Speaker 1: This is Bloomberg Daybreak here for this Tuesday, the seventeenth
Speaker 1: of January in London. Coming up this hour, growing pains.
Speaker 1: China's economy expands at the slowest rate since the nineteen seventies,
Speaker 1: pretty much gone. The Bank of England governor says the
Speaker 1: trust premium on UK assets has faded. Risky business CEOs
Speaker 1: at davas one of global recession is on the cards.
Speaker 1: Billions in UK tax go uncollected. Remote learning to combat
Speaker 1: teacher strikes and ill health costling the economy one hundred
Speaker 1: and fifty billion pounds a year. Those are the stories
Speaker 1: we're looking at in today's papers. And I'm leanne Karen's
Speaker 1: cluss trial and tribulation muskheads to court over tweets saying
Speaker 1: that he would take Tesla privates. That's all straight ahead
Speaker 1: on Bloomberg Daybreak Europe on DAB Digital Radio London, Bloomberg
Speaker 1: eleven three oh New York, Bloomberg Washington d C, Bloomberg
Speaker 1: one oh six one, Boston, Bloomberg nine sixties, San Francisco,
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Speaker 1: Bloomberg Radio dot com and via the Bloomberg Business Set.
Speaker 1: Good morning. I'm Stephen Carroll and I'm Caroline Hipke. Here
Speaker 1: are the stories that we're following today. China's economy grew
Speaker 1: at the second slowest pace since the nineteen seventies last year.
Speaker 1: GDP growth slow to three percent in twenty two as
Speaker 1: the country doubled down on it's now abandoned COVID zero policy,
Speaker 1: but the future looks brighter. In the fourth quarter of
Speaker 1: the world second largest economy expanded by two point nine
Speaker 1: percent compared to a year earlier. Vanessa Chan, head of
Speaker 1: Asian fixed Income investment directing at Fidelity, says they're seeing
Speaker 1: a welcome shift from Beijing. I think to begin worth,
Speaker 1: we do see the policy changed in tontal stance compared
Speaker 1: to last year. So first of all, they've become a
Speaker 1: lot more pro growth and just some extempro business fidelities,
Speaker 1: Vanessa Chan spoke as new data also shows that China's
Speaker 1: population shrank in twenty two for the time in six decades.
Speaker 1: Over one point four billion people lived in the country
Speaker 1: at the end of last year and now the risk
Speaker 1: premium on UK assets has all but gone, according to
Speaker 1: the Bank of England Governor Andrew Bailey, but the country
Speaker 1: isn't out of the woods yet. Speaking to the Treasury
Speaker 1: Select Committee, Bailey said that we're still recovering from the
Speaker 1: impact of Liz Trust's many budgets. To be honest, I mean,
Speaker 1: I think, you know, it's going to take some time
Speaker 1: to you know, convince everybody that we're sort of back
Speaker 1: to where we were before. I mean, not because I
Speaker 1: doubt the current government. I'm not saying to be negative.
Speaker 1: It's just obviously there is a something of of a
Speaker 1: hangover effect. The Bank of England governor also warned MPs
Speaker 1: that the ultra tight jobs market in the UK could
Speaker 1: derail any drop in the rate of inflation. The World
Speaker 1: Economic Forums annual meeting is underway in Davos with a
Speaker 1: gloomy economic backdrop corporate executives and economists. They're warning that
Speaker 1: a global recession is likely this year. Nearly three quarters
Speaker 1: of business lead year surveyed by p WC thought global
Speaker 1: growth would decline in three That's the highest proportion since
Speaker 1: poling began back in twleven. Black Rock vice chairman Philip
Speaker 1: Hilderbrand says he doesn't see central banks coming to the rescue.
Speaker 1: The central banks are going to continue on their tightening path.
Speaker 1: They're going to be very careful, very focused on not
Speaker 1: losing the long term inflation expectation anchor. H And so
Speaker 1: I think we're going to see, you know, I don't
Speaker 1: see any chances, frankly, of easing this year. I think
Speaker 1: the market has that wrong. So they're going to make
Speaker 1: sure that we can really not just get from nine
Speaker 1: to four, but also limit any kind of risks that
Speaker 1: inflation expectations become un anchored. That's Philip Hilderbrand speaking exclusively
Speaker 1: to Bloomberg in Davos. Will be live there later today
Speaker 1: with Germany's Olaf Schultz, who's set to speak in a
Speaker 1: one on one interview with Bloomberg's editor in chief John Michethwaite.
Speaker 1: Now two top corporate news memestock investor Ron Cohen is
Speaker 1: said to have taken a stake in Ali Barber and
Speaker 1: is calling on the Chinese tech giant to increase its
Speaker 1: shared by backs. A source says that Cohen built up
Speaker 1: a holding worth hundreds of millions of dollars in the
Speaker 1: second half of last year. Cohen has a strong following
Speaker 1: among so called meme stock investors and played a central
Speaker 1: role in the frenzy of a game stop. The next
Speaker 1: chapter in Elon Musk's life drama will begin to play
Speaker 1: out in the San Francisco Federal Court today. It's all
Speaker 1: to do it tweets about Tesla. Bloomberg's at Baxter has
Speaker 1: the story. The issue was a number of tweets in
Speaker 1: twenty eighteen saying that he had lined up the financing
Speaker 1: to pay for US seventy two billion dollar buy out
Speaker 1: of Tesla. He then followed up making it sound as
Speaker 1: if the transaction would be imminent. It fueled a stock rally,
Speaker 1: which abruptly ended a week later and culminated in a
Speaker 1: forty million dollar settlement with the SEC. The trial will
Speaker 1: make him explain his actions and intentions under oath in
Speaker 1: San Francisco. I'm at Baxter, Bloomberg, Gaybreak Europe. Those are
Speaker 1: a few of our top stories. Then this morning, we
Speaker 1: are very pleased to have so much coverage life from Davos,
Speaker 1: including Hildebrand that you that we heard from earlier. But
Speaker 1: also I think just thinking about what CEOs are most
Speaker 1: concerned about this year. The PwC survey was very interesting. Yeah,
Speaker 1: I mean, apart from the forecast for a recession on hiring,
Speaker 1: which I think was one of the really interesting ones
Speaker 1: to watch is that the majority that we've seen of
Speaker 1: executives do actually expect for them to retain staff. That
Speaker 1: they're not looking at cutting staff, six plan not to
Speaker 1: reduce headcount, not cutting pay, and that's because they're still
Speaker 1: trying to hang on to employees rather than go through
Speaker 1: expensive recruitment processes. So at a time when we're talking
Speaker 1: about some of the big names cutting jobs, interesting to
Speaker 1: see that sentiment at least globally among CEOs that perhaps
Speaker 1: they are going to hold onto their staff this year
Speaker 1: and they're not so worried about the prospect of big
Speaker 1: job cuts. Okay, well that's the private sector. Here in
Speaker 1: the UK, we're much more focused on the public sector.
Speaker 1: Nurses announced more industrial action, more strikes for the six
Speaker 1: seventh of February, and then also we had that news
Speaker 1: out that teachers have voted to strike. I think that's
Speaker 1: going to be the kind of big unknown. What does
Speaker 1: that mean for the UK economy if the schools are
Speaker 1: closed and so on, sending a chill down the spine
Speaker 1: of parents everywhere, and having to do with clothes schools
Speaker 1: potentially with that strike as well. Okay, up next billions
Speaker 1: in UK tax school and collected remote learning to comeback,
Speaker 1: teacher strikes and ill health casting the economy a hundred
Speaker 1: and fifty billion pounds a year. Now the paper review
Speaker 1: on blue Bird Daybreak Europe. The news you need to
Speaker 1: know from today's papers. Now joining us is Bluemberg's Leanne
Speaker 1: Garan's with the front pages of this morning's newspapers. Good morning, Caroline,
Speaker 1: good morning to you. So look, a lot of the
Speaker 1: newspapers are leading on a story that we haven't mentioned yet.
Speaker 1: This is the conviction of a Metropolitan Police officer, David Carrick.
Speaker 1: I want to mention it though he admitted to committing
Speaker 1: twenty four counts of rape, and it is really another
Speaker 1: major scandal for Metropolitan Police given that he's a very
Speaker 1: senior officer, came to the attention of police nine times
Speaker 1: that remained as serving officer. So that I think locally
Speaker 1: for London is what a lot of people are thinking about.
Speaker 1: But then there are some other news stories, including the
Speaker 1: Financial Times which leads on UK tax billions going uncollected.
Speaker 1: Tell us about that. But Caroline, just before we get
Speaker 1: to that, just touching on that case of David Carrick,
Speaker 1: that you've mentioned there all over the front pages of
Speaker 1: the newspapers. In light of this case, Scotland Yard is
Speaker 1: now reviewing more than sixteen hundred cases where police officers
Speaker 1: and staff are accused of sexual and domestic violence offenses.
Speaker 1: So we do know that this is now coming to
Speaker 1: light here off the back of that case. But we
Speaker 1: will move on to have a look at the headline
Speaker 1: in the Financial Times, and as you said, it's about taxes,
Speaker 1: and the newspaper reports on comments by the Treasury Minister.
Speaker 1: That's Victoria Atkins who says almost two thousand, three hundred
Speaker 1: stars have been transferred to work on Brexit cases or
Speaker 1: the COVID nineteen loan scheme, which we do know have
Speaker 1: been the subject of fraud. Now this amounts for around
Speaker 1: ten percent of compliance staff at h M r C.
Speaker 1: And due to this movement, billions of pounds of tax
Speaker 1: is just not being collected. So it's been left uncollected.
Speaker 1: And Sarah Olney, she's the Liberal Democrat treasury spokesman, she
Speaker 1: has put the question to the Treasury Minister Victoria Atkins,
Speaker 1: who has admitted that there's been this big transfer of
Speaker 1: staff leaving this whole when it comes to collecting money,
Speaker 1: and the Lib Dem Party says civil servants have been
Speaker 1: moved from one crisis to another in a constant game
Speaker 1: of whack a mole, leaving taxes uncollected. So there we
Speaker 1: are the latest on uncollected taxes. Okay, that's on the
Speaker 1: front page of the Flantel Times this morning. The Telegraph. Meanwhile,
Speaker 1: headline at school's told to use volunteers and remote learning
Speaker 1: to combat true strikes. Yes, and you just touched on
Speaker 1: strikes earlier with Caroline there Stephen and A mass walkout
Speaker 1: of teachers who are National Education Union members is now
Speaker 1: scheduled to begin on the first of February. Now remember
Speaker 1: that is a significant date because they will coincide with
Speaker 1: the Trade Unions Congress National Right to Strike Day. We
Speaker 1: also know the PCs is going on strike their hundreds
Speaker 1: of thousands of civil servants and with more strike dates
Speaker 1: in February and March, schools could be closed for four
Speaker 1: strike days in total in the coming weeks. Now, schools
Speaker 1: are under pressure to make effort to limit the disruption
Speaker 1: to pupil's Remember pupils went through so much disruption, especially
Speaker 1: during the pandemic. And on Monday, the Department of Education
Speaker 1: is published guidance which urges schools to consider bringing in
Speaker 1: volunteers to help look after children and to keep the
Speaker 1: classrooms open during walkouts because as we know, there's a
Speaker 1: lot of parents who have to go to work who
Speaker 1: probably can't take this time off. It's currently really unclear
Speaker 1: how many of the nu Ease three hundred thousand members
Speaker 1: will choose to walk up, but as we know, yesterday
Speaker 1: teachers did choose to strike. Okay um. Just lastly, the
Speaker 1: Times headline is rising levels of ill health costing the
Speaker 1: economy a hundred and fifty billion pounds per year. Yes,
Speaker 1: and this report in the newspaper touches on how ill
Speaker 1: health among working age people is costing the economy the
Speaker 1: equivalent of seven percent of the UK's GDP. That is
Speaker 1: a pretty significant number and this is according to an
Speaker 1: analysis by the paper's own Health Commission. So the Time
Speaker 1: has been looking at all these figures now. Really, since
Speaker 1: the start of the pandemic, more than three hundred sixty
Speaker 1: thousand people have been forced to leave the workforce because
Speaker 1: they are suffering from a health condition that does affect
Speaker 1: their ability to work. So there we are just the
Speaker 1: cost of the economy when people aren't made able to
Speaker 1: make it into the workforce. Release dark figures. Earlean Garrans,
Speaker 1: thank you very much with that review of today's papers.
Speaker 1: Let's turn next to the story out of China today
Speaker 1: the growth figures showing the expansion in the economy was
Speaker 1: hammered last year, but still come in better than forecast.
Speaker 1: In the final quarter, annual growth of GDP slowds just
Speaker 1: three percent. The pace in the fourth quarter, though, was
Speaker 1: two point nine percent of potential. Bright spot there, let's
Speaker 1: get the details from our China Economy editor James Meager,
Speaker 1: who joins us now took us through then. James, the
Speaker 1: hit that the Chinese economy suffered from COVID last year.
Speaker 1: I mean, in the headline growth number three is the
Speaker 1: lowest since and that was numbers the lowest since six,
Speaker 1: which is the end of the Culture Revolution, which was
Speaker 1: a decade of chaos and China's economy. So you know
Speaker 1: the data last year and what happened to the economy
Speaker 1: last year, it was pretty damaging. You saw massive lockdowns
Speaker 1: in Shanghai and nother sues across the country, and uh,
Speaker 1: you know, we were facing more lockdowns at dat of
Speaker 1: the year when the government's suddenly decided to open and
Speaker 1: basically everyone in China got it seems to have got
Speaker 1: COVID in December and January. So it's been a massive
Speaker 1: a year of massive disruption for for people here and
Speaker 1: and as you see in the data, also for for
Speaker 1: the economy. The hope is that that now that you know,
Speaker 1: this outbreak which is continuing right now, once that are
Speaker 1: sort of subsided somewhat, people will be willing to go
Speaker 1: out and spend again. People willing to go out shop again,
Speaker 1: and you'll see if we're rebounded in consumer spending and
Speaker 1: also in demand for the housing sector, because last year
Speaker 1: one of the big problems for the economy that wasn't
Speaker 1: COVID was this you know, more than year long slump
Speaker 1: in housing demand, which you know, it was one of
Speaker 1: the pillars of the Chinese economy, was seen as being
Speaker 1: about a quarter of GDP was related directly related to
Speaker 1: the housing sector, and that is really the bottom has
Speaker 1: fallen out of that market. So the hope is that
Speaker 1: this year people willing to go out and spend again,
Speaker 1: go shopping also by homes um. Whether that actually happens
Speaker 1: or not, that's a that's an open question. Yeah, absolutely. Gosh,
Speaker 1: you described such a difficult year for for China, James.
Speaker 1: But this story also has caught our attention. On the demographics.
Speaker 1: China's population started shrinking last year for the first time
Speaker 1: in six decades. This really has hugely profound implications, doesn't it, right,
Speaker 1: And there are some there are some demographers who said
Speaker 1: that actually started a number of years ago and the
Speaker 1: government has just been fiddling with the numbers basically. But
Speaker 1: you know, whether it happened in or whether it happened
Speaker 1: in two is kind of a mood point. When you're
Speaker 1: talking about one point four billion people, give or take
Speaker 1: a hundred million, I guess it's not so so important.
Speaker 1: But yeah, as you say that that that slump or
Speaker 1: that the start of a real fall in in the
Speaker 1: population is an important story. And as you see in
Speaker 1: other countries in each stage or in other countries around
Speaker 1: the world, Japan, South Korea, UM, that will not be reversed.
Speaker 1: There is no way, there is no government in the
Speaker 1: world that has successfully reversed these kind of like long
Speaker 1: term demographic changes. Where as people get richer, as they
Speaker 1: become more educated, they have less children, they have fewer children,
Speaker 1: and um, and that you know what the Chinese government
Speaker 1: has tried to do to try and reverse that. What
Speaker 1: they've talked about has been tried in other countries and
Speaker 1: has failed, and so there's no reason to believe that
Speaker 1: would be successful in China. And so what does that mean?
Speaker 1: You know, less demand for housing, less demand for education.
Speaker 1: If you're an education provider in the US or Australia
Speaker 1: or the UK, and you rely on Chinese students coming
Speaker 1: from students come from China to buy your university courses,
Speaker 1: there will be fewer and few of those as time
Speaker 1: goes on, and less demand for commodities from other countries. Uh,
Speaker 1: maybe this will mean less maybe this will mean less
Speaker 1: consumer demand in the country. Obviously, you know, you can
Speaker 1: make there are some changes the government can make to
Speaker 1: try and slow down the effects of this. For example,
Speaker 1: you look at Japan, the population has been shrinking for
Speaker 1: a decade now, but the number of people in the
Speaker 1: labor forces continue to rise because more and more all
Speaker 1: people are working. So that that is one thing that
Speaker 1: the government, you know, the Chinese government could also do
Speaker 1: lots to do to sort of keep more people in
Speaker 1: the workforce longer. But obviously, as you see in many countries,
Speaker 1: in on the world. It's a very very unpopular decision.
Speaker 1: There are strikes and f on that exact issue about
Speaker 1: raising the working raising and retirement, as you have to
Speaker 1: work longer before you can get the pension. It's also
Speaker 1: a very very unpopular decision in China. The government has
Speaker 1: been trying to do that now for a decade or more,
Speaker 1: and basically every time they talk about it, there's such
Speaker 1: a backlash that there they stop talking about it. So, yeah,
Speaker 1: there's some things that the government can do, but this
Speaker 1: change is inevitable, and I mean the decline is inevitable,
Speaker 1: and it's gonna cause profound changes to China's economy and
Speaker 1: to the blobble bore. This is Bloomberg Daybreak Europe, your
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