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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Day BAQ podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Tuesday, the

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Speaker 2: tenth of June in London. I'm Caroline Hepga.

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Speaker 3: And I'm Stephen Carroll. Coming up today. Two hundred and

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Speaker 3: seventy six thousand jobs last since the October budget. UK

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Speaker 3: employment plummets as the rising cost of hiring hits the

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Speaker 3: labor market.

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Speaker 2: President Trump deploys marines to Los Angeles. The White House

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Speaker 2: escalates its response to anti deportation protests as Democrats accuse

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Speaker 2: the President of inflaming tensions.

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Speaker 3: Plus of fourteen billion pound power up, the UK green

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Speaker 3: lights a major cash injection to help build the new

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Speaker 3: Size well Ce nuclear plant.

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Speaker 2: Let's start with the roundup of our top stories.

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Speaker 3: UK employment has seen the biggest monthly drop in five

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Speaker 3: years after the minimum wage and tax changes. The number

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Speaker 3: of employees on payroll fell by one hundred and nine

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Speaker 3: thousand in May, far more than the twenty thousand economists

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Speaker 3: had forecast. We got reaction from Bloomberg's chief UK economist,

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Speaker 3: Dan Hanson.

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Speaker 4: Really weak relative to at least what we were expecting.

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Speaker 4: And I think consensus was expecting as well. If you're

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Speaker 4: sitting across the road in thread Needle Street, you're going

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Speaker 4: to be pleased seeing that pay number come down a

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Speaker 4: little bit further, probably a little bit further than they expected.

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Speaker 4: It's still very high, though, and I think that's something

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Speaker 4: that you just have to have to bear in mind.

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Speaker 3: Dan Hanson adds that the data from the Office for

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Speaker 3: National Statistics has been called into question after a series

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Speaker 3: of failures at the public body. Despite concerns over the

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Speaker 3: data's reliability, the figures suggest firms are cutting back on

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Speaker 3: hiring after the government increased payroll taxes for businesses and

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Speaker 3: hiked the minimum wage in its October budget.

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Speaker 2: Now we also have the unrest in Los Angeles. The

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Speaker 2: Chomp administration says that it is deploying seven hundred marines

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Speaker 2: to the city as political tension with Democrats grow. The

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Speaker 2: White House says that conditions in LA are spirally and

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Speaker 2: that federal forces are needed to support immigration agents and

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Speaker 2: to restore order. President Trump and the California Governor Gavin

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Speaker 2: Newsom have clashed repeatedly over the response to the unrest,

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Speaker 2: with the States suing the Trump administration for mobilizing National

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Speaker 2: Guard troops in the city. Here is the Los Angeles

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Speaker 2: Democratic Mayor Karen Bass.

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Speaker 5: They're guarding the Federal building here in downtown, and they're

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Speaker 5: guarding the Federal building in Westwood. That's what they're doing,

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Speaker 5: So they need marines on top of it. I don't

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Speaker 5: understand that. That's why I feel like we are part

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Speaker 5: of an experiment that we did not ask to be

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Speaker 5: a part of.

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Speaker 2: Mayor Karen Bass speaking there as the United Nations on

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Speaker 2: Monday warned against a further militarization of the situation in

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Speaker 2: LA On Monday, largely peaceful daytime protests morphed into a

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Speaker 2: fourth day of scattered clashes with police. The protests, which

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Speaker 2: have largely been limited to a few small areas of

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Speaker 2: the city, were sparked by a rising number of raids

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Speaker 2: by immigration agents, which local officials argue have spread fear

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Speaker 2: in immigrant communities.

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Speaker 3: Bloomberg has learned that Meta CEO Mark Zuckerberg is assembling

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Speaker 3: a team of experts to achieve artificial general intelligence, recruiting

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Speaker 3: from a brain trust of AI researchers and engineers. Sources

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Speaker 3: tell us that Zuckerberg aims to hire around fifty people

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Speaker 3: for the new team, including a new head of AI research,

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Speaker 3: internally referred to as the Superintelligence Group. The Facebook founder's

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Speaker 3: goal is for Mata to outstrip other tech companies and

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Speaker 3: achieving artificial general intelligence, which could be woven into its

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Speaker 3: suite of products, including social media and communications platforms.

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Speaker 2: Now, US China trade talks will continue for a second

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Speaker 2: day here in London, as both sides tried to ease

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Speaker 2: tensions over rare earth supplies and tech exports. Bloomberg on

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Speaker 2: the sounds that the US is offering to ease some

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Speaker 2: tech export controls in exchange for rare earth shipments from China,

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Speaker 2: which would you U is seventy percent of global supply

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Speaker 2: US Jury Sectary, Scott Best Center, Commo Sexuary how Lutnik

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Speaker 2: had been leading the American delegation, with Lutnik calling the

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Speaker 2: talks fruitful, a sentiment echoed by President Trump.

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Speaker 3: We are doing well with China.

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Speaker 6: China's not easy.

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Speaker 4: I think we're doing very well.

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Speaker 3: They're over there now.

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Speaker 1: I'm only getting good reports.

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Speaker 2: So that was at President Trump. But although optimistic about

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Speaker 2: the talks, Trump gave no clear answer on lifting export

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Speaker 2: restrictions for China, saying we'll see when he was asked

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Speaker 2: about it. The Chinese delegation was led by the Vice

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Speaker 2: Premier Hurley Feng, who left without commenting to the media.

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Speaker 3: Europe stock exchanges are fighting fiercely to win the few

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Speaker 3: pending IPOs across the continent. Data compiled by Bloomberg shows

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Speaker 3: Europe has just made up eight percent of global issuance

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Speaker 3: so far this year. That's against a yearly average of

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Speaker 3: sixteen percent for the last decade. Bloomberg ex Chames Wilcock

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Speaker 3: has more.

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Speaker 6: You may not have heard of Visma or Very Sure,

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Speaker 6: but the stock exchange in Stockholm, London, Zurich and Amsterdam have.

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Speaker 6: One's a software company and the other makes alarms. But

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Speaker 6: both are expected to list at valuations potentially worth more

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Speaker 6: than twenty billion euros. Europe's capital markets are trying their

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Speaker 6: best to charm these potential public companies after being starved

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Speaker 6: of new listings, and for the exchanges who miss out,

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Speaker 6: alarm bells will be ringing in London, James Wilcock, Bloomberg

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Speaker 6: Radio now Here.

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Speaker 2: In the UK, the government says that it will invest

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Speaker 2: fourteen point two billion pounds to help build the size

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Speaker 2: well seen nuclear power plant in Suffolk in eastern England,

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Speaker 2: a project that has already been on the drawing board

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Speaker 2: for more than a decade. Bloomberg's U and Pots has more.

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Speaker 1: When completed, the three point two gigawatts Size or See

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Speaker 1: nuclear plant will generate enough power for six million homes,

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Speaker 1: which the government hopes will usher in a quote golden

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Speaker 1: age of abundant clean energy. The total price tag for

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Speaker 1: this clean energy, though, is likely to pass forty billion pounds.

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Speaker 1: Today's announcement ahead of tomorrow's spending review, brings the government's

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Speaker 1: total commitment to Size We'll See to just shy of

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Speaker 1: eighteen billion pounds, meaning there's plenty to do in raising

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Speaker 1: funds from the private sector. In London, I'm Une Pots

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Speaker 1: Spoomberg Radio.

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Speaker 5: Well.

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Speaker 3: The UK government has reversed an unpopular cut it made

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Speaker 3: to pensioner's winter fuel benefits. Pensioners that income of under

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Speaker 3: thirty five thousand pounds will now be able to claim

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Speaker 3: extra money to heat their homes during winter. It's a

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Speaker 3: U turn. The Chancellor, Rachel Reeves says she can afford

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Speaker 3: because she has stabilized the economy.

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Speaker 7: We did that with a number of difficult decisions. But

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Speaker 7: because of those decisions, our public finances are now in

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Speaker 7: a better position, which means this year we're able to

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Speaker 7: play the winter fuel payment to more pensioners, so nine

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Speaker 7: million we'll receive it this year.

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Speaker 3: The Chancellor earlier this year had to make last minute

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Speaker 3: changes to curb disability benefits to return her fiscal headroom

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Speaker 3: to just under ten billion pounds. The governing Labor Party

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Speaker 3: is seen an abrupt fall in popularity since taking off US,

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Speaker 3: with most polls putting the party now second place to

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Speaker 3: Reform UK.

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Speaker 2: So those are our top stories for you this morning.

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Speaker 2: In terms of the markets this hour, European stock's really

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Speaker 2: not going anywhere flat, although the fifty one hundred t's

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Speaker 2: again are four tenths of one percent. It seemed to

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Speaker 2: be that the sentiment in market seemed to sour somewhat

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Speaker 2: towards the end of the Asian trading session. US stop

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Speaker 2: futures are in the red. You've also got sterling continuing

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Speaker 2: to decline, actually accelerating the declines now down six cents

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Speaker 2: of one per cent on cable one thirty four to

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Speaker 2: sixty four. After the job's figures. We'll get more on

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Speaker 2: that in a minute. Are the euro's also softer almost

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Speaker 2: four tenths of one per cent now one thirteen eighty two,

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Speaker 2: with a stronger US dollar this morning. As for treasury

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Speaker 2: yealds down two basis points at four forty five this morning,

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Speaker 2: so it looks like have an assets of seeing something

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Speaker 2: of a bid still and gold is stronger tenth of

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Speaker 2: one percent, with bitcoin also close to a record, bitcoin

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Speaker 2: trading at one hundred and nine four hundred dollars this

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Speaker 2: out of those are the markets.

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Speaker 3: Well, in a moment, we'll bring you more on the

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Speaker 3: UK jobs data plus the latest on events in Los Angeles.

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Speaker 3: Another story that we've been reading today from our food

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Speaker 3: editor Kate Crad. She's been sifting through the latest ranking

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Speaker 3: of the best restaurants in the UK and came out

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Speaker 3: on top of the ritz. A bit of a shift

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Speaker 3: into fine dining.

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Speaker 8: Yeah.

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Speaker 2: Absolutely. This is the chef for John Williams's sort of

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Speaker 2: classic menu and very elegant dining room obviously, which has

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Speaker 2: been awarded the top spot at the UK's National Restaurant Awards,

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Speaker 2: which took place last night. It's quite interesting because these

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Speaker 2: awards are only it's quite a small select group of

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Speaker 2: people that choose them, only about two hundred industry professionals

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Speaker 2: and chefs and food writers and others who make the decision.

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Speaker 2: Most of them are in London. But yes, the Ritz

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Speaker 2: is at the top of that list.

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Speaker 3: Yeah, and indeed, of course can play the game of

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Speaker 3: how many of the top one hundred have you eaten?

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Speaker 2: In?

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Speaker 3: Which is that I've been doing this morning. You'll find

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Speaker 3: a link to the article in our podcast show Notes.

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Speaker 2: Now, the latest UK job data has been published and

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Speaker 2: it does show the biggest marketing job in employment since

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Speaker 2: the pandemic. Average earnings were by five point three percent

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Speaker 2: year or year. That was less than the estimate of

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Speaker 2: five and a half percent. Our TFUK economist Dan Hanson

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Speaker 2: joins us now for more. Dan, We've had a moment

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Speaker 2: to think about this just a beat. So what is

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Speaker 2: your reading? How negative is this for the UK?

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Speaker 4: I mean, I don't think we should overplay it, but

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Speaker 4: I think it's it's definitely weaker than we expected and

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Speaker 4: everyone everyone else expected to. I mean, one thing to

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Speaker 4: just mention and this is where the sort of this

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Speaker 4: the number you mentioned there comes from the payrolls data.

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Speaker 4: It does get revised quite a lot, so you know,

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Speaker 4: we have to just be take it with a little

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Speaker 4: bit of a pinch of salt. Nonetheless, there is definitely

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Speaker 4: a trend in the labor market, particularly on in the employees' data,

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Speaker 4: where we had these these falls in employees, and it's

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Speaker 4: very clear the labor market is loosening and that is

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Speaker 4: beginning to feed through to the pay data. Pay data

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Speaker 4: is beginning. Pay growth is cooling, but it is still

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Speaker 4: very elevated. So you know, I think if you're thinking

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Speaker 4: about this from a Bank of England perspective, you're thinking,

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Speaker 4: this is things moving in the direction I want. I

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Speaker 4: think what you have to be really careful of is

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Speaker 4: that the jobs market is one of these things that

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Speaker 4: it suddenly tips and it suddenly moves very quickly, and

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Speaker 4: I think the bank just needs to be really careful

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Speaker 4: that that it doesn't preside over that situation where it's

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Speaker 4: held interest rates too high for too long and it

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Speaker 4: hasn't recognized that the labor market has shifted from a

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Speaker 4: world of being extremely tight to a world where it's

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Speaker 4: loose and actually now loosening quite quickly. So I think

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Speaker 4: that's the risk with this is that things move quickly

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Speaker 4: and the bank has to basically catch up.

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Speaker 3: How much of this can be attributed though, to the

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Speaker 3: policy changes that were announced in the budget last October.

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Speaker 3: It is a cumulative decline and employment that we've seen

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Speaker 3: since October. Of course, the big changes would have increased

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Speaker 3: the cost of employment for employers at national insurance contributions

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Speaker 3: for employers going up, as well as the increase in

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Speaker 3: the minimum wage.

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Speaker 4: Yeah, I think there are I mean, there are different

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Speaker 4: elements to it, aren't there. I think the first six

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Speaker 4: months of Labour's tenure and power we had this we

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Speaker 4: had basically had this confidence shock from with the and

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Speaker 4: that was not necessarily to it policy. It was just

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Speaker 4: to do with the rhetoric around the economy. Then you're right, Stephen.

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Speaker 4: We had the budget and there were some policies in

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Speaker 4: there that you would argue on negative for the outlook

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Speaker 4: for employment, but also negative for the outlook for wage

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Speaker 4: growth in terms of the increase in employer national insurance contributions,

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Speaker 4: that's the main one. But also, of course you've got

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Speaker 4: the rise in the national living wage, which of course

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Speaker 4: is positive for pay growth for the people who are

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Speaker 4: who were earning the National living wage, but it increases

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Speaker 4: employer's cost space and that obviously creates a question about

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Speaker 4: whether they ads their cost base in other ways. Potentially

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Speaker 4: through headcount, so I think there is some element to that.

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Speaker 4: To you, to answer your question directly, I think there

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Speaker 4: is some element to what the government has done has

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Speaker 4: created some of this additional weakness in the labor market.

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Speaker 4: So I think, yes, there is there is certainly something there.

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Speaker 2: Okay, Dan, thank you so much for being with us

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Speaker 2: this morning. Are UK Chief Economist Dan Hanson. I thought

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Speaker 2: it was also very interesting that we spoke to Manpower

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Speaker 2: Group UK this morning and they were talking about how

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Speaker 2: there is a lack of visibility around work of rights

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Speaker 2: reforms that are coming to the UK and that that

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Speaker 2: is also weighing on UK businesses.

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Speaker 3: Now, the top of administration is sending about seven hundred

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Speaker 3: active duty marines to respond to protests in Los Angeles.

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Speaker 3: California's Governor, Gavin Newsom has called the decision unlawful, and

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Speaker 3: as requested, the White House revoked the order joining us

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Speaker 3: now from more our senior editor Bill Ferries, Bill, deploying

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Speaker 3: active duty military within the United States is highly unusual.

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Speaker 3: How has President Trump justified this.

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Speaker 8: For having me? Yes, we've seen the reports now of

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Speaker 8: about seven hundred marines heading from the twenty nine Palms

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Speaker 8: base into Los Angeles. In a full caravan of buses.

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Speaker 8: That's on top of the two thousand National Guard troops

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Speaker 8: that the administration has authorized to be deployed in Los Angeles,

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Speaker 8: although so far local officials say it's mostly been about

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Speaker 8: three hundred that they've seen on the streets. It's highly unusual.

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Speaker 8: The President basically invoked a provision of US law that

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Speaker 8: allows him to deploy active duty US forces on American

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Speaker 8: territory in the case of an invasion or a rebellion

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Speaker 8: or a potential rebellion. So that's the point that California authorities,

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Speaker 8: including Gavin Newsom, are really contesting at this point, saying

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Speaker 8: it's an over the top decision that risks inflaming the

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Speaker 8: situation on the ground. In terms of what has been

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Speaker 8: happening on the ground, it looks like Monday evening. Monday

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Speaker 8: and Monday evening where a little bit quieter, calmer than

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Speaker 8: what we had seen over the weekend when you had

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Speaker 8: a bunch of cars that were set on fire and

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Speaker 8: you had some pretty large clashes between protesters and authorities.

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Speaker 8: It was not nearly at that level on Monday night

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Speaker 8: in LA And we'll have to see it's still a

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Speaker 8: very tense situation there though.

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Speaker 2: Yeah, absolutely. The last time I can recall the Marines

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Speaker 2: being used in the US's Hurricane Katrina. I looked that up,

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Speaker 2: that is right, two thousand and five, and that was

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Speaker 2: used basically in a very different set of circumstances. In

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Speaker 2: terms of what the officials in California are saying and

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Speaker 2: what they're doing legally, I mean, the state leaders are

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Speaker 2: sueing the Trump administration.

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Speaker 8: That's right. California has put forward a twenty two page

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Speaker 8: complaint late Monday to the federal court in San Francisco,

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Speaker 8: with Governor k Newsom urging a judge to void the

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Speaker 8: president's orders and transfer the National Guard back from federal

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Speaker 8: Pentagon control to the command of the state. You mentioned

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Speaker 8: that situation in New Orleans. There was also the Los

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Speaker 8: Angeles riots in nineteen ninety two when Rodney King was detained.

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Speaker 8: In both of those cases, I believe it was local

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Speaker 8: authorities who requested federal help. What's particularly unusual about the

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Speaker 8: situation now is that the White House is authorizing and

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Speaker 8: deploying these forces without any request coming from state officials.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Streets and beyond.

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Speaker 2: I'm Caroline Hepcare.

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Speaker 3: I'm Stephen Carol. Join us again tomorrow morning for all

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