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Speaker 1: This is Bloomberg Daybreak here for this Friday, the third

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Speaker 1: of February in London. Coming up today Bailey's interest gap.

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Speaker 1: The BAWI governor tells Bloomberger corner has been turned, but

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Speaker 1: there's work to do doubling up. The ECB hikes by

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Speaker 1: half a percent and signals the same again. In March,

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Speaker 1: a wealth whitefuse gouger M Dannie sees his fortune full

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Speaker 1: by close to sixty billion dollars as troubles mount Soon.

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Speaker 1: Act rules out massive pay rises for nurses, the risks

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Speaker 1: of delaying chip strategy and pre payment meters controversy. Those

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Speaker 1: are the stories we're looking at in today's papers. And

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Speaker 1: I'm leanne Garon's plus triple A troubles, Amazon, Apple and

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Speaker 1: Alphabet get way down by cooling demand. That's all straight

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Speaker 1: ahead on Bloomberg Daybreak Europe on DAB Digital Radio, London,

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Speaker 1: Bloomberg eleven three oh New York, Bloomberg Washington, d C,

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Speaker 1: Bloomberg one oh six one, Boston, Bloomberg nine six, San Francisco,

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Speaker 1: cyrus x M Channel one nineteen and around the world

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Speaker 1: on Bloomberg Radio dot com and via the Bloomberg Business Set.

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Speaker 1: Good morning, I'm Stephen Carroll and I'm Caroline Hitker. Here

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Speaker 1: are the stories that we're following today. The Bank of

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Speaker 1: England has signaled to the fastest pace of interest rate

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Speaker 1: hikes in three decades, maybe drawing to a close. Speaking

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Speaker 1: to Bloomberg's editor at large, Francine Laque, the Governor Andrew

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Speaker 1: Bailey said, it's too soon to declare victory on inflation.

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Speaker 1: We are going to react to the information and the

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Speaker 1: evidence that we see. We're not on We're not. We

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Speaker 1: haven't pre announced an intention because we have reached a

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Speaker 1: point and as I've said for I think we have

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Speaker 1: started to turn a corner that's encouraging. There's a long

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Speaker 1: way to go and there are a lot of risks. Yesterday, policymakers,

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Speaker 1: led by Andrew Bailey, voted seven to two to raise

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Speaker 1: the rate to four percent. That's the highest since two

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Speaker 1: thousand and eight. However, the bo's latest forecast show that

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Speaker 1: inflation is likely to fall sharply this year to around

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Speaker 1: four percent from a four decade high of eleven point

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Speaker 1: one last October. The central Bank's outlook is for a

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Speaker 1: shorter and shallower recession than it projected in November, well

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Speaker 1: a fifty basis point hike is a near certainty in March.

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Speaker 1: That's according to the ECB president Christine Lagarde. Her comments

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Speaker 1: came after the European Central Bank lifted its rates by

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Speaker 1: a half a percentage point to two and a half percent.

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Speaker 1: Speaking to journalists, Laguards sought to make her position on

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Speaker 1: the matter clear. It should be fifty this time around.

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Speaker 1: It intended to be fifty in March. Now you will say, well, yes,

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Speaker 1: but what about after March? Does that mean that you

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Speaker 1: have reached the pinnacle or the peak? No? No, no, no.

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Speaker 1: We know that we have ground to cover. We know

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Speaker 1: that we are not done. As you heard their Leaguards

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Speaker 1: sought underscore that hikes are likely to persist beyond next month.

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Speaker 1: That echoed the message from the Fed. Ched your own

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Speaker 1: Pal a day earlier, but as with Pal, investors were

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Speaker 1: not convince. Your bond's extended gains and European stocks now

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Speaker 1: are within striking distance of April run versus April of

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Speaker 1: last year. The value of Gajamdani's beleaguered empire has now

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Speaker 1: more than halved the one and twenty five billion dollar

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Speaker 1: wipeout comes less than two weeks after the accusations of

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Speaker 1: fraud by Hindenburg Research. A short seller now veteran emerging

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Speaker 1: markets investor, Mark Mobias told Bloomberg his firm didn't participate

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Speaker 1: in the Adani stock offering due to concerns over how

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Speaker 1: much the conglomerate had borrowed. It's all about debt, and

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Speaker 1: company and its associates heavily in debt and that's what

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Speaker 1: sort of scares away. That was Mark Mobia speaking to

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Speaker 1: Bloomberg Television. The Danni Group has repeatedly denied the allegations

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Speaker 1: from Hindenburg, calling their report bogus. Whoever, the growing crisis

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Speaker 1: of confidence has seen Gautamadanni's personal fortune dropped by close

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Speaker 1: to sixty billion dollars. Now in the tech sector, three

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Speaker 1: mega companies have reported earnings. For Apple, it was the

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Speaker 1: first dropping courtly revenue in three and a half years.

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Speaker 1: The smartphone giant blamed supply snags and softening demand from

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Speaker 1: the poor holiday A sales CEO Tim Cook says, it's

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Speaker 1: a difficult period for the company as a result of

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Speaker 1: a challenging environment. Our revenue was down five percent year

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Speaker 1: over year. We remain confident in and focused on the

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Speaker 1: long term opportunity well Cook's long term optimism is driven

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Speaker 1: by China, where he expects the lifting of COVID restrictions

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Speaker 1: to bring back demand. Amazon's earnings didn't quite deliver, with

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Speaker 1: the web giant warning of slow cloud computing sales. It's

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Speaker 1: a troubling forecast because AWS Amazon Web Services has long

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Speaker 1: generated most of the company's profit. CEO Andy Jasse told

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Speaker 1: investors he's pairing back the business after a rapid expansion

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Speaker 1: during the pandemic. Probably the number one priority that I

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Speaker 1: spent time with the team on is reducing our cost

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Speaker 1: to serve and our operations network. Amazon started a new

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Speaker 1: round of upcuts last month that will eventually total eighteen

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Speaker 1: thousand employees. Meanwhile, Google parent Alphabet reported fourth quarter results

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Speaker 1: which narrowly missed analysts expectations. CFO Ruth Poet tell Bloomberg

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Speaker 1: that they too are looking to cut costs and slow harring.

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Speaker 1: Charlie Pellett has the numbers. Alphabet said sales excluding partner

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Speaker 1: payouts were sixty three point one billion dollars in the

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Speaker 1: fourth quarter. Analysts had projected sixty three point two billion,

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Speaker 1: according to data compiled by Bloomberg. The lackluster results come

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Speaker 1: as Google's core and business is under threat on multiple fronts,

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Speaker 1: and not just because of a slowing economy. The U.

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Speaker 1: S Department of Justice has called for a breakup of

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Speaker 1: the Search Giants AD technology business over alleged illegal monopolization

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Speaker 1: of the market, and the company's flagship search business maybe

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Speaker 1: under threat from new entrants in New York. Charlie Palett

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Speaker 1: Bloomberg Daybreak Europe. So those are a few of our

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Speaker 1: top stories. Um, there's lots of think about really today.

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Speaker 1: I mean, not least that the now stack looks to

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Speaker 1: beyond trap for bullmarket, but all of those disappointing earnings

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Speaker 1: for the big tech sector. They did see after hours

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Speaker 1: shares dropped for Alphabet, Amazon, Apple, all in the range

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Speaker 1: of about four percent. So that's, you know, one of

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Speaker 1: the big stories that we're thinking about today. You've also

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Speaker 1: got the US jobs report that's coming out. But plenty

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Speaker 1: more you interesting hearing on those Amazons or those good

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Speaker 1: Alphabet numbers, I should say, because of course there are

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Speaker 1: still plenty of alphab employees waiting to hear whether their

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Speaker 1: jobs are going to be safe enough. There still in

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Speaker 1: the middle of announcing the who's going to be affected

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Speaker 1: by the job cuts? Twelve thousand jobs and all that's

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Speaker 1: going to They're not the only ones, though, who are

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Speaker 1: considering what's going to be happening with jobs. That's part

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Speaker 1: of the story about Deutsche Bank preparing further further job

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Speaker 1: cuts keep casts and check, but could be set to

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Speaker 1: spare traders as it prepares that that reduction and staff numbers. Yeah,

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Speaker 1: it could be focused on the retail branches in Germany

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Speaker 1: in terms of job cards. I mean, Deutsche Bank did

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Speaker 1: already slash what thousands, I think it was about eight

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Speaker 1: thousand jobs in twenty nineteen. I think the other story

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Speaker 1: to think about is the consent continued pursuit also around

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Speaker 1: bankers and money managers. In the US, the SEC is

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Speaker 1: really getting tough on messaging, not just WhatsApp. Yes, they've

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Speaker 1: issued a billion dollars worth of fines, but apparently now

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Speaker 1: they're coming after people's mobile phones. They've asked certain businesses

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Speaker 1: to look at the personal mobile phones of their employees

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Speaker 1: just to make sure business isn't happening sort of somewhere

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Speaker 1: else in an avenue on people's personal mobiles. I thought

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Speaker 1: that was really interesting. Yeah, definitely a story to watch

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Speaker 1: given all of the regulator decisions we've had on that

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Speaker 1: issue already up next Seago was out massive pay rise

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Speaker 1: for a nurse, the risks of delaying chip strategy and

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Speaker 1: controversy over prepayment meters. Now the paper review on bluebirdday

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Speaker 1: Break Europe. The news you need to know from today's

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Speaker 1: papers fusic again, so as it's now for a roundup

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Speaker 1: of today's papers. The Financial Times headline reads Soonac says

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Speaker 1: UK cannot afford quote massive pay rises for nurses. This

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Speaker 1: is the Prime Minister again laying things out, Leon Goins,

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Speaker 1: What did he say? Yes? Indeed, good morning to you

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Speaker 1: Friday Friday, Caroline. I was going to say Happy Friday

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Speaker 1: and all just went into one. Say everyone out there,

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Speaker 1: happy Friday. Now. Speaking to Pis Morgan on Talk TV

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Speaker 1: last night, Caroline, the Prime Minister just continued to take

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Speaker 1: the super tough line on pay rises for nurses. Now.

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Speaker 1: This comes ahead of strike action next week. The Royal

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Speaker 1: College of Nursing is asking for this pay rise to

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Speaker 1: really battle inflation and a demand. That demand has been

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Speaker 1: rejected by both the Prime Minister, Rishi Sunac and also

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Speaker 1: by the labor leader Kia Starmer. While speaking to Pis Morgan's,

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Speaker 1: Sunac also insisted that the government can just not afford

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Speaker 1: these massive pay rises at the moment and this is

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Speaker 1: due to inflation. Of course. Yesterday we saw a rise

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Speaker 1: in int as rates and the economy is said to

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Speaker 1: be going into the shallower recession, even though it's going

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Speaker 1: to be shorter. And this leaves room really for Steve Barkley,

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Speaker 1: the Health Secretary, to make nurses a big one off

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Speaker 1: payment or backdating a more generous pay rise. And according

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Speaker 1: to the Financial Times, the wave of strike action across

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Speaker 1: the country is really sapping support for the Prime Minister

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Speaker 1: and our very own Kitty Donaldson has a really great

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Speaker 1: place on the Bloomberg terminal today. It's called soon next

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Speaker 1: Rocky premiership after one hundred days of strikes and scandals.

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Speaker 1: The Prime Minister has only been in on what office

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Speaker 1: one hundred days and that was yesterday. So if you

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Speaker 1: do read that piece, it's very interesting, Okay, Leon, Let's

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Speaker 1: turn to the Times next. It says the chip industry

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Speaker 1: delays pose and national risk. Yes, indeed, so the Chairman

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Speaker 1: of the Commons Business Select Committee, that's Darren Jones, has

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Speaker 1: a superstark warning when it comes to the chip industry

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Speaker 1: here in the UK and the labor MP says a

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Speaker 1: lack of national strategy to secure supply chains for semiconductors

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Speaker 1: is actually quote an act of national self harm. The

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Speaker 1: Times newspaper reports that the UK needs to act swiftly

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Speaker 1: to keep up with the US, the EU and Japan.

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Speaker 1: The Department for Digital Culture and Media and Sport was

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Speaker 1: supposed to lay out a plan for the microchip industry

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Speaker 1: here in the UK last autumn. However, that has been

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Speaker 1: delayed and it's very long overdue, and I just want

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Speaker 1: to say one thing Darren Jones also mentioned is semiconductors

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Speaker 1: are the brains of modern electronics, used in everything from

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Speaker 1: mobile phones to cars to wind turbines. So really knuckling

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Speaker 1: down there, and the fact that it's so important we

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Speaker 1: have our own industry in order to make sure those

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Speaker 1: things are secured. There's also another striking story though in

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Speaker 1: The Times, as a big photograph on the front page

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Speaker 1: and the headline of art O debt collector reviewed by

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Speaker 1: Watchdog over gas meter breakers. Yes, indeed and Caroline we

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Speaker 1: were discussing this early and it's a very very emotive

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Speaker 1: piece that has been in the news for the last

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Speaker 1: couple of weeks, and The Times is continuing with its

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Speaker 1: investigation on this and on British Gas, and the company

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Speaker 1: has been banned from force fitting pre payment meters to

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Speaker 1: protect its vulnerable customers, and all other major energy companies

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Speaker 1: have also agreed to suspend this practice. Now, this follows

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Speaker 1: the paper's deep dive into the situation and it has

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Speaker 1: now been revealed the debt collection company used by British

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Speaker 1: Gas is also been closely reviewed by the Financial Conduct

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Speaker 1: Authority and this comes after the time alleged that Avarto

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Speaker 1: obtained warrants gaining access to homes of vulnerable customers to

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Speaker 1: force fit these energy payment meters when they just weren't

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Speaker 1: able to pay for their energy bills. As we do know,

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Speaker 1: they have really skyrocketed. But the German company does not

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Speaker 1: have a direct role in regulating the collection of utility debts. However,

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Speaker 1: the f c A have said that any rogue behavior

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Speaker 1: could have an impact on the company's overall fitness to practice. Now,

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Speaker 1: a spokesman for the German parent company said yesterday that

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Speaker 1: it expects a Varto to comply with the law and

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Speaker 1: to adhere to the company's code of conduct. And also

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Speaker 1: the British Gas have made a statement apologizing for what

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Speaker 1: has happened when it comes to vulnerable people and these

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Speaker 1: pre payment meters. Yeah, I thought that was it was

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Speaker 1: a very interesting story and it has dominated the news

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Speaker 1: over the last sort of week, the investigations into pre

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Speaker 1: payment meters at a time of very high energy costs. So, yeah,

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Speaker 1: that's a very interesting one to follow in the Times newspaper.

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Speaker 1: Lean go and thank you so much for that newspaper review. Well,

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Speaker 1: let's get back to our conversation around central banks. That

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Speaker 1: there wasn't much caroline in Andrew Bailey's either commentary or

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Speaker 1: interview to be optimistic about. No. I thought it was

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Speaker 1: completely bleak. The economy is already in recession, pre pandemic

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Speaker 1: levels of output are not going to come back until

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Speaker 1: six The forecast for growth in Britain it's only seven

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Speaker 1: tenths of one for the next three years. It's a

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Speaker 1: very very difficult moment, even though it does look like markets,

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Speaker 1: you know, took it as read that the hiking cycle

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Speaker 1: is coming to an end. Well, that key phrase was

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Speaker 1: a corner has been turned a center bank speak goes.

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Speaker 1: Markets are taking that line as cautious optimism from Governor

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Speaker 1: Andrew Bailey. Bloom Books editor at large. Francy Lacque spoke

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Speaker 1: to the governor yesterday and asked him where rates will

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Speaker 1: eventually settle. We don't have a view on the neutral rate,

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Speaker 1: which actually shapes our decision making at the moment. And

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Speaker 1: the reason for that. You might say, that's a interesting

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Speaker 1: thing for me to say, But the reason is that

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Speaker 1: there is such uncertainty at the moment. Uh. You know,

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Speaker 1: in the landscape that we face, we've got very big

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Speaker 1: move being parts. We've had very big shocks, and particularly

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Speaker 1: there are big shocks on the supply side. But if

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Speaker 1: you look at the market reaction, so you hiked by

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Speaker 1: fifty basis points and the market is taken this as

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Speaker 1: a devish message, are they right? Well, the market, of

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Speaker 1: course was expecting us to hike by fifty basis points.

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Speaker 1: Sim don't think they will have been surprised by that.

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Speaker 1: I think the market obos to be focused on what

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Speaker 1: we do next and they will have seen some change

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Speaker 1: in our language and they that's deliberate. I mean that

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Speaker 1: change is obviously deliberate. And the way I would interpret

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Speaker 1: it is to say, we are going to react to

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Speaker 1: the information and the evidence that we see. We're not

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Speaker 1: on We're not we haven't pre announced an intention because

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Speaker 1: we have reached a point. You As I've said before,

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Speaker 1: I think we have started to turn a corner that's encouraging.

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Speaker 1: There's a long way to go and there are a

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Speaker 1: lot of risks. How soon do you think we'll see

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Speaker 1: it cut? From the Bank in England, we're not in

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Speaker 1: We're not in a position of speculating on that at

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Speaker 1: the moment. That's that's that's all. That's all somewhere in

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Speaker 1: the future, not this year. We're not speculating on what

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Speaker 1: it is I say in the future, because you know

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Speaker 1: rates do go up and down in the long run,

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Speaker 1: but when we have no date in our speculation. We've

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Speaker 1: heard a lot from the Bank in England about the

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Speaker 1: many sharks that this economy is facing. What's the prescription

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Speaker 1: to fix this longer term? Well, I think I mean

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Speaker 1: there's a number of issues that come out of them. Obviously,

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Speaker 1: some of those shocks are external and relate to very sadly,

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Speaker 1: obviously the war in Ukraine, which is terrible. Um, we

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Speaker 1: are beginning that the energy prices come down quite rapidly,

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Speaker 1: Food commodity prices have sort of seemed to have reached

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Speaker 1: at least a level, but it's not coming through and

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Speaker 1: yet in retail food prices, so obviously that's important. Um,

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Speaker 1: Europe has had a much better winter from the point

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Speaker 1: of view of energy than I think people feared, so

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Speaker 1: that's important. And then domestically, labor supply is the big issue.

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Speaker 1: I think just getting closer to the EU change that

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Speaker 1: does it change the trajectory for the UK economy in

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Speaker 1: the context of the of the EU, in the context

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Speaker 1: of Brexit, well, I think what we were identified as

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Speaker 1: is at least three big shocks that we can see.

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Speaker 1: There's been a there's been COVID, there's been energy, and

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Speaker 1: has been Brexit. It's very hard to separate them out.

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Speaker 1: But the judgment that we've we've we've sort of reached

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Speaker 1: on rather tentative, but I think the evidence is pointing

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Speaker 1: that way. Is that we identified that there would be, yeah,

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Speaker 1: a shock to UK productivity from the reduced openness of

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Speaker 1: the economy. We thought that might might emerged over a

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Speaker 1: rather longer period. You know, on our latest evidence, it's

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Speaker 1: probably going to emerge over a rather shorter period and

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Speaker 1: possibly by the end of the forecasts arising, so look

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Speaker 1: forward to three years. This is Bloomberg Daybreak Europe. Your

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