17 Burst results for "OBR"
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Forecast in the Bank of England's own forecast that looks really weak for you for the UK economy. It's immensely difficult for them to clear. And that's fine. It's interesting the Bank of England, they start having so terrible, they're just going to say that's going to be terrible for the next four or 5 years. You know, you can't put what's out in the last two or three years in econometric model because everyone's been wrong for the last years. IMF OECD Bank of England clearly. However, it's interesting to read what Liz trust said because though she had some fine sentiments should we say for growth, clearly the execution was so appalling, you do have to slightly laugh when you read some of the commentary from her 4000 words of it. Nonetheless, there is equally some blame to be put as rob persons pointing out today to the institutions. Such as the erb, the treasury and the Bank of England, who are not innocent here. There is more blame to put at the government clearly, but there is a collective failure to understand what caused the tinderbox of the LDA crisis, which is in plain sight for many years and simply ignored it until it was too late. Well, while we're doing post mortems or at least list trust is doing one on herself, how do we do one on the OBR? What needs to change then to the OBR is just there to mark the government's homework. The point is, is their role where we have to wait and watch and listen to their every word. In the correct context, they're there as a guide, not as not as the diviner of every form of government policy. And this is the trouble with such lack of confidence we are scared of our own shadow that we are watching waiting. We can't do anything till the OBR says it's true, which is always looking backward data. Some of the restrictions on what they can do and how they have to present the data when we've policies moving all over the place, it's impossible for them you can't blame the obar per se, you have to blame the government or indeed in structure of how we've allowed ourselves to become completely right. Only country in the world on some form of office of four budget responsibility and we're tying its hands behind the back the way it does its forecast in the first place. Okay. The only other thing that we should really mention, of course, is the bank of Japan, and now the kind of runners and riders are emerging for who takes home from haruhiko kuroda. On YCC, does it matter? I had a guess on this one and he said it doesn't matter actually who the next governor of the bank of Japan is that their view was still YCC would be adjusted, but it would be ditched. I mean, I sort of traded KGB's on my own. Ever since it is a consensus way of going about it. It doesn't really matter who the baggage bank governor is, per se. The perspective replacement is actually, I think, slightly more dovish, but that's the whole point. They're moving to get rid of the policy, but steadily, I don't think you know everyone says, don't find the fed. Don't ever fight the bank of Japan because they own most of the market and they're increasingly anymore. The market. But Japan moves as one wants to consensus builds, they will move. And I think by April, we will have we got 4% plus inflation, they will need to correct that and I think there's well slowly. But only very carefully. Okay, Marcus, thank you so much for your time. Thanks for being in our studio. Lovely always have our opinion columnist Marcus ashworth. To detail, yeah, everything that's happened in central banks and including the U.S. non payroll figure. Right, let's hop over to Louis moon, who has a global news briefing
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Their risk appetite. Cryptos are very high rates investment and people should only be investing in crypto if they don't prepare to lose all their money to raise chambers also told us firms could potentially be hit with unlimited fines if they don't stick to the FCA's rules. Now, the European Union has paused efforts to approve a package of emergency measures to tackle high natural gas prices. Speaking to Bloomberg's Maria todayo, Spain's environmental transition minister Theresa Ribera had this to say about it. There was something that was missing this very important signal to the market and traders. Of course, we need gas, but so we can not be sold at any price. So it was important to provide some input on how we can send the signal to the traders. And for the time being the proposal of the commission was not sufficiently effective, I would like to see this dynamic solution. There is a Ribera and her colleagues are also at loggerheads over a G 7 plan to curb Russia's oil revenues with the level of a price cap continuing to divide EU member states. JPMorgan is forecasting a $1 trillion boost in demand for global to bonds next year. The positive prediction comes after the market entered its first bear market in a generation in 2022 as Central Bank rate hikes pushed up yields and volatility. Strategists at JPMorgan say quote, there is an emergence consensus view that softening growth and declining inflation should contribute to declines in bond yields. Okay, those are a few of our top stories for you. This morning. So Jeremy hunt rejecting the idea that Brexit is hurting the UK economy. This is the government's independent watchdog which is forecast basically a 4% drag on the UK economy relative to the EU because of the split. It is 6 years after the Brexit vote, the discernible benefits of Brexit seem immensely difficult to find and yet the government sticks to the line that the benefits are coming they're coming Lizzie Burton. Look, when we were speaking to cammy badenoch, the trade secretary, and she disputed the OBR's forecast on Brexit. Personally, I thought it was pretty worrying. So I put those comments to the OBR, David miles, who was extremely humble about the OBR's forecasting ability. Take a listen to this. I don't think that is undermining what we do. I completely agree. How forecasts are always wrong. Let me give you an analogy if I might. You take a snap now. I got to drive to extra tomorrow. I put in the stand up. How long is it going to take me? It says three hours, 51 minutes. Is it going to take me? Is it really going to be three hours 51? I can guarantee it won't be. So that's a forecast, right? It's guaranteed to be wrong. Furthermore, you start driving
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Morning from London. I'm Stephen Carroll. I'm Caroline hepco, welcome to Bloomberg daybreak, Europe this morning, where we are looking ahead to the Central Bank decision from the fed, of course. We also have a really great interview with the international trade secretary Kimi bad knock and we'll talk about UK mortgages with ray bulger of charcoal at about 20 past 7. In terms of the market figures this hour then, we have stocks at the moment up on the hang saying 2.4%, although Hong Kong has closed afternoon trading because of a major storm, stop futures for Europe are still higher three tens of 1%, U.S. benchmark yields on the most sensitive interest rate sensitive yield on the two year four 51 down three basis points. The ten year yield at four spot zero 5, other major news this morning, the dollar at the moment is down a tenth of 1% and oil prices continue to rise after dwindling a U.S. stockpile reported yesterday Brent crude futures $95 50. Those are the markets. A couple of corporate headlines crossing the terminal for you this morning from the shipping giant mask cutting its global container demand forecast for 2022 to minus two to minus four percent so that is interesting to reflect how things are affecting, of course, has been massive demand for ocean shipping as we know as after from during the pandemic in fact. So I'm just going to see that come back down. This is the company's reporting third quarter ebit of $9.48 billion, a big beat on the estimate of 8.63 billion. We've also got results from GSK as well. There are adjusted earnings per share, 46.9 pounds. That's a big beat on the estimate of 39.2 pants as well. They're not saying full year operating adjusted operating profit, I would grow the 15 to 17% that's at big upgrade on the previous forecast of 13 to 15% growth. That's from GSK. So those are the breaking news lines. Let's go to our top stories. The UK's trade secretary Kimi bad knock has questioned the accuracy of the economic forecast that are produced by Britain's independent fiscal watchdog. Speaking to Lizzie burden for us here on Bloomberg day bake Europe, bed nook said that The Office for budget responsibility doesn't always get things right. Having been a treasury minister, I distinctly remember pretty much every previous OBR forecast never been quite right. So this is about us working in partnership with UBI to get good forecasting rather than having debate about whether the OBR or the government is correct. Though beta knocks comments were focused on Brexit and trade, they risk rekindling around that help to end the premiership of the former prime minister Liz truss, Joss government announced a massive package of tax cuts without an OBR forecast leading to chaos in the financial markets and her eventual resignation. The CEO of HSBC says China will emerge from COVID and that it's important economically for the country to find a solution to its current strategy. Speaking to Bloomberg television, Noah quin said moving beyond the virus will be key for the country's economic success in the future. The COVID is a big story because with a restriction in movement into an hour of China, it's very hard for the international community to reconnect with that economy. But it will rebound and China will open up at some point in time. But I think it is important for the economy for China eventually to find a solution to the COVID strategy. That HSBC is no Quinn, a Chinese stocks rallied on Monday on speculation that policymakers were forming a committee to assess COVID exit scenarios, China's farmers she spokesperson though saying he's not aware of any such steps. Credit Suisse's long-term credit rating has been downgraded by S&P due to concerns about the viability of the bank's turnaround plan, the ratings agency has now cut the bank's long-term rating from triple-b minus to triple-b with a stable outlook. The downgrade comes after the Credit Suisse chairman axel layman told Bloomberg that he is bullish about the bank's growth prospects for the Asia Pacific region. Of course, we monitor and watch carefully potential geopolitical tensions, but we think as a European Swiss based company, we are very well positioned to navigate through that probably challenging future uses. Credit Suisse's chairman axel layman there. He, along with the CEO Ulrich kerner, are betting that they can revive the struggling lender with a restructuring plan funded via a multi-million dollar multi-billion dollar rather capital ways. The FT is also reporting this morning that the Qatar investment authority plans to increase its stake in Credit Suisse by investing in a share sale alongside the Saudi national bank. The U.S. job openings unexpectedly rebounded in September complicating the policy picture for the Federal Reserve ahead of today's rate decision. The strength of the jobs market is likely to fuel further wage gains and add pressure on the fed to extend its aggressive campaign of hikes to carbon inflation. His Bloomberg's Michael McKee with more on what we can expect from today's meeting. The focus of the November fed meeting is going to be the December fed meeting. Once again, central bankers have told us they intend to raise interest rates by three quarters of a percentage point to 4% this week, but there have also been some hints from some fed officials and some data that they might dial back to a half point rise in December at a quarter point rise after that. Much will depend on how the economy develops, but markets would like a better idea of just how high the fed will go. Answering that question without creating more market volatility will be determined Jay Powell's main job after Wednesday's meeting. Michael McKee, Bloomberg daybreak Europe. And just finally, here in the UK, prices in supermarkets have surged by the fastest raids since at least 2005 last month the cost of living crisis is piling pressure on consumers, Bloomberg's Ewan Potts reports now. The British retail consortium says shop price inflation accelerated to 6.6% in the year to October, a record for the index which goes back 17 years and up from 5.7% in September. Food price increases were faster still hitting
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"I'm Caroline heparin. And I'm Stephen Carol you're listening to daybreak Europe live on London DAB digital radio. So huge day ahead, of course, the Federal Reserve, the FOMC decision, but also really fascinating news line from chemi bade Knox speaking to Bloomberg radio. She is seen as an up and coming minister potential leadership qualities. Yes, her casting doubt over those independent forecasts so important to that fiscal statement on the 17th of November. Of course, the lack of an OBR forecast was part of what fed into the market turmoil around the mini budget. The absolutely. Let's go to the markets, thank you an update, now Chinese stocks in the rally there extends actually into a second day. The hang seng index is up above 2% this morning. Even though there's been no confirmation, no signs that the relaxation of the COVID zero policies actually going ahead, but as I say, the rally remains in place. The hang saying higher. The nikkei two two 5 is down a tenth of 1% European and U.S. futures climbing after declines in U.S. shares on Tuesday, ten year treasury yields now trading at four spot zero 4%, the more policy sensitive two year yield at four 51, hopes that the fed will soften its hawkish stance seem to have faded a little bit yesterday after jobs figures more on that in a moment. The Bloomberg dollar spot index is down a tenth of 1% and oil prices jump 1.1% for Brentford futures on dwindling U.S. stockpiles, those the market numbers. Our top stories this morning, the UK's trade secretary cammy Baden ark has questioned the accuracy of economic forecasts produced by the country's independent fiscal watchdog. Speaking to Lizzie Burton for his here on Bloomberg daybreak, Europe, Baden arc said The Office for budget responsibility doesn't always get things right. Having been a treasury minister, I distinctly remember pretty much every previous OBR forecast never been quite right. So this is about us working in partnership with UBI to get good forecasting rather than having a debate about whether the government is correct. Comments were focused on Brexit and trade. They risk rekindling around that helped end the premiership of Lee's trust. Trust us government announced a massive package of tax cuts without an OBR for cost leading to chaos on financial markets and eventual resignation from office. Okay. The CEO of HSBC says that China will emerge from COVID and that it's important economically for the country to find a solution to its current strategy. Speaking to Bloomberg TV, Noel Quinn said that moving beyond the virus will be key for the country's economic success in the future. The COVID is a big story because with a restriction in movement into an hour of China. It's very hard for the international community to reconnect with that economy. But it will rebound and China will open up at some point in time. But I think it is important for the economy for China eventually to find a solution to the COVID strategy. So that was the HSBC CEO, his comments come after Chinese stocks rallied on Monday on speculation that policymakers are making preparations to gradually exit the stringent COVID zero policy. Credit Suisse's long-term credit rating has been downgraded by S&P is to concerns about the viability of the bank's turnaround plan, the ratings agency has now cut the bank's long-term rating to triple B minus from triple B with a stable outlook, the downgrade comes after the Credit Suisse chairman aksa Lehman told Bloomberg, he's bullish about the bank's growth prospects for the Asia Pacific region. This inherent growth, of course, monitor and watch carefully potential geopolitical tensions, but we think as a European Swiss based company, we are very well positioned
This Week In Google
"obr" Discussed on This Week In Google
"When they were going to lose it, it wasn't a confidence vote. Then they were actually wrestling with each other in the voting line. And the two chief which resigned and I don't actually know what's going on. The cabinet secretary who yesterday's was raving about, let's see if I can do it. Guardian reading tofu eating woke teas. Horse to resign over a security breach today. Oh my God. Yes. And all of this precipitated by tax cut, which is something that here in the U.S. would guarantee you four more years. It's good for the very, very richest. That's the problem. And the markets. Which is weird also. The combination of the combination of a tax cut and no plan for how you would pay for it, you know, no budget balancing basically. You never stopped us. The OBR and firing this suit is also in charge of it. So basically, what it was is what it meant was the markets were looking at this going. This doesn't add up. I don't understand what they're going to do. We need to understand what's really going on, but clearly they're spending it at the wrong end of the economic distribution because actually the big challenge here at the moment is the cost of the riders and the price of gas like methane gas fees. And that's pushing up on inflation. But also it's explicitly pushing up household bills by a factor of four for electricity and gas. Actually telling me what I'm like, there are some businesses that are going to see four to 6 fold increases in their electrical costs for instance. They're like, no, no, no, you're making that up. There must be no here. These are sources. This is literally people are posting the bills. They're watching like bakeries. Well, that's not his fault. That's the war in Ukraine's fault. This Russia's fault. It's also like only investing in gas for the last 20 years while looking at other energy supplies and blocking onshore wind and blocking installation of housing and blocking nuclear for 20 years. There's a great deal of sort of built up and stuff. Yeah, we have cut down on coal, which is basically replaced with natural gas. And also they close the natural gas storage facility two years ago, so we can't actually store it, isn't it? Great cascades failure of government. So they're trying to what they need to do and what the first thing they said they weren't going to do. Which is so much their credit. We were waiting for the Johnson debacle with the election, the internal election to finish. Was that they said, okay, we are going to work out how to fund your fund you'll get bills and we'll pay you will pay you so that you don't have to pay all these bills yourselves. But then they also refuse to do a windfall tax on the gas company was getting on the windfall product profits from this. And so basically the budget didn't add up at all. The markets would look at this going, this is currently where they're going to cut something else, ten simple that's going to be, and then it just got more and more chaotic and eventually they were like, so you should do what we just think. You should just be stuck with whoever you got for four years and just your stock. You're just stuck. That gets a whole lot of things. General election, it's 2024, 2025. It has to happen by, yeah, I think January 2025. But the prime minister can call one before that if they decide to or the parliament can call one by a very kind of confidence in the prime minister. That's why I'm super excited. Of 70 or so. So it will take a lot of them to defect at all. Or commit suicide for that actually happened. There are 30% behind in the polls, so they probably don't want to do it now. Right. If Facebook were a country, it would be England. Oh, that's me. I don't know. We saved a story. You do have our own deputy prime minister running Facebook's. That's true. That's right. That's right. So maybe there is something to that. We saved a story just for you, Kevin Marx, because I really wanted to get your comment on it. As you know, Jack Dorsey before leaving Twitter established and funded something called blue sky social, which is an attempt to create a Federated Twitter. The next Twitter in effect, it is now kind of going public. In fact, I'm here on the launch page, which is BSK app, see what's next blue sky social app page, and then there's also the API page. So yeah, there's a new API, which is called AT, I think, the AT protocol. If you go to blue sky web X dot XY they call it the oh, that makes sense. It's actually really bad because if you search for 80, you get modem commands and things. It was ADX. It was called the authenticated transfer protocol or ADX. But I guess because the ad sign on Twitter, they thought it would be clever to call it the app protocol. So I'm curious, because we know you're the open web advocate, mister indie web and open standards and all that. What is your initial? Could you go down? Can you go down the audience? Can you go down? There's a list of four principles too. Yes. I'll post it. Might be useful to have that as a background. Yeah, account portability, a person is online and then you should not be owned by corporations with no accountability or users. With the AT protocol, you can move your account from one provider to another without losing any of your data or social graph. That's great. And by the way, that's right now what Mastodon offers and I guess that's the we'll talk to Apple next week about
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Flash the action today again focused on the UK ahead of that statement by Jeremy hunt later on he's expected to unveil more measures from the medium term fiscal plan that will be fully detailed on the 31st of October with the OBR forecast that according to statement from the treasury this morning ahead of that, the pound 8 tenths of 1% stronger now one 1257 slightly, pairing the gains that we saw earlier on in trading, but still up significantly on the day. This is the Bloomberg dollar spot index is two tenths of 1% weaker so that's having an impact as well on other currencies the Euro is currently trading at 97 37 against the dollar of this as we have seen the BOE rate hike pricing by markets falling to the lowest sense the mini budget traders are pairing their wagers on where the BOE will cease in a key rate peaking at 5.36% by May of next year the current implied rate under WRP to be IRP function on the terminal this morning shows a hundred basis point rise being priced in for the next meeting of the Bank of England on the 3rd of November, but we are seeing that the future projections of hikes being paired ahead of the announcement. By the Chancellor later, looking ahead towards the start of European trading later, the FTSE 100s two according to the future is a tenth of 1% weaker, the Euro stock 50 features are tens of 1% weaker as well. S&P I mean, these though on Wall Street are still positive there of 8 tenths of 1% NASDAQ features are 9 tenths of 1% higher in both of those markets saw a big sell off on Friday, the S&P finished down 2.4% and that's continued on into trading and Asia today, the MSCI Pacific index down by 9 tenths of 1% across the European bond space. We are seeing a rally this morning yields on the ten year bunt are down four and a half basis points to two spot 29 to 2.3% now. In fact, whereas the Italian ten year BCP is down 5 basis points as well to four spot 73. Of course we will be watching the issue for guilt markets as they open up with just been hearing from Valerie title that she's expecting the possibility of a relief rally on girls markets this morning, the ten year gilt yield finished on Friday at fort spot 33 13 basis points higher. That's your Bloomberg radio business flash. Now here's the Ann garons with more on what's going on around the world, we are. Steven
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Finances look slightly better. Now my worry is that the government will publish a growth forecast, which actually turns out to be unrealistic, which again is why it would be good to see what the OBR have to say on that. And does the OBR then use its own, its own judgment, or do they take that from the government? No, absolutely. They are an independent observer. And they will come up with their own forecast for growth, and they will then apply that to assess whether the public finances are in a sustainable position or not. Yeah, and also the IFRS has to be said, was using city forecasts as well around GDP growth of 8 tenths of 1%. So it was factoring in. Some city forecasts anyway to its thinking. But the other issue and the IMF again has warned on this and so have others. The fact that the UK could end up with higher inflation, perhaps even structurally higher inflation. In August, you were talking about inflation peaking at 11% in the fourth quarter and the MF talking about more than 6% inflation by the end of next season. Perhaps even double what the U.S. would be at, what is your expectation now around when we get peak inflation and where inflation is next year? Okay, so our expectation is that inflation will peak in January at around about 11%. It will then start coming down. By the end of the year, we're thinking we're thinking something in the order of 4%. We're not quite as high as the IMF. And then coming down to 2% into 2024. Now, of course, this is all dependent on the Bank of England on the monetary policy committee continuing to raise rates in the way that we're expecting at the moment. But assuming they do assuming they get on top of inflation and don't get sidetracked by the need to shore up the financial markets, then we're fairly confident inflation will come back down to target. Okay, Stephen, thanks very much for your time this morning. Stephen Miller, deputy director of macroeconomics at the UK's NIE SR. This is Bloomberg
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"How much is the Bank of England going to have to spend here? So, well, to use the Mario Draghi analogy, it was kind of a he introduced the concept of unlimited. And we're not there yet. To date, look, let's hope I'm wrong, and today this announcement about buying index linked gilts will be enough to stabilize and then maybe something more fundamental and quasi and his team realize that the bond market is pretty important, not least because people's two year and 5 year fixed mortgages, et cetera, that affects people's livelihood. So that combo could solve it. But today is very important because I'll tell you the next few days as we come towards the end of the week. If it doesn't work and stabilize the long end and you do have a vicious spiral and the Bank of England, I wouldn't be surprised if the bank of incoming with a version of that of the original whatever it takes. Okay, so then I suppose it's sort of, yeah, it's back to the government's plan. If they have to fill a sort of 60 billion pound hot, this can't hold surely the kind of did you think that quasi quoting, I suppose, why did he not understand the ramifications that that sort of budget would have? And there have been quite slow to respond, haven't they? Or is that just my view? Well, no, it's fair. I think now you're in the details of planning for the budget. Well, at first they were very quick to respond very quick announcement of tax cuts. And now the detail of the plans of potentially cutbacks in spending and details of what's growth going to be look like and a lot of OBR negotiation going on, no doubt. I know the OBR is independent. So I can understand why that takes some time. And to be fair, no one expected this kind of death spiral that we're seeing in pension funds, which is very specific. I think you have a fair point could quasi have seen the damage to two and 5 years because moving away from pension funds to be average person in the street who has an average mortgage here in the UK, the two in 5 year fixed is where they go. And you would have thought someone would have said, well, you're going to save money on energy, but guess what? Most people's mortgages are going to go through the roof and you're just taking it away from them. So I think that's fair criticism. But I think the pension fund is very specific and I wouldn't expect it to be on that. Just very briefly, vern got another minute, Allen. What should we watch out for this morning? Because this is all happening real time, what should we watch out for in terms of Sterling markets and when the stock market's open, other ramifications? So in stock markets less so but keep an eye on the big insurance companies. In the UK, which are LDI managers, but really, really, I will be watching index they kill very stuck. I rarely watch it and it's like guilt, but index linked guilt is the long end and guilt, of course. And has the Bank of England done enough this morning. Okay. Alan, thank you so much for being with us. Yeah, really, very interesting to have you on the program. Alan Higgins is the chief investment officer and managing director at coots and co. So really kind of underlining the seriousness now of what's happening in gilt market. Puts it into context for sure. Yeah, absolutely. The comparison to Mario Draghi. Yes, and will be no doubt watching at 10 a.m. the debt management office sale, of course, of linkers, so that will happen at ten this morning. You're listening to put a big day break yet. We have the start of European trading in just a moment, don't go anywhere. This is Bloomberg. Some bonds last a lifetime. Some bonds inspire confidence, and some you grow to rely on. These
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"That. But if it comes before that, that, of course, will also help inform the decisions that committee makes in one might assume also soften the base rate move that the MPC comes up with compared to what they would otherwise have done. So a positive move all around. So we've had a U turn on the top rate of income tax. This seems to be a U turn on the OBR forecast. Where do you stand on upgrading benefits in line with inflation? Could that be the next U turn? It's conceivable. There will be tough choices to be made. And they will be broadly fleshed out in that forecast that we've just discussed. You've got to remember that, well, the welfare upgrade loft April was relatively low because it's pegged to the previous September's inflation rate, and that was quite low. So we're already starting on benefit upgrades from a fairly low base as it were. And I think within the parliamentary Conservative Party, it's going to be quite difficult, I think, to go for an earnings based increase this time around rather than inflation. So I think yes, that could be quite problematic. So what we're hearing from even cabinet ministers is that Liz truss is going to be a lame duck for the rest of her premiership. She's already had to U turn on the top rate of income tax. Could the bankers bonus cap be the next to go or could it be planning reform? Is Liz trus going to have to make this package more politically palatable? Well, I think we've got to sort of take a step back and understand that a lot of these kind of issues were not in a sense come to a head. Until further down the line. So some of these measures will be brought through, for example, in a finance Bill next year in the spring. So there is a bit of time for the government now to really just try and steady the markets. I think they've made two pragmatic
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"The monetary policy committee meeting on the 3rd of November. It was originally going to be three weeks after that. But if it comes before that, then of course, we're also help inform the decisions that committee makes in one might assume also soften the base rate move that the MPC comes up with compared to what they would otherwise have done. So a positive move all around. So we've had a U turn on the top rate of income tax. This seems to be a U turn on the OBR forecast. Where do you stand on upgrading benefits in line with inflation? Could that be the next U turn? It's conceivable. There will be tough choices to be made. And they will be broadly fleshed out in that forecast that we've just discussed. You've got to remember that, well, the welfare upgrade loft April was relatively low because it's pegged to the previous September's inflation rate, and that was quite low. So it really starting on benefit upgrades from a fairly low base as it were. And I think within the parliamentary Conservative Party, it's going to be quite difficult, I think, to go for an earnings based increase this time around rather than inflation. So I think yes, that could be quite problematic. You're a conservative MP, but you're not here in Birmingham. Why not? Well, nothing sinister to be read into that. I basically took a decision many months ago that for personal family reasons we were going to do something around this time. So it's certainly not a case of, in any way, boycotting what's happening in Birmingham at the moment. You were Rishi sunak's campaign chief when he was trying to become the next Tory leader prime minister. Have you communicated with Rishi sunak in the past few days? I've not had any contact between Russian myself. I'd love to meet up with him because I haven't actually seen him for a few weeks now. But no, I think he's having a well earned rest. It was a very, very tough campaign. And I think also he's probably keen to know not be the focus of what's going on here. It really is about the government and the new prime minister and the new Chancellor
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Well, the turmoil in the UK markets continues today last week. We of course had to sell off and guilt and then the emergency intercession by the Bank of England. Today we have the new government of prime minister trust turning about face on at least part of their budget plan to take us up to date on what's going on with turned out to Lizzie Burton. She's Bloomberg, EMEA, economics and government correspondent reporting from the Conservative Party Congress in Birmingham. So Lizzie, you've already been interviewing people. They say they're listening government. They're listening and they're changing their ways, at least in some ways. Well, you have to wonder why they weren't listening for the past ten days when the markets were calling out for a U turn. And they've only turned on the bit that was the most politically toxic, the top rate of income tax cut. But actually for markets, it was the rest of the package that was so offensive. It's unfunded tax cuts on a massive scale in a time of inflation with higher interest rates with no economic forecast from the office for budget responsibility, the official fiscal watch shop. We've just heard from the Chancellor quasi cross Tang. He's made a very defiant speech. It was trailed last night, and I have to say, apart from the opener, very little was changed. And he is not you turning, including on the part about when we're going to get this forecast from the OBR. It's still going to be on November the 23rd. So not much effort to reassure markets, although he did not to the office of a responsibility and the Bank of England talking about how important these institutions are a very different tone to the leadership campaign when of course in his trust said that she wanted to take on the blob the economic orthodoxy. Now the Chancellor and the prime minister seem to be going cap in hand to them. We're a lot to look forward to
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Essential. Let's cross out to Bloomberg's Leon Garrett and London Leon. So what's changed here for traders is we count down to potentially additional context in the coming hour. So youssef, as you just said, the pound had a rally. So Sterling almost back up to where it was before quasi quantum gave that speech Can you believe it was just a week ago? And one of the reasons that this speculation, the Sterling is up today, is that because Liz truss and quasi quatre the Chancellor of set to meet the head of the OBR today. So that's the office for budget responsibility. The UK's financial watchdog. And one of the key issues that has caused market trauma here in the UK since that mini budget was announced not so many we saw those absolutely massive tax cuts. Was people were concerned about the forecast. We didn't get an OBR forecast with that budget and people were worried about where the money was going to come from to pay for what Liz truss as government is suggesting and also yesterday we saw Liz truss come out defending her mini budget and the tax cuts that are coming and she was speaking to BBC local radio and saying this is absolutely the right thing for the country right now. And as you have seen, we have seen Sterling rise, but this could possibly not be the end for turmoil. I mean, I'm looking here at the Tory party conference, right? We're going into that. There seems to be a lot of momentum in terms of the polling numbers that speak in favor for some gains for the toy party and what they might be able to do or actually not be able to do rather. The other way around. I know Tory party conference just ahead of us. We were on the brink of that. Of course, we saw labor's last week and labor seemed to pick up loads of momentum during that conference. Now we are seeing that in the polling today, I bet you the Tories are going to be looking at these grim numbers that you gave have reported today saying labor is actually the biggest party at the moment, so it's leading the conservatives by 33 points, which is massive, and that's the biggest lead for labor since the 1990s in the polling. So I guess going into this conference, a lot of the Conservative Party are going to be concerned about the future of their government and how long they're going to stay in power. And what's also really interesting is we have seen some betting places here like ladbroke saying that Liz truss might not even last until the end of the year. So we're going to keep a close eye on this polling and we're going to be watching out for that conference. That is coming up. It's going to be extremely tough for Liz truss because now we're getting reports in the newspaper today that benefits could be cut in order to pay for this new package that she's brought in, which could affect people even more at a time of crisis. Yeah, thank you for that. I know you'll be very close to this story throughout the morning. That's not Bloomberg's land guarantees in London. I want to get to the markets again more broadly because we're looking here at caution, risk aversion, not to the extent that we saw overnight in the U.S. saw significant drawdown a 22 month low. That is a new low as well. Of course, for the year 2022, Apple, Nike, and a few others in focus and it tells us a story of weakening demand and perhaps more adjusted realistic expectations for future economic performance. But here's the story on the wild ride that's been in terms of the liquidity levels. This is something I mentioned at the top of the show. One of the world's deepest markets, the daily swings and interest rate swaps, right? So this is the gap between the floating and the fixed rate legs of longer dated swaps tied to what is famously known as the secured overnight financing rate that went down to 7 bps, -75 bps of 7 bit move, and then it went back up. These moves are not normal. It tells us a story of liquidity drying up. I was talking about equity futures at the moment. I'm just going to visually get that for you now. This is the state of play on the S&P 500 mini, down about a 5th of 1%. But from the equity futures I take you to some of the yields moves we've seen as fed hawks continue to stick to the rate hiking script on the U.S. tens we're not back below 3.8%. It's also fascinating to see the round trip that we've experienced. Whereas 4.01%, the route this week now, just under 3.8. And then India as well over the last 30 minutes, the headlines continue to cross from the RBI governor after removing higher with a 50 basis
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"The long term impact on growth is. And we will start seeing that we'll start seeing city forecast changing or not changing over the next few weeks. According to their routine cycles, we'll see the Bank of England doing routine quarterly forecast in November and now as we know there will be the OBR assessment towards the end of November on the 23rd as well. So that question will be answered. It feels a little to me like it's a bit of an experiment in terms of what we know now and experiments can go well, but they don't always go well. And so that's what that's the risk that the market is now pricing in. Okay. The cost of borrowing for businesses is going up, just finally, your view on the outlook for UK PLC. I mean, it surely bad even worse than for Europe. Again, it comes back to this fundamental point as to how the markets are responding to government policy. In terms of, in terms of business at the moment, confidence is very low. And investment is therefore slightly volatile and has certainly been on a downward trend over the last 12 months. Most of our members and we represent the SME sector. So probably less likely to be listed but mature enough to have a property constituted board and we represent those directors. They are on the whole relatively last time we checked in August relatively optimistic about prospects for their own individual businesses, big difference between how they feel about the economy is the sort of wider macroeconomy and their own firms. So but that is the tracking tracking slightly downwards. So I mean, I said a few weeks ago that in terms of the economy, it's kind of all to play for because if inflation is peaking around about now or in the next few months, which the energy price intervention has really helped with. And if we can get confidence motoring again, it may feel much more benign in 6 months time. Because remember that the Bank of England's original forecast of a slight recession, which they made in early August. Did not assume any original forecast of a slight recession, which they made in early August. Did not assume any policy intervention whatsoever, because by convention, they don't assume policies that haven't been announced. Until the market reaction on Friday, it was all to play for, but obviously confidence has been very badly affected now and that's raising borrowing costs until that can be fixed. Casey, thank you so much for being with us and for your time very good to get your input and the perspective of the institute of directors, kitty usher is chief economist at the IOD former treasury minister and Labor Party at MP, of course, has had a long career in both policy and politics. So very interesting to have your views, again, as markets move pretty swiftly here in the UK more on that in just a moment, this is Bloomberg. Markets, headlines, and breaking news 24 hours a day. The Bloomberg business and quick take. This is a Bloomberg business flash. From Bloomberg's
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"What's in the UK has been that it was far too loose last year when it should have been tightened, but they're in a difficult situation now. The markets have been saying this in recent weeks and I've been echoing it. Don't raise rates aggressively in which case you leave the pound thunderbolt against a resurgent dollar or if you do raise interest rates, then you start to weaken the domestic economy. Now with an economy already according to the Bank of England in recession and with inflation according to the Bank of England about to peak, that's why they're treading the path that they are. But at the end of the day, even before Friday, you had the market saying rates needs to go to four and a half percent. Now you have the markets and rates need to go well above that. And inflation in double digits and policy rates are only two in the quarter. So it's quite clear that monetary policy is still very loose, but the speed the scale the sequencing of that tightening whilst it was very much focused on the domestic economy needs to take into account financial markets of the hate. So Jared, what would you think the Chancellor? What would your advice to the Chancellor be as to what he should say now? You say that Friday was aimed at the domestic market, but clearly he has experience in finance and he knows that international markets are always listening. So what kind of messaging should he come forward with when it comes to debt sustainability? Okay, well, there are a number of things that have come to the head. Three things in particular. First he needs to make clear that the markets recognize the difference between his pro growth strategy as opposed to a dash of growth. The pro growth strategy is supply side focus on boosting investment. Second, he needs to reaffirm that tax cuts are only part of the story. They're not the false story because it's led to this idea that trickle down economics trickle down economics is a load of nonsense. That is definitely not the government's following what they're following is the supply side agenda. But comments and tax cuts over the weekend seem to have added fuel to the fire in the eyes of the markets. And that comes on to the third part about financial and fiscal discipline and about reducing the ratio debt to GDP over time. As the Chancellor made clear on Friday, he will have a medium term fiscal plan, the fact that we didn't have an OBR statement on Friday shouldn't have swooped people just because we knew that they weren't going to have one and then we'll have one in a few weeks. But maybe the absence of a medium term fiscal plan on Friday, even though the Chancellor said that will come later. So allowed those misplaced worries to sort of gather strength shall we say. So I think he needs to make clear those aspects of policy. And then the markets need to recognize that what we have now very much instead of monetary policy always run into the economy's rescue with rates cuts with each problem. It's going to be a case of fiscal policy stabilizes the economy in the near term, which will allow monetary policy fully to curb inflation. And on the point, since 2008, chief money has led to asset price inflation, has led markets to not fully price but risk is led to a misallocation of capital, and it's not an environment in which the recent pickup have inflation has gathered strength that we need to move away from cheap money. What the bank of income clearly has been trying to do and I think should continue to do is clearly be mindful of how the domestic reacts to that same it's quite clear they need to take on board the worries that the financial markets. But I keep coming back to this point of the idea of fiscal policy being stabilizing, which is clearly not given the reaction that we're seeing. Can this is not a good start for a new Chancellor, can he turn this around and regain the confidence of the markets? Well, that's what I'm saying to you. You need to differentiate between the general public business and markets. And as I've said to you, in recent weeks, my point was that they needed to take accounts of the feeble state of the markets. So he needs to address fully the concerns of the market. The bank doesn't clear these decline because as we've seen for some time, that is up to the Bank of England to address that not for the Chancellor. But in terms of the domestic economy, let's be quite clear the energy price gap and reversing the tax increases has addressed the big worries the markets had about the possession. Of course, the economy has slowed. Over 82% of the fiscal easing on Friday, apart from the energy help, was just reversing two tax increases. And the national insurance tax increase. So what we're talking about here is the market. The part of the budget or many statement on Friday, which I thought was strange was getting rid of that top rate of tax. Okay. Jared, so just to bring our conversation on just because we're running out of time. So if the chance of what if the chance to follow your advice comes forward with messages that say, look, this is pro growth, it's not a dash for growth, the tax cuts are just part of the story. They're not the full story, and he also sets out a medium term fiscal plan. What if he does all of those things, but the market keeps responding negatively because it's the fundamentals of his policy that investors don't like and not his messaging. Well, he made those points of Friday needs to echo it of the policy itself focused on the supply side is a policy that is well established. At the wrong time though sorry, what do you mean at the wrong time? It's not at the wrong time, but it is in the wrong time to focus on those supply side policies. Okay, well the energy price and reversing the tax increases has effectively ruled out a deep recession that with the blown the public finances out of the water. You've got to borrow somehow, you either borrow to actually stabilize the situation or you're forced to borrow even more because the economy is tanked. So that's the challenge they're in. They've inherited like every other country in Western Europe with difficult situation. So he was trying to address or explain that on Friday. But at the same time, it's not just down to the Chancellor. It's also down to the Central Bank to actually try and get ahead of the curve as well or to actually try and address the market concerns. It's about money policy and fiscal policy. I won't say just acting together because that would suggest sometimes in people's eyes interference. But what leads to clearly C is from Chancellor to address the concerns of the markets, as I've said. And from monetary policy to address the worries about inflation pressures. Okay, Jared lines, chief economic strategist at nest wealth and an external adviser to the prime minister Liz trust. Thank you very much for joining us on Bloomberg radio. This is Bloomberg. Markets, headlines and breaking news 24 hours a day. Dot com, the Bloomberg business app. Quick take. This is a Bloomberg business flash. The Bloomberg business app and good for quick take. This is a Bloomberg business flash.
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"The Central Bank of the UK, the BOE to stop its quantitative tightening and start buying bonds again. A foreign investor is going to start walking away from these bond markets, yields have been grinding higher. As they have everywhere else in the world. And no, is the answer to that, but I can't put that many extreme confidence because, you know, who knows what goes on, but I mean, the point is that Sterling is very, very cheap. It's cheaper for a regular reason. It's followed the Euro and other currencies down as the dollar is swept all away from it. But as far as the guilt market is concerned, I think it's got plenty of flexibility. There's been a lack of supply bear in mind when she's not canceled 100 billion worth of supplier in October last year. So there was a natural shortage the market is seeing what's coming on here and priced accordingly and I think if the guilt remix comes out when quasi quantum sits down on tomorrow is around 60 billion extra this fiscal year I doubt they'll look further than that for next year because that will come in the Burma budget along with an OBR forecast. The market can handle it. It can handle QUT from the Bank of England at the same time. So in that sense, I'm not too pessimistic about the guilt market ability to fund itself. I think they're much bigger problems in place like Italy than there are in the UK. We had the NCHS fiscal studies speaking to us earlier in the program, though deputy director Karl Emerson talking about the lack of the OBR forecast being released with this many budget tomorrow. Is that a concern of how not perhaps getting the granular detail behind these spending promises? Yes, and remember when the why and when the OBR was set up, right? The office for budget responsibility was supposed to prevent governments overspending. And splurging the cash for political ends. And in this case, they are avoiding having their homework marched by it. So there are questions raised about that. But given the scale of the spending here, and I guess the scale of the problems we face, I mean, some people are asking whether or not the OBR is something we need and require anymore. Considering the economic circumstances we're in. There is no budget to be responsibility. There is no maybe the response they would probably argue being responsible in this case is avoiding some sort of economic collapse and people choosing between eating and heating over the winter. So yes, if you can sort of sidestep the regulator and say we don't need to actually score our card this time, but we will later in the year, then maybe any of that analysis becomes a bit irrelevant. I David, I just have flashbacks to Cameron Osborne and days of austerity. And what a marked shift in a relatively short space of time, historically, to the politics line up behind the two elections were won by the conservatives on this mantra that there is no magic money tree. Remember that phrase and that Britain needed to balance the books, otherwise future generations, we heard all that we were all in it together, won't we? Remember that George Osbourne austerity, that one David Cameron, his years in Downing Street, and then the complete one 80 from the same party member. This is the same party. That was the response to the financial crisis in 2008 and the aftermath. This is in response to the COVID Martin now the energy crisis, but by the war in Ukraine, but it is a complete one 80, isn't it? It approach. And COVID off to Martin now, the energy crisis, but by the war in Ukraine, but it is a complete one 80, isn't it? It approach. And we'll have to see how it pans out. Marcus, if you were in charge, which I mean, some might argue that you are. But if you were in charge of the treasury going into tomorrow's mini budget, where do you think the most effective use can be made of fiscal stimulus at this stage? Oh, that's a difficult question. I think the approach that clearly quasi cartel is doing and I don't think it's the treasury necessarily would be on board with all of it. He's going to go at a whole raft of different things all at the same time to create an overall wave of patch confidence in the west way of putting it. But certainly to create a pro growth momentum and to try and perhaps reverse some of this sort of negativity which is pervasive across our society at the moment and perhaps give a bit of a towards the end of the year and some point. Some of these numbers are coming out of the costing of it. We just don't know where they're going to be in like that. It does depend on the gas prices, a bunch of parts as Davis outlined. But I think there is some point to what they're trying to do, which is to essentially give back control to the individual consumer, they're trying to shore up business, they're trying to get confidence back to the city that they are important part of tax raising a little in the overall economy. So it's going to be quite a lot of heavy lifting and I think there's going to be some misses here, but there are sufficient amount of hits or whack it up against the wall. Maybe the wall falls out a bit. But we shall see it certainly a very bold move. It really is essentially unwinding everything that received an act did post furlough, which he was very generous, then decided he had to pay for it all of a sudden. The OBR has been impediment, it was created by George Osborne by the treasury to prevent spending for other apartments, it was a means to an end for the treasury to go and gain a lot of control and this government clearly wants to unwind a lot of that control and whether the ABR is OBR is fit for purpose is interesting here. I don't think it has been forecast of being less than useless, I think, and at some point, I think there may well extend the range from the three year budget forecast out of 5 if they feel this is not the right time to perhaps be accused of willful spending. But these things are there to help and at the moment they are possibly hindering so we shall see. Okay, the opinions of Bloomberg opinion columnist Marcus ashworth and our executive editor David marriage and studio with this as well. Thank you to you both for joining us as we look ahead to those busy days for the UK economy. This is Bloomberg. Markets, headlines and breaking news 24 hours a day. Quick take. This is a Bloomberg business flash.
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"The paper review on Bloomberg daybreak Europe. The news you need to know from today's papers. So joining us this morning put it back to Leigh Anne garon's with some of the headlines in the newspapers. Well, of course, one of the big issues Leanne is the 18% inflation forecast, the time splashes on that. Also, the independence editorial is trusses boosts to ish case for tax cuts doesn't stand up to scrutiny and then the FT reporting on the BA cuts further cuts to flights. Good to have you with us at Leigh Anne. So a lot of focus then and it is the lead in many newspapers about just how high price rises could go in Britain. Yes, indeed, we actually got this news yesterday Caroline, but it's still dominating many of the front pages because it's a pretty frightening figure, inflation will hit its highest level in nearly half a century of 18.6% early next year. That's according to new forecasts, economists at city, the American bank, said the BOE might now be forced to raise interest rates from the present level of 1.75% to as high as 7%, the time reports are 18% inflation forecasts will now put pressure on the BOE to increase those interest rates in a bid to really get the economy under control. The energy price cap is also expected to rise to 3582 pounds in October and 4266 in January according to forecast by Cornwall insight consultancy this month and tomorrow not tomorrow because tomorrow is not Friday, but on Friday off gem, the energy regulator will announce the October price cap, but Caroline, you and Steven just spoke to Sharon Graham there unite general secretary and there are strikes happening in this country because of inflation because people are not being paid in line for this. So this is really causing ripple effects across the whole of the economy and the country. Meanwhile, the independence editorial looking at Liz truss's plans for an emergency budget. Yes, so the independent is looking just at this thing and basically it's saying the emergency budget would bypass the usual scrutiny of the office for budget responsibility, Steven, the paper argues that trusted OBR is the latest institution to be useful budget responsibility, Steven, the paper argues that trusted OBR is the latest institution to be sidelined for sordid political purposes. The OBR was created a decade ago by George Osborne, now this was really to try to keep governments as honest as possible, and as the independent sees it, it now represents an impediment to Liz truss's reckless dogmatic tax cutting agenda. But I want to bring you is quite a sentence actually. It's quite blistering, but the trust campaign says immediate action is required and that Etruscan government would seek to act as soon as possible to help people across the UK by cutting taxes and introducing a temporary monitoring on energy levels. So that's the argument set out there and as we've been talking about inflation is just set to soar early next year and people are concerned about energy prices right now. Sure. Okay, Leon garan, thank you very much. That's been through the papers. This is Bloomberg
Bloomberg Radio New York
"obr" Discussed on Bloomberg Radio New York
"Bloomberg quicktake powered by more than 2700 journalists Santa analysts symbol then 120 countries I'm neon garands This is Bloomberg Caroline Thank you so much Leanne guerin's for those top stories Well you mentioned Leigh Anne that consumer confidence in the UK has plunged We are in the midst of a cost of living crisis Now the treasury will collect more tax from 7 out of 8 workers in the years ahead despite the reductions that the Chancellor announced on Wednesday in his spring statement That is according to the think tank the resolution foundation Now Rishi sunak announced personal tax cuts of about 10 billion pounds in an effort to ease the cost of living crisis but his mini budget still leaves 27 million people in work paying more in income tax and national insurance at the end of the current parliamentary term in 2024 So this has been the backlash really against Rishi sunak's budget mini budget on Wednesday Now in Bloomberg Westminster you and pots and I was speaking to the conservative MP Gareth Davies and to the Liberal Democrat MP Christine jardine about this we started by asking Davis where he is worried that millions of voters have actually been forgotten by the Chancellor Statement is appropriate for the economic commissions we're experiencing It is supporting people through these very high energy prices It's also cutting taxes for working families but it's also taking a responsible approach to our public finances So I don't believe that this is leaving people behind I think actually it's popping people up in a very very difficult situation That's through the 5% fuel duty cut increasing the national insurance personal threshold or indeed sporting the very most vulnerable through the household support fund So I'm afraid I think this was an appropriate spring statement to support people through a very difficult time The OBR the government's own independent forecaster warning of the biggest hit to real household disposable income since comparable records began back in the 1950s I'm sure you've read this line And it's kind of backed up by a chorus of other think tanks and economy watchers who see the same Has the government really address this Is this really going to be enough Well I actually just think it's important that we constantly do things under review You'll remember it was only in February that the Chancellor announced another 9 billion pounds of support through the 250 Bill rebate ash rebate for those on council tax and a 144 million in local authority discretionary ground It also comes on the back by the way of the budget last year which is increasing the national living wage by 6 and a half percent And reducing taper rate both of those measures will result in an extra thousand pounds going into the bank account of working families So I'm afraid the trends amount support being put out there but there's only so much the government can do We are experiencing a global shock to energy prices This is global inflationary phenomenon And actually you know it's doing the can to provide support but ultimately these are global forces and markets dictate those Well to continue our conversations around Rishi sunak spring statement we're joined by the Liberal Democrat MP Christine jardine who is the party's finance spokesperson With global inflation really a huge problem sawing prices and bills what would your party have done differently in order to help households Oh well this was an opportunity to make a big difference by cutting the from 2017 and a half percent across the board with a much bigger difference in the 5 p.m. field duty It will be about 50 pounds a year for the typical household on the car I realized I think the year would be about 600 pounds worth of difference Also this is the perfect opportunity for a win full tax Not a long-term tax I wouldn't full tax on the energy companies who have made massive extra profits in the past year or so And also the companies have made massive extra profits out of the pandemic because there are companies that are done I think it just yesterday just showed how out of touch this Chancellor and this government is what's the actual problems that families up and down the country have facing The choice between heating the homes and feeling the children We still many people have talked about now The Chancellor just doesn't get it I mean I'm a market this morning about every day having their own type of brain size because he realized how heartful that is for families who are struggling to afford bread So that was Christine jardine there the Liberal Democrat MP also a key spokesperson for that party on matters of finance The conservative MP also Gareth Davis that you just heard there on the treasury select committee There is a concern perhaps amongst some conservative MPs about a backlash against Rishi sunak's careful spring statement that it didn't give enough help to Britain struggling with rising prices And we'll have a lot more will wrap up all of the commentary around the spring statement with our Bloomberg economy reporter Lizzie burden that's at 12 noon today catch it live or download our podcast later from Apple music or your preferred radio app Now.