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

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Speaker 2: This is the Bloomberg Daybreak Europe podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Friday, the

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Speaker 2: first of November in London. I'm Stephen Carroll and.

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Speaker 3: I'm Lizzie Berden. Coming up today, the UK's Chancellor tells

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Speaker 3: me the government's number one commitment is economic and fiscal stability.

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Speaker 3: After a post budget bond sell.

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Speaker 2: Off, Apple disappoints investors with a tempered growth forecast and

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Speaker 2: weaker revenues from China.

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Speaker 3: Plus sewing early doubts. Trump sets the stage for a

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Speaker 3: disputed election result, telling supporters he's on track for a

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Speaker 3: blowout victory.

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Speaker 2: Let's start with her und up of our top stories.

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Speaker 3: The Chancellor, Rachel Reeves, is seeking to reassure financial markets

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Speaker 3: after her budget trigger to sell off in UK bonds.

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Speaker 3: The negative market reaction came after official projections that an

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Speaker 3: extra one hundred and forty two billion pounds of borrowing

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Speaker 3: is going to be needed over the next five years

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Speaker 3: to help fund an increase in public spending. Speaking exclusively

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Speaker 3: to Bloomberg after the market's sell off, Yeves was asked

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Speaker 3: if her government now risks its own leaz trust moment we.

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Speaker 4: Put in place yesterday in the budget for robust fiscal

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Speaker 4: rules that we will meet two years early. There's a

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Speaker 4: significant fiscal consolidation during the course of this parliament that

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Speaker 4: takes debt as a share of our economy from four

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Speaker 4: and a half percent, which is what we inherited to

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Speaker 4: two point one percent of GDP. And we've set out

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Speaker 4: a framework for the second phase of the spending Review

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Speaker 4: based on the envelope that we set out yesterday that

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Speaker 4: will require difficult decisions, but the ones that this government

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Speaker 4: are prepared to mate because we know the importance of

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Speaker 4: economic and fiscal stability.

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Speaker 3: The yield on the UK's ten year benchmark government bond

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Speaker 3: has risen by roughly twenty five basis points since Rachel

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Speaker 3: Reeves's budget was announced near the market Reeves this week,

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Speaker 3: much smaller than the fallout from Liz Truss's plan for

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Speaker 3: unfunded tax cuts in twenty twenty two, it is still

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Speaker 3: a hit to Labour's claim to have restored stability to

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Speaker 3: Britain's finances.

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Speaker 2: The search for bodies and stranded vehicles and buildings continues

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Speaker 2: in Eastern Spain after flash floods wiped through towns, killing

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Speaker 2: more than one hundred and fifty people. The Spanish army

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Speaker 2: has been called in to help affected areas. In Valencia.

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Speaker 2: Prime Minister Pedro Sanchez says the government's priority is to

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Speaker 2: find people who are still missing.

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Speaker 5: I want to tell you that the government of Spain

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Speaker 5: is here to provide you with any additional resources you

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Speaker 5: may need. I said that yesterday. We're not going to

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Speaker 5: leave the Valentians alone. We're going to be with you

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Speaker 5: for as long as it takes.

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Speaker 2: Spain's Prime minister there, speaking through a translator. He's declared

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Speaker 2: the area disaster zone and warned there are likely to

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Speaker 2: be many more victims.

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Speaker 3: Apple's results have disappointed investors after it projected a rise

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Speaker 3: in revenue that came in below what analysts have been projecting.

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Speaker 3: Shares fell almost two percent post market after the iPhone

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Speaker 3: maker also saw its revenues from China falling in the

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Speaker 3: last quarters, despite total sales edging past Wall Street projections,

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Speaker 3: rising by more than six percent to almost ninety five

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Speaker 3: billion dollars. Here's Apple CEO Tim Cook.

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Speaker 6: iPhone grew in every geographic segment, marking a new September

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Speaker 6: quarter revenue record for the category, and Services set an

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Speaker 6: all time revenue record, up twelve percent year over year.

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Speaker 6: We also set September quarter segment revenue records in the Americas, Europe,

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Speaker 6: and the rest Ofvation Pacific, as well as in a

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Speaker 6: large number of countries.

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Speaker 3: Tim Cook's Apple remains the world's most valuable company, but

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Speaker 3: it's had to contend with a sluggish smartphone market, more

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Speaker 3: competition in China, and of course regulatory scrutinary around the world.

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Speaker 2: Chase An Intel jumped by almost seven percent, and after

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Speaker 2: I was trading as the chip Giant, forecast fourth quarter

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Speaker 2: revenues that will be slightly higher than market expectations. The

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Speaker 2: projections are sparking optimism that the company could win back

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Speaker 2: some of its last market share. Intel CEO Pac Elsinger

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Speaker 2: says the upbeat forecast is down to their cost cutting plan.

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Speaker 7: We've taken these steps this quarter and restructuring and getting

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Speaker 7: our costs where they need to be. Here, we have

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Speaker 7: the capacity to go on the journey yas Singer's.

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Speaker 2: Intel was once the industry leader in semiconductors, but it's

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Speaker 2: lost out to rivals like Nvidia amid soaring demand for

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Speaker 2: accelerator chips for AI. Orders for Intel's Ai Chip Goudi

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Speaker 2: have been weaker than projected.

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Speaker 3: Oil prices have jumped following a report that Iran could

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Speaker 3: be preparing for an attack on Israel. Brent surged as

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Speaker 3: much as two percent after Axios cited two Israeli sources

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Speaker 3: saying Tehran is planning a strike through militias that it

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Speaker 3: backs in Iraq. The move higher in prices comes after

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Speaker 3: a tumble at the start of the week when a

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Speaker 3: limited Israeli attack on Iran prompted some of the war

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Speaker 3: premium to unwind. Brent is currently higher one point seven

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Speaker 3: seventy four dollars a barrel.

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Speaker 2: Donald Trump has insisted he's leading the US presidential race,

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Speaker 2: despite most polls showing a statistical dead heat in swing states.

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Speaker 2: With Kamala Harris speaking to supporters, the Republican candidate conflated

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Speaker 2: polling and early voting dated to claim that only fell

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Speaker 2: play could prevent his victory. Yesterday, the former president also

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Speaker 2: falsely claimed that he'd won the state of New Mexico

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Speaker 2: in the past two US elections.

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Speaker 8: We almost won it twice, and let me tell you,

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Speaker 8: I believe we won it twice. Okay, you want to

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Speaker 8: know the truth, and if you can watch your vote counter.

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Speaker 8: If we could bring God down from heaven, he could

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Speaker 8: be the vote counter.

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Speaker 9: We would win this.

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Speaker 8: We'd win California, We'd win a lot of states, a

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Speaker 8: lot of states that they say, oh, Republican can win

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Speaker 8: that shit, they say Republican can't win. Well, you know what,

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Speaker 8: We're gonna win it. We gotta win it. You just

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Speaker 8: got to keep the votes honest, keep the votes honest.

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Speaker 2: Despite Trump's claims at that rally in New Mexico, in reality,

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Speaker 2: he lost the state to Biden by ten percentage points

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Speaker 2: into Hillary Clinton by eight points. The former president has

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Speaker 2: repeatedly declines to say, without qualification, whether he'll accept the

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Speaker 2: results of the election, and often denies that he lost

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Speaker 2: his previous White House bid in twenty twenty.

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Speaker 3: Well, those are your top stories this morning. On the market,

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Speaker 3: it's euro stocks fifty futures a high are two tents

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Speaker 3: of eight percent. Just over fifteen minutes away from the open.

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Speaker 3: We have smp E mean eas hire two tents of

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Speaker 3: a percent, THEMSCI Specific Index lower half of a percent,

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Speaker 3: and the tenure US treasure yield lower two basis points

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Speaker 3: at four point two percent.

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Speaker 2: In a moment, we'll hear more from our interview with

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Speaker 2: Rachel Reeves plus take you to the final days of

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Speaker 2: campaigning in the US election and what to look out for.

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Speaker 2: But another story that caught her eye this morning to

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Speaker 2: do with a job that could be replaced by artificial

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Speaker 2: intelligence fashion models. I didn't see this one on the

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Speaker 2: Bingo card of things that were going to be replaced.

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Speaker 2: There's actually a story around Mango using AI generated imagery

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Speaker 2: in some of its latest ad campaigns, and it's a

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Speaker 2: move that the fashion brand says it's about faster content creation.

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Speaker 2: You can see the logic in that they want, you know,

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Speaker 2: fast fashion is quick, so save the time and money

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Speaker 2: if you don't have to be having a photo shoot

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Speaker 2: with all of your new collections. Every time they've tried

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Speaker 2: it oad on two campaigns so far, they have used

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Speaker 2: disclaimers and some of the image to say they were

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Speaker 2: generated by AI. But I suppose what does it mean

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Speaker 2: for the future of this massive industry. Apparently modeling is

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Speaker 2: worth two point five trillion dollars.

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Speaker 3: No more divas on set.

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Speaker 2: I'm sure. I'm sure many models would reject that characterization

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Speaker 2: to say you're looking at me.

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Speaker 3: Having participated in this industry many moons ago, I think

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Speaker 3: it was over when social media came in and it

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Speaker 3: stopped being about who was most fun on set. The

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Speaker 3: days of Kate Moss were far more legendary time than

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Speaker 3: how it is now. I feel like artificial intelligence was

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Speaker 3: always the inevitable conclusion to this, and if you could

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Speaker 3: have reliable images that match to data of what the

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Speaker 3: market wants, you can do you market research of what

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Speaker 3: size and market you've got and just match it with

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Speaker 3: an image. Sounds like it makes perfect sense.

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Speaker 2: Okay, well, a story that could be worth your time

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Speaker 2: to read. How Mango are planning to think about this already?

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Speaker 2: Let's go to more though, to our exclusive interview with

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Speaker 2: the Chancellor of the Exchequer, Lizzie Burden. You were speaking

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Speaker 2: to Rachel Reeves.

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Speaker 3: I was, indeed, and it was such a moment to

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Speaker 3: speak to her just before the clothes We were summoned

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Speaker 3: to the Treasury for this live interview and you'd seen

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Speaker 3: this sell off in stocks and sterling and it started

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Speaker 3: in the guilt market. And what was really interesting was

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Speaker 3: as Rachel Reeves was speaking, actually some of that reversed

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Speaker 3: in the guilt market. So I started by asking her

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Speaker 3: whether she was worried that actually things were heading in

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Speaker 3: the direction of Liz Truss.

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Speaker 10: Take a listen.

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Speaker 4: The number one commitment of this government is economic and

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Speaker 4: fiscal stability, which is why we put in place yesterday

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Speaker 4: in the budget for robust fiscal rules that we will.

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Speaker 9: Meet two years early.

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Speaker 4: There's a significant fiscal consolidation during the course of this

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Speaker 4: parliament that takes debt as a share of our economy

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Speaker 4: from four and a half percent, which is what we

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Speaker 4: inherited to two point one percent of GDP. And we've

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Speaker 4: set out a framework for the second phase of the

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Speaker 4: spending review based on thee that.

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Speaker 9: We set out yesterday.

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Speaker 4: That will require difficult decisions, but they're ones that this

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Speaker 4: government are prepared to mate because we know the importance

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Speaker 4: of economic and fiscal stability.

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Speaker 3: Which as your margin ferrera for meeting your main fiscal

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Speaker 3: rules near historic lows. If there's even a minor hit

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Speaker 3: to growth, you'd have to hike taxes more to hit

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Speaker 3: your fiscal rule. That's not very stable for the bond vigilantes,

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Speaker 3: is it.

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Speaker 4: We have more headroom than the previous government left us,

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Speaker 4: and that is important to guard against those sorts of shocks.

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Speaker 4: But we in the budget yesterday were open and honest

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Speaker 4: about the scale of the challenge left to us by

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Speaker 4: the previous government. But we have now put our public

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Speaker 4: finances on a stable and a solid trajectory, including through

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Speaker 4: difficult decisions on increasing taxes. We did increase taxes yesterday

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Speaker 4: by forty billion pounds. That was necessary alongside with the

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Speaker 4: changes they made on spending and welfare to put our

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Speaker 4: public finances on a firm trajectory. And that's what we

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Speaker 4: did in the budget yesterday.

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Speaker 3: But how can invest believe that this is a one

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Speaker 3: off hit when you repeatedly said before the election you

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Speaker 3: weren't going to raise taxes beyond your manifesto commitments. Now

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Speaker 3: you've raised them twenty billion pounds more than the fiscal

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Speaker 3: hole the Tories left behind.

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Speaker 4: Well, we were left with a terrible situation by the

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Speaker 4: previous government, a big black hole in the public finances,

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Speaker 4: a number of commitments around infected blood and the post

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Speaker 4: office scandal that weren't properly funded. We've now put all

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Speaker 4: of that out in the open, and we've raised taxes

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Speaker 4: in a way that now put our public finances on

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Speaker 4: a stable trajectory. Indeed, the Office of Budget Responsibility confirmed

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Speaker 4: that we meet both our stability and our investment rule

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Speaker 4: two years early. That should give confidence alongside what the

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Speaker 4: International Monetary Funds said yesterday that these were the right

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Speaker 4: decisions for our public finances and indeed for growth. We're

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Speaker 4: making the decisions to get our public finances on a

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Speaker 4: firm trajectory and also to boost the growth potential of

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Speaker 4: our economy.

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Speaker 3: But that IMF endorsement, it's almost out of date now

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Speaker 3: given the market reaction, and a lot of people are

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Speaker 3: going to be asking what the point of all these

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Speaker 3: tax rises was. When the OBR sees the economy growing

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Speaker 3: more slowly under this parliament under your plans than if

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Speaker 3: Richie Soon I could stay Prime Minister.

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Speaker 4: But the OBR say that their forecast in March would

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Speaker 4: have been materially different if they knew then what they

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Speaker 4: know now about the previous government spending plans, So those

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Speaker 4: comparisons aren't fair ones to make that The OBR say

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Speaker 4: that growth will be around the same in this parliament

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Speaker 4: as what they said previously, but of course those projections

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Speaker 4: were based on spending projections which weren't real that. The

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Speaker 4: growth forecast, though, aren't the summit of my ambition, which

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Speaker 4: is why we are doing planning reform, pensions reform, skills

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Speaker 4: reform to get our country growing again, and we're determined

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Speaker 4: to do that. But the OBR also say that over

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Speaker 4: the longer term, our plans will boost GDP by one

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Speaker 4: point four percent. That is significant, or one point four

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Speaker 4: percent when our economy has barely grown the last of

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Speaker 4: five years. It is a signific boost to growth. But

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Speaker 4: it shows that this government. It shows that this government,

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Speaker 4: and this is one point four percent in addition to

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Speaker 4: the growth we're already experiencing, just to be clear about that,

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Speaker 4: and that would be a big uplift on the growth

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Speaker 4: of we experienced the last few years. But we're doing

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Speaker 4: more to boost growth. We're getting Britain building again with

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Speaker 4: those planning reforms, We're unlocking long term patient capital to

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Speaker 4: help small businesses and start up and scale up businesses

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Speaker 4: to grow. All of that could have a big impact

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Speaker 4: on growth, as could the sixty three and a half

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Speaker 4: billion pounds investment that this government unlocked at our International

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Speaker 4: Investment Summit just two weeks ago.

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Speaker 3: And yet, Chancellor, for all your revenue raising, there are

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Speaker 3: still going to be real terms cuts for some government departments.

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Speaker 3: If that's not the definition of austerity.

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Speaker 4: What is that's not correct? The numbers we put out

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Speaker 4: yesterday that shows real terms increases to government spending of

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Speaker 4: one point five percent during the course of this parliament

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Speaker 4: one point seven percent if you take in to account

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Speaker 4: capital spending as well. Austerity for se well, that would

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Speaker 4: be even higher than the growth roats being forecast. Austerity

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Speaker 4: is when you're cutting public spending. We're not cutting public spending,

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Speaker 4: but it will require difficult decisions and we set out

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Speaker 4: the envelope for spending in the Parliament ahead at the

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Speaker 4: budget yesterday. We are determined to live within art means.

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Speaker 4: We are conducting a zero based review to drive efficiency

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Speaker 4: and productivity across government because better public services are not

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Speaker 4: just about money. It's about running those public services better

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Speaker 4: and that is what we're going to do well.

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Speaker 3: Indeed, think tanks like the Resolution Foundation are saying inevitably

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Speaker 3: employers are going to pass on this national insurance rise

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Speaker 3: to workers, that this is going to be the worst

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Speaker 3: term for living standards under any labor government. Yes, you're

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Speaker 3: not technically raising taxes on working people, but if you're honest,

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Speaker 3: it's going to feel like it won't it.

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Speaker 4: Well, the last Parliament saw living standards stagnate. It was

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Speaker 4: the worst parliament for living standards ever recorded. The Office

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Speaker 4: of Budget Responsibility for cast yesterday that real household disposable

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Speaker 4: income will increase on average by zero point five percent

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Speaker 4: in real terms per year. So that is a world

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Speaker 4: away from the stagnating living standards that we saw in

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Speaker 4: the last parliament.

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Speaker 9: But do we want to do more?

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Speaker 4: Absolutely, That's why we were introducing planning reform, the pensions reform,

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Speaker 4: the skills reform, to get Britain building, to get our

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Speaker 4: economy growing again, bringing in private sector investment, for example

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Speaker 4: through the National Wealth Fund and through the International Investment

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Speaker 4: Summit that unlocked sixty three and a half billion pounds

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Speaker 4: of private investment in the UK, showing the confidence that

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Speaker 4: business and investors have in this government and our strategy.

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Speaker 3: Chancelly, you keep emphasizing the long term here. Do you

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Speaker 3: worry that you're not going to get two terms in

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Speaker 3: government to realize your ambitions, to get to the summit

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Speaker 3: of your ambitions, because it's going to take a decade

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Speaker 3: of national renewal for people to feel better off. I'm

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Speaker 3: thinking about George Broufsenior saying, read my lips, no new

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Speaker 3: taxes and he was out after one term.

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Speaker 4: Well we made It was a significant budget yesterday, but

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Speaker 4: that budget wipes the slate clean so that we never

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Speaker 4: have to do a budget like this again. We are

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Speaker 4: cleaning up the mess left by the previous government, but

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Speaker 4: we are meeting our fiscal rules two years early. We've

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Speaker 4: set the spending path of public services for the course

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Speaker 4: of this parliament. We will do a zero based review

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Speaker 4: to make sure we're getting value for money for that spending.

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Speaker 4: We have had to make tax increases, but that is

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Speaker 4: to get our public finances on a sustainable footing. Economic

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Speaker 4: and fiscal stability are the number one priorities of this

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Speaker 4: government and we will meet them.

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Speaker 3: So can I take that confirmation no tax rises for

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Speaker 3: the rest of this parliament.

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Speaker 4: Or no chancellor is going to be able to tie

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Speaker 4: their hands in that way. But there was a significant

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Speaker 4: budget yesterday because we had to wipe the slate clean

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Speaker 4: after their economic mismanagement, the chaos and the instability from

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Speaker 4: the previous government. No government should have found themselves in

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Speaker 4: a position that we did having to clear up that mess.

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Speaker 9: We've now done that and we can move on.

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Speaker 2: So the Chancellor of Racha reeves speaking exclusively to you,

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Speaker 2: Lizzie Burden yesterday. Lizzie, I wonder you know you look

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Speaker 2: at the market moves that we've seen over the past

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Speaker 2: two days. Gil's still finished up significantly at the end

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Speaker 2: of the day. Yes, the two year yield up twelve

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Speaker 2: basis points. It's Rachel Reeves done enough to calm the markets.

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Speaker 3: Well, you did see her slightly calming the markets into

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Speaker 3: the clothes, which clearly was the aim. I don't know

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Speaker 3: what the guilt moves are going to be today, as

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Speaker 3: anybody's guess, but I do think that it was a

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Speaker 3: moment to be summoned to the Treasury to have this conversation.

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Speaker 3: Clearly the Chancellor wanted to speak directly to markets. Clearly

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Speaker 3: she had seen the market moves. I wonder whether the

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Speaker 3: Treasury gets the market moves. You know, the story behind

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Speaker 3: them is that traders reckon the Bank of England is

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Speaker 3: going to cut rates more slowly because this budget is inflationary.

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Speaker 3: But the focus very much on growth in this conversation

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Speaker 3: with Rachel Reeves. So will we actually see the market

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Speaker 3: calming down today? I just spoke to an analyst on

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Speaker 3: Bloomberg TV from State Street who was actually quite forgiving

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Speaker 3: of these of the budget and actually saying any chancellor

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Speaker 3: would have a tough time delivering a budget in this

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Speaker 3: context in any country. So perhaps actually when we get

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Speaker 3: the US jobs report at twelve thirty, that's going to

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Speaker 3: give a bit of leeway to Rachel Reeves and hopefully

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Speaker 3: she'll get a breather over the weekend.

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Speaker 2: And the castle has moved somewhere else there as well,

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Speaker 2: So just about forty minutes until we get the first

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Speaker 2: trades on Gilts and of course we'll bring that to

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Speaker 2: you here on the program. Lizzie, thank you for bringing

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Speaker 2: us your exclusive interview with the Chancellor Rachel Reeves. On

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Speaker 2: the program, we're going to turn to the US election

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Speaker 2: campaign next. Most polls showing the candidates are essentially tied,

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Speaker 2: with some models featuring a slight Trump advantage. Despite the deadlock,

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Speaker 2: Trump and his allies are claiming that he's the front runner,

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Speaker 2: and rival Kamala Harris has been hitting back. Our manager

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Speaker 2: editor Derek Wildbank, joins us Now for more on the

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Speaker 2: US election race. Derek, we've seen this shift in the

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Speaker 2: Trump rhetoric, and the last week of campaigning took us

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Speaker 2: through what we should read into this change in narrative.

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Speaker 11: Well, look, we're a couple of days away from the

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Speaker 11: US election, right and the totals may take a little

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Speaker 11: while to come in, but everything right now points to

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Speaker 11: the idea of an election on a knife sedge, one

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Speaker 11: of the closest elections we've seen, certainly within one week

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Speaker 11: out in recent memory. In the sum total of this,

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Speaker 11: you still see.

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Speaker 10: Betting markets giving Donald Trump a little bit of an edge.

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Speaker 11: But if you sort of go state by state, you

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Speaker 11: can find a pretty convincing pathway for Kamala Harris, particularly

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Speaker 11: if she can hold onto the blue wall states of Michigan, Wisconsin,

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Speaker 11: and Pennsylvania. Pennsylvania may be the big tipping point state.

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Speaker 11: And you see as Donald Trump and Kamala Harris are

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Speaker 11: going around all of these states, you do see them

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Speaker 11: coming back and again and again and again to Pennsylvania.

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Speaker 11: But right now, look, they're trying to find any.

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Speaker 10: Old advantage they can possibly get, and they'll take it

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Speaker 10: anywhere way.

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Speaker 3: They can't talk us through the Trump trades as they stand,

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Speaker 3: Derek Bitcoin dropping market seeing Trump election odds decreasing. But

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Speaker 3: how are the other Trump trades fairing?

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Speaker 11: Well? I think they run, you know, look, they rise

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Speaker 11: and fall with a polls.

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Speaker 10: The first one that I would say is, you know,

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Speaker 10: the polymarket still looks quite strong for him, you know,

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Speaker 10: so that's the first place that you kind of go.

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Speaker 10: The other one that I think that is the most

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Speaker 10: obvious is if you look at Donald Trump's own publicly

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Speaker 10: traded company, right, dj t US Equity.

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Speaker 11: Right, it's still holding on reasonably okay, but it has.

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Speaker 10: Come off of its off of its highs from just

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Speaker 10: a couple of days ago. I mean a couple of

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Speaker 10: days ago in the fifties. Now it's in the mid

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Speaker 10: thirties here, right. You know, that's still up from where

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Speaker 10: it was, but it's you know, it rises.

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Speaker 11: And falls depending.

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Speaker 10: So you are seeing a little bit of a question

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Speaker 10: a question creeping into markets. I guess one might say

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Speaker 10: maybe they're not quite as confident as there were earlier

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Speaker 10: in the week that it was going to be a

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Speaker 10: Trump walk away.

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Speaker 11: And that sort of comes along with some of the

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Speaker 11: polling that I've seen. You know, we saw Marris pulls

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Speaker 11: out overnight that said that Harris was up between two

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Speaker 11: and three points in all three of those blue Wall

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Speaker 11: states at the same time. Look, if you're the Trump campaign,

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Speaker 11: you're staring early vote data from Nevada, from Georgia, from

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Speaker 11: North Carolina. That makes you pretty happy. So there's a

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Speaker 11: lot for read in here, a bunch of different ways,

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Speaker 11: but I would say generally the Trump trade has stoppened

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Speaker 11: a little bit over the last let's say.

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Speaker 10: A couple of days.

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Speaker 2: Okay, Derek well bind Car managing Edwaer, thank you so

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Speaker 2: much for bringing us the latest on the US election

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Speaker 2: campaign as we count down to of course the voting,

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Speaker 2: the full day of voting on Tuesday, and the results

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Speaker 2: we're expecting, well, could be any time, I suppose after

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Speaker 2: Paul's clouse no definite moments as well. We know we're

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Speaker 2: going to get the results we'll be finding across all

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Speaker 2: the developments. Here for you, this is Bloomberg Daybreak Europe,

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Speaker 2: your morning brief on the stories making news from London

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