's semiconductor ambitions. The BO week gets a
Speaker 1: warning from its ex Rolls Royce burning platform, and Rishie
Speaker 1: SUONAC looks to the student economy. Those are the stories
Speaker 1: we're looking at in today's newspapers. And I'm Leanne Garon's
Speaker 1: plus managing a diversity drive. Bank of America modes m
Speaker 1: d s from underrepresented groups. That's all straight ahead on
Speaker 1: Bloomberg Daybreak Europe on d A B Digital Radio, London,
Speaker 1: Bloomberg eleven three oh New York, Bloomberg Washington d C,
Speaker 1: Bloomberg one oh six one, Boston, Bloomberg nine sixties, San Francis,
Speaker 1: Go cyrus x M Channel one nineteen and around the
Speaker 1: world on Bloomberg Radio dot com and via the Bloomberg
Speaker 1: Business at Good Morning I'm Stephen Carroll and I'm Caroline Hecker.
Speaker 1: Here are the stories that we're following today. In a
Speaker 1: major speech at Bloomberg's European headquarters here in London, the
Speaker 1: Chancellor Jeremy Hunt will lay out his plan for the
Speaker 1: UK economy. Hunt is expected to reject calls for tax
Speaker 1: cuts while arguing the country can use it's bregsit freedoms
Speaker 1: as a catalyst for prosperity. Former Chancellor Philip Hammond says
Speaker 1: the country has a major issue it needs to address.
Speaker 1: It's about productivity. It always was about productivity and it
Speaker 1: always will be. The UK's shockingly low rate of productivity growth,
Speaker 1: which we're beginning to tackle with things like improvements in
Speaker 1: the technical skills agenda, but we've still got a huge
Speaker 1: amount to do and we just can't say it often enough.
Speaker 1: It is about productivity that is the route to sustainable
Speaker 1: higher standards of living. That was the former Chancellor Philip Hamment.
Speaker 1: His comments reflected in the data which show the UK
Speaker 1: is the only G seven economy with GDP below pre
Speaker 1: COVID levels. Will be speaking to Bloomberg Anker and Edwards
Speaker 1: for more about this story in just a moment and now.
Speaker 1: Growth in the US economy beta expectations in the final
Speaker 1: quarter of two GDP expanded at an annualized pace of
Speaker 1: two point nine percent, down from three in the third quarter.
Speaker 1: The data suggests that there's still a path to a
Speaker 1: soft landing for the FED. Reacting to the news, President
Speaker 1: Biden gave this Bolitio assessment. Jobs are the highest in
Speaker 1: American history. Wages are up, and they're growing faster than inflation.
Speaker 1: Over the past six months, inflation has gone down every month,
Speaker 1: and god willing will continue to do that. Despite President
Speaker 1: Biden's optimism, some economists believe that there are warning signs
Speaker 1: in the data. Personal consumption rose by less than economists
Speaker 1: had expected. The two point one percent gain suggests a
Speaker 1: recession continues to be a significant risk for America. Shares
Speaker 1: in the Adanne Groups companies are continuing to fall today,
Speaker 1: with now more than thirty billion dollars wiped off their
Speaker 1: market value after a scathing report from a short seller
Speaker 1: earlier this week. In a call with investors, the Conglamorate
Speaker 1: called Hindenburg's report devoid of facts and bogus. The Adanne
Speaker 1: Group is also understood understood to be exploring legal action
Speaker 1: against the investment research firm Our Asia Equities reporter Abishak
Speaker 1: Vishnoy says market reaction will be key today is the
Speaker 1: real tist because you know the share sale is going
Speaker 1: to open up for retail investors and you know other
Speaker 1: other investors in general. So the response to that and
Speaker 1: how much stocks moved today would establish, you know where
Speaker 1: where the sentiment, whether Heinenberg's report has actually changed the sentiment,
Speaker 1: it marks a U turn in Adani groups again be
Speaker 1: uning rally, or it's just our dent along the way.
Speaker 1: A visionaries assessment comes. As the investor Bill Ackman said
Speaker 1: he found Hindenburg. The Hindenburg does cier on the A.
Speaker 1: Daney Group highly credible and extremely well researched. And now
Speaker 1: sources tell Bloomberg that Japan and the Netherlands are set
Speaker 1: to join the US in limiting China's access to advanced
Speaker 1: semiconductor machinery. Bloomberg's You and Potts has the details. It's
Speaker 1: shaping up to be a powerful alliance to undercut China's
Speaker 1: ambitions to build its own domestic chip industry. Bloomberg has
Speaker 1: learned that Dutch and Japanese officials will conclude talks today
Speaker 1: on setting limits on what can be supplied to Beijing.
Speaker 1: The Netherlands is to expand restrictions on a SML, which
Speaker 1: will prevent it from selling advanced chip making machinery to China,
Speaker 1: and Japan is likely to set similar limits on Nikon.
Speaker 1: The joint effort will expand restrictions the US government unveiled
Speaker 1: in October. China has fall back against the u S
Speaker 1: moves with the complaints to the World Trade Organization in London,
Speaker 1: i'mun pot spin bog day, but europe Intel shares fell
Speaker 1: in late trading after a dire forecast for the first quarter.
Speaker 1: The U S chip maker expects maximum sales of eleven
Speaker 1: point five billion dollars, far short of analysts estimates of
Speaker 1: fourteen billion. CEO pak Elsinger used or urged investors to
Speaker 1: think of the bigger picture. I want to remind everyone
Speaker 1: that we are on a multi year journey. We remain
Speaker 1: focused on the things that are within our control as
Speaker 1: we navigate short term headwinds while executing to our long
Speaker 1: term strategy. Guessing there is now attempting a radical acceleration
Speaker 1: into advanced semiconductor technology. The figures indicate, though the slumber
Speaker 1: demand for personal computers may persist this year. And in
Speaker 1: corporate news this morning, Bank of America has named three
Speaker 1: hundred and sixty new managing directors and more than half
Speaker 1: are from underrepresented groups. It's the third year in a
Speaker 1: row that the bank has awarded the majority of m
Speaker 1: D roles to women all people of color, with Wolfster
Speaker 1: Banks pledging to improve their diversity as senior levels. Competition
Speaker 1: for top talent is heating up across the industry. Those
Speaker 1: our top stories this morning. Of course, we are looking
Speaker 1: ahead to Jeremy Hunt's big speech here at Bloomberg's offices
Speaker 1: in London, so more on that in a moment as well.
Speaker 1: Another name that was visiting us yesterday there was the
Speaker 1: Irish Finance Minister Michael McGrath, who met with Jeremy Hunt yesterday.
Speaker 1: They were talking about the course of the Northern Iron
Speaker 1: Protocol talks and he did say that things had moved
Speaker 1: to a new level in advancement towards a solution there.
Speaker 1: So's some positive signals coming from the Irish side in
Speaker 1: that conversation. Yeah, absolutely, And of course we'll bring you
Speaker 1: the chance of Jeremy hunt speech live here on radio
Speaker 1: later on this morning. Well, the other issue. I think
Speaker 1: that was quite interesting for me. A bit more in
Speaker 1: the weeds, but Esthma the European market watchdog again warning
Speaker 1: London based hedgephons and asset managers to build up their
Speaker 1: presence in the European Union after breggsit. It's not enough
Speaker 1: just to have a few Apparently the big band banks,
Speaker 1: according to our reporting, are really under pressure to move
Speaker 1: senior staff and the decision makers the places like Paris
Speaker 1: and Frankfurt and Ouncer down. Perhaps more flexibility for the
Speaker 1: smaller businesses more to watch their up. Next, the BWI
Speaker 1: gets a warning from its ex Rolls Royce's burning platform
Speaker 1: and soon that it looks to the student economy. Now.
Speaker 1: The paper review on blue birdday Break Europe the news
Speaker 1: you need to know from today's papers to us now
Speaker 1: it's been basically and Garan's to take us through the
Speaker 1: interesting newspaper stories. The Telegraph headline reads the Bank of
Speaker 1: England must slow down interest rate rises. WARN's ex chief
Speaker 1: economists tell us more lean Caroline, good morning to you
Speaker 1: and thank you. Yes, a warning from their ex Andy
Speaker 1: Haldane and here's the Bowees former chief economists says bluntly,
Speaker 1: flickers of life in the economy risk being hindered by
Speaker 1: Rishi Sunac's lack of a medium turned plan for growth.
Speaker 1: The ft says. Haldane is also warning that families were
Speaker 1: content need to be hit by painful price risers and
Speaker 1: also falling real incomes this year. He was actually speaking
Speaker 1: to the BBC on Thursday where he also criticized the
Speaker 1: interest rate risers, saying he would have preferred to have
Speaker 1: seen the Bank of England and other central banks starting
Speaker 1: to raise their rates a little bit sooner. Hal Dane
Speaker 1: does believe this would have helped to nip inflation in
Speaker 1: the bud. The banks expected to raise interest rates for
Speaker 1: the tenth time in a row next week to four percent,
Speaker 1: which hal Dane is really fearing will cause more pain
Speaker 1: for households as mortgage rates will also climb. And we're
Speaker 1: in a cost of living crisis as we know, food
Speaker 1: and lots of other things are extremely expensive. Energy included
Speaker 1: Okay Leanne in the Financial Times. Meanwhile, they have comments
Speaker 1: from Rolls Royce's new chief warning the company is a
Speaker 1: burning platform. Well he didn't hold back, so the new
Speaker 1: CEO of Rolls Royce has given this brutal assess and
Speaker 1: of Britain's flagship engineering group and according to the FT,
Speaker 1: he has told employees it must transform the way it
Speaker 1: operates or it will just not survive. This is almost
Speaker 1: an iconic brand here in the UK and in a
Speaker 1: global address broadcaster staff, parts of which were shared with
Speaker 1: the newspaper, so we're shared with the FT. He said
Speaker 1: investors were losing patients with the iconic British band brand.
Speaker 1: He used the address to launch a transformation program with
Speaker 1: a focus on efficiency and optimism. Now, many people who
Speaker 1: work within Rolls Royce was saying this has been interpreted
Speaker 1: as a signal to staff to expect another round of
Speaker 1: job cuts, in particular among white collar workers as they
Speaker 1: do try to get the company back on track. So
Speaker 1: all not terribly well in sort of industrial Britain. What
Speaker 1: about the Times headline though, when it comes to trying
Speaker 1: to help with this very tight labor market reci sooner
Speaker 1: foreign student plan to show up economy. Yeah, this is
Speaker 1: a really interesting one and it's in the Times. And
Speaker 1: as you say, foreign students would be allowed to work
Speaker 1: longer hours under plans to boost the economy. And this,
Speaker 1: of course, Caroline, as you say, comes in a really
Speaker 1: tight labor market. Where there's loads of vacancies, especially in
Speaker 1: hospitality and retails. So ministers are now looking at ways
Speaker 1: to encourage both British and over see students to take
Speaker 1: more part time jobs really to deal with all the
Speaker 1: shortages we're seeing. Britain's six hundred and eighty thousand overseas
Speaker 1: students currently can only work twenty hours a week during
Speaker 1: term time, but the newspaper says discussions have begun within
Speaker 1: government about either raising that cap to thirty hours or
Speaker 1: removing it entirely. But remember, Richie Sunac is concerned that
Speaker 1: he will struggle to fulfill his pledge that the economy
Speaker 1: will grow this year unless the government can really deal
Speaker 1: with the surge in job vacancies. And it will be
Speaker 1: interesting to see against Suella Brahman's plans really for immigration
Speaker 1: at this time. Yeah, that's such an interesting story in
Speaker 1: the Times today, Leon Garran's thank you very much for
Speaker 1: that review. Afterday's newspapers. Now, the Chancellor Jeremy Hunt will
Speaker 1: speak here at Bloomberg's European headquarters in London later this morning.
Speaker 1: He's expected to reject calls for tax cuts and also
Speaker 1: make the case for how Brexit will drive economic Growth.
Speaker 1: Bloomberg anchor Anna Edwards will be speaking to the chance
Speaker 1: later and she joins us, now, really good to have you, Anna.
Speaker 1: What do we know then about what's going to be
Speaker 1: in this important speed Yeah, good morning, Good morning everybody.
Speaker 1: So he's going to be speaking here at Bloomberg and
Speaker 1: then he's going to be giving an interview to us
Speaker 1: a little bit later on. But what we do know
Speaker 1: then is he is set to rule out tax cuts
Speaker 1: and this is of course, in the build up to
Speaker 1: the budget in March. He's been under a lot of
Speaker 1: political pressure, in particular from his back benches to agree
Speaker 1: to some kinds of tax cuts. Some in the back
Speaker 1: benches of the Tory Party still think that this is
Speaker 1: the way forward, despite the termoil that was created in
Speaker 1: markets by unfunded tax cuts around the mini budget. So
Speaker 1: that's a battle that he is, it seems, still fighting.
Speaker 1: He's also going to talk about some of the positives
Speaker 1: as he sees them for the UK economy and in
Speaker 1: the post Brexit world, in particular drawing on the massive
Speaker 1: amount of money that is available in in for private
Speaker 1: investments in the UK and trying to channel that into
Speaker 1: green projects, and the reason that this was not available
Speaker 1: previously is because of solvency to regulations that meant that
Speaker 1: insurance companies had to keep large amounts of capital tied
Speaker 1: up on their balance sheets. Now post Brexit, we know this,
Speaker 1: this has been talked about for some time. He's able
Speaker 1: to then remove the solvency to regulation, which frees up
Speaker 1: more money for investment, So there'll be some figures around that.
Speaker 1: And he also wants to talk about productivity. This has
Speaker 1: been an issue we've talked about on the program many times.
Speaker 1: It's been something that holds back the UK economy for
Speaker 1: such a long time. Tackling it head on is the
Speaker 1: words he's going to use a little bit later on,
Speaker 1: in particular offering support individual sectors. And we know from
Speaker 1: our own reporting that the semiconductor, the chip sector could
Speaker 1: be in focus there the collapse of that business, British
Speaker 1: roleter course growing into into stark relief, the difficulty that
Speaker 1: perhaps the UK has at the moment in establishing those
Speaker 1: kinds of important strategic tech businesses. So that will be
Speaker 1: a focus. Are the key questions you're hoping to get
Speaker 1: answers to when he speaks. The chance well, a lot
Speaker 1: of our focus given that this is Bloomberg. We will
Speaker 1: be talking about the economy, will be talking about investments,
Speaker 1: investments in the in the UK economy, account corporation tax
Speaker 1: is set to go up by six percentage points in April.
Speaker 1: What that means for business at a time when energy
Speaker 1: bills might still be going up, even though wholesale gas
Speaker 1: prices have been coming down. Will be exploring that and
Speaker 1: whether there is given that he said he's ruling out
Speaker 1: tax carts, are there is there any room to maneuver
Speaker 1: around that at all? Will be will be trying to
Speaker 1: dig into that a little bit. What does all of
Speaker 1: this mean for business. We also live in a fast
Speaker 1: changing geopolitical environment. The news we carried earlier this week
Speaker 1: about the UK government support for the chip sector, and
Speaker 1: the news overnight about Japan and the Netherlands joining in
Speaker 1: a pact to try and keep China away from chip technology.
Speaker 1: All of that's playing out very quickly. And where does
Speaker 1: the UK stand in that the Inflation Reduction Act in
Speaker 1: the in the United States is certainly going to incentivize
Speaker 1: a lot of investment there is that to the detriment
Speaker 1: of the UK. So these are certainly going to be
Speaker 1: some of the conversations will have and perhaps we'll mention
Speaker 1: the name Nadine's are we perhaps that might come okay?
Speaker 1: The have the issue around taxes, um, yeah, and and
Speaker 1: no doubt there will be some quite robust questioning around
Speaker 1: leveling up. Because Bloomberg's own Joe May's is the reporter
Speaker 1: plus team who have done the deep dive into the
Speaker 1: big pledge by government to bring up the rest of
Speaker 1: the UK, bring up the other regions in Britain. It's
Speaker 1: a very very difficult challenge that the government's not doing
Speaker 1: well us right, and there's so there's a lot of
Speaker 1: questions around the budget and how much room for maneuver
Speaker 1: the government really has to do their leveling up spending
Speaker 1: to settle some of the strike activity that we've seen
Speaker 1: taking place, of course, but but in terms of expectations
Speaker 1: around the budget, he's going to rule out tax cuts
Speaker 1: and we do have to remember there's not an election
Speaker 1: until twenty four Eurasia groups saying, of course, giveaways much
Speaker 1: more likely ahead of that than now. This is Bloomberg
Speaker 1: Daybreak Europe, your morning brief on the stories making news
Speaker 1: from London to Wall Street and beyond. Look for us
Speaker 1: on your podcast feed every morning on Apple, Spotify, and
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Speaker 1: I'm Stephen Carroll. Join us again tomorrow morning for all
Speaker 1: the news you need to start your day right here
Speaker 1: on Bloomberg Daybreak Europe