1 00:00:02,680 --> 00:00:05,760 Speaker 1: Good morning. It's Thursday, the seventh of September in London. 2 00:00:05,840 --> 00:00:09,320 Speaker 1: This is the Bloomberg dabt Uit podcast. I'm Caroline Hepka. 3 00:00:09,080 --> 00:00:11,880 Speaker 2: And I'm Ana Edwards. Coming up today, China broadens its 4 00:00:11,880 --> 00:00:14,520 Speaker 2: iPhone ban to include state firms and agencies. 5 00:00:14,800 --> 00:00:18,360 Speaker 1: Labor gives us their pitch on why they should now 6 00:00:18,440 --> 00:00:20,360 Speaker 1: be viewed as the party of business. 7 00:00:20,120 --> 00:00:23,040 Speaker 2: And homes Under the hammer, UK property prices fall by 8 00:00:23,079 --> 00:00:26,000 Speaker 2: the most in fourteen years. Let's start with a roundup 9 00:00:26,040 --> 00:00:28,880 Speaker 2: of our top stories. Bloomberg understands that a ban on 10 00:00:28,960 --> 00:00:32,640 Speaker 2: Chinese government agencies using iPhones at work will be extended 11 00:00:32,640 --> 00:00:35,479 Speaker 2: to a plethora of state owned enterprises and other government 12 00:00:35,479 --> 00:00:38,879 Speaker 2: controlled organizations. Apple suffered its worst stock decline in a 13 00:00:38,920 --> 00:00:41,240 Speaker 2: month on the initial reports of the ban. Our chief 14 00:00:41,240 --> 00:00:44,600 Speaker 2: correspondent Mark German spells out why investors have been spooked 15 00:00:44,600 --> 00:00:45,200 Speaker 2: by the news. 16 00:00:45,600 --> 00:00:49,080 Speaker 3: First, it's the Chinese government that doesn't want their employees 17 00:00:49,200 --> 00:00:52,400 Speaker 3: using these devices. Is there something that's going to happen 18 00:00:52,440 --> 00:00:55,360 Speaker 3: next in terms of the Chinese consumer being able to 19 00:00:55,400 --> 00:00:57,560 Speaker 3: buy the Apple devices? Are there going to be limits? 20 00:00:57,600 --> 00:00:57,840 Speaker 4: There? 21 00:00:58,240 --> 00:01:00,600 Speaker 3: Is the Chinese government going to begin lamping down on 22 00:01:00,640 --> 00:01:05,160 Speaker 3: Apple's ability to sell offer services offer, retail stores offer 23 00:01:05,200 --> 00:01:08,280 Speaker 3: Apple care and support right, so there clearly is a 24 00:01:08,280 --> 00:01:10,639 Speaker 3: potential domino effect that I think investors are more afraid 25 00:01:10,680 --> 00:01:13,600 Speaker 3: of rather than just lost sales to Chinese government workers. 26 00:01:14,280 --> 00:01:16,800 Speaker 2: Mark German points out that China is the tech giant's 27 00:01:16,880 --> 00:01:19,720 Speaker 2: largest international market, while the firm also relies heavily on 28 00:01:19,760 --> 00:01:23,399 Speaker 2: the country as a manufacturing partners. This matters to Apple 29 00:01:23,480 --> 00:01:25,480 Speaker 2: in a number of ways. The share price down by 30 00:01:25,480 --> 00:01:27,959 Speaker 2: three point six percent in yesterday's trade, and it is 31 00:01:27,959 --> 00:01:31,120 Speaker 2: a giant, of course, caroline of the US corporate scene. 32 00:01:31,400 --> 00:01:33,640 Speaker 2: It is weaker again today in pre market, down around 33 00:01:33,680 --> 00:01:34,520 Speaker 2: one point six percent. 34 00:01:35,080 --> 00:01:39,039 Speaker 1: Now the Labor Party is making an increasingly aggressive bid 35 00:01:39,319 --> 00:01:42,240 Speaker 1: to claim the Conservatives mantle as the party of business. 36 00:01:42,480 --> 00:01:46,080 Speaker 1: Speaking to Bloomberg's UK Politics podcast, the Shadow Business and 37 00:01:46,120 --> 00:01:50,080 Speaker 1: Trade Secretary Jonathan Reynolds was clear and what he believes 38 00:01:50,120 --> 00:01:51,720 Speaker 1: are the risks for companies. 39 00:01:52,160 --> 00:01:54,360 Speaker 5: The policy's Labour's offering across the board. When it comes 40 00:01:54,400 --> 00:01:56,640 Speaker 5: to the economy and to business, it is simply a 41 00:01:56,720 --> 00:02:00,360 Speaker 5: far more compelling offer than anything the government have put forward. 42 00:02:00,760 --> 00:02:03,520 Speaker 5: The risk premium for most businesses is a continuation of 43 00:02:03,600 --> 00:02:06,440 Speaker 5: the Conservative government rather than a change to Labor Party 44 00:02:06,480 --> 00:02:08,720 Speaker 5: and we've worked very hard at that, but obviously we 45 00:02:08,760 --> 00:02:10,960 Speaker 5: need to continue to It's not be complacent to continue 46 00:02:10,960 --> 00:02:12,600 Speaker 5: that work, to work on the detail which is so 47 00:02:12,680 --> 00:02:15,720 Speaker 5: important in making these policies work, and will absolutely be 48 00:02:15,720 --> 00:02:16,639 Speaker 5: continuing to do that. 49 00:02:17,520 --> 00:02:21,760 Speaker 1: Jonathan Reynolds also discussed Labour's plans for an Industrial Strategy 50 00:02:21,880 --> 00:02:25,240 Speaker 1: Council that would have the same place in policymaking as 51 00:02:25,240 --> 00:02:29,120 Speaker 1: bodies like the Office for Budget Responsibility. You can listen 52 00:02:29,160 --> 00:02:31,359 Speaker 1: to the full interview with the Shadow Business and Trade 53 00:02:31,400 --> 00:02:34,240 Speaker 1: Sectory on the latest episode of the UK Politics Podcast 54 00:02:34,320 --> 00:02:36,160 Speaker 1: on Apple, Spotify or whatever you listen. 55 00:02:36,280 --> 00:02:39,040 Speaker 2: Speaking about the UK economy, UK house prices have fallen 56 00:02:39,080 --> 00:02:41,639 Speaker 2: at their sharpest annual pace since two thousand and nine. 57 00:02:41,639 --> 00:02:45,040 Speaker 2: According to one of the biggest mortgage lenders in Britain, 58 00:02:45,320 --> 00:02:48,120 Speaker 2: Halifax says the average value of a home fell one 59 00:02:48,120 --> 00:02:50,840 Speaker 2: point nine percent in August, leaving prices four point six 60 00:02:50,919 --> 00:02:53,200 Speaker 2: percent lower than a year ago, when the value of 61 00:02:53,600 --> 00:02:57,560 Speaker 2: UK property peaked. The findings echo those of rival lender Nationwide, 62 00:02:57,560 --> 00:03:00,280 Speaker 2: whose own survey just last week showed prices full five 63 00:03:00,320 --> 00:03:03,000 Speaker 2: point three percent from their peak year ago. Together, the 64 00:03:03,040 --> 00:03:05,800 Speaker 2: reports indicate the market is now roughly halfway through the 65 00:03:05,880 --> 00:03:09,519 Speaker 2: ten percent slump in prices that economists, some economists at least, 66 00:03:09,520 --> 00:03:10,760 Speaker 2: have forecast well. 67 00:03:10,800 --> 00:03:13,560 Speaker 1: Speaking of which the Bank of England's governor says that 68 00:03:13,720 --> 00:03:17,920 Speaker 1: UK interest rates are near the peak. Andrew Bailey told 69 00:03:18,120 --> 00:03:21,360 Speaker 1: MPs that previous hikes are still feeding into the economy. 70 00:03:22,760 --> 00:03:25,800 Speaker 6: Many of the indicators are now moving as we would 71 00:03:25,800 --> 00:03:28,520 Speaker 6: expect them to move, and our signaling that the fallen 72 00:03:28,600 --> 00:03:30,959 Speaker 6: inflation will it will continue, and as I've said a 73 00:03:31,040 --> 00:03:33,600 Speaker 6: number of times, I think will be quite marked by 74 00:03:33,600 --> 00:03:35,800 Speaker 6: the end of the ship. Further, I think we are 75 00:03:36,000 --> 00:03:37,840 Speaker 6: much nearer and now at the top of the cycle. 76 00:03:39,080 --> 00:03:41,480 Speaker 1: The pound fell to a three month low against the 77 00:03:41,560 --> 00:03:45,320 Speaker 1: US dollar after Bailey's darvish remarks. The Bank of England 78 00:03:45,320 --> 00:03:48,560 Speaker 1: governor added that major revisions upward to the official UK 79 00:03:48,680 --> 00:03:53,520 Speaker 1: GDP growth figure helped to explain inflation surprises in the 80 00:03:53,560 --> 00:03:54,119 Speaker 1: past year. 81 00:03:54,360 --> 00:03:57,360 Speaker 2: Lloyd's of London CEO John Neil says insurance is growing 82 00:03:57,400 --> 00:03:59,880 Speaker 2: at three times its normal rates. The exchange is pretax 83 00:04:00,040 --> 00:04:02,119 Speaker 2: offered of nearly four billion pounds for the first half 84 00:04:02,160 --> 00:04:04,800 Speaker 2: of this year, nearly reversed its losses from the Ukraine 85 00:04:04,800 --> 00:04:07,800 Speaker 2: War last year. Neil told us on Bloomberg Daybreak Europe 86 00:04:07,840 --> 00:04:10,400 Speaker 2: that climate change and other risks are boosting business. 87 00:04:10,840 --> 00:04:13,360 Speaker 7: So I think we're at one of those unusual points 88 00:04:13,400 --> 00:04:17,719 Speaker 7: in time where risk is understood and it is our 89 00:04:17,839 --> 00:04:20,880 Speaker 7: job to put our balanceet to play, you know. So 90 00:04:21,360 --> 00:04:23,400 Speaker 7: what we're seeing at the moment is we're in the 91 00:04:23,400 --> 00:04:25,839 Speaker 7: middle of a decade where I think the penetration for 92 00:04:25,920 --> 00:04:29,280 Speaker 7: insurance life and non life will double. I grow at 93 00:04:29,360 --> 00:04:31,200 Speaker 7: three to four times the rate of GDP. 94 00:04:32,680 --> 00:04:35,960 Speaker 2: John Neil added he sees extreme weather events driving more 95 00:04:36,000 --> 00:04:37,960 Speaker 2: interest in climate change insurance. 96 00:04:39,000 --> 00:04:43,480 Speaker 1: Vauxhall opened the first electric vehicle only plant in Britain today. 97 00:04:43,680 --> 00:04:47,000 Speaker 1: The one hundred million pound upgrade to the automaker's Ellesmere 98 00:04:47,040 --> 00:04:49,400 Speaker 1: Port plant is a major win for the government who 99 00:04:49,440 --> 00:04:52,520 Speaker 1: are hoping to make the UK electric vehicle HRB, but 100 00:04:52,600 --> 00:04:56,279 Speaker 1: alloming post bregsit deadline around tariffs on car components could 101 00:04:56,279 --> 00:04:59,719 Speaker 1: threaten the new plants exports. The managing director, James Taylor, 102 00:04:59,760 --> 00:05:02,760 Speaker 1: told on Bloomberg Radio that he wants clarity on the 103 00:05:02,800 --> 00:05:06,560 Speaker 1: government's efforts to negotiate an extension to the changes that 104 00:05:06,600 --> 00:05:07,760 Speaker 1: come in January. 105 00:05:08,200 --> 00:05:11,800 Speaker 8: Clearly we prefer clarity further out and depending on what 106 00:05:11,880 --> 00:05:15,839 Speaker 8: happens Obviously we will make the appropriate decisions, but clearly 107 00:05:15,960 --> 00:05:18,520 Speaker 8: we have confidence in the UK. As I say, Boxall 108 00:05:18,600 --> 00:05:21,359 Speaker 8: is market leader, so the Lantists take over half of 109 00:05:21,400 --> 00:05:24,360 Speaker 8: the electric commercial vehicle market in the UK and that's 110 00:05:24,360 --> 00:05:26,080 Speaker 8: why we put the investment into this plant. 111 00:05:27,000 --> 00:05:30,480 Speaker 1: Taylor added that the pure electric vehicles make up nearly 112 00:05:30,520 --> 00:05:33,920 Speaker 1: twenty percent of the UK market. Now. He sees public 113 00:05:34,040 --> 00:05:36,919 Speaker 1: charging points as one of the next big barriers for 114 00:05:36,960 --> 00:05:39,760 Speaker 1: the technology. Forecasters say there will be no let up 115 00:05:39,760 --> 00:05:42,279 Speaker 1: in the current heat wave for gripping much of the UK. 116 00:05:42,600 --> 00:05:45,720 Speaker 1: Temperatures could sort to thirty three degrees celsius on Saturday 117 00:05:45,800 --> 00:05:49,200 Speaker 1: in Britain, while Europe's Earth Observation Agency says this summer 118 00:05:49,360 --> 00:05:52,680 Speaker 1: was the warmest on record. Meanwhile, Texas has announced that 119 00:05:52,760 --> 00:05:55,720 Speaker 1: it's now close to rolling blackouts as soaring temperatures lead 120 00:05:55,720 --> 00:05:58,239 Speaker 1: to a surge in energy use. The state has declared 121 00:05:58,320 --> 00:06:01,719 Speaker 1: its first power emergency since deadly winter storm two years ago, 122 00:06:01,880 --> 00:06:05,200 Speaker 1: which led to major power cuts. Let's get to our 123 00:06:05,240 --> 00:06:09,040 Speaker 1: top corporate story this morning around Apple and China. China 124 00:06:09,040 --> 00:06:11,320 Speaker 1: plans to expand a ban on the use of iPhones 125 00:06:11,360 --> 00:06:14,920 Speaker 1: in sensitive departments to government backed agencies and state companies 126 00:06:15,160 --> 00:06:18,120 Speaker 1: a sign of growing challenges for Apple in its biggest 127 00:06:18,160 --> 00:06:21,440 Speaker 1: foreign market and global production base. Our market's report of 128 00:06:21,520 --> 00:06:24,440 Speaker 1: valerie titel joins US now with more and it's really 129 00:06:24,880 --> 00:06:27,440 Speaker 1: it's hard to overstate the role that China plays in 130 00:06:27,480 --> 00:06:30,560 Speaker 1: Apple's business, both in manufacturing the phone's valerie but also 131 00:06:30,600 --> 00:06:32,400 Speaker 1: as a sales destination. 132 00:06:32,000 --> 00:06:34,440 Speaker 2: For around a fifth of their revenue. I think the 133 00:06:34,440 --> 00:06:37,839 Speaker 2: prospects of China souring on Apple then it's really jarred investors. 134 00:06:38,320 --> 00:06:39,680 Speaker 9: It has really dried investors. 135 00:06:39,839 --> 00:06:42,719 Speaker 4: And you just noted Apple's exposure to China, but we 136 00:06:42,800 --> 00:06:46,000 Speaker 4: have to also remember it is a big production hub 137 00:06:46,279 --> 00:06:46,800 Speaker 4: for Apple. 138 00:06:46,839 --> 00:06:49,640 Speaker 9: It's the biggest global production hub for Apple. 139 00:06:49,640 --> 00:06:52,560 Speaker 4: And you know, we start to maybe get concerned that 140 00:06:53,400 --> 00:06:58,800 Speaker 4: this Chinese ban on Apple could possibly continue to expand 141 00:06:59,480 --> 00:07:01,719 Speaker 4: to other hearts of Apple's business line, and we're seeing 142 00:07:01,760 --> 00:07:06,000 Speaker 4: the kind of reaction today. European chips are European suppliers 143 00:07:06,040 --> 00:07:09,080 Speaker 4: to Apple are also in the red. Asia suppliers to 144 00:07:09,120 --> 00:07:11,120 Speaker 4: Apple are also in the red. So this is really 145 00:07:11,640 --> 00:07:14,160 Speaker 4: jarring investors. And we just need to remember just how 146 00:07:14,240 --> 00:07:17,400 Speaker 4: big Apple is, how big of an impact it does 147 00:07:17,440 --> 00:07:19,440 Speaker 4: have on the equity markets. 148 00:07:19,600 --> 00:07:21,360 Speaker 9: Makes up seven percent. 149 00:07:21,160 --> 00:07:22,800 Speaker 4: Of the s and P five hundred, and then on 150 00:07:22,840 --> 00:07:26,200 Speaker 4: a global basis the MSCI World Index, it makes up 151 00:07:26,280 --> 00:07:29,760 Speaker 4: five percent, So a five percent slide in Apple, which 152 00:07:29,760 --> 00:07:32,360 Speaker 4: we're now seeing over two days. Just with the pre 153 00:07:32,480 --> 00:07:36,120 Speaker 4: market opening down nearly two percent this morning, adding to 154 00:07:36,160 --> 00:07:40,440 Speaker 4: its nearly four percent slide yesterday. It's really really causing 155 00:07:40,600 --> 00:07:42,520 Speaker 4: the equity markets to be a bit shaken up. Here 156 00:07:42,520 --> 00:07:44,880 Speaker 4: we have NASAC features down some six tenths to one percent. 157 00:07:45,280 --> 00:07:48,440 Speaker 1: But this is China hitting back against the US after 158 00:07:48,520 --> 00:07:50,160 Speaker 1: so many American sunctions. 159 00:07:50,680 --> 00:07:54,840 Speaker 4: Possibly it could possibly just be part of a Beijing's 160 00:07:54,880 --> 00:07:59,960 Speaker 4: campaign to cut reliance on foreign technology and promote homegrown products, 161 00:08:00,040 --> 00:08:03,679 Speaker 4: homegrown technology instead. Also, is it probably top of mind 162 00:08:03,840 --> 00:08:07,320 Speaker 4: for China these security concerns which the US has also 163 00:08:07,360 --> 00:08:09,680 Speaker 4: done on their part with their Huawei ban as well 164 00:08:09,680 --> 00:08:12,960 Speaker 4: in those US sanctions on chips. But it goes without 165 00:08:12,960 --> 00:08:16,239 Speaker 4: saying that this is just adding to the geopolitical tensions 166 00:08:16,240 --> 00:08:18,920 Speaker 4: that investors now have to take into account on their 167 00:08:18,960 --> 00:08:21,720 Speaker 4: exposure to China. Just what kind of risk are you 168 00:08:21,800 --> 00:08:24,920 Speaker 4: taking to your business if you do conduct business in 169 00:08:25,000 --> 00:08:27,200 Speaker 4: it China? Do you really need to be worried about 170 00:08:27,240 --> 00:08:30,280 Speaker 4: these geopolitical events because they continue to escalate. 171 00:08:30,520 --> 00:08:33,920 Speaker 2: Now onto Matter's macro valerie. And the Beige Book often 172 00:08:34,200 --> 00:08:37,200 Speaker 2: sort of flies beneath the radar, doesn't it. It's called beije, 173 00:08:37,240 --> 00:08:40,120 Speaker 2: and often markets assume its contents are fairly beige. But 174 00:08:40,280 --> 00:08:43,599 Speaker 2: yesterday was an exception, and it underscored a number of 175 00:08:43,640 --> 00:08:46,040 Speaker 2: the things we've been watching, you know, strong revenge spending 176 00:08:46,080 --> 00:08:50,600 Speaker 2: on tourism and leisure, and maybe not a clear market message, 177 00:08:50,640 --> 00:08:52,640 Speaker 2: but lots of really interesting anecdotal information. 178 00:08:53,120 --> 00:08:55,840 Speaker 4: Yes, and I think that the takeaway from the markets 179 00:08:55,960 --> 00:09:00,760 Speaker 4: is that while it did assess growth as still being modest, 180 00:09:01,360 --> 00:09:04,400 Speaker 4: it was an uptick in that growth assessment. We're now 181 00:09:04,440 --> 00:09:07,400 Speaker 4: still worried about these warnings on the consumer, and the 182 00:09:07,440 --> 00:09:10,080 Speaker 4: Beige Book did give us a few warnings on where 183 00:09:10,120 --> 00:09:12,719 Speaker 4: the consumer is headed in the third quarter, and this 184 00:09:12,760 --> 00:09:14,760 Speaker 4: is what the FED has to deal with. Now, do 185 00:09:14,880 --> 00:09:18,800 Speaker 4: you pause this rate hiking cycle and wait for these 186 00:09:19,200 --> 00:09:21,920 Speaker 4: rate hikes to have their effect on the economy, or 187 00:09:21,960 --> 00:09:24,959 Speaker 4: do you really need to see them concretely before calling 188 00:09:24,960 --> 00:09:26,920 Speaker 4: an end to this rate hiking cycle. We do hear 189 00:09:26,960 --> 00:09:31,559 Speaker 4: for some FED members tonight before the blackout period begins 190 00:09:31,600 --> 00:09:34,320 Speaker 4: on Saturday. The most important one is New York Fed 191 00:09:34,480 --> 00:09:37,960 Speaker 4: President John Williams, who was speaking to Bloomberg later. Anna, 192 00:09:38,040 --> 00:09:40,480 Speaker 4: this is important because in his last time he spoke 193 00:09:40,520 --> 00:09:43,280 Speaker 4: to the media, he talked about the possibility that. 194 00:09:43,280 --> 00:09:45,000 Speaker 9: Rates could be lower next year. 195 00:09:45,080 --> 00:09:48,240 Speaker 4: Does he continue to keep that line or perhaps does 196 00:09:48,240 --> 00:09:51,120 Speaker 4: he look at the data? Does he see Powell's hawkish 197 00:09:51,120 --> 00:09:54,120 Speaker 4: comments at Jackson Hole and maybe refrain from talking about 198 00:09:54,160 --> 00:09:55,160 Speaker 4: cuts in twenty twenty four. 199 00:09:55,280 --> 00:09:57,600 Speaker 2: Yeah, we got that feedly strong. Oh yes, m figure 200 00:09:57,640 --> 00:10:00,960 Speaker 2: yesterday didn't we We sent yields high and there's a 201 00:10:01,000 --> 00:10:03,080 Speaker 2: sort of healthy conversation going on in markets as to 202 00:10:03,080 --> 00:10:05,360 Speaker 2: how relevant, how up to date that IM figure is 203 00:10:05,360 --> 00:10:09,240 Speaker 2: EASi an outlier, but we'll see that where Williams falls 204 00:10:09,280 --> 00:10:11,040 Speaker 2: on that kind of data point. Thanks very much, Valerie. 205 00:10:11,040 --> 00:10:13,400 Speaker 2: Our market's report of Valerie Titel with the latest on 206 00:10:13,720 --> 00:10:14,680 Speaker 2: China and the US. 207 00:10:14,880 --> 00:10:17,679 Speaker 1: Absolutely, I want to spend some time now though, thinking 208 00:10:17,679 --> 00:10:21,239 Speaker 1: about the UK. The Labor Shadow Business and Trade Secretary 209 00:10:21,640 --> 00:10:26,360 Speaker 1: spend twenty minutes with us talking about the party's policies, 210 00:10:26,440 --> 00:10:31,760 Speaker 1: how businesses are essentially at more risk of having a 211 00:10:31,800 --> 00:10:35,400 Speaker 1: continued Conservative government or the Conservatives winning the next general 212 00:10:35,400 --> 00:10:38,680 Speaker 1: election than if the Labor Party are elected in So 213 00:10:38,800 --> 00:10:41,959 Speaker 1: this was Jonathan Reynolds. He talked to us about the 214 00:10:42,280 --> 00:10:46,160 Speaker 1: long term industrial strategy that Labor has rebuilding, its the 215 00:10:46,200 --> 00:10:50,040 Speaker 1: EU relationship that the UK has also praise the CMA, 216 00:10:50,080 --> 00:10:53,320 Speaker 1: the Competition of Markets Authority for its work on the 217 00:10:53,360 --> 00:10:56,359 Speaker 1: Microsoft Activision deal. Joining us. Now is our UK correspondent 218 00:10:56,360 --> 00:10:59,280 Speaker 1: Lizzie Burden to discuss. Great to have you with us, 219 00:10:59,320 --> 00:11:01,800 Speaker 1: is it? What were you impressions? Then, you know, we're 220 00:11:01,920 --> 00:11:04,160 Speaker 1: just over a year out from the next general election. 221 00:11:04,559 --> 00:11:07,880 Speaker 1: A lot of eyes this September as Parliament sits once 222 00:11:08,000 --> 00:11:11,800 Speaker 1: more on what Labor might bring were it to win. 223 00:11:12,040 --> 00:11:15,600 Speaker 10: And indeed what a significant role Jonathan Reynolds is set 224 00:11:15,640 --> 00:11:18,240 Speaker 10: to play in this election campaign. Kised Armer has just 225 00:11:18,280 --> 00:11:23,040 Speaker 10: reshuffled his shadow cabinet and the brief of Jonathan Reynolds 226 00:11:23,080 --> 00:11:26,160 Speaker 10: has been expanded, so now it includes trade to mirror 227 00:11:26,480 --> 00:11:29,800 Speaker 10: Kemy Baidnock, who he's shadowing. Look some of the key 228 00:11:29,800 --> 00:11:33,160 Speaker 10: points for me from this interview. Fantastic interview with Johnny Reynolds. 229 00:11:33,160 --> 00:11:35,600 Speaker 10: Great that you've got such a long conversation with him. 230 00:11:35,840 --> 00:11:38,920 Speaker 10: But first of all that Labor at its party conference 231 00:11:38,960 --> 00:11:41,880 Speaker 10: is going to focus on small business, so extending the 232 00:11:42,440 --> 00:11:45,520 Speaker 10: smoked salmon and scrambled eggs offensive. 233 00:11:45,000 --> 00:11:47,400 Speaker 9: That it's already been on trying to woo the city. 234 00:11:48,040 --> 00:11:51,880 Speaker 10: Also that he sees the Industrial Strategy Council operating on 235 00:11:51,920 --> 00:11:54,600 Speaker 10: the same model as the Office for Budget Responsibility. For me, 236 00:11:55,160 --> 00:11:58,120 Speaker 10: I would point out that the OBR is actually incredibly small. 237 00:11:58,440 --> 00:12:00,960 Speaker 10: It's only got about forty five and if you compare 238 00:12:00,960 --> 00:12:03,840 Speaker 10: it to its foreign counterparts, then the one in the 239 00:12:03,880 --> 00:12:08,520 Speaker 10: Netherlands is able to cost the opposition's fiscal plans. 240 00:12:08,800 --> 00:12:09,800 Speaker 9: Ours can't do that. 241 00:12:10,120 --> 00:12:14,600 Speaker 10: Does Labor want to expand the OBR as well? It 242 00:12:14,640 --> 00:12:16,880 Speaker 10: was effectively sidelined at the time of the mini budget 243 00:12:17,080 --> 00:12:20,080 Speaker 10: around this time last year, you'll remember. But as I say, 244 00:12:20,280 --> 00:12:25,000 Speaker 10: Reynolds taking into his brief trade as well, he wants 245 00:12:25,040 --> 00:12:28,760 Speaker 10: to improve the relationship with the European Union. Obviously it 246 00:12:28,800 --> 00:12:30,520 Speaker 10: was good that you pressed him on how he wants 247 00:12:30,559 --> 00:12:33,600 Speaker 10: to do that. So he says he wants healthy labor 248 00:12:33,880 --> 00:12:38,480 Speaker 10: market mobility, so not just not revisiting freedom of movement, 249 00:12:38,480 --> 00:12:44,480 Speaker 10: but improving cross border movement of people, mutual recognition of 250 00:12:44,559 --> 00:12:48,720 Speaker 10: professional qualifications, agreement on health checks. And he said that 251 00:12:48,760 --> 00:12:53,280 Speaker 10: he wanted to rejoin Horizon, which was funny timing because 252 00:12:53,440 --> 00:12:56,959 Speaker 10: later yesterday we had that Bloomberg scoop confirming that indeed 253 00:12:57,280 --> 00:13:00,520 Speaker 10: the UK is expected to announce an agreement to rejoin Horizon. 254 00:13:00,679 --> 00:13:03,880 Speaker 2: Yeah, in fact getting that confirmation this morning, then the 255 00:13:04,000 --> 00:13:06,280 Speaker 2: UK Prime Minister giving the go ahead for the UK 256 00:13:06,400 --> 00:13:09,320 Speaker 2: to rejoin the EUS ninety five and a half billion 257 00:13:09,440 --> 00:13:15,080 Speaker 2: euro Horizon science program. So that allows closer ties, almost 258 00:13:15,080 --> 00:13:17,680 Speaker 2: as if the Conservatives are trying to sort of neutralize 259 00:13:17,720 --> 00:13:20,439 Speaker 2: that part of the labor threat. Perhaps, how significant is 260 00:13:20,480 --> 00:13:22,120 Speaker 2: this movie around Horizon Exactly? 261 00:13:22,200 --> 00:13:24,360 Speaker 10: Labour's going to have to do more to distinguish its 262 00:13:24,360 --> 00:13:28,240 Speaker 10: position on Europe when you have progress like this. It's 263 00:13:28,280 --> 00:13:31,079 Speaker 10: significant because of course Britain was one of the biggest 264 00:13:31,120 --> 00:13:34,280 Speaker 10: beneficiaries of this funding before leaving the EU fully at 265 00:13:34,280 --> 00:13:36,840 Speaker 10: the end of twenty twenty, and it was so important 266 00:13:36,840 --> 00:13:39,760 Speaker 10: that officials were working on a backup plan called Pioneer 267 00:13:40,200 --> 00:13:43,080 Speaker 10: just in case the UK was shut out permanently. So 268 00:13:43,200 --> 00:13:46,680 Speaker 10: it means that those close ties between Europe's top research 269 00:13:46,760 --> 00:13:50,040 Speaker 10: hubs will be able to resume, and it has bigger 270 00:13:50,160 --> 00:13:55,280 Speaker 10: political significance because it signifies the improved ties between the 271 00:13:55,400 --> 00:13:57,960 Speaker 10: UK and the EU post Brexit. I saw that with 272 00:13:58,080 --> 00:14:01,520 Speaker 10: my own eyes in Paris, the brom between Rishi Sunac 273 00:14:01,559 --> 00:14:04,880 Speaker 10: and Immanuel Macon. You heard it when Ursula Vonderlon called 274 00:14:04,960 --> 00:14:07,600 Speaker 10: Rishi Sunac, dear Rishi, and here we have it a 275 00:14:07,640 --> 00:14:11,240 Speaker 10: manifestation of that warmth in policy we expect. 276 00:14:11,480 --> 00:14:15,680 Speaker 1: Yeah, absolutely, no, And I suppose the thing is about 277 00:14:15,960 --> 00:14:18,520 Speaker 1: Jonathan Reynolds. It's about the sort of water fund and 278 00:14:18,559 --> 00:14:21,960 Speaker 1: trying of policy that they have, even if the details 279 00:14:22,000 --> 00:14:25,560 Speaker 1: are not there yet. You know, talking about Labour wanting 280 00:14:25,600 --> 00:14:30,600 Speaker 1: to secure the highest sustained growth in amongst G seven nations. 281 00:14:30,600 --> 00:14:32,040 Speaker 1: Sort of that commitment to growth. 282 00:14:32,080 --> 00:14:34,240 Speaker 9: I'm sure the Tories want to as well, of course. 283 00:14:34,320 --> 00:14:37,960 Speaker 1: Yeah. Absolutely. Andrew Bailey's comments though, how do they feed 284 00:14:38,000 --> 00:14:42,200 Speaker 1: into this conversation because Parliament sitting again, so a whole 285 00:14:42,280 --> 00:14:44,640 Speaker 1: raft of policy makers were speaking to MPs. 286 00:14:44,720 --> 00:14:47,840 Speaker 10: Yes, Bank of England Governor Andrew Bailey flanked by his 287 00:14:47,920 --> 00:14:50,680 Speaker 10: one of his deputies, to John Cunliffe and Swatty Dinger, 288 00:14:50,800 --> 00:14:53,400 Speaker 10: the big dove of the Monetary Policy Committee. Look, the 289 00:14:53,400 --> 00:14:56,760 Speaker 10: pound is not thanking Andrew Bailey for those comments today. 290 00:14:57,000 --> 00:14:59,320 Speaker 10: It was below one dollar twenty five the last time 291 00:14:59,360 --> 00:15:03,280 Speaker 10: I checked. Clearly dollar strength also playing a part. You 292 00:15:03,320 --> 00:15:06,680 Speaker 10: talked about the ism data with Valerie just there. The 293 00:15:06,720 --> 00:15:08,800 Speaker 10: way it fell was there was a tip lower on 294 00:15:08,840 --> 00:15:11,640 Speaker 10: Bailey's comments and then a dive lower on the ISM data. 295 00:15:11,680 --> 00:15:14,280 Speaker 10: But look, guilts were also the outlier in the bond 296 00:15:14,360 --> 00:15:17,360 Speaker 10: market yesterday because of this dubvish tilt from the governor 297 00:15:17,480 --> 00:15:19,720 Speaker 10: and the two year now the last time I looked, 298 00:15:19,760 --> 00:15:22,680 Speaker 10: was down six basis points at five point one eight percent. 299 00:15:23,160 --> 00:15:26,560 Speaker 10: What they were reacting to, specifically was Bailey saying that 300 00:15:26,840 --> 00:15:30,080 Speaker 10: rates are probably near the top of the cycle because 301 00:15:30,120 --> 00:15:33,840 Speaker 10: a further marks drop in inflation is likely this year. 302 00:15:34,200 --> 00:15:36,280 Speaker 9: And at nine thirty am we're going. 303 00:15:36,240 --> 00:15:39,320 Speaker 10: To get even more data on this, the inflation expectations data. 304 00:15:39,800 --> 00:15:43,240 Speaker 10: The expectation is for another drop in August. But these 305 00:15:43,320 --> 00:15:45,720 Speaker 10: comments from Andrew Bailey the clearest sign yet that the 306 00:15:45,760 --> 00:15:50,680 Speaker 10: banks worried further tightening could cause an unnecessarily harsh recession.