1
00:00:02,400 --> 00:00:04,960
Speaker 1: Good morning. It's Wednesday, the twelfth of July in London.

2
00:00:05,000 --> 00:00:07,600
Speaker 1: This is the Bloomberg Daybreak You Up podcast. I'm Caroline

3
00:00:07,640 --> 00:00:08,240
Speaker 1: Hepcat and.

4
00:00:08,200 --> 00:00:10,880
Speaker 2: I'm Lizzie Burden. Coming up today, the Bank of England

5
00:00:10,920 --> 00:00:13,720
Speaker 2: warns rate rises and now turning the screws on the

6
00:00:13,800 --> 00:00:17,079
Speaker 2: UK economy, as a new report suggests inflation could hit

7
00:00:17,120 --> 00:00:19,040
Speaker 2: households until next.

8
00:00:18,840 --> 00:00:22,320
Speaker 1: May, and US inflation data out today is likely to

9
00:00:22,320 --> 00:00:25,480
Speaker 1: be pivotal for FED officials ahead of their next meeting.

10
00:00:25,680 --> 00:00:28,480
Speaker 2: Plus, we hear about the high end home buyers becoming

11
00:00:28,520 --> 00:00:32,840
Speaker 2: increasingly nervous about London's prime property market. But let's start

12
00:00:32,840 --> 00:00:35,239
Speaker 2: with a roundup of our top stories. The Bank of

13
00:00:35,240 --> 00:00:38,440
Speaker 2: England says higher rates are squeezing the UK economy, but

14
00:00:38,479 --> 00:00:42,080
Speaker 2: the financial system remains resilient. All of the biggest banks

15
00:00:42,120 --> 00:00:44,320
Speaker 2: past the latest stress test, and the Bank of England

16
00:00:44,360 --> 00:00:47,120
Speaker 2: says it believes that they'll be able to support households

17
00:00:47,159 --> 00:00:51,280
Speaker 2: and businesses quote even if economic conditions turn out to

18
00:00:51,320 --> 00:00:54,360
Speaker 2: be much worse than we expect. Stephen Major, Global head

19
00:00:54,400 --> 00:00:57,360
Speaker 2: of Fixed Income Research at HSBC says the bank has

20
00:00:57,400 --> 00:00:59,720
Speaker 2: little choice but to continue raising rates.

21
00:01:00,120 --> 00:01:03,200
Speaker 3: The UK is a bit unique in the global economy

22
00:01:03,240 --> 00:01:05,759
Speaker 3: because you're not seeing this in the US. You've seen

23
00:01:05,800 --> 00:01:09,479
Speaker 3: a complete disinflation pattern on the headline. At least UK

24
00:01:09,600 --> 00:01:14,760
Speaker 3: looks very different. Brexit effect, the huge fiscal stimulus of

25
00:01:14,800 --> 00:01:17,800
Speaker 3: the during the COVID period, all of this is coming

26
00:01:17,880 --> 00:01:18,559
Speaker 3: home to roost.

27
00:01:19,800 --> 00:01:23,240
Speaker 2: Those comments from HSBC's global head of Fixed Income research

28
00:01:23,280 --> 00:01:25,560
Speaker 2: come as the Bank of England also warned that the

29
00:01:25,680 --> 00:01:29,600
Speaker 2: UK faces financial stability risks from the withdrawal of foreign

30
00:01:29,600 --> 00:01:33,319
Speaker 2: investors from the country's commercial property market. To get to

31
00:01:33,360 --> 00:01:35,480
Speaker 2: that level, the Bank of England says rates would be

32
00:01:36,000 --> 00:01:37,840
Speaker 2: needed to be over nine percent.

33
00:01:38,720 --> 00:01:41,760
Speaker 1: Now, the average UK household will be twenty three hundred

34
00:01:41,760 --> 00:01:44,880
Speaker 1: pounds worse off by the time inflation eases in May

35
00:01:45,120 --> 00:01:48,080
Speaker 1: next year. That's according to a report by Grant Thornton

36
00:01:48,160 --> 00:01:51,400
Speaker 1: and Retail Economics, who say the financial squeeze will wipe

37
00:01:51,440 --> 00:01:54,320
Speaker 1: sixty five billion pounds off household spending power. The five

38
00:01:54,360 --> 00:01:57,880
Speaker 1: Minister issue Soon insists that getting inflation down remains his

39
00:01:57,960 --> 00:02:00,280
Speaker 1: top priority, not.

40
00:02:00,280 --> 00:02:04,160
Speaker 4: Alone in experiencing a rise in interest rates very similar

41
00:02:04,160 --> 00:02:06,840
Speaker 4: in America or Australia, Canada and New Zealand for example.

42
00:02:07,080 --> 00:02:09,360
Speaker 4: The crucial thing that we have to do is bring

43
00:02:09,400 --> 00:02:12,160
Speaker 4: inflation down. That's how we're going to ease the burden

44
00:02:12,200 --> 00:02:14,720
Speaker 4: on families. That's how we're going to stop the increase

45
00:02:14,919 --> 00:02:17,560
Speaker 4: in interest rates. And that's why my first priority is

46
00:02:17,600 --> 00:02:18,400
Speaker 4: to harm inflation.

47
00:02:18,720 --> 00:02:18,800
Speaker 1: Now.

48
00:02:18,880 --> 00:02:21,520
Speaker 4: Of course that is proving to be more persistent than

49
00:02:21,560 --> 00:02:22,280
Speaker 4: people thought.

50
00:02:23,360 --> 00:02:26,639
Speaker 1: Speaking to reporters at the NATO summit, Sunak also said

51
00:02:26,639 --> 00:02:29,160
Speaker 1: that the fight against price rises trump's the needs for

52
00:02:29,360 --> 00:02:32,400
Speaker 1: tax cuts. The comments echo those of chances of Jeremy

53
00:02:32,480 --> 00:02:35,880
Speaker 1: Hunt over the weekend. However, the stance risks alienating members

54
00:02:35,919 --> 00:02:38,720
Speaker 1: of his own political party, who are unhappy that a

55
00:02:38,760 --> 00:02:41,480
Speaker 1: conservative government has taken the tax burden in Britain to

56
00:02:41,480 --> 00:02:42,639
Speaker 1: a seventy year high.

57
00:02:42,720 --> 00:02:45,519
Speaker 2: And NATO has moved forward with plans to enlarge its

58
00:02:45,520 --> 00:02:49,200
Speaker 2: defense alliance. During a meeting in the Lithuanian capital Vilnius,

59
00:02:49,480 --> 00:02:52,840
Speaker 2: the group firmed up the prospects for Ukraine's future membership

60
00:02:53,040 --> 00:02:56,080
Speaker 2: and secured a breakthrough deal with Sweden that will complete

61
00:02:56,120 --> 00:02:59,520
Speaker 2: its expansion northwards. Speaking to bloem Megg's Maria Todao at

62
00:02:59,600 --> 00:03:02,359
Speaker 2: the gather ring, the UK Foreign Secretary James Cleverly made

63
00:03:02,400 --> 00:03:05,520
Speaker 2: clear that he feels it's Moscow's actions that have forced

64
00:03:05,600 --> 00:03:06,680
Speaker 2: NATO to take action.

65
00:03:07,800 --> 00:03:12,079
Speaker 5: My message to Russia is remove your troops now. Russia

66
00:03:12,480 --> 00:03:17,280
Speaker 5: is the aggressor. Russia sent its troops into Ukraine, Russian

67
00:03:17,320 --> 00:03:22,120
Speaker 5: missiles targeting civilian infrastructure, civilian centers. Russia has been the

68
00:03:22,120 --> 00:03:25,720
Speaker 5: one that has escalated throughout this And you.

69
00:03:25,639 --> 00:03:28,440
Speaker 2: Can listen to Maria Todaeo's full conversation with the UK

70
00:03:28,480 --> 00:03:31,880
Speaker 2: Foreign Secretary James Cleverly on the Bloomberg Talks podcast. All

71
00:03:31,919 --> 00:03:34,320
Speaker 2: your best interviews in one place now.

72
00:03:34,560 --> 00:03:37,080
Speaker 1: US inflation data out to date is likely to be

73
00:03:37,200 --> 00:03:41,560
Speaker 1: pivotal for Fed officials. The consensus estimatecies headline inflation falling

74
00:03:41,640 --> 00:03:45,360
Speaker 1: sharply from four to three point one percent. Bloomberg Economics

75
00:03:45,400 --> 00:03:49,000
Speaker 1: expects headline and core CPI to be subdued. Meanwhile, JP

76
00:03:49,080 --> 00:03:51,200
Speaker 1: Morgan's analysts think that there's a good chance that it

77
00:03:51,240 --> 00:03:54,400
Speaker 1: comes in coulder than expected. Their trading desk puts an

78
00:03:54,440 --> 00:03:56,800
Speaker 1: eighty percent chance the print comes in below or in

79
00:03:56,880 --> 00:04:00,440
Speaker 1: line with forecasts. A coll print could allow the FORMC

80
00:04:00,560 --> 00:04:04,440
Speaker 1: to pause the hiking cycle. After the July meeting.

81
00:04:04,680 --> 00:04:07,640
Speaker 2: The US Federal Trade Commission is understood to be plotting

82
00:04:07,720 --> 00:04:11,200
Speaker 2: its next move after a judge ruled against the agency

83
00:04:11,320 --> 00:04:15,720
Speaker 2: in its case to block the Microsoft Activision deal. Dodkrisner

84
00:04:15,880 --> 00:04:16,640
Speaker 2: has the details.

85
00:04:17,000 --> 00:04:19,640
Speaker 6: We're told the FTC is leaning toward filing an appeal

86
00:04:19,680 --> 00:04:22,560
Speaker 6: as soon as today. A federal judge found the FTC

87
00:04:22,720 --> 00:04:25,640
Speaker 6: did not prove the deal would harm competition for gaming,

88
00:04:25,800 --> 00:04:28,599
Speaker 6: but Robert Landy of the University of Baltimore Law School

89
00:04:28,680 --> 00:04:31,680
Speaker 6: said the law only requires the agency to show a

90
00:04:31,760 --> 00:04:35,960
Speaker 6: deal may substantially lessen competition, not that it will or

91
00:04:36,120 --> 00:04:39,680
Speaker 6: is likely too. The judge extended in order, blocking Microsoft

92
00:04:39,720 --> 00:04:42,960
Speaker 6: from closing the deal until midnight Pacific time on Friday.

93
00:04:43,160 --> 00:04:46,400
Speaker 6: The FTC would need to seek an emergency stay to extend.

94
00:04:46,720 --> 00:04:49,640
Speaker 6: The question is whether the appeals court would rule before

95
00:04:49,680 --> 00:04:53,040
Speaker 6: the deal's deadline on July eighteenth in New York I'm

96
00:04:53,040 --> 00:04:54,880
Speaker 6: Dead Prisoner, Bloomberg Daybreak Europe.

97
00:04:55,240 --> 00:04:58,320
Speaker 2: That news comes as the UK Competition and Markets Authority

98
00:04:58,360 --> 00:05:02,560
Speaker 2: says it's prepared to evaluate proposals from Microsoft after vetoing

99
00:05:02,560 --> 00:05:05,159
Speaker 2: the deal in May. The CMA says it has now

100
00:05:05,200 --> 00:05:08,480
Speaker 2: agreed to stay in the company's appeal before the Competition

101
00:05:08,680 --> 00:05:09,880
Speaker 2: Appeal Tribunal.

102
00:05:10,680 --> 00:05:15,160
Speaker 1: Now, documents detailing how the biggest merger in golf history

103
00:05:15,200 --> 00:05:18,640
Speaker 1: came together has attracted the scrutiny of US lawmakers. The

104
00:05:18,760 --> 00:05:22,040
Speaker 1: US Senate has released documents from officials that show how

105
00:05:22,200 --> 00:05:26,040
Speaker 1: Live agreed to stop competing against the PGA in exchange

106
00:05:26,080 --> 00:05:29,279
Speaker 1: for assay in governance and a share in future media rites.

107
00:05:29,720 --> 00:05:34,120
Speaker 1: Senator Richard Blumenthal, the panal's chairman, though, says that transparency

108
00:05:34,279 --> 00:05:34,800
Speaker 1: is vital.

109
00:05:35,200 --> 00:05:38,120
Speaker 7: Americans very simply deserve to know what this agreement means

110
00:05:38,120 --> 00:05:40,479
Speaker 7: for the future of golf, as well as for the

111
00:05:40,480 --> 00:05:45,680
Speaker 7: future of the Saudi Arabian government's investment in sports and

112
00:05:45,880 --> 00:05:48,839
Speaker 7: other autocratic regimes that may choose to do the same.

113
00:05:50,040 --> 00:05:53,200
Speaker 1: The deal that the PGA made with Livgolf found the

114
00:05:53,200 --> 00:05:57,040
Speaker 1: Saudi Sovereign Wealth Fund, includes a broad non disparagement clause

115
00:05:57,080 --> 00:06:01,080
Speaker 1: that Blumenthal argues could prevent criticism of Saudi Arabia.

116
00:06:01,480 --> 00:06:04,640
Speaker 2: And Finally, London's property market slump is starting to weigh

117
00:06:04,680 --> 00:06:08,880
Speaker 2: on even the richest buyers. James Wilcock has more rather.

118
00:06:08,720 --> 00:06:11,320
Speaker 8: Than sell a house for less, many owners are opting

119
00:06:11,480 --> 00:06:15,680
Speaker 8: not to sell at all. Property researcher Londrez says transactions

120
00:06:15,680 --> 00:06:18,200
Speaker 8: are down twenty percent compared to this time last year,

121
00:06:18,360 --> 00:06:20,960
Speaker 8: with homes worth more than five million pounds being worst hit.

122
00:06:21,360 --> 00:06:24,120
Speaker 8: It's not just volume. Deals are taking longest to happen

123
00:06:24,200 --> 00:06:26,760
Speaker 8: and are more likely to fall through. Foreign buyers are

124
00:06:26,760 --> 00:06:28,960
Speaker 8: also holding back as they look ahead to a general

125
00:06:29,000 --> 00:06:33,040
Speaker 8: election and potential rule changes by any new government in London.

126
00:06:33,120 --> 00:06:35,400
Speaker 8: James Wilcock, Bloomberg Daybreak Europe.

127
00:06:36,120 --> 00:06:38,279
Speaker 1: Right, those were a few of our top stories for

128
00:06:38,400 --> 00:06:40,880
Speaker 1: you this morning. On a slightly lighter note, have you

129
00:06:40,880 --> 00:06:44,440
Speaker 1: booked your weekend ticket? Then? For Barbenheimer?

130
00:06:45,040 --> 00:06:46,800
Speaker 2: Well you put it well, because I don't think I

131
00:06:46,839 --> 00:06:50,599
Speaker 2: could choose between Oppenheimer or Barbie, the Bomb or the Bombshell,

132
00:06:50,800 --> 00:06:53,880
Speaker 2: as our Sarah Rappaport put it in her excellent piece

133
00:06:53,920 --> 00:06:56,640
Speaker 2: about these two movies this morning, I must stay Caroline.

134
00:06:56,839 --> 00:06:59,120
Speaker 2: Let me admit, when I woke up at three am

135
00:06:59,200 --> 00:07:01,719
Speaker 2: this morning, the thing I did what I watched the

136
00:07:01,760 --> 00:07:04,840
Speaker 2: trailer for Barbie. Did you nothing like Margo, Robbie and

137
00:07:04,920 --> 00:07:06,360
Speaker 2: Ryan Gosling to start your day?

138
00:07:06,440 --> 00:07:06,640
Speaker 7: You know?

139
00:07:06,720 --> 00:07:07,400
Speaker 9: Absolutely?

140
00:07:07,600 --> 00:07:09,800
Speaker 1: I just wonder whether you also want the tail of

141
00:07:09,880 --> 00:07:12,840
Speaker 1: the atomic bomb and the creation there of to go

142
00:07:12,960 --> 00:07:15,000
Speaker 1: with the Barbie story. But look, it's a real thing.

143
00:07:15,040 --> 00:07:16,120
Speaker 1: It's not just on the internet.

144
00:07:16,160 --> 00:07:16,880
Speaker 9: Apparently it is a.

145
00:07:16,800 --> 00:07:20,480
Speaker 1: Double bill at cinemas anyway. Look, that's just a bit

146
00:07:20,520 --> 00:07:24,080
Speaker 1: of fun. Let's also dive into the more serious, shall we.

147
00:07:24,440 --> 00:07:26,960
Speaker 1: The Bank of England publishing the results of its stress

148
00:07:27,000 --> 00:07:30,720
Speaker 1: tests for banks, along with the Financial Policy Committee's review

149
00:07:31,200 --> 00:07:33,960
Speaker 1: on the stability of the UK Financial System in the

150
00:07:34,120 --> 00:07:37,239
Speaker 1: face of rising interest rates. Lots of the top lines

151
00:07:37,280 --> 00:07:39,360
Speaker 1: are out and the key message does seem to be

152
00:07:39,360 --> 00:07:42,280
Speaker 1: that high rates are beginning to squeeze the economy. Joining

153
00:07:42,320 --> 00:07:45,760
Speaker 1: us now Bloomberg's EMEA Finance editor Tom Metcalf, Great, have

154
00:07:45,840 --> 00:07:50,360
Speaker 1: you in studio and you're chuckling away at our cinema, Jakes, Tom,

155
00:07:50,560 --> 00:07:54,400
Speaker 1: What is the big takeaway then from the Bank of England?

156
00:07:54,440 --> 00:07:56,720
Speaker 1: I mean, this is surely what they want, isn't it

157
00:07:56,800 --> 00:07:59,320
Speaker 1: rising interest rates and meant to cool the economy.

158
00:08:00,040 --> 00:08:01,840
Speaker 10: Yes, so I'm struggling to think how I can follow Barbie,

159
00:08:01,920 --> 00:08:04,840
Speaker 10: but yes, absolutely it was pretty good news all around.

160
00:08:04,960 --> 00:08:07,520
Speaker 10: Definitely a clean bill of health. And I was just

161
00:08:07,560 --> 00:08:09,840
Speaker 10: going through the results where they don't really go into

162
00:08:09,880 --> 00:08:11,840
Speaker 10: specific banks, but what they do say is how much

163
00:08:11,840 --> 00:08:15,040
Speaker 10: they cleared each sort of hurdle capital ratio by and

164
00:08:15,080 --> 00:08:16,960
Speaker 10: you know, they're all pretty clear, even they're sort of

165
00:08:17,040 --> 00:08:19,520
Speaker 10: the low point. I think the closest to bank came

166
00:08:19,560 --> 00:08:23,120
Speaker 10: as one point seven percentage points and a nationwide the

167
00:08:23,120 --> 00:08:25,360
Speaker 10: Build and Society I think had a clear at rate

168
00:08:25,400 --> 00:08:30,320
Speaker 10: of thirteen percentage points. Very conservative institution that but I think,

169
00:08:30,360 --> 00:08:31,600
Speaker 10: you know, and then you see the rush of all

170
00:08:31,640 --> 00:08:33,920
Speaker 10: the reports out from the banks, all noting they all passed,

171
00:08:34,000 --> 00:08:36,520
Speaker 10: et cetera, et cetera. So I took a look at

172
00:08:36,559 --> 00:08:38,240
Speaker 10: the share prices just before I came on and they

173
00:08:38,280 --> 00:08:40,920
Speaker 10: all were all mildly up. This has Raja been pricing

174
00:08:41,040 --> 00:08:44,360
Speaker 10: by the market, But certainly it's much better news than

175
00:08:44,480 --> 00:08:46,480
Speaker 10: you know, sort of seeing you know, those bank shares

176
00:08:46,559 --> 00:08:47,160
Speaker 10: drop or something.

177
00:08:47,200 --> 00:08:50,160
Speaker 2: So that's stress at the bank level, but at an

178
00:08:50,160 --> 00:08:53,120
Speaker 2: individual level, looks like there's more pain ahead. The bank

179
00:08:53,240 --> 00:08:56,400
Speaker 2: saying that the average mortgage holder is to pay about

180
00:08:56,400 --> 00:08:59,319
Speaker 2: three thousand pounds a year more because of these higher

181
00:08:59,360 --> 00:09:02,880
Speaker 2: interest rates. That's even higher than the Resolution Foundation was estimating.

182
00:09:03,400 --> 00:09:05,640
Speaker 10: Yeah, no, exactly. So as you were just saying on

183
00:09:05,679 --> 00:09:07,960
Speaker 10: the housing market is all kind of freezing up, there's

184
00:09:08,000 --> 00:09:10,040
Speaker 10: going to be a lot of individuals in pain. And

185
00:09:10,240 --> 00:09:11,439
Speaker 10: that was the other thing to come out of the

186
00:09:11,520 --> 00:09:14,360
Speaker 10: report is what's really going to drive these capital ratio

187
00:09:14,520 --> 00:09:17,679
Speaker 10: falls if in this scenario would be big impairments so

188
00:09:17,720 --> 00:09:19,520
Speaker 10: I think they calculated something like one hundred and twenty

189
00:09:19,520 --> 00:09:23,199
Speaker 10: five billion pounds the eight banks being tested would potentially,

190
00:09:23,240 --> 00:09:24,719
Speaker 10: you know, sort of have to absorb up to I

191
00:09:24,760 --> 00:09:26,960
Speaker 10: think it was twenty thirty So that's a huge, huge amount.

192
00:09:27,160 --> 00:09:28,439
Speaker 10: But it does just go to show that the fact

193
00:09:28,480 --> 00:09:31,000
Speaker 10: they didn't fail to stressed US shows how resilient, how

194
00:09:31,080 --> 00:09:32,959
Speaker 10: much kind of over the years they built up those

195
00:09:33,120 --> 00:09:36,480
Speaker 10: capital reserves. But absolutely on an individual basis, it's very,

196
00:09:36,559 --> 00:09:40,360
Speaker 10: very painful, and you know, the accompanying Financial Stability Report

197
00:09:40,760 --> 00:09:43,400
Speaker 10: does paint, you know, a pretty gloomy picture for the

198
00:09:43,480 --> 00:09:44,120
Speaker 10: UK economy.

199
00:09:44,240 --> 00:09:46,679
Speaker 1: Yeah, I'm just looking at the bank's socks this morning. Actually,

200
00:09:46,800 --> 00:09:50,600
Speaker 1: broadly across the USOX six hundred, the sector is up

201
00:09:50,600 --> 00:09:52,960
Speaker 1: by half of one percent. You've got gains for Virgin

202
00:09:53,040 --> 00:09:57,200
Speaker 1: Money for Barclay's, for Lloyd's Banking Group this morning. So

203
00:09:57,440 --> 00:10:00,640
Speaker 1: actually they seem to be leading the pack at least

204
00:10:00,640 --> 00:10:05,520
Speaker 1: for now. Just though the other risk around foreign investors

205
00:10:05,520 --> 00:10:08,360
Speaker 1: into the UK. I thought that was quite interesting from

206
00:10:08,400 --> 00:10:09,199
Speaker 1: the Bank of England.

207
00:10:09,880 --> 00:10:11,600
Speaker 10: Yeah, you know, and that's the great thing about the report.

208
00:10:11,640 --> 00:10:13,880
Speaker 10: It sort of pulls in all sorts of different elements

209
00:10:13,960 --> 00:10:16,080
Speaker 10: and you know, that was something new for them. I

210
00:10:16,080 --> 00:10:18,959
Speaker 10: think they also again hammered home on market based finance,

211
00:10:18,960 --> 00:10:22,240
Speaker 10: which you know basically that is hedge funds, and so

212
00:10:22,280 --> 00:10:24,520
Speaker 10: again saying, look, that is another risk and we are

213
00:10:24,760 --> 00:10:26,199
Speaker 10: I think there was a line in that we're looking

214
00:10:26,240 --> 00:10:28,600
Speaker 10: at doing more with other regulators on that. So you know,

215
00:10:28,600 --> 00:10:29,960
Speaker 10: it's a line that's been out there, but the fact

216
00:10:29,960 --> 00:10:32,079
Speaker 10: they keep on coming back to it, it is certainly

217
00:10:32,120 --> 00:10:33,280
Speaker 10: something we're going to be looking into.

218
00:10:33,480 --> 00:10:36,040
Speaker 2: All right, thanks for taking us through the key takeaways

219
00:10:36,080 --> 00:10:40,600
Speaker 2: of that report. That's Bloomberg's AMEIR Finance editor Tom metcalf Up. Next,

220
00:10:40,760 --> 00:10:44,360
Speaker 2: Jeremy Hunt orders cuts to fund public sector pay rises

221
00:10:44,679 --> 00:10:48,360
Speaker 2: and Elon Musk's shock plan to enter the UK energy market.

222
00:10:50,679 --> 00:10:54,240
Speaker 4: Now the paper review on blue Bird Daybreak Europe, the

223
00:10:54,320 --> 00:10:56,479
Speaker 4: news you need to know from today's.

224
00:10:56,080 --> 00:10:59,959
Speaker 1: Papers, and is this morning Bluebergsleyanne Gerin's The Financial Time

225
00:11:00,240 --> 00:11:04,360
Speaker 1: Leanne has Jeremy Hunt orders ministers to find two billion

226
00:11:04,400 --> 00:11:08,880
Speaker 1: pounds of savings for public sector pay rises. So we

227
00:11:08,880 --> 00:11:11,280
Speaker 1: actually know how much the government is going to increase

228
00:11:11,360 --> 00:11:13,160
Speaker 1: pay by well.

229
00:11:13,000 --> 00:11:14,480
Speaker 9: We don't know yet, Caroline.

230
00:11:14,480 --> 00:11:17,640
Speaker 11: But remember the government is proposing a three point five

231
00:11:17,720 --> 00:11:22,559
Speaker 11: percent pay rise for public sector workers. But the independent

232
00:11:22,720 --> 00:11:27,360
Speaker 11: pay Review bodies are recommending public sector awards of around

233
00:11:27,640 --> 00:11:31,199
Speaker 11: six percent for two thousand and twenty three. In two

234
00:11:31,760 --> 00:11:34,760
Speaker 11: and twenty four, that's the figure we know at the moment,

235
00:11:35,240 --> 00:11:38,400
Speaker 11: and this is why the Chancellor is asking ministers to

236
00:11:38,480 --> 00:11:42,520
Speaker 11: find billions of pounds of savings to fund public sector

237
00:11:42,559 --> 00:11:46,079
Speaker 11: pay rises, basically to plug the gap that we are

238
00:11:46,120 --> 00:11:47,079
Speaker 11: seeing emerge.

239
00:11:47,400 --> 00:11:49,600
Speaker 9: And Hunt has made it clear that he.

240
00:11:49,600 --> 00:11:53,280
Speaker 11: Will not borrow any more money to fund pay rises

241
00:11:53,679 --> 00:11:57,840
Speaker 11: for police officers, teachers, nurses and other public sector pay

242
00:11:59,080 --> 00:12:02,679
Speaker 11: for other public sects to workers. But Caroline Rishi h

243
00:12:03,000 --> 00:12:05,560
Speaker 11: Rishi Sunac, I would call it Rishi Hunt. Made up

244
00:12:05,559 --> 00:12:08,720
Speaker 11: a whole new name there. But Jeremy Hunt and Rishi

245
00:12:08,760 --> 00:12:12,920
Speaker 11: Sunac are expected to agree on a strategy. The reality

246
00:12:13,000 --> 00:12:15,320
Speaker 11: is we don't know when, but we do know that

247
00:12:15,360 --> 00:12:19,000
Speaker 11: they're getting together on Thursday, when the Prime Minister is

248
00:12:19,080 --> 00:12:22,000
Speaker 11: back in the country, and they're going to weigh if

249
00:12:22,000 --> 00:12:24,720
Speaker 11: a six percent pay rise is reasonable.

250
00:12:25,200 --> 00:12:27,319
Speaker 1: This is the inflation, Yeah, this is the real question.

251
00:12:27,320 --> 00:12:29,720
Speaker 1: Are they going to sweep aside the independent pay review

252
00:12:29,720 --> 00:12:31,640
Speaker 1: bodies and say, look, times are too tough and we

253
00:12:31,679 --> 00:12:34,960
Speaker 1: can't possibly pay this to nurses and teachers that's surely.

254
00:12:34,840 --> 00:12:39,719
Speaker 2: And they're hidden behind the paybodies evaluations previously when they

255
00:12:39,720 --> 00:12:40,160
Speaker 2: haven't won it.

256
00:12:40,240 --> 00:12:43,839
Speaker 1: YEA quote the independence of those pay review bodies and

257
00:12:43,920 --> 00:12:45,760
Speaker 1: that they are central to the decision making.

258
00:12:45,920 --> 00:12:48,920
Speaker 11: Yeah, but I also think maybe they would be scared

259
00:12:48,960 --> 00:12:51,920
Speaker 11: to go against it in many ways, as the Financial

260
00:12:52,000 --> 00:12:56,079
Speaker 11: Times does highlight that this could heighten even you know

261
00:12:56,360 --> 00:13:00,600
Speaker 11: things further. We've seen public sector workers tensions so high,

262
00:13:00,679 --> 00:13:02,120
Speaker 11: a lot of them going on strike.

263
00:13:02,200 --> 00:13:05,479
Speaker 9: We've had a wave of industrial action here in the UK.

264
00:13:05,520 --> 00:13:08,040
Speaker 2: But indeed the number of working days lost two strike

265
00:13:08,080 --> 00:13:11,160
Speaker 2: action actually down in the latest data, so an encouraging

266
00:13:11,240 --> 00:13:15,200
Speaker 2: sign for the Chancellor. Meanwhile, The Guardian says financial firms

267
00:13:15,280 --> 00:13:19,079
Speaker 2: must boost protections against AI scums. That's according to the

268
00:13:19,200 --> 00:13:22,720
Speaker 2: UK regulator, or that it's going to warn later on today.

269
00:13:23,160 --> 00:13:26,640
Speaker 11: Yeah, exactly, So Nicole Rathi, he is the head of

270
00:13:26,679 --> 00:13:29,440
Speaker 11: the Financial Conduct Authority and he's going to be giving

271
00:13:29,720 --> 00:13:32,640
Speaker 11: a speech today right here in London, and he's going

272
00:13:32,679 --> 00:13:35,880
Speaker 11: to warn a boss's on the positives and negatives of

273
00:13:36,800 --> 00:13:41,920
Speaker 11: rapidly advancing technology and he's basically going to say the

274
00:13:42,040 --> 00:13:47,440
Speaker 11: finance sector need to be accountable for decisions taken by

275
00:13:47,559 --> 00:13:51,839
Speaker 11: AI at their firms, so that's something he'll be focusing on.

276
00:13:52,080 --> 00:13:54,240
Speaker 9: He'll also talk about the risks.

277
00:13:53,880 --> 00:13:59,080
Speaker 11: Of cyber frauds, cyber attacks, identity fraud, all increasing in

278
00:13:59,160 --> 00:14:02,280
Speaker 11: scale and sophistication as AI just.

279
00:14:02,320 --> 00:14:04,440
Speaker 9: Becomes more and more widespread.

280
00:14:05,200 --> 00:14:08,840
Speaker 11: Today's speech by Rathi will outline the benefits for the

281
00:14:08,880 --> 00:14:12,560
Speaker 11: financial sector in improving financial models.

282
00:14:12,440 --> 00:14:14,199
Speaker 9: But will also warn.

283
00:14:14,320 --> 00:14:19,440
Speaker 11: That the tech will increase risks for financial firms in particular.

284
00:14:19,840 --> 00:14:21,800
Speaker 9: So a warning about AI.

285
00:14:22,080 --> 00:14:24,680
Speaker 11: We do know Rishie Sunak hoping to make the UK

286
00:14:24,840 --> 00:14:28,360
Speaker 11: Center for Regulation of AI, but there we are a

287
00:14:28,440 --> 00:14:32,200
Speaker 11: warning on both sides about the rapidly advancing tech.

288
00:14:32,960 --> 00:14:36,520
Speaker 1: Then this last year in the Telegraph headline Elon Musk's

289
00:14:36,560 --> 00:14:40,000
Speaker 1: Tesla poised to launch British household electricity supplier.

290
00:14:40,200 --> 00:14:43,000
Speaker 9: Hmm, yeah, I know, Caroline, but let me get into

291
00:14:43,040 --> 00:14:43,600
Speaker 9: the details.

292
00:14:43,680 --> 00:14:47,000
Speaker 11: So Elon Musk is about to gate crash Britain's energy

293
00:14:47,040 --> 00:14:49,920
Speaker 11: market by selling electricity to households.

294
00:14:50,480 --> 00:14:53,360
Speaker 9: But this has all been revealed in a job listing.

295
00:14:53,400 --> 00:14:56,120
Speaker 11: I think this is pretty nifty journalism by the Telegraph,

296
00:14:56,200 --> 00:14:56,840
Speaker 11: to be honest.

297
00:14:57,360 --> 00:14:58,840
Speaker 9: So the job.

298
00:14:58,680 --> 00:15:03,080
Speaker 11: Listing says Test's making plans to register as an electricity

299
00:15:03,160 --> 00:15:08,280
Speaker 11: provider with the industry regulator and launcher retail electricity products

300
00:15:08,320 --> 00:15:12,160
Speaker 11: here in the UK. Now the servers, according to the newspaper,

301
00:15:12,160 --> 00:15:15,520
Speaker 11: will be available to owners of the company's power Wall

302
00:15:15,680 --> 00:15:20,320
Speaker 11: home battery, and Tesla will sell electricity to households and

303
00:15:20,400 --> 00:15:24,400
Speaker 11: buy back stored energy at a time of peak demands.

304
00:15:24,600 --> 00:15:27,640
Speaker 11: Of course, all relates to the fact that he's got

305
00:15:27,680 --> 00:15:31,640
Speaker 11: electric cars. They becoming more and more common to see

306
00:15:31,680 --> 00:15:34,360
Speaker 11: on the road, so we need more and more power ploints.

307
00:15:34,680 --> 00:15:37,880
Speaker 11: But this is not the first time Tesla's flirted with

308
00:15:37,920 --> 00:15:42,560
Speaker 11: our energy market, so they were actually involved with Octopus

309
00:15:42,760 --> 00:15:45,280
Speaker 11: Energy back in twenty twenty, so let's see how this

310
00:15:45,320 --> 00:15:45,840
Speaker 11: one goes.

311
00:15:46,960 --> 00:15:49,880
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

312
00:15:49,920 --> 00:15:53,040
Speaker 2: stories making news from London to Wall Street and beyond.

313
00:15:53,320 --> 00:15:56,520
Speaker 1: Look for us on your podcast feed every morning, on Apple,

314
00:15:56,640 --> 00:15:59,320
Speaker 1: Spotify and anywhere else you get your podcasts.

315
00:15:59,320 --> 00:16:03,040
Speaker 2: You can also and live each morning on London Dab Radio,

316
00:16:03,240 --> 00:16:06,040
Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

317
00:16:06,080 --> 00:16:08,840
Speaker 1: Our flagship New York station is also available on your

318
00:16:08,880 --> 00:16:13,560
Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

319
00:16:13,800 --> 00:16:15,160
Speaker 1: I'm Caroline Hipka.

320
00:16:15,000 --> 00:16:17,360
Speaker 2: And I'm Lizzie burden. Join us again tomorrow morning for

321
00:16:17,440 --> 00:16:19,920
Speaker 2: all the news you need to start your day right here.

322
00:16:19,800 --> 00:16:20,880
Speaker 9: On Bloomberg Daybreak.

323
00:16:20,880 --> 00:16:24,800
Speaker 2: Europe