Bloomberg, Europe, Frankfurt discussed on Bloomberg Daybreak Europe

Automatic TRANSCRIPT

This is Bloomberg daybreak Europe. The governing council took further key steps to make sure that inflation returns about 2% target over the medium term. Russia is blackmailing us, Russia is using energy as a weapon. We just don't know yet whether Boris Johnson is going to come back reincarnated as Rishi or Liz, but they're both responsible for every single economic error that has been made under the Johnson mill. Bloomberg daybreak, Europe. On Bloomberg radio. It's 9 30 a.m. in London ten 30 a.m. in Frankfurt. I'm you and Potts And I'm Caroline Hepburn. Welcome to Bloomberg daybreak, Europe this morning. So in terms of the markets, we're up by four tenths of 1% for European stocks delivery hero, although it's cut it, gross merchandise value for 2022 its share price actually sawing and also boosting others in that sector. In terms of bond markets though, close on Italian BTPs this morning, trading at three 36, so plunging some 18 basis points German yields are also down by 14 basis points one spot zero 7 U.S. yields at two 82. The Euro slumped 6 tenths of 1% one spot zero one 6 two. So that is a look at the market. It's just breaking on the term law UK July manufacturing PMI comes in actually above forecasts 52.2 is the manufacturing PMI, the services PMI is at 53.3. So that from the services and manufacturing PMI. Yeah, a little bit more robust than the Euro area figures we had earlier. Those show that the Euro area basically flat over the course of July Germany both manufacturing and services showing in contraction. Let's get to our top stories now. The European Central Bank has raised interest rates for the first time in 11 years that announced a new tool to combat disorderly moves in sovereign bond yields. Bloomberg's max Ramsay has more from Frankfurt. Well, the hike was guaranteed, but what was not was the size of the move from the ECB and it came in decidedly hawkish at 50 basis points double the consensus 25. It was a unanimous decision from Christine de guard and her governing council as the Eurozone tackles, of course, not only high inflation, but also crises that range from energy security to Italian politics. The other mystery that this meeting sheds some light on was the Central Bank's anti fragmentation to its designed to ensure markets don't push up borrowing costs to aggressively invulnerable economies. We know more now about the conditionality, the eligibility and also the scope potentially unlimited is not restricted X anti. In Frankfurt, max Ramsey Bloomberg daybreak Europe. Or the new tool to fight Bond sprays came as Italy endured a fresh bout of political turmoil Italian prime minister Mario Draghi resigned as p.m. yesterday triggering elections to be held on the 25th of September. Meanwhile here in the UK sawing food and fuel prices and rising interest rates have kept consumer confidence at a 48 year low, according to the latest monthly research by JFK, all of the measures that make up the confidence index remain deep in negative territory. One bright spot though, UK retail sales, The Office for national statistics shows that they are down .1% covering everything in pound terms that sold in shops and online. Well, Bank of America CEO Brian moynihan has told Bloomberg that U.S. consumer spending remains healthy in the face of inflation and geopolitical turmoil. He also says the bank is sticking to its original hiring plans even as other big corporations pull back. I don't think it's peaked yet. Our economists would say it's peaking. Our team basically says that the fed will continue to raise rates and actually Candice browning pipe that research team at Bank of America has the year end recession, which they made a call on a few weeks ago. But it's a slight recession and a recession is not accompanied by high unemployment, which means it ought to write itself and come back out. But it's more impact to the fed raising rates and slowing economy. So it's peaking that's probably more appropriate than peak. Probably 100, that's the Bank of America's CEO speaking to Bloomberg. The comments come as Goldman Sachs says it's slowing the pace of hiring to reign in expenses while reinstating annual performance reviews to weed out the worst performing staff. Also, in U.S. politics, former president Donald Trump took no action to stop the storming of the capitol building. That's according to the congressional committee investigating January 6th, Alex holder, filmed the last TV interview that Trump gave in The White House, he asked the former president directly if he regretted what happened that day. In Mar-a-Lago about January 6th, he said, so he does start off by saying it's a sad day. But I don't believe that he's referring to the tragic events as being said. I think it was a sad day in the sense that he didn't get what he wanted. He had made it very clear that his last hurrah essentially. The last thing he could do to maintain his control and remain the president was to intervene in the ceremonial process on January 6th to stop the counting of the Electoral College votes. Well, we'll be bringing you more of that interview with Alex holder later in the program, the January 6th committee are trying to build a case that Trump acted illegally by holding more hearings in September. And BlackRock is launching investment products designed for female investors. The story from Bloomberg's Charlie palette. The world's largest asset manager has created model portfolios that take into account gender discrepancies around life expectancy, time in the workforce and income. One major difference for women is that on average, they live 5 years longer than men and spend around a year out of the workforce to care for family. In New York, Charlie palette, Bloomberg daybreak Europe. Right, those are our top stories for you this morning. Now to one of our key interviews, we're down to two candidates for the leadership of the Conservative Party and therefore prime minister will find out in September, both will face those significant economic challenges from higher energy prices, record inflation, to the longer term pressures from an aging population in Britain moving us to a net zero economy. So many challenges, joining us now to discuss is Ben's or ranco senior research economist at the institute of fiscal studies, Ben great to have you with us. You've been looking at the programs as much as we know them from Liz truss and Rishi sunak. We know obviously more about the former chancellors economic plans, but you say that actually they both do represent very different offerings. They both want tax cuts put on a different time horizon. What do you take away from trust and soon acts economic agendas? I think we know a great deal about what Rishi sunak's economic policy gender might look like because he was of course Chancellor for the last couple of years. He had lots of chances to set out his stall and I think we have a fairly good idea of what things might look like at least over the next few years. Liz trust has indicated a bit of a more shaking things up a bit more change of direction. She's promising large scale tax cuts, that's partly just reversing tax rises that have already been announced that are already in the books. And she's promising to relook at the Bank of England's mandate. She's talking about changing the government's fiscal rules. She's talking about almost a much bigger shift in Britain's economic policy. And I think that the key dividing line between the two for me is Rishi sunak is prioritizing safe stewardship of the public finances, prioritising getting inflation down a public fences and a healthy position before he's willing

Coming up next