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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Daybreak Europe podcast, available every morning on Apple, Spotify or

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Speaker 1: wherever you listen. It's Friday, the thirtieth of August in London.

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Speaker 1: I'm Stephen Carroll coming up today. Kamala Harris pledges to

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Speaker 1: turn the page, but offers few specifics in her first

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Speaker 1: in depth interview since entering the US presidential race. China

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Speaker 1: considers allowing homeowners to refinance five point four trillion dollars

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Speaker 1: of mortgage debt and making the case for more government spending.

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Speaker 1: The UK's fiscal watchdog sees benefits from a ramp up

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Speaker 1: in public investment. Let's start with a roundup of our

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Speaker 1: top stories. US Vice President Kamala Harris has doubled down

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Speaker 1: on her pledge to target price gouging in her first

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Speaker 1: sit down interviews and centering the race for the White House,

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Speaker 1: the Democratic presidential nominee says her day one priority would

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Speaker 1: be helping address economic woes and supporting the middle class.

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Speaker 1: Speaking to CNN, Harris sought to frame her pitch as

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Speaker 1: an evolution of Bidenomics.

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Speaker 2: When we came in, our highest priority was to do

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Speaker 2: what we could to rescue America, and today we know

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Speaker 2: that we have inflation at under three percent. A lot

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Speaker 2: of our policies have led to the reality that America

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Speaker 2: recovered faster than any wealthy nation around the world. But

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Speaker 2: you are right, prices, in particular for groceries are still

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Speaker 2: too high. The American people know what I know it,

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Speaker 2: which is why my agenda includes what we need to

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Speaker 2: do to bring down the price of groceries, for example,

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Speaker 2: dealing with an issue like price gouging for supporters.

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Speaker 1: Harris's CNN interview avoided a major gaff likely to damage

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Speaker 1: her momentum, while detractors are likely to argue that her

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Speaker 1: answers were light on policy detail. The interview comes as

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Speaker 1: a new Bloomberg News Morning Consult poll found the vice

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Speaker 1: president now leading or tied with Republican rival to Donald

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Speaker 1: Trump in each of the seven states most likely to

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Speaker 1: decide the outcome of the election. China is considering allowing

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Speaker 1: homeowners to refinance as much as five point four trillion

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Speaker 1: dollars in mortgages. The plan is designed to lower borrowing

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Speaker 1: costs for millions of families and boost consumer spending. Sources

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Speaker 1: say homeowners would be able to renegotiate their terms before January,

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Speaker 1: when banks typically reprice mortgages. Chinese authorities are facing renewed

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Speaker 1: pressure to stem a housing led slowdown in the country.

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Speaker 1: The next wave of UK bank capital reforms may come

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Speaker 1: later than expected. It's the latest example of a global

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Speaker 1: financial hub abandoning its timetable for the changes. Bloomberg's two

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Speaker 1: out of Bio has more.

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Speaker 3: When regulators hashed out the final iteration of the bulls

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Speaker 3: or three post crisis reforms in twenty seventeen, they intended

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Speaker 3: to implement them by January twenty twenty two, but more

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Speaker 3: than two years later, that goal is a distant memory.

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Speaker 3: The delays are already a point of contention in the US,

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Speaker 3: where banks are threatening to sue regulators over initial proposals. Now.

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Speaker 3: Sources say the Bank of England won't announce its finalized

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Speaker 3: package until January twenty twenty six at the earliest. Originally,

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Speaker 3: the lender hoped to share its remaining plans by June

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Speaker 3: this year. The Central Bank's Prudential Regulation Authority says it

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Speaker 3: will publish near final rules next month. In London. Tiwa

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Speaker 3: Adubayo Bloomberg Radio, the.

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Speaker 1: UK's fiscal watchdog says a boost to public investment would

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Speaker 1: increase the country's growth by two and a half times

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Speaker 1: the amount spent over the long term. The Offers for

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Speaker 1: Budget Responsibilities analysis warns of the risks of austerity just

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Speaker 1: two months ahead of what the Prime Minister has described

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Speaker 1: as a painful budget. Speaking to Bloomberg last month, Chancellor

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Speaker 1: Rachel Reeves said she will both have to balance the

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Speaker 1: books while achieving growth.

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Speaker 4: We're going to have to make difficult decisions. We need

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Speaker 4: to fix the foundations before we can start rebuilding things

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Speaker 4: in Britain. I asked the Treasury officials to give me

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Speaker 4: an assessment of how much stronger the UK economy would

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Speaker 4: be today if would have grown at just the average

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Speaker 4: right of OECD economies these last fourteen years. And the

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Speaker 4: answer is would be one hundred and forty billion pounds

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Speaker 4: bigger today.

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Speaker 1: Reeves has since cut some cut back some government payments

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Speaker 1: to pensioners and warned of tax rises to come. In

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Speaker 1: the October budget. The Chancellor will be seeking to reassure

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Speaker 1: markets she is a trustworthy manager of the public finances,

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Speaker 1: as the UK's debt is at a six decade high

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Speaker 1: and memories of the bond route under Liz Truss's government

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Speaker 1: remained fresh in investors' minds. Ukraine says it'd last a

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Speaker 1: US made F sixteen fighter jet and a crash that

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Speaker 1: killed the pilot. Authorities believe the aircraft was trying to

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Speaker 1: repel a Russian aerial attack. At the time, the incident

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Speaker 1: took place, as the country endured its biggest drone and

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Speaker 1: missile assault since the start of the war. MP he Erotic,

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Speaker 1: who lives in Kiev, says the impact is being felt.

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Speaker 5: For the last four nights. We are spending them in

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Speaker 5: the bomb shelters. Attacks are significant and Russians keep targeting

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Speaker 5: our energy infrastructure. The majority of the day, we do

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Speaker 5: not have electricity at.

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Speaker 1: Homes, Ukrainian MP kier Rudik, speaking there. The EU, meanwhile,

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Speaker 1: has agreed to proceed with plans to secure Ukrainian aid

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Speaker 1: from frozen Russian Central Bank assets. The block's top diplomat, Josepharel,

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Speaker 1: says plans will go ahead irrespective of the US, which

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Speaker 1: is seeking further assurances before pursuing congressional approval. INTEL is

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Speaker 1: considering potentially splitting up its business as it navigates the

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Speaker 1: most difficult period in its fifty six year history. Bloomberg

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Speaker 1: has learned the chip maker has brought in Goldman and

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Speaker 1: Morgan Stanley to advise on possible cutbacks and m and

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Speaker 1: A moves. The company suffered a net loss of one

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Speaker 1: point six billion dollars last quarter, and analysts are predicting

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Speaker 1: more red ink for next year. Bloomberg's Annabel Droulers says

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Speaker 1: the bleak earnings are making Intel consider some extreme option.

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Speaker 6: Really, that question now is how is Intel going to

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Speaker 6: chart its path forward and where do they go from here?

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Speaker 6: And looking at the different possibilities, and one of those,

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Speaker 6: perhaps the most extreme, seems to be either splitting off

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Speaker 6: or listing its foundry business. And that's really significant because

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Speaker 6: Pat Gelsinger, who took the CEO role back in twenty

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Speaker 6: twenty one, has really promised to turn around the company

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Speaker 6: and part of that is promising to build out the

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Speaker 6: foundry division.

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Speaker 1: Annabel Druler speaking, their shares in Intel of declined sixty

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Speaker 1: percent this year, compared to the twenty percent gain for

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Speaker 1: the Philadelphia Stock Exchange Semiconductor Index, which is a benchmark

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Speaker 1: for the sector. Now, in a moment, we'll bring you

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Speaker 1: some analysis of Kamala Harris's interview at CNN plus some

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Speaker 1: more details on that story around Chinese mortgages. But another

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Speaker 1: story that I've been reading from our Bloomberg Pursuits correspondent

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Speaker 1: Sarah Rappaport on the popularity of branded merchandise from the

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Speaker 1: world's top hotels. So Sarah was inspired to write this

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Speaker 1: story because, and you may have noticed it as well,

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Speaker 1: the number of people wandering around with tote bags, usually

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Speaker 1: from some very fancy hotels. So she spotted once from

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Speaker 1: the Four Seasons in Athens or newt in Summerset, and

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Speaker 1: in her words, wearing swag from a beloved property has

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Speaker 1: suddenly become the latest fashion flex, the hottest flash fashion flex.

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Speaker 1: I should say it's a big business too. A bag

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Speaker 1: from the Beverly Hills Hotel costs two hundred and eighteen dollars,

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Speaker 1: or if you're looking for different kinds of March silk,

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Speaker 1: pajamas in the Penincida in London cost six hundred and

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Speaker 1: twenty pounds. This era points out this is a trend

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Speaker 1: that began during the pandemic. It's something to help to

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Speaker 1: boost hospitality businesses that weren't able to bring in guests.

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Speaker 1: But it's been a huge success for hotels since some

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Speaker 1: high end designers are getting involved in as well, and

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Speaker 1: she speaks to branding experts who point out that it's

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Speaker 1: hard to get a unique souvenir while traveling, so a

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Speaker 1: lot of people are making this decision instead to bring

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Speaker 1: back something special from their trips. So more on that

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Speaker 1: to be found on Bloomberg dot com and on the terminal.

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Speaker 1: Let's bringing more details now on Kamala Harris's interview alongside

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Speaker 1: her running mate Tim Walls with CNN Bloomberg TV anchor

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Speaker 1: Critty g Goop does with us for more morning, Curtty,

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Speaker 1: what's your overall and pression? Then, how did Kamala Harris do?

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Speaker 7: She performed well, she came out very presential, very confident,

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Speaker 7: but at the end of the day wasn't very.

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Speaker 8: Revealing in terms of getting more next steps.

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Speaker 7: And I think that's why there was so much kind

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Speaker 7: of hype in the build up to this interview, which

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Speaker 7: is this idea that we don't actually know that much

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Speaker 7: about what a Kamala Walls in the Oval office may

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Speaker 7: actually look like, from the economics policy to an immigration policy.

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Speaker 8: See how it actually differs from Bidenomics.

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Speaker 7: This first interview with the press was meant to change

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Speaker 7: a little bit of that, and instead it kind of

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Speaker 7: did the exact opposite.

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Speaker 1: Okay, did we get any more details on her economic policies.

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Speaker 7: We got a few details, but not still not enough,

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Speaker 7: still falling short of some of the information that we needed.

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Speaker 7: I think the key question going in here was is

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Speaker 7: Harris nomics, which is I think the term we're going

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Speaker 7: to be using now different from Bidenomics, and how does

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Speaker 7: it differ? And it feels like the line that we've gotten,

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Speaker 7: the key line that we got overnight is that it

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Speaker 7: takes Bidenomics one step further. We've already had lines around

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Speaker 7: price gouging, what she going to be doing to continue

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Speaker 7: protections around higher drug prices as well protecting things like

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Speaker 7: insulin for the people who really need it and making

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Speaker 7: it affordable. She also talking about extending it to groceries.

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Speaker 7: She talked a little bit about not banning fracking. That

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Speaker 7: was one of the criticisms around the Biden administration as well,

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Speaker 7: that despite oil being one of the largest exports of

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Speaker 7: the United States, fracking is a way to kind of

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Speaker 7: undermine that economic growth and that level of industry. She

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Speaker 7: was very clear yesterday, she said no, there will no,

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Speaker 7: there won't be a ban on fracking, but they are

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Speaker 7: going to be regulating it in some way. Again hazy

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Speaker 7: on the details of what that actually looks like.

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Speaker 1: She was asked about Donald Trump's comments about her identity

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Speaker 1: when he said that she had only embraced her black

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Speaker 1: heritage for political purposes, and she sort of sidestepped the

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Speaker 1: issue in her response. Is that significant?

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Speaker 7: It is significant in the regard that it has both

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Speaker 7: boosted her and hurt her and in a lot of ways. Look,

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Speaker 7: one of the issues with and I hate to say this,

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Speaker 7: in the twenty first century, one of the issues here

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Speaker 7: is that we've never had a female president in the

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Speaker 7: United States. It's never happened, and certainly not one even

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Speaker 7: of color. Very few of color have even ran. I

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Speaker 7: think Kamala Harris is the first woman of color to

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Speaker 7: have run. This is a really big deal. But it's

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Speaker 7: something that can galvanize the demographic, gain the minority vote,

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Speaker 7: gain the female vote.

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Speaker 8: You've seen her kind of.

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Speaker 7: Take a lot of coaching and a lot of following

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Speaker 7: the footsteps of Barack Obama in terms of galvanizing the

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Speaker 7: African American population. However, it is also something that can

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Speaker 7: work against her, especially when she's trying to appeal to

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Speaker 7: parts of the country that maybe aren't as diverse, and

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Speaker 7: that's I think why she really skirted that line carefully

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Speaker 7: when asked about it.

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Speaker 1: Let's talk a bit about the response to this and

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Speaker 1: the broader context in the race. What if we heard

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Speaker 1: from Donald Trump, And perhaps it would be interesting to

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Speaker 1: you just to reflect on where we are in the

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Speaker 1: polling too, given we've had any numbers out from Pembergnese

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Speaker 1: in Morning consult.

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Speaker 7: Yeah, so the latest polling shows a slight edge from

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Speaker 7: Kamala Harris over President Trump. But emphasis on slight, and

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Speaker 7: this is a really big deal when we talk about

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Speaker 7: just kind of the momentum that may be fading.

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Speaker 8: And remember one of the main themes.

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Speaker 7: That political strategists across the United States and arguably across

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Speaker 7: the world have looked at as saying that right now

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Speaker 7: the momentum around Kamala Harris has been a little bit

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Speaker 7: of a whirlwind, a little bit of a vacuum. This

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Speaker 7: idea that we had this very quick change in nominee,

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Speaker 7: we had a very what felt like an exciting race

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Speaker 7: around who her VP pick would be, and then a

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Speaker 7: very again galvanizing to use that term again, DNC convention

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Speaker 7: or a Democratic National Convention. So she's had a couple

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Speaker 7: of kind of key events, not to mention key rallies,

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Speaker 7: and in certain states including Milwaukee, which was the big

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Speaker 7: one during that week of the DNC, where she has

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Speaker 7: actually had a moment to gain more momentum in her campaign,

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Speaker 7: but then also make waves on social media's while which

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Speaker 7: she's absolutely tapped into to get that younger demographic vote. However,

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Speaker 7: the concern here is that we are still in early days,

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Speaker 7: we are still in summer months.

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Speaker 8: Anything can change this time.

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Speaker 7: Last election cycle, you had a Trump polling higher than

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Speaker 7: President Biden as well, and then the election result was

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Speaker 7: very different. So the expectation here is that this is

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Speaker 7: still a little bit of a honeymoon period and all

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Speaker 7: polling should be taken with a grain of salt. But

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Speaker 7: right now, the momentum isn't fading as fast as people

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Speaker 7: thought it would reflect it in the polls.

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Speaker 1: Okay, Christy Coop to Bomberg TV anchor, thanks so much

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Speaker 1: for joining us with your analysis this morning. Now, China

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Speaker 1: is considering allowing homeowners to refinance as much as five

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Speaker 1: point four trillion dollars in mortgages. That's part of efforts

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Speaker 1: to lower borrowing costs for millions of families and boost

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Speaker 1: consumer spending. Amid a week economic outlook, Bimbergney's editor Jail

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Speaker 1: Lisis joins us Now for more on this story from

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Speaker 1: Hong Kong. Jill, great to have you on what exactly

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Speaker 1: does this plan entail, Hey morning, Stephen.

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Speaker 9: Well, as you said, we're looking at refinancing worth as

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Speaker 9: much as five point four trillion dollars in mortgages. The

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Speaker 9: idea would be that homeowners could renegotiate terms with their

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Speaker 9: current lenders before January. That's when banks typically reprice their mortgage.

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Speaker 9: In this they'd be allowed to refinance with a different bank.

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Speaker 9: That would be a first since the global financial crisis.

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Speaker 9: The other part of this, Stephen, that I think is

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Speaker 9: really important to highlight here is that while a lot

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Speaker 9: of the previous efforts that China has put into play

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Speaker 9: in the past have kind of worked around new first

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Speaker 9: time home buyers, this new plan would target existing homeowners.

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Speaker 9: They've really been left out is a lot of those

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Speaker 9: new home buyers were the ones that have really enjoyed

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Speaker 9: a lot of the cuts to key interest rates that

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Speaker 9: we've seen over the course of this year. And such,

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Speaker 9: So really just targeting a different group of people there.

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Speaker 1: How much could it help those households and those existing

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Speaker 1: homeowners and the property sector more.

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Speaker 9: Broadly well, as you know, Stephen, obviously, the Chinese government

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Speaker 9: has tried to take several measures over the last several

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Speaker 9: years to stem this massive housing route. What Weeds maybe

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Speaker 9: see out of this if it's approved, is it may

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Speaker 9: serve to ease mortgage burdens faster than we might expect.

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Speaker 9: So will China's pushed average mortgage costs to a record

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Speaker 9: low this year, Most households really haven't benefited since those

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Speaker 9: banks won't reprice their existing loans until next year. So

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Speaker 9: maybe this sort of you know opens the umbrella, sort

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Speaker 9: of you know, expands the umbrella in terms of you know,

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Speaker 9: homeowners that would be affected by some of the recent

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Speaker 9: property easing measures that the Chinese government has taken to

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Speaker 9: you know, try to ease a lot of this crisis.

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Speaker 9: You would have to see how much how long though

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Speaker 9: it would take to kind of have all of that

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Speaker 9: transmit through.

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Speaker 1: Could this put a strain on Chinese banks?

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Speaker 9: Gell? Yes, So the thing about this is that you know,

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Speaker 9: you'd look at i mean lower lowering mortgage rates ultimately

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Speaker 9: would hurt profitability. It's some you know, state run, state

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Speaker 9: run banks, so that further pressure on those banks, which

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Speaker 9: you know, point out that Beijing has relied on quite

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Speaker 9: heavily to help revive you know, it's it's economic woes.

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Speaker 9: That being said, though, you can make the arguments that

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Speaker 9: you know, authorities are still facing a lot of pressure

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Speaker 9: to stem this slow down given how long it's really

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Speaker 9: just persistent.

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Speaker 1: Talk us through just the backdrop to all of this

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Speaker 1: as well. We've had a number of warnings this way

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Speaker 1: Sea about how the weakness of the Chinese economy is

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Speaker 1: still causing concern.

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Speaker 9: Yes, I think at this point, Stephen. So if you

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Speaker 9: recall back in March, the Chinese government set this economic

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Speaker 9: growth target for the year, about five percent growth over

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Speaker 9: last year. That's looking more and more in danger as

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Speaker 9: a number of investment banks have really downgraded their expectations.

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Speaker 9: UBS was the latest this week sort of adding to

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Speaker 9: those cuts. They think that China's GDP is going to

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Speaker 9: expand around four point six percent this year. That's significantly

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Speaker 9: below that economic growth target that the government set. That's

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Speaker 9: also significantly lower than UBS's own forecast of four point

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Speaker 9: nine percent said earlier this year. It's kind of adding

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Speaker 9: to some other banks, including JP Morgan and Nomura, which

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Speaker 9: also think China is going to undershoot that target. Now, Stephen,

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Speaker 9: the big concern here is that because of a host

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Speaker 9: of issues, including most pressingly this real estate downturn that

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Speaker 9: at this point has entered its fourth year, you're still

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Speaker 9: seeing a lot of concerns over growth within the Chinese economy,

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Speaker 9: particularly on that domestic side. So this idea that consumers

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Speaker 9: just aren't there's really really weak demand here, consumers just

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Speaker 9: aren't really spending money.

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Speaker 1: That just continues to be.

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Speaker 9: This persistent issue that doesn't really seem like authorities have

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Speaker 9: really been able to shake here.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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