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Speaker 1: Good morning. It's finday, the twenty first of July in London.

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Speaker 1: This is the Bloomberg Daybreak you at podcast.

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Speaker 2: I'm Caroline Hepker and I'm Anna Edwards. Coming up today soon.

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Speaker 2: Actuff as a double by election blow. We get the

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Speaker 2: thoughts of the Conservative Party chairman.

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Speaker 1: Nigel Farage, gets an apology from the CEO of nat West,

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Speaker 1: the mid growing political pressure.

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Speaker 2: And the Nazdak braces for big price swings. Let's start

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Speaker 2: with a roundup of our top stories. Rishi Sunak has

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Speaker 2: suffered a dramatic political upset as his Conservative Party lost

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Speaker 2: a key parliamentary election in northern England to Labor. The

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Speaker 2: result overturned a huge Tory majority in Selby and ainste

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Speaker 2: gives Keir Starmer's party clar momentum ahead of next year's

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Speaker 2: expected general election. Conservative Cabinet Office Minister Johnny Mercer tried

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Speaker 2: to put a positive spin on the results.

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Speaker 3: I did see that swing being reflected at general election.

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Speaker 3: It's a by election. I think they're always difficult, particularly

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Speaker 3: being in for thirteen years, but you know I paid

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Speaker 3: tribute to the campaign up there. Congratulations to the Labor

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Speaker 3: candidate and let's wait for the General.

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Speaker 2: Those comments from a Conservative Minister of State corm after

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Speaker 2: Tories also lost a key seat of Somerton and Froome

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Speaker 2: in southwest England to the Liberal Democrats. However, soon Aq

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Speaker 2: was spared a whitewash when his party unexpectedly held ex

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Speaker 2: leader Boris Johnson's old seat in a close result on

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Speaker 2: the outskirts of London in Oxbridge.

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Speaker 1: Now to some results this morning, glen Core says that

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Speaker 1: full year profits from its trading business will probably be

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Speaker 1: in line and in the range of three and a

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Speaker 1: half billion to four billion dollars as the commodity gant

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Speaker 1: heads for another bumper year. The commodity trader has already

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Speaker 1: beaten its long term target for trading profit for three

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Speaker 1: years in a row, which has prompted questions from Alison

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Speaker 1: investors about whether it should be adjusted in terms of

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Speaker 1: the share price in London, glen Core shares currently down

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Speaker 1: seven tenths of one percent.

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Speaker 2: Let's move on to nat West's CEO Alison Rose, who

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Speaker 2: has apologized to Nigel Farage for closing his Coots Bank account.

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Speaker 2: Rose says and internal men where the politician was described

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Speaker 2: as a quote decingenuous grifter, did not reflect the view

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Speaker 2: of the bank. Nigel Farage thanked the government for taking

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Speaker 2: an interest in the case.

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Speaker 4: It was always good to get an apology, and particularly

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Speaker 4: from somebody running a bank with nineteen million customers, So

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Speaker 4: thank you for the apology. But it does feel it

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Speaker 4: was a slightly forced. The Treasury made her do this,

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Speaker 4: I have no doubt about that, and I do want

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Speaker 4: to say that the rapid reaction we've had from the

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Speaker 4: British government is superb full marked Andrew Griffith, the City Minister, the.

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Speaker 2: City Minister who Farage cited there yesterday, instructed banks to

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Speaker 2: delay decisions on account closures and give their customers better

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Speaker 2: explanations for taking such decisions.

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Speaker 5: Now.

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Speaker 1: US markets are on high alert today as an out

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Speaker 1: of cycle rebalancing and the Nazak one hundred collides with

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Speaker 1: some two point four trillion dollars of options contracts tied

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Speaker 1: to stocks and indexes scheduled to mature. Socks have defied

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Speaker 1: a lot of gloomy warnings all year, charging into a

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Speaker 1: bull run. Forcing trade is to flock to bullish options

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Speaker 1: to play catch up. Now. The rejig of the tech

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Speaker 1: heavy index is intended to reduce the dominance of megacaps

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Speaker 1: including Apple and Microsoft, boost the presence of others in

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Speaker 1: the NAZAT one hundred. Alysts say the events are likely

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Speaker 1: to spur trading volume and violent price wings.

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Speaker 2: The former governor of the Bank of England, Mervn King,

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Speaker 2: has told Bloomberg that the bank risks triggering a recession

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Speaker 2: in the UK by tightening interest rates too much in

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Speaker 2: a bid too stamp out inflation. Speaking to the Mayor

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Speaker 2: and Talks Money podcast, King says the central bank is

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Speaker 2: ignoring signals from money supply data, which had predicted soaring

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Speaker 2: prices before the Bank of England acted.

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Speaker 6: And I think it's quite possible that having lost control

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Speaker 6: of inflation and therefore having lost a good deal of credibility,

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Speaker 6: that central banks will see that the safest course for.

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Speaker 7: Them is one of overkill now, so that they do

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Speaker 7: bring inflation back to two percent, and if they carry

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Speaker 7: on for the next six months or so tightening monetary policy,

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Speaker 7: it could well be that they generate both a recession

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Speaker 7: as well as a sharp fall invation.

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Speaker 2: That was the former Governor of the Bank of England,

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Speaker 2: Irvin King, on this week's Marin Talks Money podcast from Bloomberg.

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Speaker 2: You can download the full episode now on Apple, Spotify,

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Speaker 2: or wherever you listen to podcasts.

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Speaker 1: Meanwhile, the former Federal Reserve chair Ben Bernanke says that

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Speaker 1: the Fed's widely expected increase in interest rates next week

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Speaker 1: may prove to be the last in its current credit

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Speaker 1: tightening campaign. That's story now from Bloemberg's Charlie Pellett.

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Speaker 8: Speaking on a webinar organized by Fidelity Investments, Bernanke said, quote,

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Speaker 8: it looks very clear that the Fed will raise another

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Speaker 8: twenty five basis points at its next meeting. He says

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Speaker 8: the possible increase in July might be the last one.

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Speaker 8: Investors seem to agree. They are pricing in the near

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Speaker 8: certainty of a rate hike of the Fed's July twenty fifth,

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Speaker 8: twenty sixth meeting, with limited chances of an additional increase thereafter.

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Speaker 8: According to trading in the Federal Funds futures market in

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Speaker 8: New York Charlie Pellett Bloomberg Daybreak, Europe.

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Speaker 2: The hottest June on record led to equally hot retail sales.

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Speaker 2: The volume of goods sold rose zero point seven percent

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Speaker 2: in June, a whole half a percentage point above economist's

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Speaker 2: average guess. The guess or estimate, depending on the word

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Speaker 2: you prefer. The figure suggests the economic activity is still

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Speaker 2: proving resilient. It's a mixed picture though, as UK consumer

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Speaker 2: confidence is falling for the first time in six months

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Speaker 2: as rising rates and prices eroad consumer spending power.

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Speaker 1: Let's turn our attention then to the Conservative Party here

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Speaker 1: in the UK, which has lost two out of the

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Speaker 1: three by elections that were held yesterday. They only managed

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Speaker 1: to hold on to Boris Johnson's old parliamentary seat in

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Speaker 1: Uxbridge and South Rice LIB, but by fewer than five

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Speaker 1: hundred votes. Labour's Kim Mather wins the vote in Selby

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Speaker 1: and Ainsty, which is a rural seat in North Yorkshire,

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Speaker 1: in a huge swing to the main opposition party, and

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Speaker 1: the lib Dems overcame and overturned a huge Conservative majority

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Speaker 1: to win SMRTM and Froom. Joining us now as our

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Speaker 1: Bloomberg UK Politics correspondent Emily Ashton to discuss all of this, Emily,

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Speaker 1: really good to have you. We have the Conservative Party chairman.

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Speaker 1: He's going to be joining us in a few minutes.

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Speaker 1: Lay it out for us then, how bleak are these

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Speaker 1: results for the Conservatives and for the Prime Minister Richie

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Speaker 1: sin that is, is that how it's going to be seen.

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Speaker 5: Well, I woke up at half two this morning to

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Speaker 5: the news that the Tories had taken Uxbridge and I

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Speaker 5: think that was a surprise for many people. And you think, okay, well,

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Speaker 5: that's the way the evening is going to go. Well, no,

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Speaker 5: because within an hour you see two more results that

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Speaker 5: were actually if the scale of those defeats for the

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Speaker 5: Conservatives that really matter. In Selby, one of the safest

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Speaker 5: toy seats in the UK, Labor took that on a

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Speaker 5: twenty four percent swing. You know, that's the second biggest

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Speaker 5: wing ever in a by election. In Somerton and Freo.

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Speaker 5: That's right over the other side of the country in

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Speaker 5: the West Country, Southwest England, another massive swing to the

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Speaker 5: Liberal Democrats twenty nine percent. So you're seeing on both

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Speaker 5: both North and South England toy seats at risk and

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Speaker 5: that will worry Tory MPs. And you also see very

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Speaker 5: efficient tactical grows here, especially in some of the improved

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Speaker 5: where Labor voters switched to the Lib Dems. That will

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Speaker 5: worry Tory MPs. So now the issue seem like is

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Speaker 5: how did he get both the blue Wall those Lived

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Speaker 5: and Toy seats in the south and the Red Wall

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Speaker 5: the Labor Toy seats in the north. How did he

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Speaker 5: win over vote in both those areas going to be

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Speaker 5: very difficult and early.

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Speaker 2: What's the assessment of how the Tories held on to

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Speaker 2: the Uxbridge seat?

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Speaker 9: Then?

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Speaker 2: Was these very much more around local issues?

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Speaker 5: Yes, Uxbridge seems a bit of an outlier. I mean,

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Speaker 5: obviously the Tories are so pleased that they won it

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Speaker 5: because it means it wasn't a whitewash for the night,

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Speaker 5: but they clung on only after a recount less than

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Speaker 5: five hundred votes in it, And even the Toy Canada

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Speaker 5: himself admits that it was down to local issues. Down

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Speaker 5: this emission scheme, which means that drivers are going to

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Speaker 5: be charged for having kind of inefficient vehicles in a

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Speaker 5: bid to reduce pollution, and the Tories made it a

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Speaker 5: local referendum basically on that issue, and you know, it

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Speaker 5: paid off. But I don't think anybody is seeing that

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Speaker 5: as a kind of reflection of the national picture.

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Speaker 1: And so where does this leave then the Labor Party

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Speaker 1: in all of this, I mean, they're twenty points ahead

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Speaker 1: in the kind of big picture polling nationwide of Conservatives

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Speaker 1: and there was a win for Labour's ker Mother. How

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Speaker 1: do you think that Kiir Starmer is going to take

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Speaker 1: this and how much of a vote of confidence is

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Speaker 1: it for him and his party leadership.

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Speaker 5: Well, make no mistake, this result in Selby is huge

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Speaker 5: for Kiir Starmer and no doubt he'll be heading there

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Speaker 5: now to make the most of it with a clip

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Speaker 5: later that Shelby is a kind of a rural seat,

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Speaker 5: very largely white, older voters, kind of pro Brexit. This

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Speaker 5: is the kind of seat he needs to win if

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Speaker 5: he wants to win the general election. But what I

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Speaker 5: would say is that even though Labor won that seat,

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Speaker 5: it's not it doesn't look like the Tory vote translated

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Speaker 5: into Labor votes, So lots of Goots basically stayed home.

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Speaker 5: And what Labor needs to do over the next year

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Speaker 5: if the election is about a year away, they need

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Speaker 5: to really convince people to switch to them and not

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Speaker 5: just to stay home. So I'll be interesting to see

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Speaker 5: where that torygo ends up at the general election.

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Speaker 2: Yes, and what does it tell us anything about? Does

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Speaker 2: it tell us about the bigger picture question, which is

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Speaker 2: about whether Richie Sunak can hold on to the gains

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Speaker 2: that Boris Johnson made in the North. Does it tell

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Speaker 2: us about that or is it sort of a different

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Speaker 2: story in Selboyne.

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Speaker 5: Well, I think it's kind of I think it's a

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Speaker 5: similar story. Yeah, I think it's very looking, very very

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Speaker 5: risky for those Tory MPs with much smaller majorities in

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Speaker 5: seats in across northern England. I mean, this was a

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Speaker 5: majority of twenty thousand over twenty thousands that they overturned,

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Speaker 5: and the Labor MPs god and majority of four thousand,

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Speaker 5: much higher than people expected, and the Tory MP's with

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Speaker 5: very very slim majorities in the Red Wall, especially in

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Speaker 5: Northeast England Northwest England, they're going to be looking a

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Speaker 5: that thinking there is no way I'm going to be

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Speaker 5: able to keep my feat so on twings like that. Obviously,

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Speaker 5: a swing like that twenty four percent is unlikely to

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Speaker 5: be replicated in a general election, but still they don't

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Speaker 5: need much more than ten percent to get in the

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Speaker 5: majority government at the next general election. So you know,

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Speaker 5: even doing half as well, they will do very well

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Speaker 5: at the next general election and Victorian people will be worried.

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Speaker 1: My thanks to Bloomberg's UK Politics corresponded Emily Ashton. Joining

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Speaker 1: us now Greg Hans, the Conservative Party chairman, with us.

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Speaker 1: Very good morning, so you thank you so much for

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Speaker 1: your time. You've gone from three seats to one. What

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Speaker 1: do you think went wrong with the by elections, the

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Speaker 1: local votes in the UK yesterday?

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Speaker 10: Greg, Well, look, obviously we're disappointed by the results in

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Speaker 10: Selby and Ainsty and Summit and Through. We didn't obviously

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Speaker 10: want to lose those two seats. One had been labor

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Speaker 10: held up to twenty ten, the other had been lived held.

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Speaker 9: Until twenty fifteen.

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Speaker 10: But clearly nobody was expecting us to hold Uxbridge. That

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Speaker 10: was the real standout result that sort of defied expectations.

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Speaker 10: The book makers had Labour twenty five to one on

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Speaker 10: to hold Darksbridge, yet we defied the odd Steve Tuckwell

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Speaker 10: a brilliant local candidate in Uxbridge. So I think there's

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Speaker 10: some good news for the Conservative Party, good news for

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Speaker 10: the government as well.

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Speaker 2: On Selby though, for example, that seat we were just

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Speaker 2: hearing from our colleague Emily, who was telling us, you know,

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Speaker 2: the twenty thousand majority overturned there there will be other

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Speaker 2: Conservative MPs in the North who were thinking if it

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Speaker 2: happens in Selby, I've got a lower majority and that

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Speaker 2: will it happen to me? Are you taking that message

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Speaker 2: away from the night?

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Speaker 9: Well?

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Speaker 10: I think obviously it will look very carefully the results

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Speaker 10: in Selby. I spent quite a bit of time there myself,

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Speaker 10: where we've had a very good candidates.

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Speaker 9: In Claire Holmes. But we need to look at that.

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Speaker 10: I think the turnout was pretty low in Selby and Ainsty.

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Speaker 10: The evidence is that a lot of Conservative voters decided

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Speaker 10: not to go to the polls, not to go and vote.

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Speaker 10: That's something which obviously we need to work on. We

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Speaker 10: can't win elections if people are going to vote for us,

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Speaker 10: or have voted for us before, aren't going to go

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Speaker 10: and vote, So that will obviously be working progress. But

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Speaker 10: I think what people want to see us do is

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Speaker 10: to carry on delivering combetant and good, strong governments. And

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Speaker 10: that's why Richie Sunac has set those five priorities of

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Speaker 10: harving inflation, growing the economy, cutting the debt, reducing hospital waiting, this,

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Speaker 10: stopping the votes. That's what people want to see us

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Speaker 10: getting on delivery.

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Speaker 1: Yeah, but our vote is excited about that, you know,

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Speaker 1: give Given the turnout issues, you know, what does the

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Speaker 1: government have to offer beyond just stability only a few

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Speaker 1: months after the Liz Trust administration.

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Speaker 10: Well, I mean you're right to pointing out that Richie

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Speaker 10: Suna has only been in charge for nine months.

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Speaker 9: We set those priorities.

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Speaker 10: They weren't designed to be easy, those priorities to deliver against.

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Speaker 9: But we are making progress.

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Speaker 10: The inflation rate has come down just this week from

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Speaker 10: eight point seven percent to seven point nine per so

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Speaker 10: big faur, but prices are still rising. We still have

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Speaker 10: a lot of work to do there. When it comes

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Speaker 10: to a legal migration, we've just passed the legislation this week,

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Speaker 10: but we now need to make that operational and to

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Speaker 10: make that deliver in the channel. So there's a lot

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Speaker 10: of work to be done. But people want to see

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Speaker 10: the Conservatives under Bushi Sunaka getting on with the job.

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Speaker 9: That is exactly what we are doing.

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Speaker 2: Okay. You talked about your success relative to the losses

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Speaker 2: in Uxbridge, and a lot of that seemed to be

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Speaker 2: about the local issues, in particular around u les, which

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Speaker 2: some on the left would say is very important green policy.

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Speaker 2: You push back against u les and that's paid off

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Speaker 2: for you, it seems in this by election. But how

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Speaker 2: green is this government. We've seen Zach Goldsmith of course

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Speaker 2: being very critical of the government's green record.

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Speaker 10: Well, I think we've got an excellent record. If you

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Speaker 10: look at what we've done, for example with renewable end

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Speaker 10: the percentage of our energy that comes from renewables has

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Speaker 10: risen to from about seven percent under Labor to forty

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Speaker 10: three percent just last year. There's a big increase in

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Speaker 10: renewable energy. There's also a green policies and terms of

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Speaker 10: providing support for people to make their homes.

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Speaker 9: More energy efficient.

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Speaker 10: There's a lot of green policies that are being put

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Speaker 10: through by the government. I think where Sadik Khan and

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Speaker 10: Labor got it wrong was they had no manifesto commitment

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Speaker 10: to introducing the ules. They botched the consultation. Sadik Khan

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Speaker 10: effectively tried to fix the consultation and was caught out,

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Speaker 10: and then we had the unedifying site to Kir Starmer,

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Speaker 10: who had always been a big supporter of the ULES,

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Speaker 10: going to out to London and suddenly saying he was

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Speaker 10: backing his local candidates and saying it should be delayed.

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Speaker 9: Yes. Another example, almost a.

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Speaker 10: Daily example of Sekir Starmer's flip flops on major issues.

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Speaker 10: So I think that is real your trouble for labor there,

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Speaker 10: but I don't think you'll see a change from the

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Speaker 10: concernaive government course.

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Speaker 9: We want to deliver a clean, greener environment of the country.

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Speaker 1: Greg Hans. The issue with that though, is, for example,

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Speaker 1: is it deliverable Because the vatin Full Swedish company scrapping

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Speaker 1: the wind farm plan in the North Sea means that

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Speaker 1: you know, by some readings the twenty thirty goals for

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Speaker 1: the UK in terms of renewable energy are now in doubt.

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Speaker 1: And you also have to think about Boris Johnson in

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Speaker 1: the run up to the COP twenty six Climate Change

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Speaker 1: Summit talking about climate change being the number one international priority.

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Speaker 1: So I want to return to that idea of of

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Speaker 1: is it actually deliverable in the UK, the kind of

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Speaker 1: renewables and moving away from dependency on fossil fuel.

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Speaker 10: Well, I think fundamentally is because we have been delivering

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Speaker 10: upon it. I mentioned the incredible record we've got on

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Speaker 10: delivering renewable energy, particularly in offshore wind. We've got the

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Speaker 10: western world's largest installed off floor wind capacity. We are

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Speaker 10: number one in the West for off floor wind. When

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Speaker 10: I was Energy minister. Just a year or so ago

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Speaker 10: I had the French Energy minister come to see me

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Speaker 10: and she said that for us you are the model

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Speaker 10: and how the you.

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Speaker 1: So then it's not a problem that the Vattenfall wind

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Speaker 1: farm plan has now been scrapped in the North Sea.

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Speaker 10: Well, look, we've just delivered and the world's largest wind

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Speaker 10: farm at Dogger Bank. We continue to deliver in the

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Speaker 10: CRD auctions that we've had, the CFD auctions that we've

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Speaker 10: had the last two rounds really kind of doing really

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Speaker 10: well on delivering more wind. On top of wind, we've

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Speaker 10: got a huge amount of solar capacity as well.

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Speaker 9: In this country.

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Speaker 10: People often think the UK can't be good at solar.

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Speaker 10: We're delivering a lot of solar and we're seeing a

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Speaker 10: regeneration of our nuclear capability after thirteen years of failure

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Speaker 10: under Labor, we're delivering. We're building heating Point C where

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Speaker 10: we have admitted to size well, a big, big increase

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Speaker 10: in our nuclear capacity as well.

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Speaker 2: Okay, so that's the sort of green and jet Back

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Speaker 2: to the results overnight. Are you sticking to all of

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Speaker 2: the five pledges as a result of this, including the

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Speaker 2: one on inflation. It's looking like a challenge. Do you

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Speaker 2: think that the Prime Minister should step away from that

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Speaker 2: that commitment to bring down inflation, to have inflation looks difficult,

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Speaker 2: Not at all.

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Speaker 9: We're not stepping away from those at all.

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Speaker 10: They are never designed to be easy to deliver on,

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Speaker 10: so I'm not the least bit surprised that they're bumps

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Speaker 10: along the way. What I would say is that the

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Speaker 10: inflation data this past week, getting inflation down from eight

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Speaker 10: point seven to seven point nine percent, is I think

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Speaker 10: one of the biggest falls in inflation. But we also

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Speaker 10: and I'm sure your your listeners will know this only

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Speaker 10: too well, that is of course a line in the

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Speaker 10: rate of the right the right of the rise of prices.

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Speaker 10: Prices are still going up too much. That is work

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Speaker 10: that we need to continue to do to make sure

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Speaker 10: that we're helping to deliver that inflation target, working obviously

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Speaker 10: with the Bank of England and so on. So there's

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Speaker 10: still a lot of works of inflation is still too high.

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Speaker 1: In terms of from this by election to thinking about

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Speaker 1: the general election, Bloomberg is reporting the Prime Minister eyeing

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Speaker 1: on holding the UK general election in November twenty twenty four,

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Speaker 1: is holding off as long as possible the right plan.

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Speaker 10: Well, look, I think that's entirely speculative when the election

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Speaker 10: might be. We are focused on getting on with the

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Speaker 10: job of delivering the general election. Date and the campaign

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Speaker 10: for the general.

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Speaker 9: Election is literally something for another day.

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Speaker 1: And in terms I mean you recently did well a

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Speaker 1: few months ago, you did talk about leaving it eighteen

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Speaker 1: months or so. Do you think that in general the

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Speaker 1: idea of giving yourselves, giving the Conservative Party longer to

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Speaker 1: do better on the economy as the right way forwards?

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Speaker 10: Well, look what I have to see. We've set our

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Speaker 10: five priorities. Harving inflation, growing the economy, cutting the reducing

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Speaker 10: hospital waiting, is stopping the votes. Those are the priorities

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Speaker 10: that we're getting on with delivering at the moment. Any

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Speaker 10: thought of a general election, either the date or the

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Speaker 10: content of the campaign, is something for another day.