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Speaker 1: This is Bloomberg Daybreak up for this Friday, the tenth

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Speaker 1: of February in London. Coming up today, Bumping along the bottom,

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Speaker 1: Breaton dodges a recession for another quarter, but the data

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Speaker 1: suggest there's little reason to be cheery. The pound in

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Speaker 1: your pocket. Public sector pay rises may spur inflation, says

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Speaker 1: the Bank of England. No nickel and more than a dime.

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Speaker 1: Metal fraud leaves Traffagora lasses of more than half a

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Speaker 1: billion dollars, Britain's two billion pound fraud bulls bags can't

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Speaker 1: get copied in cyberspace? And Sam are you there? The

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Speaker 1: final hours of FTX? Those in the stories we're looking

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Speaker 1: at in today's papers. And I'm Leanne Geron's plus a

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Speaker 1: multi billion pound football pitch. Jim Ratcliffe lines up Golflin

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Speaker 1: Sacks to bank roll his Manchester United bids. That's all

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Speaker 1: straight ahead on Bloomberg Daybreak Europe. The business news you

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Speaker 1: need to start your day in just one fifteen minute

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Speaker 1: podcast on Apple, Spotify, the blue Book Business app and

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Speaker 1: everywhere you get your podcasts. Good morning, I'm Stephen Carroll

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Speaker 1: and I'm Caroline Hecker. Here are the stories that we're following. Today.

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Speaker 1: UK GDP has remained unchanged in the fourth quarter compared

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Speaker 1: with previous quarters. The economy, though shrank half of one

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Speaker 1: percent in December. Month or month, The estimates had been

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Speaker 1: for a three tenths of one percent drop. When it

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Speaker 1: comes to industrial production in December that falls four percent

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Speaker 1: year on year. The estimate had been for a bigger

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Speaker 1: drop of five point two percent. Manufacturing production also a

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Speaker 1: drop of five point seven percent, So the UK economy

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Speaker 1: having shrunk month or month half of one percent in December.

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Speaker 1: The Bank of England Governor Andrew Bailey says big increases

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Speaker 1: in public sector pay will add to inflation if they

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Speaker 1: aren't offset by tax increases. Speaking to the Treasury Committee

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Speaker 1: in Parliament, Bailey said that even with falling energy costs,

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Speaker 1: inflationary risks remain. If you've got those powerful sort of

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Speaker 1: downside forces, why are you raising interest rates again? And

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Speaker 1: the answer for me to that question is I'm very uncertain,

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Speaker 1: particularly about price setting and wave setting in this country.

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Speaker 1: We have got the largest upside skew on it and

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Speaker 1: our forecast we've ever had on inflation. The Bank Ofving

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Speaker 1: governor was speaking as firefighters called off the threat of

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Speaker 1: strikes after receiving an improved payoff for the fire brigades,

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Speaker 1: union said its members would vote on a seven percent

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Speaker 1: raise back data till last summer and a further five

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Speaker 1: percent increase from this July. Traffic is facing a five

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Speaker 1: hundred and seventy seven million dollar loss after discovering metal

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Speaker 1: cargoes it board did not contain the nickel that they

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Speaker 1: were supposed to. The commodity trader says that it has

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Speaker 1: spent the past two months and covering what it believes

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Speaker 1: is a systematic forward against the company. Bloomberg sue Keenan

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Speaker 1: broke down how Trafficer found out it had been duped.

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Speaker 1: Traffic Ore began reviewing its relationships with various trading partners

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Speaker 1: late last year. It's a per only been buying nickel

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Speaker 1: in containers that are already on board ships, and then

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Speaker 1: it sells that when the vessels reached their destination, the

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Speaker 1: cream began to unravel. When the company's investigators arrived at

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Speaker 1: a port in Rotterdam, they checked the contents of the

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Speaker 1: container and guess what, no nickel inside. It was some

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Speaker 1: other worthless metal. Well that was Bloomberg's Sukinan reporting their

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Speaker 1: the revelations are another black mark for the metals trading industry,

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Speaker 1: which in recent years has been beset by tales of

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Speaker 1: fake warehouse with seats, duplicate shipping documents, and even containers

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Speaker 1: filled with painted rocks. Thousands of AID workers are pouring

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Speaker 1: into Turkey and Syria, where deaths from one day's massive

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Speaker 1: earthquakes have arisen past twenty thousand people. Here in the UK,

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Speaker 1: Prime Ministers she soon acters urging everyone to donate what

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Speaker 1: they can to support those in need. We will do

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Speaker 1: everything that we can to help Turkey. I already said

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Speaker 1: that to the President when I spoke to him a

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Speaker 1: couple of days ago, and what the government's also said

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Speaker 1: is that we will match all the country's donations pound

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Speaker 1: for pound. Soon. I spoke as the first un AID

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Speaker 1: shipment arrived in Syria, load of the blankets, hygiene products

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Speaker 1: and materials to give people temporary shelter. Meanwhile, the World

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Speaker 1: Bank will provide Turkey with nearly one point eight billion

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Speaker 1: dollars for disaster relief and recovery. Now more economic news,

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Speaker 1: China's consumer inflation accelerated last month as the Lunar New

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Speaker 1: Year holiday stimulated demand. Bloomberg's Brian Curtis has more from

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Speaker 1: Hong Kong. The CPI rose two point one percent from

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Speaker 1: a year earlier. That was in line with estimates. Core inflation,

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Speaker 1: stripping out food and energy, gained just one percent. In

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Speaker 1: the meantime, the PPI fill zero point eight percent as

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Speaker 1: commodity prices lagged. The estimate was for a drop of

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Speaker 1: zero point five percent. Bloomberg Economics says the pickup in

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Speaker 1: cp I was down to higher food prices, not services.

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Speaker 1: As such, the signal is underwhelming in Hong Kong, Brain Curtis,

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Speaker 1: Bloomberg Daybreak. Europe business billionaire Jim Ratcliffe is said to

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Speaker 1: have lined up banks, including Goldman's Sacks, to bankroll a

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Speaker 1: bid to buy Manchester United. The source says the banks

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Speaker 1: are prepared to fund to take over offer for the

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Speaker 1: English football club with bonds and loans. Bloomberg understands this

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Speaker 1: would include covering Manus existing eight hundred million dollars of debt.

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Speaker 1: Shares in the company surge this week on reports Guitari

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Speaker 1: investors are also looking to bid for the club. So

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Speaker 1: those our top stories this morning. Okay, quite a lot

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Speaker 1: of serious news this morning. Something a little bit lighter,

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Speaker 1: or at least you know, the jokes can flow from

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Speaker 1: this one, can't they. We're focused on energy usage, on

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Speaker 1: trying to have a more efficient home. I now I

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Speaker 1: am apparently loads of heat escapes to your windows. So

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Speaker 1: who's coming to the rescue. Who's the most famous word

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Speaker 1: name you associated with windows? Yeah? Bill Gates. There you go.

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Speaker 1: He's made this investment into a company that's trying to

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Speaker 1: come up with a new design for windows. And there's

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Speaker 1: a long article on the Blueberg terminal. It gives you

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Speaker 1: even the pictures of how it's being made in so on,

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Speaker 1: but basically to try to help how become more efficient.

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Speaker 1: I mean, look at it is an absolutely fascinating business

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Speaker 1: and to see somebody like Bill Gates's name attached to

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Speaker 1: it is very interesting as well. Although you can't bust

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Speaker 1: draw comparisons with the software version and make jokes about

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Speaker 1: whether upgrades will be needed regularly. For example, that's a

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Speaker 1: very expensive through the looking glass moments. All right, Okay,

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Speaker 1: let's turn then to get more detail on those UK

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Speaker 1: GDP figures. The UK has avoided a recession in the

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Speaker 1: fourth quarter, that's what we've learned this morning. Let's speak

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Speaker 1: to Professor Stephen Millard, who definutely Director of the think tank,

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Speaker 1: the National Institute of Economic and Social Research, Stephen, Good

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Speaker 1: morning to you. Thank you for being with us. Now.

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Speaker 1: You said earlier in the week that you're you're expecting

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Speaker 1: at sir, for the UK to avoid a recession this year,

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Speaker 1: in contrast to the gloomy Bank of England view. What

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Speaker 1: do you make of what we've learned from this data? Well,

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Speaker 1: the data has come out weaker than we're expecting for December,

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Speaker 1: but having said that, I think we're still in the

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Speaker 1: same place in terms of the data forecast for the

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Speaker 1: coming year. And the key point I think I'd like

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Speaker 1: to make is that although we're not forecasting recession as such,

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Speaker 1: life is certainly not going to be great for a

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Speaker 1: large number of households. We're not expecting the economy to

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Speaker 1: grow that much at all. Yeah, and so basically Britain

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Speaker 1: managed to sort of dodge back to back quarterly contractions.

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Speaker 1: But the feel for people in the UK and enter

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Speaker 1: the cost of living crisis is absolutely real. I mean,

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Speaker 1: you came out with this extraordinary figure one in four

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Speaker 1: UK households will be unable to pay their energy and

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Speaker 1: food bills in three A permanent reduction in living standards.

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Speaker 1: The hit to the UK is very significant. How would

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Speaker 1: you characterize it? I think you've done it very well

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Speaker 1: in what you just said. There's going to be there's

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Speaker 1: a very significant hit to the UK as a whole

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Speaker 1: that's resulting from the terms of trade shock that we've

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Speaker 1: had for from higher energy and food prices, the result

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Speaker 1: from the awful war in Ukraine. Um and the question

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Speaker 1: for government really is how to distribute that hit if

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Speaker 1: you like it's they can't reduce that hit for everybody

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Speaker 1: in the economy. They have to They have to try

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Speaker 1: and say, Okay, richer households can actually withstand that, or

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Speaker 1: households struggle much more. We're talking about despite the fact

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Speaker 1: that the picture is is less bad than it could

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Speaker 1: have been, we are still talking about the economy in

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Speaker 1: the UK being point eight percent smaller than it was

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Speaker 1: at the end of the UK is still the only

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Speaker 1: G seven country that hasn't recovered the output last during

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Speaker 1: the pandemic. Is there anything that surprises you in this

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Speaker 1: data in terms of I suppose that the picture of

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Speaker 1: what we've learned over the past three months. As I

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Speaker 1: said that, the data did come out a little bit

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Speaker 1: weaker than we were expecting for December, but over overall

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Speaker 1: the three months turned out in line with where we

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Speaker 1: we thought it was going to be. I think there

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Speaker 1: is a real issue about the UK's recovery from COVID

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Speaker 1: and the UK's growth prospects in general. I mean, we

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Speaker 1: have been arguing for quite a while that there needs

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Speaker 1: to be more public investment in infrastructure, etcetera as a

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Speaker 1: way of trying to encourage productivity growth in the UK. Yeah,

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Speaker 1: I was going to come onto that. The budget obviously

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Speaker 1: is in focus fifteenth of March, and so I'd like

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Speaker 1: to know, you know, what should SUNAC and Hunt focus

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Speaker 1: on in the budget because that sort of productivity investment

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Speaker 1: to get productivity gains is a long, very long term issue. Um,

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Speaker 1: you know what should SUNA can Hunt focus on this

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Speaker 1: March now? Well, I think that's the first thing is

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Speaker 1: they should They should look at those public services which

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Speaker 1: are are clearly in crisis, the National Health Service, Education.

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Speaker 1: They should look to see if there's some way of

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Speaker 1: resolving the strikes, which if anything, making the situation in

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Speaker 1: the health service and education much worse. And they should

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Speaker 1: make sure that they at least hold up the level

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Speaker 1: of public investment as a portion of g d P.

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Speaker 1: It's it's currently four, it's currently a three percent. It's

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Speaker 1: forecast of all to two. I think at the very

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Speaker 1: least they should aim to hold that at three, and

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Speaker 1: then as the economy grows and the public finances recover,

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Speaker 1: they should aim to increase that proportion. We heard yesterday

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Speaker 1: from the Bank of England Governor Andrew Bailey that he

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Speaker 1: said that public sector pay increases will add to inflation

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Speaker 1: if they don't come with tax rises. Do you agree, Yeah,

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Speaker 1: Although the the mechanism is is it's quite indirect, so

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Speaker 1: public a lot of public sector word doesn't enter the

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Speaker 1: consumer price index as such. But obviously if if public

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Speaker 1: sector work is a better raf and they spend those

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Speaker 1: wage increases, that adds to demand and that would add

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Speaker 1: to inflation. As I said, it's very indirect route and

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Speaker 1: then will will take a bit of time for that

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Speaker 1: to come through. Is it a risk though? Is it

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Speaker 1: something that that the government needs to be conscious of

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Speaker 1: in in resolving those pay disputes. I don't. I don't

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Speaker 1: think so. I think that the first thing the government

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Speaker 1: needs to do is to work out what the correct

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Speaker 1: level of pay is for public sector workers that would

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Speaker 1: help resolve the staffing issues that we see across the

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Speaker 1: public sector. To be honest, it's the Bank of England's

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Speaker 1: job then to worry about the inflationary consequences and to

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Speaker 1: look to to certain monetary policy in line with what

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Speaker 1: they feel the inflation consequences would be okay, Stephen, thank

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Speaker 1: you so much for being with us. Great to have

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Speaker 1: you on the program as ever. Professor Stephen Millard is

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Speaker 1: the Deputy director at the National Institute of Economic and

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Speaker 1: Social Research. Breaking down the latest UK GDP figures. Up next,

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Speaker 1: Britain's two billion pounds odd bill Erna's bags can't be

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Speaker 1: copied in cyberspace? And Sam, are you there the final

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Speaker 1: hours of FTX. Now the paper review on bluebirdday Break Europe.

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Speaker 1: The news you need to know from today's papers Leanings

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Speaker 1: is here with the newspaper review. Let's start with the

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Speaker 1: headline in the Telegraph lean It reads Britain forced to

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Speaker 1: pay Brussels two point three billion pounds over import fraud.

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Speaker 1: What is this case? Yes, indeed, Caroline, good morning to you.

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Speaker 1: So the government has paid this huge sum of money

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Speaker 1: to the EU and this all comes after a court

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Speaker 1: route that Britain had failed to collect billions as a

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Speaker 1: result of fraud on imports and they were coming in

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Speaker 1: from China. The Telegraph says the European Commission did complain

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Speaker 1: that importers into Britain had escaped a number of customs

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Speaker 1: duties with false invoices and also artificially low valued documents

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Speaker 1: for things like Chinese textiles and also footwear. The European

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Speaker 1: Quarter Justice ruled against the UK, saying it had really

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Speaker 1: failed to adopt the measures necessary to combat fraud import

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Speaker 1: between two thousand and eleven and twenty seventeen. And I

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Speaker 1: think if you can cast your mind back then we

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Speaker 1: were still members of the European Union. Now there's been

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Speaker 1: a bit of pushback. So the Chief Secretary to the Treasury,

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Speaker 1: that's John Glenn, said Britain had maintained that it had

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Speaker 1: taken appropriate steps to combat fraud throughout these ongoing legal proceedings. However,

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Speaker 1: he also said the UK has increased its measures to

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Speaker 1: prevent a fraud going forward. So there's big court battle

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Speaker 1: between Britain and the EU coming to a settlement of

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Speaker 1: two point three billion pounds. Not a small sun there. Caroline.

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Speaker 1: Back in the day, the Europeans was saying that the

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Speaker 1: UK was a significant hub of fullback in it was

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Speaker 1: a really this was a big kind of long run

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Speaker 1: in case. Interesting. Thanks. Let's sear into the Times next

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Speaker 1: lean the headline MS bags when in digital token copyright case.

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Speaker 1: This puts together one of your favorite things bags and

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Speaker 1: one of my favorite things copyright law. Yes, indeed, Wells

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Speaker 1: bags beats copyright law in my mind. But however, let's

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Speaker 1: get onto this very modern court battle one between extremely

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Speaker 1: expensive handbags and digital tokens. So digital token featuring copies

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Speaker 1: of Mare's Birken bags didn't fringe the fashion houses a

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Speaker 1: trademark rights. Now, this is according to a New Yorker

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Speaker 1: jewelry and the moment has actually been described as a

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Speaker 1: terrible day for artists. The case before a federal court

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Speaker 1: over in Manhattan was one of the first disputes over

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Speaker 1: the popular non fungible tokens that actually went to full trial.

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Speaker 1: So this is a really big modern case that we're

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Speaker 1: looking at here. And the French luxury design house has

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Speaker 1: been awarded one hundred and thirty three thousand dollars in

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Speaker 1: damages for trademark infringement, dilution and also something called cyber

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Speaker 1: squad wing. Now, Stephen, I feel like you possibly could

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Speaker 1: pay one hundred thirty three thousand dollars for a Birken bag.

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Speaker 1: As we knew know, they are super rare and cost

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Speaker 1: an absolute fortune. But we can't get meta burkens anymore.

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Speaker 1: They no longer on the market, so we have to

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Speaker 1: try and hustle for a real one. And it's quite

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Speaker 1: a small award in the grand scheme of things, but

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Speaker 1: I suppose it gives you. It does send a signal

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Speaker 1: about using trademark designs and digital tokens. Yeah. Absolutely, I

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Speaker 1: think it's it's just that it's one artist though, isn't

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Speaker 1: it so? Yes, it's a kind of award against an individual. No,

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Speaker 1: it's totally fascinating case. Then this long read in the

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Speaker 1: Ft is also so interesting about Sam Bankman freed. Obviously

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Speaker 1: this is all going to court. Sam. Are you there?

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Speaker 1: The bizarre and brutal final hours of f t X

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Speaker 1: that's the headline of this piece in the Ft. What

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Speaker 1: did you take away from la? Yes, indeed, Caroline, a

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Speaker 1: six page read in the Ft today, and it's amazing

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Speaker 1: account of what actually happened during the collapse of the

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Speaker 1: crypto firm. Joshua Oliver from the ft has spoken into

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Speaker 1: former employees of the crypto company and also has spoken

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Speaker 1: to Sam Bankman Freed himself. So really people at the

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Speaker 1: forefront with knowledge of events that just unfolded which appeared

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Speaker 1: to be rapid. There are some incredible details of when

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Speaker 1: reports of troubles at f t X really started spreading.

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Speaker 1: Staff were rushing to leave their very glamorous office in

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Speaker 1: the Bahamas. They were even throwing out clothing with the

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Speaker 1: company's logo, and that's all due to rumors that people

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Speaker 1: were being searched at the airport. And you also get

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Speaker 1: a real sense in this piece that's been written by

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Speaker 1: Joshua Oliver, real excellent please piece of news journalism of

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Speaker 1: how committed the staff really were to ft X. And

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Speaker 1: one other thing is there's this exchange between Sam Bagman,

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Speaker 1: Freed and as arch rival Czed over binances proposed by

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Speaker 1: out of ft X. This is Bloomberg Daybreak Europe, your

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Speaker 1: morning brief on the stories making us from London to

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Speaker 1: Wall Street and beyond. Look for us on your podcast

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Speaker 1: feed every morning on Apple, Spotify and anywhere else you

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Speaker 1: get your podcasts. You can also listen live each morning

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Speaker 1: on London, D A B Radio, the Bloomberg Business app,

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Speaker 1: also available on your Amazon Alexa devices. Just say Alexa

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Speaker 1: play Bloomberg thirty. I'm Caroline Hitka and I'm Stephen Carroll.

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Speaker 1: Join us again tomorrow morning for all the news you

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Speaker 1: need to start your day right here on Bloomberg Daybreak

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Speaker 1: Europe