tom: good morning, this is

daybreak europe. a new era in british politics begins. we are live on bloomberg tv and radio. these are the stories that set your agenda. labour several landside when with -- win with voters turning on the tories after 14 years in power. >> tonight people here and around the country have spoken, and they are ready for change, to end the politics of performance and return to politics as public service. tom: equity futures point higher. investors harold a new political -- herald a new political dawn. we have a great lineup of

guests, we will bring you analysis and reaction with a focus on the politics but also the market reaction to the now and the future. we have the incoming prime minister of the united kingdom, having secured the majority plus 326 seats. keir starmer, we will go live to that speech. outgoing prime minister rishi sunak has conceded that labour has won. let's listen in to keir starmer. [applause] >> across our country, people will be waking up to the news, relieved that a weight has been lifted, a burden finally removed from the shoulders of this great nation. now we can look forward again, walk into the morning, the

sunlight of hope, getting stronger through the day, shining once again on a country with the opportunity after 14 years to get its future back. [applause] i want to thank each and every one of you here for campaigning so hard to change. not just in this campaign, also for these 4.5 years changing our party. the labour movement is always everything is achieved, past and future, down to the efforts of its people. thank you, truly, you have

changed our country. [applause] a mandate like this comes with a great responsibility. our task is nothing less than renewing the ideas that hold this country together, national renewal. whoever you are, wherever you started in life, if you work hard, if you play by the rules, this country should give you a fair chance to get on. it should always respect your contribution, and we have to restore that. [applause]

and alongside that, we have to return politics to public service. show that politics can be a force for good. make no mistake, that is the great test of politics in this era, a fight for trust is the battle that defines our age. it is why we campaigned so hard on demonstrating we are fit for public service. service is the precondition for hope. respect, the bond that can unite a country. together, the values of this change labour party are the guiding principle for a new government. country first, party second. [applause]

that is the responsibility of this mandate. 14 years ago, we were told that we are all in it together. i say to the british people today, imagine what we can do if that were actually true. by all means enjoy this moment. nobody can say you have not waited patiently. [laughter] enjoy the feeling of waking up on a morning like this with the emotion that you see the country through the same eyes. hold onto it because it is what unity is made from. use it to show to the rest of the country, as we must, that this party has changed. that we will serve them faithfully, govern for every single person in this country.

[applause] but also, do not forget how we got here. this morning we can see that the british people have voted to turn the page on 14 years, but do not pretend there was anything inevitable about that. there is nothing preordained in politics. election victories do not fall from the sky. they are hard won and hard fought for, and this could only be won by a changed labour party. [applause] we have the chance to repair our public services because we changed the party. we have the chance to make work pay because we changed the

party. we have the chance to deliver for working people, young people, vulnerable people, the poorest in our society because we changed the party. [applause] country first, party second is not a slogan, it is the guiding principle of everything we have done and must on doing. on the economy, national security, protecting our borders, the british people have to look us in the eye and see that we can serve their interests. that work does not stop now, it never stops. the changes we have made our permanent, irreversible, and we must keep going. we ran as a changed labour party, and we will govern as a

changed labour party. [applause] i do not promise you it will be easy. changing a country is not like flipping a switch, it is hard to come a patient and determined work, and we will have to get moving immediately. even when the going gets tough, and it will, remember, tonight and always what this is all about. i may have mentioned my parents a few times in this campaign. [laughter] once or twice. the sense of security that we have, the comfort they took from believing that britain would always be better for their children, the hope, not high-minded or idealistic but a

hope that working class families like mine could build their lives around. it is a hope that may not burn brightly in britain at the moment, but we have earned the mandate to relight the fire. that is the purpose of this party and this government. we said we would end the chaos, and we will. we said we would turn the page, and we have. today we start the next chapter, but given the work of change, the mission of national renewal and start to rebuild our country. thank you. [applause] thank you. thank you. thank you. thank you.

thank you very much. thank you. thank you. tom: that is the incoming prime minister, keir starmer, with labour party having secured the incoming prime minister, keir starmer speaking after the party secures the majority that it needs to govern, with exit polls suggesting it will be a significant majority, the biggest since 1997. i'm alongside caroline. it is a change, he is talking about a significant mandate, but responsibility as well. what else did you get from the speech that we heard? caroline: i think it is fascinating. rishi sunak called this snap

election six weeks ago. the rebuke to conservatives has been extreme. the incoming new prime minister has a huge job to do. he talked about a changed labour party, he ran on a single word, change, so the rebuke to conservatives is strong. he was also implying we had to deliver in terms of the change. that was a call to unity for the party to stay united. remember the difference between 2019 and now, you jeremy corbyn then. keir starmer has renewed the party and won today. tom: and the biggest defeat the labour party had in 2019 since the 1930's, so that reversal of fortunes is significant. he says they will govern as a changed labour party, talking

about the fact they can reignite the fire in terms of hope for the british people. 14 years of conservative rule. the outgoing prime minister, rishi sunak, has conceded, and now the process in place, we will likely see the outgoing british prime minister going to the king to get that approval, and then it will be the turn of keir starmer. caroline: it is extraordinary you have seen a record number of prime minister's ousted. under the surface of this landslide victory is the story of reform. nigel farage won his seat. tom: for a closer look at the results, alex. alex: what does change look like when you put it on a bar chart? talking about labour's result in

20 1930's. what a turnaround, labour will over the 326 mark. the conservative party at the moment trailing on 76 seats. there is a lot to unpack from these numbers, the liberal democrats coming back as the third force in british politics. the national scottish party campaigning on a referendum of independence, their vote has collapsed, labour regaining ground in scotland. and the reform party of nigel farage having won four seats. all of this is on bloomberg.com. you can have a go looking at the interactive tracker as the results come in. it is a sea of red and white dots. the white dots are where labour is picking up seats. labour sweeping the board.

caroline was talking about reform being an influence, and that is true, even in seats they are not winning. tom: alex morgan breaking down the electoral data for us. there are plenty of great guests ahead as we continue to cover the outcome of this u.k. election. we will do a deep dive in terms of what it means for the economy of the u.k. and these markets. stay with us. this is bloomberg. ♪

tom: welcome back to bloomberg

daybreak: europe, we are live on bloomberg tv and radio outside the palace of westminster. alongside caroline hepker from bloomberg rate. rishi sunak has conceded defeat. keir starmer will be the next british prime minister. it is a new chapter for the u.k. and a significant turn of fortunes for the labour party after 14 years of conservative party rule. caroline: now we have to think about what the incoming labour party will deliver. they were talking about secure-nomics. the numbers are extremely small. there is a question, despite this landslide victory, which i will not diminish, there is a question about the mandate of the labour party, and what it will be. in terms of spending and taxation, under 10 billion

pounds a year, not much and yet keir starmer wants to change the country, wants to deliver a plan of reform and deliver on the nhs and other priorities u.k. has. how will he do that without changing the fiscal rules? there will be a lot of questions around the manifesto. the kicking voters have gotten from voters in the u.k. is self-evident that the verdict on the 14 years of rishi sunak and the other prime ministers we have had under conservatives is clear. but what we get from labour is less clear. tom: let's bring in daniel murray to take a view on how this impacts markets and assets. deputy cio / global head of research, efg private bank. thank you for joining us. what do you think the market impact of this will be? it has come in line with polls, do you want to lean into u.k. assets? daniel: it is a super

interesting result. keir starmer in the party have done a lot of hard work to reassure markets that this labour government will be relatively business friendly. whether it is in terms to commit to progrowth policies, and what you should not forget is the labour -- [indiscernible] tom: seems like we have a connection issue. can you still hear me? this sometimes happens on live tv. daniel: i can still hear you. tom: you were saying you have been hearing a relatively constructive view from this labour party. pick up from there and what it means for risk assets. daniel: historically labour

governments have been viewed negatively by governments because of being high tax and high spend. this government will not raise any of the main taxes and will invest in the economy and pursue progrowth policies, and it should have stronger ties with europe which will be relatively friendly. overall it is a positive step. caroline: keir starmer, in one interview, talked about how he would like economic growth of 2.5%, similar to what we had in the tony blair era. since 2010, u.k. growth has been weaker, 1.6% on average. are you hopeful we could get up into a 2% level for economic growth? daniel: i think 2.5% is pushing it given the underlying demographics and productivity

trends, but if the labor government -- if the labour government could achieve the high ones or low twos, that would be a great achievement. tom: what will you be looking for in the first 100 days, where will your lynn e? daniel: we will be looking forward to adherence of the manifest of pledges of the labour party movement and policies that will remain business friendly. the real test will come and will likely be in terms of the economic policies, how they intend to finance, and policies they will implement to support business, and hope to reinvigorate growth. the first hundred days we just need to see steady as she goes, and that will lead into the

autumn budget, give us more color as to how they want to carry out their plan. tom: the real test being the autumn budget as we look through the first 100 days. daniel murray, deputy cio / global head of research, efg private bank, thank you very much. coming up, plenty of great guests as we cover the outcome of the u.k. election, rishi sunak conceding defeat in the last hour. stay with us. this is bloomberg. ♪

tom: welcome back, let's check in on the asian markets. avril hong is standing by. avril: really interesting to see how the u.k. election results have crosscurrents for the japanese yen, as the pound has been strengthening in the past

hour. we have seen weakness coming through on the u.s. dollar, three we close, but the root cause is that deflationary narrative out of the u.s. and how the u.s. economic data is exacerbating. we will keep a close watch on the u.s. jobs data but given the soft dollar that is helping the japanese currency start of the day --this is a much bigger move compared to what we have seen on the recovery on the chinese yen, the underperformance is playing out in equities, especially given those continue concerns in the chinese economy. the nikkei has been paring gains. tom: thank you very much. let's get you up to speed on the

u.k. and the politics, we have changed the chapter, the incoming labour government having secured the majority of more than 326 seats out of a parliamentary seat count of 650. it is set for the biggest majority since 1997. keir starmer he will be the incoming prime minister. rishi sunak has conceded, and accusations are flying from outgoing ministers who lost their seat, and has fired a broadside at the conservative party, which is facing potentially its worst defeat on record. we will bring you the latest on the u.k. elections of the continue to unfold. stay with us. this is bloomberg. ♪

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tom: good morning, this is bloomberg daybreak europe. live from westminster, a new era in british politics begins. we are live on bloomberg tv and radio. these are the stories that set your agenda. labor set for a landslide win, voters turning on the tories after 14 years in power. rishi sunak has conceded defeat. keir starmer is set to become the u.k.'s next prime minister. equity futures point higher in the pound is steady. a new political dawn in britain. we have a great lineup of guests, we will bring you analysis and reaction as the final results role in. keir starmer has promised national renewal with his labour party heading to a resounding win in the u.k. general election.

starmer is set to become the next prime minister with labour putting a heavy defeat on the conservatives. starmer spoke to conservatives moment ago. >> we did it! [cheers and applause] you campaigned for it, you fought for it, you voted for it, and now it has arrived. change begins now. tom: a short time ago rishi sunak conceded. in the heavy defeat, which has seen several cabinet ministers lose their seats, it will bring to an end 14 years of conservative rule. >> the labour party has won this general election, and i called keir starmer to congratulate him on his victory. today power will change hands in a peaceful manner with goodwill on all sides.

that is something that should give us confidence in our country's stability and future. british people have delivered a sobering verdict tonight, there is much to learn and reflect on. i take responsibility for the loss. tom: the outgoing british prime, rishi sunak. the pound is relatively steady at 1.27 versus the u.s. dollar. ftse 250 futures pointing to gains around 0.4%, this is a result predicted by the polls. no big shock for these markets. it does not dilute the significance of this moment, bringing you your expertise, what are you watching for in the next few days ahead. what is the significance around the economic policies of this incoming labor government. --labour government. caroline: the u.k. economy is

doing better, more economic growth, living standards are starting to shift in the sense that inflation is coming down and wages are going up. the picture looks better. we are expecting the first interest rate cut. it is looking like things are brighter. it is the obstacle of five prime minister's over 14 years where real disposable incomes have been cut and fallen over that period, and three prime ministers in 2022. that hurdle was too great to get over with the electorate, dissatisfied at the ballot box. tom: within the labour party manifesto, there was a focus on energy, those plans will take time, the investment they have to put into those projects is less than they would have hope. in terms of the first hundred days, what are the crucial steps we are looking for from the incoming chancellor and keir

starmer? caroline: planning reform, the promise to build more houses. tom: how realistic do you think that is? caroline: historically housing targets have never been met. they will have to do something significant to change that. the other issue is workers rights. i think the issue will be how bold will the autumn statement be, given that they have run on this manifesto with few promises for change in terms of numbers, taxing and spending. can they do anything significant in autumn? is it going to be 18-24 months they have to pull the lever of higher taxes? that has led conservatives to be ousted, because we had the

highest tax rate in something like 70 years with a 40 year spike in inflation in the u.k., those of the things that led to the trouncing of the former prime minister, rishi sunak. tom: i was speaking to a ceo of a major u.k. bank, saying in their opinion, rachel reeves and jeremy hunt, they were interchangeable, that is how relaxed they were about the prospects of rachel reeves. caroline: i would say there is another view, and that is that the labour party is looking to be interventionist. if you read into the manifesto and the sectors they want to government to have a say in, it will be different in the u.k. tom: for the market response we will go to joe easton, but first we are looking at the results. alex: good morning, this is our

bloomberg interactive tracker, you can have it on a big screen or on your phone, it is updated in real time. while we know who the winner is, labour with 371 seats, we are getting a sense of the national picture, of a tory rout in their heart lens the collapse of conservative vote is one of the driving forces behind the labour majority. not a wave of love for a new labour government but frustration with the last 14 years. the threats to the conservatives are on two flanks. you have the threat in the heartland in the southeast from the liberal democrats. jeremy hunt narrowly hung onto his seat. many thought he would be a goner, the result coming down to hundreds of votes. you have a threat on the right of the party. nigel farage of the reform

party, at the beginning he was not even in the race, he said he would support donald trump in the states. then he picked up the conservative seat of clacton. the chancellor, jeremy hunt, look how close that was. that is how close they came to unseating him. when it came to farage and clacton, not close at all, he stopped the tories. -- he stomped the tories. tom: thank you very much. in terms of big names of the fallen within the cabinet, the previous cabinet of rishi sunak, including the likes of penny morgan, jillian keegan, former educational secretary, johnny mercer and arguably the biggest name so far to fall in terms of the cabinet, grant chaps who has

held a number of different in the ministry, he took a broadside at the conservative party saying this is more about a conservative party loss. caroline: saying we did not keep our promises, the party did not listen to you. there will be a lot of thinking, a huge amount of turmoil and what is left of the conservative party in parliament and across the country as to why they lost and did not deliver what voters wanted. there will be a lot of soul-searching. tom: from a market perspective, does the size of the majority that the labour party set, is that a positive in terms of implement and policy or a risk factor for markets if it is power unchecked? caroline: that was the accusation from the conservatives, which is meaningless in the parliamentary system.

we shall see. will it mean more delivery or a more fractious party, or will they have to be under pressure to do more? tom: thank you, caroline hepker. we will let caroline go. let's look at what the election could mean for u.k. homebuilders, and bring in joe easton for the equity market response. joe: for homebuilders, the labour government is focusing on supply policy, looking to build around 1.5 million new homes over five years, that is what they said in their manifesto. with this majority, we will see if they can enact some of these. they're looking to build homes by announcing a number of new planning reform offices that will put pressure to build homes. the conservatives announced a similar policy in terms of the

amount of homes they want to build but when for more taxcutting, a traditional conservative approach in terms of new measures to reduce taxes on landlords when they sell properties to tenants. they much prefer the labour approach in increasing supply because demand for houses is -- the only thing concerning it is mortgage rates, and we have seen a bit of a rebound in housing stocks this year with big ones gaining and because of the policies that labor have been announcing in the manifesto ahead of this, we have seen the likes of this down at the bottom rally and because those are the ones that could get these contracts on new social housing. the ones at the top, they have done ok but that is driven by the rates that caroline has been talking about in terms of when interest rates come down, the mortgage market should rebound.

therefore we will see demand come back into the market. it is about the government coming in, can they increase supply? and the key overhang is the bank of england, it is too early for them to cut rate this summer but we may see that soon. a fantastic chart at the bottom, the bank of england rates shooting up. house builders slumping, and if the government is stable, we could see those trends go the other way. the market is positive on homebuilders. tom: equities reporter, joe easton on the implication of the house builders in the u.k. on the back of this vote. over to another election in europe this week, we should not lose focus on france. polls in that country show marine le pen's national rally is set to fall well short of an absolute majority in the parliamentary election on sunday. let's bring in bloomberg's

senior editor. where do we stand going into that final day of campaigning? >> as you said come on the polls that came out yesterday showed marine le pen falling short of the majority. the election is a fairly complicated system, 577 seats in parliament. there were three or four candidates, a lot who have decided to withdraw to set up a head-to-head contest with the national rally in a lot of districts. the expectation from the polls is marine le pen will not succeed in getting a majority in the national assembly. you have to see the final outcome. the polls are not votes but if this happens, that means there will be a problem for france monday morning. what kind of government do they appoint with no clear majority.

it is a leap into the great unknown. tom: we look ahead to the final round of voting in those french elementary elections. we will have the exit polls of france sunday evening. let's get a roundup of other stories making the news. >> good morning. joe biden's reelection campaign limped into the independence holiday as the u.s. resident tries to salvage his candidacy. leading democratic governors offered some of the strongest words of support for his bid for reelection after a crisis meeting at the white house where it is believed the 81-year-old admits he will have to work a reduced schedule to avoid fatigue. party anxiety is mounting over his chances of getting former in november, with polls showing him losing ground to his republican opponent after a poor debate performance last week.

senior u.s. officials say hamas has broadly agreed to the framework of a cease-fire proposal with israel. the response was received earlier this week through qatari officials. the development is called encouraging, saying it may be the basis for an agreement to free some of the israeli hostages from gaza. israel is said to send a delegation to qatar for further talks. hurricane beryl is heading toward mexico's yucatan. it is expected to we can before making landfall, bringing strong winds, a dangerous storm surge and damaging waves. the airport has suspended operations, and cancun's airport has canceled flights. a trail of destruction has been through the caribbean and winds reached a rare category-5 strength. tom: thank you. coming up, we

will hear from the chief economist at the bank of singapore, mansoor mohi-uddin, and get his view on the pound. plenty of great other guests as well. stay with us. this is bloomberg. ♪

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beaches rhythm and blues caribbean sale is now on. visit beaches.com or call 1-800-beaches. tom: welcome back to bloomberg "daybreak: europe." we are live on bloomberg tv and radio outside the palace of westminster on the back of this historic vote, ending 14 years of conservative rule, the later will take over. they have secured the majority, and the next prime minister of the u.k. will be keir starmer. rishi sunak is the outgoing prime minister, conceding defeat

and taking responsibility. keir starmer saying it is a changed labour party, and they will govern in a changed way. labor currently has 378 seats, well above the 326 needed for a majority. the conservatives are set for one of their worst election nights in history. for market analysis and what this means for u.k. assets, we can bring in mansoor mohi-uddin, chief economist, bank of singapore. thank you for joining us. a line from your notes stands out, the prospects of a stable government plus boe rate cuts are likely to benefit u.k. assets. how does that look and shape up, what does that benefit look like? mansoor: thank you. the election result clears away the political uncertainty. we have had a decimal decade of disorder in politics, economic

instability, market underperformance. now in the next five years, investors and companies can plan for the future, it should be good for growth. perhaps a quarter trading relationship. it could benefit assets and the pound as well. tom: keir starmer has talked about 2.5% growth, the kind we had under tony blair. his 2.5% real estate for the u.k., or would it need to get -- if it is not realistic, what is your outlook? mansoor: 2.5% is definitely ambitious. we have an aging population and will have increased defense spending and the claimant transition. it will be tough to get 2.5% growth. we had a recession last year, we get below 1% growth this year,

1.5% next year. 2.5 percent growth, you need to see a letter structural reforms and investment. the new government has a chance to do that but it will have to push things hard in the next few years. tom: do you see the incoming prime minister, keir starmer getting a lift from a cut in august? is that priced in for you? mansoor: yes, i think the markets expect inflation back to the 2.5% target and we should get a rate cut in august and november. that will give a tailwind to u.k. assets. markets will be hoping if we get sustained rate cuts through the rest of this year and next year as well, that would help lift the u.k. stock market. tom: what does it mean for the pound in that context? the stability of this government and expectations of rate cuts

from the bank of england pushing on the other's of the pound the? we see strength versus the euro to percent pound versus zero, does that have momentum or is it cap by cuts from the bank of england? mansoor: obviously the bank of england rate cuts are a minor headwind. central banks will cut rates, we expect the european central bank will cut rates a few more times this year. the federal reserve we anticipate in september. what will help the pound is renewed political stability from this election result and reforms, and if they bear fruit, the pound's outlook is considerably better. the pound is trading at 1.28, it was 1.50 on the day of the brexit vote. it is divided on long-term measures.

tom: mansoor mohi-uddin, chief economist, bank of singapore with a view of what this electoral victory for the labour party could mean for the u.k. economy. you are looking at the pound at 1.27 versus the u.s. dollar. ftse futures with gains of around 0.2%. the incoming british prime minister, keir starmer, hailing the victory of the labour party, saying the hard work starts now. this is a new chapter, he says, for britain. we will bring you the latest on the u.k. elections this is bloomberg. ♪

tom: welcome back to bloomberg "daybreak: europe." we are live on bloomberg tv and radio as the incoming british

prime minister, keir starmer, says the british government and the country should prepare for a period of national renewal. we look at the challenges facing the incoming government. they have secured the majority. suggesting -- exit polls suggest they have more than the six needed for a majority. the autumn statement with the incoming chancellor, rachel reeves, will be scrutinized by the markets. ftse 100 futures pointing to gains around 0.2%. this is the question mark around the u.k. budget, deficit forecasts widening since may. the deficit, the 2025 budget deficit is increased above 3%, 3.15% of gdp. that is a reminder of the constraints on the incoming government when it comes to the fiscal spend they might want to push through. that is part of the rationale for why they have revised those spending plans. we also look at the equity market story as bank of

america's survey says fund flows are increasing into u.k. equities on the prospect of political stability. mid-cap stocks in focus. ftse 250, futures pointing higher today. to what extent will they benefit from labour's spending plans? the property and real estate and home builders will be in focus with that plan around reforms to the planning regime, and that target of 1.5 million homes built over the next parliament. we will focus on utility and energy companies as well, potential windfall coming through. plenty more coming, a scrutiny of equity market on the impact of the victory by the labour party. stay with us. this is bloomberg. ♪

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tom: good morning, i am tom mackenzie in london. labor claims victory in the u.k. , a land slide when after 14 years of power. >> we can look forward again. the sunlight of hope is getting stronger through the day. tom: equity futures higher, the pound gaining with a new political don in british politics. a great lineup and analysis and reaction with focus on the u.k. economy.

let's get you up to date. keir starmer and labor inflicting a heavy defeat. labor party heading toward a significant majority in parliament. change is coming. >> it's the guiding principle, everything we have done and must do. protecting our borders, the british people have to look us in the eyes and they that we can serve their interests. the work never stops. the changes are permanent, irreversible and we must keep going. we will govern as a changed labor party.

tom: a short time ago the prime minister conceded following a disastrous campaign. this will bring to an end 14 years of tory rule. >> the labour party has won and power will change hands with goodwill on both sides, something that should give us confidence in our countries du jour. british people delivered a sobering verdict, there is much to learn and reflect on and i take responsibility or the loss. tom: it is a significant new chapter in british political history. markets take this in stride,

results are in line with what the polls suggest. up versus the euro and the pound is stronger for the seventh straight day. ftse futures .2 upside in the 250 pointing to gains. let's get the latest on the political arithmetic. alex morgan for a closer look, you have been monitoring the seats. alex: good morning. it is easy to monitor when the live tracker updates in real time. we are not thinking about the

majority, realignment in british politics, labor demolished the conservatives with the help of nigel's right wing reform party. his party came in second chopping down the conservative vote which led to the tories losing majority. why does this matter? in 2019 boris johnson got an 80 seat majority in the conservatives seemed poised for 10 years. in five years they have collapsed. they are below 100 seats. labor charge ahead. nigel picked up four seats. taking a huge chunk of a share

that conservatives would have been defending. you have the collapse of the scottish national party. they swept labor and have been pushing for a referendum and the reemergence of the liberal democrats, they have more than five times the number and labors victories are a mile wide. people express frustration and new parties like form and it is a big win, there is a sense that labor will have to win over a cynical electorate. tom: that is important context. alex morgan breaking down data as labor close in on 400 seats.

indeed. let's bring in a capital strategist outside westminster. what do you make of the market reaction, a challenge for labor, is the market response rational. >> the market is muted because it's been expected in the market preempted results. the initial response is muted and the key thing is what will they do with public finances? they do not want to change dynamics and the market will take it positively.

i think we have to differentiate. we have not heard from the bank of england. we think the indication is rate cuts are coming, one or two. indeed, we are 10 basis points away from pricing so back to the finances, one thing is angst around since liz truss, particularly at the back of the curb, upside risks and that will be arrested. tom: if that was capex would gilt markets stomach that? peter: depends because guilt issuance will behind in net

terms you factor in the bank of england even for capex reasons, it is better than spending on other things. tom: seven days of gains for the pound versus the dollar. peter: it is a slightly positive story because one thing the market has been worried about was the government not functioning so now the fact that we have stability, the hallmark of what they have been telling everyone, that should be positive for the perception in the pound, but in the euro area we have rate cuts. many things are coming.

tom: is the u.k. developing a safe haven status? peter: i think we are safe haven and we have the benefit of the doubt. there is turmoil across the channel but we will see how the government lifts up after the first 100 days. tom: whenever previous guests that the autumn statement is critical. what are you watching for? peter: they want mild tax increases and increase in spending. it is the size of the deficit that matters. they said they respect the

forecast, do not want to change fiscal rules so debt needs to be lower than at the moment, these are things the market will watch for and i will watch for because this matters for the gilt market. tom: indeed, really appreciate you on this historic day. peter, chief macro strategist at rbc. let's get you some other stories crossing in terms of headlines. let's bring in jennifer. jennifer: thank you, joe biden's reelection campaign as he tries to salvage candidacy, leading governors offered the strongest words of support for his bid after a crisis meeting where the 81-year-old admitted he will have to work a reduced schedule.

party anxiety is mounting over his chances of beating donald trump with polls showing him losing ground after a poor performance. senior u.s. official says hamas agreed to a cease-fire with israel. the response was received this week and the development was called encouraging, saying it may provide a basis to freeze some hostages. israel is sending a delegation to qatar. canada approved glencore's acquisition of a coal business with stringent conditions. they made legally binding pledges to protect jobs in the environment. the dual -- deal was announced last fall after a public by when

tech rejected a $23 billion offer. tom: indeed. other news making headlines, we appreciate it indeed. in our election special we will be hearing from the cio of gamma asset management in a few minutes about the u.k. market reaction to this slice of history in british politics. also ahead, a partner gives her view on labors tax plans and stay across the latest on tliv on the terminal indeed. stay with us. this is bloomberg. ♪

>> welcome back. the labour party he secured the election with keir starmer as the next prime minister. the outgoing prime minister conceded. the defeat has seen cabinet ministers lose their seats including hopefuls and jacob rees-mogg. jeremy hunt held onto his seat. have a look at the results in the days ahead. joe easton is standing by.

joe a couple of sector specific things, first of all the government owns 6 billion pounds in natwest. conservatives pledged to offload this. we will wait and see what the labor government does. the second thing is how the bank of england pays interest rates to the lenders.

we expect to keep that in place. more importantly is the outlook. santander, we saw interest rates go up. because the government is a bit more stable policies are not different from conservatives, economy will start growing and we've seen the banking index

coming up. it's all about stability but there are specific things including natwest. tom: really fast that -- fantastic. joe easton, brillion. thank you indeed. let's bring in chief investment officer at gamma investments. thank you for joining us. are you adjusting your portfolio ? guest: as you mentioned before, this is expected so in terms of port folio adjustment there is no need to make adjustments. what is surprising is the margin

of victory and what that means for my investments is it does give the labour party more flexibility to move. you mentioned continuity, but this gives them room to do more and that might be difficult to digest. but we would not know that in the short-term -- tom: they could -- they could -- they could -- they could -- they could -- the risk was they could turn to the left. would this be guilt exposure, risk? was this a u.k. equity story? rajeev: there might be some

temptation to do more on the fiscal side. of course, the lessons learned in the big selloff from liz truss is fresh in people's memories. we've seen the long end of the markets deepening with expectations of spending, a global story and that could be a risk. in terms of equity markets, different policies can be favorable, i agree with the former guest mansell on the stability. however with a large margin and number of seats, policies can shift more to the left. tom: what is the play on gilts?

how would you position? rajeev: the market has priced in cuts. bank of england will cut now. it will take its time. central banks are cautious about cutting rates too fast. led by the fed which has delayed its easing cycle. ecb cuts in june reluctantly because it pre-committed more than it really wants to. central banks are constrained in terms of how fast they can cut because their track record has been pork and they are restoring credibility and inflation is staying higher than they would like. bank of england will be cautious. tom: ok, rajeev, cio of gamma

asset management. also what are potential risks if the labor market goes to the left? thank you indeed. how much is priced into these gilt markets? markets priced in a first cut in august. we remain live in london as labor claims a victory in the u.k. election set for a majority above 400 seats in the parliament, one of the worst defeats for the u.k. conservative party in history. stay with us. this is bloomberg. ♪

♪ tom: welcome back.

let's look at asian markets with avril. avril: interesting picture in fx. pound downward, dollar index low and they climb in japanese currency gaining ground against g10 counterparts. unwinding of goldilocks trade underway. offshore yen recovering. flip the board. assets are underperforming. flip the board. new k is erasing gains amid the -- nikkei is erasing gains. profit raises optimism about memory chip demand.

tom: avril in singapore, thank you indeed. incoming u.k. prime minister keir starmer is positioning the new government. coming through with the largest majority it seems on track for that since 1997 in the victory of tony blair. this labour party on track for 410 as things stand. that is a turnaround of huge significance sin 20 when the labor party suffered its worst electoral outcome. the conservative party faced its worst outcome in history. the outgoing prime minister saying he takes full responsibility.

the outgoing prime minister talking about addressing responsibility given the significant mandate. the liberal democrat party have performed well with 65 seats becoming the third party, reform led by nigel notching gains in the parliament. we keep across the change of power. it was achieved by the labour party and they're closing in on a significant majority. we keep across that fo (jennifer) the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy.

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tom: i'm tom mackenzie. voters turn on the tories after 14 years in power. >> hope is getting stronger throughout the day. tom: a great lineup and analysis and reaction throughout the day. the u.k. labour party securing a majority in the country's general election with the leader

set to become the leader of great britain. >> it is the guiding principle, everything we have done. the economy, protecting our border. the british people have to look us in the eyes and see we can serve their interests. that work never stops. changes we have made our permanent and we must keep going. we will govern as a changed labour party. tom: outgoing prime minister took responsibility for that heavy did that has seen cabinet

ministers lose their seats including grant chaps and jacob rees-mogg. >> the labour party has won the labour election and and i've called keir starmer. power will change hands with goodwill on all sides. that should give us confidence in our stability and future. the british people delivered a sobering verdict. there is much to learn and i take responsibility for the loss. tom: britain's outgoing prime minister taking responsibility for the worst defeat or his conservative party in history. it is a significant milestone in terms of politics.

suggesting this would be the result with the majority taking equity market futures on the back of this benign thing given this is what the polls indicated. currently the pound is at 127. seventh straight upside for the pound. inflows in terms of equity markets. bank of america suggesting fund managers turn more constructive. ftse futures pointing to gains. let's bring in alex morgan. alex: good morning. nothing subtle about that. this is our results tracker and labor, 399.

were expecting that across the 400 mark. the conservatives languish in could be heading for their worst result. let's look at labor. the new administration, a huge majority on paper. a sea of red from scotland into the heartland's in south east england. a broad sweep. labor under pressure. not a rosy result for every seat. in member of the shadow cabinet was ousted by an independent. that is overturning a labor majority, coming down to a couple of percent. the issue of gaza costing labor dearly in the country and there is a sense in which labor has the massive wind but the case of

the vote is fragile. they lost suits they did not expect to lose. jonathan ashworth was not expected to be looking for a job. conservatives collapsed and people went to labor out of frustration. keir starmer was trying to win people over, that is borne out by results, a huge win, a landslide. terrible and fragile results for labor. tom: alex morgan breaking down the data as it comes through. crossing over to alex, thank you very much indeed. now some other stories making news indeed. in europe the focus switching to

french elections. polls and francis show that the national rally will fall short of a majority on sunday. let's get the details and bring in phil serafina out of the french capital of paris. where do we stand in france? phil: we have the latest poll numbers confirming what you said. national rally getting 230 seats, short of the 289 you need so the contrast could not be more stark. you have a clear mandate in here voters will not give anyone a majority and it will create a problem on monday morning. emmanuel macron coming in third place, second place goes to the

left-wing alliance, 190 seats. assuming that comes to pass on sunday, france is facing something where the president will decide who is going to run the company -- the country from among three groups. it is unclear what is going to happen, whether there can be a coalition or minority government so the polls show the national rally falling short. tom: indeed. drawing the distinction between what is happening in france versus u.k. parliament. given the sizable majority.

indeed. to the u.s. where president biden is heading into the most important weekend of his career as he looks to restore faith. he has refused to step down following a debate which raised concerns. kriti gupta has been following all of this. is the president going to stay in the race? in terms of the pressure he is under in the calculation, what it is. pretty -- pretty -- host: tonight 8 p.m. he has been doing several interviews to repair damage in the interview, but now there are questions about the alternative. vice president harris has risen in the polls with democrats

pushing for her to take on trump, but how much did harris now and why did she not speak up? you have seen her be an advocate. gavin newsom, all these replacements over the last years one bidens health was brought to the forefront. now this brings about questions where democrats are worried and republicans are targeting it. tom: bloomberg's kriti gupta with the latest indeed on the thinking around biden. if indeed he steps down. no decision has been made. indeed. two other stories making the news. jennifer has a roundup indeed.

jennifer: u.s. economy is expected to add 218 thousand jobs for the month of june as unemployment remained at 4%, the labor market is nearing an inflection point ahead of rapid deterioration. bloomberg projects unemployment will reach 4.5% by the end of the year and the fed will cut rates in september followed by a cut in december. christine lagarde says european central bank would require reassurance that inflation is headed to the 2% target before it lowers interest rates. the ecb president urged officials to remain alert saying data on wages and profits should enforce confidence that consumer prices are going down. officials signaled no rush to

follow a reduction last month with another. the owner of saks 5th avenue is acquiring neiman marcus group in a deal uniting two of america's largest department chains. amazon and salesforce will facilitate the deal by hudson bay and the companies will take stakes in a new company called sax global. the goal is to boost profitability by giving the company power with vendors and reducing shared costs. tom: jennifer, indeed. a roundup of news indeed. coming up, labors tax policy. that conversation, next. this is bloomberg. ♪

♪ tom: welcome back. the labour party secured a majority with keir starmer becoming prime minister. voters turned on conservatives and an unparalleled collapse. grant shafts and penny mordant and jacob rees-mogg or. jeremy hunt held onto his seats. he was seen arriving at downing street. what this could mean with joe

easton in terms of u.k. utilities and databanks. what are the implications from the majority of labor? ? : there are two elements. we seen villages and companies, pledging to fix that, some followed ends -- politicians as for dividends and that has weighed on stocks. brought energy bills, labor will have a new renewable energy company, not much detail so the market is skeptical and it's weighing on companies.

the most important thing for this sector is bond yields. the big drop that we soar in 2022 was with trust -- liz truss budget with a more stable government. people hope we will not see a repeat but that has been the concern. we don't want another point of that, but sector specific thing are a key focus for the labor government. tom: joe easton, indeed. let's focus on tax now. joining me in terms of how we should think about changes, let's bring in alexander britton

davis. with a focus on dom's and the agenda. a windy day, a slice of history. proposed tax around private schools, the privilege they have had is in the manifesto. the labour party will not raise capital gains, but parts of the economy could be hit. >> non-dom regime is abolished and what they mean is taxation that enables non-dom's to keep gains. they're going to replace that with a more modern system in line with conservatives plans.

tom: to what extent is that being factored in? >> the conservative announcements are what we are basing the announcement on and if these reforms do come in it's a short time to make changes. some are thinking of leaving, others will remain, but a lot of people are waiting. we have people -- tom: still waiting for more detail. when you talk about jurisdictions where our clients focused? >> other jurisdictions such as

italy as possible and spain, portugal, ireland, dubai. tom: capital gains has not been ruled out in terms of the change. how are you thinking about capital gains? alexandra: they plan to move all interests to be taxed as income suggesting they are not planning to raise income tax because there would be no need for a change but lugar will think -- labor will think about rates. perhaps back up to 28%. tom: so -- so -- 28%, they would be looking to move it above?

alexandra: currently most gains are 20% and then 28 for private equity. tom: how many clients are freaking out? alexandra: some schools are taking prepayments and we will have to see if that works given the change in lore. but not too much, looking to see if they can save. tom: do we trust them when they say they are not going to raise taxes? what are you on alert for? alexandra: income tax rates are high, particularly compared to other countries so we do not have a concern but changes to the non-dom are where we will see changes.

tom: alexandra, thank you indeed with the take on what clients are thinking indeed. coming up at 7:15 a.m. we will be joined by chief economist at the institute of directors and ceo at amadeus for more on the u.k.. stay with us, this is bloomberg. ♪ i can't believe you corporate types are still at it.

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tom: welcome back. keir starmer will be the prime minister, securing a significant majority. big names falling, most recently liz truss losing her seat.

alex morgan has a closer look. alex: it is raining in westminster. at least you have an umbrella but this chart is looking like a chance for labor. 407 seats, eclipsing 2019. conservatives are set for their worst results. they will not be 156 and liberal democrats have more than six times the number of mps, complete realignment of british politics setting the tone for the next four years. let's show you a sea of red. triumphant night for the

conservative vote collapsing. former prime minister liz truss lost her seat and there is a suggestion that support for independent candidates means a lot labor wins are fragile. people are turning away from conservatives and in conservative seats there is a rise of reform costing them dearly. nigel was not standing at the beginning of the election. picking up a seat from conservatives with 46% of the vote. a vocal voice coming for the labor government. really dramatic. tom: alex morgan breaking down data for us. just because polls point to a headline result, do not let that distract you from the rewiring

of british politics. this party had 300 85 seats at the last election and before we wrap up from westminster here is how newspapers cover this election with a landslide, the times in the guardian playing it straight in a labor majority. stay with us for more indeed on the u.k. elections in the market reaction when we speak with the chief economists and ceo and cofounder of amadeus capital. keir starmer is the next dish prime minister. the opening trade is next, this is bloomberg. ♪ (♪♪)

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