tom: good morning. this is "bloomberg daybreak europe." i'm tom mackenzie in london. >> a reduction in our policy rate could be on the table as soon as the next meeting in september. tom: u.s. futures pointed to

further gains for the s&p, after the fed signals a rate cut, as soon as the next meeting. meta beats on sales, as ai delivers insta results, helping mark zuckerberg's company sell targeted ads. we look ahead of earnings from apple and amazon later today. oil extends gains on a new york times report that iran's supreme leader ordered a direct strike on israel in retaliation for killing hamas' political chief in tehran. we start on the earnings story and a very solid beat from the french lender of credit, agricole, helped by its trading

team, second quarter net income coming in at 1.8 3 billion euros, comfortably above the estimates of 1.64 billion. that is credit agricole, the investment bank outperforming at that french lender, dealmaking coming back and business with delayed benefits from the higher interest rate environment across europe. that income for the three months through june coming in at 1.8 billion euros and that gain for credit agricole, the details around the expenses story higher than estimates, but net income with a decent beat. second-quarter revenue at 6.8 billion, the estimates had been 6.48. we will be speaking exclusively with that french lender's deputy ceo jerome in our next hour. staying in the world of finance and we switch to what's

happening with ing. we also have lines crossing from ab inbev. the brewer with a focus on the volumes out of the u.s. story but also china. the lines in terms of volumes for north america contracting 3.2%, less than expected. in terms of revenue in the second quarter for ab inbev, below the estimates. revenue increasing, organic revenue by 2.7%, the estimate had been an increase of just shy of 4% in terms of organic volume growth you are seeing a contraction of 0.8%. that is a deeper contraction than the estimates of around 0.5%. it's a miss in terms of the volume growth for ab inbev. we know north america is a key focus. margins at 34.6% in the second quarter. adjusted, just slightly above

the estimates. and in terms of underlying eps, 90 cents versus the estimates of 86, so it is a beat, but the top line in terms of organic volume growth is a miss for ab inbev. let's check broader markets. it is the earnings story, the central banking action and the fed opening the door to that september cut in focus. as we lead up to the boe later today. european stocks pointing currently higher, in terms of the future story, just shy of two tenths of a percent rate ftse 100 futures pointing to gains of 21 points as we build up to that decision from the boe. s&p futures after a solid session yesterday closing higher over 1%, as tech turned around to the upside, s&p futures higher 0.5 percent. nasdaq futures building on the gains of yesterday, what a rally we saw, little over 3%, the likes of nvidia soaring 13%.

nasdaq futures looking to build on that today. let's look cross asset. treasuries giving up some but not all of the games of yesterday. we saw moves across the treasury curve, yields lower yesterday on the fed story, paring some of that today at 4.28 on the front end. the japanese yen, what a turnaround in the fortunes of this currency, 149 as amundi and td securities 5:00 140 for the japanese currency and that is weighing on equities. the pound that 1.28 and brent 81.50, up 0.8% on the geopolitical risks around iran and israel. our top story of the morning in terms of the macro. and central banking. chair powell signaling the u.s. is on course for an interest rate cut next month, as long as progress on inflation continues. we are joined by markets live report or mark cranfield. mark, your top take from what we heard.

the statement was adjusted at the margins but we got a dovish line from jay powell in the press conference appears to be the take. >> from a traders point of view, the most interesting thing is if you compare it to the first quarter, markets were pricing something like three to four interest rate cuts. here we are, third quarter of the year and we are still pricing three interest-rate cuts. this time jerome powell is not pushing back. he is more or less giving a green light. he is not 100% saying it is a done deal but the door is wide open. unless the data is very disappointing the next couple of weeks, a first cut of this series will happen in september. unless the two cpi reports in between are very bad, it's a done deal pretty much, and probably for some more this year, maybe even the three the market is looking for. no pushback and that's what the traders heard. tom: the door wide open for that

september cut from the fed, the first of the cycle. the ecb are looking at another cut in september. the door wide open for the fed in september. surely, the boe 's today -- boe goes today. >> it may come to five against four votes, either one in favor of a cut or one against. from an investor's point of view, it is the guidance. they want to hear if the boe do cut today, has some clarity on where they will cut again and that will probably not happen. somebody will be disappointed today. people trading the pound will see it as a slightly bullish thing because they don't want too many rate cuts but bond traders will be disappointed. a lot has been priced into the u.k. gilt market and it is unlikely the boe will satisfy those expectations. equity market can probably take it in stride, provided the earnings continue to be decent. a very mixed bag.

not everybody will be happy with the outcome today. tom: mark cranfield wrapping what we heard from the fed and previewing that crucial decision around the boe later today. our mliv team, thank you very much indeed. very pleased to say i'm drawing for an exclusive interview with the cfo of ing, tanate phutrakul . just to wrap up some of the lines that crossed earnings in terms of net income, second quarter, it's a beat. you and the team with 1.7 8 billion euros. the estimate had been 1.6 billion. total income outlook for about 2024 increased to 22 billion euros. what gives you the confidence to upgrade the outlook for the year? tanate: thank you very much, tom. i think we come into the second quarter with good commercial

momentum. we have added almost 248,000 new primary customer the last three months. growth has been strong particularly in the retail bank with mortgage going across all our markets. that has been complemented by good inflows of liabilities, as our customers deposit more money , both in retail as well as the wholesale bank. but the standout for us has to be strong fee momentum. we recorded almost a billion euros in fees, up 10% year on year. our credit book remain strong although risk costs have ticked up but at 1.8 billion euros we come in with strong commercial momentum and strong retail nonequity, that's why we have updated our guidance to be a little over the 22 billion mark in terms of revenue for the year. tom: we know the fee story is really important for you. that is one of the key standouts.

you set this target of 5 billion euros in terms of fees by 2027. how do you get to that target? is that focused on organic growth or do you need acquisitions to get to 5 billion by 2027? tanate: our strategy is based on organic growth. we have a key bellwether for us is continuing to add primary customers. at the half year, we have added almost half a million new primary customers, that has been key for us. a key driver is helping our customer to open more investment accounts. we have seen good growth, almost 8% in new openings of investment accounts. on top of which, we have been able to optimize our feed packages to our customer base. these are all levels in terms of operating at a structurally higher fee level when we have

done in the past. tom: how do you see the loan volume growth evolving over the short to medium-term? tanate: it is in two parts. in the regional bank, i see loan growth being quite strong. as you mentioned at the top of your show, interest rates have begun to come down. mortgage rates are normalizing, housing prices are beginning to ticked up in markets like belgium and the netherlands. that is a conducive market for mortgage growth. our growth has been a little on the high side because we have been gaining market share in the second quarter. that bodes well in terms of lending growth in the retail bank. the wholesale bank is more of a mixed picture. we see growth in certain areas and other areas we have been optimizing our capital, selling loans in some instances, to make

sure we get the right return on equity. it is a balanced picture but overall our target is to growth our loan book over the period by around 4% to 2027. tom: as we think about the interest-rate environment, markets expecting sub-3% by the start of 2025, in terms of the ecb benchmark rate, what would that mean for net interest income and loan growth? tanate: probably two parts to that. as rates come down, you would expect loan demands to increase, which means economic activities are getting more positive. it should be positive for long growth. in terms of interest margin, we expect that margin on lending would be increasing because rates are lower, whereas we expect liability margins to

normalize more but overall we're confident to maintain a net interest margin over the cycle of 158 basis points. this is what we have achieved historically and we are confident we can achieve that in the future. tom: should we expect that loan loss provisions will be moving higher, at least the next couple of quarters? tanate: we have seen that at ing, that our loan loss provision has increased from the last couple of quarters. we don't see it much in the retail bank. i attention to mortgages, loan losses have been small. we see it more in the wholesale bank but overall, if you look at our loan loss provision for the second quarter at 300 million, it is 18 basis points over lending, which is a low hour through the cycle average, so we expect normalization but coming from a period of low risk costs the past couple of years.

tom: ing cfo tanate phutrakul joining us for that exclusive interview. with the upgrade in terms of the guidance for ing on the back of gains around the loan book and additional customers. let's switch focus. we will stay on the earnings story. we will focus on supply chains. interesting this environment of continued inflation cost pressures and disruptions globally. in terms of dhl, listed in germany, but without global footprint. deutsche post dhl second-quarter revenue coming through with 20.6 billion euros, slightly above estimates. a beat in revenue. ebita slightly higher, 1.3 5 billion in the second quarter. let's bring in the company's cem

bonn. give me a sense of how these numbers that you up for the quarters ahead? tobias: good morning. we are seeing a gradual progression in the economic cycle. we came off a high during the corona pandemic. we saw volume softening, rates softening. this has now really bottomed out. it's not the same across the globe. we see pronounced differences in different regions. we see a good uptrend in asia, exports strong not only out of china, but other markets as well. whereas europe continues to be relatively weak, especially trading within europe. it is progressing in the economic cycle but not at the same pace. tom: how do you see volumes evolving?

you have got the different units of this business, whether it is the e-commerce part, express or the parcels part of the business, but in terms of volumes in the short to medium-term, how do you see that evolving? tobias: on the one side, we have structural drivers, especially e-commerce. people shipping more small packages to consumers especially. that structural trend is fully intact. we saw after the pandemic, we had that huge boost, and it is now normalizing to the trajectory we had before. on the other hand is the cyclical park especially on the beta beside in air freight and our express business. yes, we are expressing that progressing through the economic cycle, we have returned to growth in all of our five business decisions, but it is

not the same across the globe. we see weakness in europe and ok trading in the americas. but we see it positive momentum in asia, in the middle east and in africa. tom: where do you see freight rates going? you are seeing supply chain disruptions around the red sea. rates are higher, to some extent you benefited from that, are those higher rates sustainable? tobias: we need to clearly differentiate between different modes of transportation. on the ocean side, we have the disruption in the red sea causing the diversion of ships around the cape of good hope. that adds a lot of transit time that ties up capacity. this is why the capacity balance of demand and supply for oceangoing container vessels has tightened. that is not what we expected a year ago when we were in that situation. there is additional supply of tonnage through new vessels.

this situation is relatively tight, also, because the exports out of asia are so strong. we have seen a lot of new things out of asian ports. that is where rates have risen to quite an astonishing level. airfreight is different. b2b trading, tech being relatively weak, there we have a strong element in e-commerce out of china, which ties up a lot of capacity, it's often directed charter planes. so it is business we are engaged in but not to that extent. that is something that ties up capacity on the transpacific route, for instance, this is why the landscape is quite heterogeneous. tom: tobias meyer, dhl ceo, thank you for joining us. it's a beat for the second quarter in terms of earnings from deutsche post. we appreciate the time, the ceo

looking ahead to how that story revolves, thank you, tobias. fears of regional war mounting after iran thousand revenge on israel. the latest from that region. this is bloomberg. ♪

tom: fears of escalation mounting in the middle east after iran vowed revenge against israel following airstrikes that killed senior hamas and hezbollah leaders. joumanna bercetche has the latest. there are reports that iran's leader issued an order for a direct strike on israel. joumanna: that's right, tom. we got very strong wording out of these iranian officials yesterday. the supreme leader saying he

would like to seek revenge for the strike in the capital. overnight, there was a report by the new york times suggesting that the supreme leader ordered a direct attack to be administered within israel, saying iranian military commanders are preparing for the possibility of a combined drone and rocket attack, specific targets in tel aviv and haifa, but targeting military structure and not civilians. that is happening alongside development in lebanon. hezbollah yesterday confirming that the senior commander was killed in that airstrike on tuesday evening. five civilians were killed, two children and three women. the leader of hezbollah, the commander hassan nasrallah, will deliver a speech at 5:00 p.m. local time and that will be keenly watch for clues of retaliation from the lebanon

reporter alongside what the iranians made it was well. tom: talk us through the oil market reaction to this. joumanna: we have seen an uptick in oil yesterday, wti was up more than 3% today, as well as geopolitical premium starts getting priced in energy markets. bear in mind, today is a technical meeting for opec-plus, it is a market monitoring meeting. typically they were just ascertain the outlook. remember, the opec-plus group are set to start withdrawing some restrictions at the end of q3, so beginning to put back oil barrels to the market in q4, but if the situation holds with the outlook from china demand looking weak, it's unlikely they would be incentivized to put further barrels onto the market. the reason we see an uptick is concern about geopolitical developments. that being said, none of the supply outlook has actually been hit.

yesterday iranian supply has been on the up and up over the last five years, pumping the most it has in the last six years, unless that oil infrastructure gets hit, it is unlikely you will see an impact on supply, hence why the outlook seems to be quite balanced. tom: joumanna bercetche on the latest in the tensions in the region and the impact on the oil markets. plenty more coming up. stay with us. this is bloomberg. ♪

tom: socgen posting trading revenue to help the french franc outperform wall street peers as it continues to face disappointing performance at its domestic retail unit. revenue from equities trading surged 24% in the three months to june, beating estimates.

boeings next ceo says there is much work to do ahead for the planemaker. kelly orberg is being hired after apartment after rising through the ranks of rockwell collins but the scale of the turnaround task he faces was highlighted by a company warning that third-quarter cash burn could reach $10 billion paid bill ackmans pershing square has withdrawn a initial public offering for a closed end fund after facing difficult questions from investors. pershing square says it will reevaluate its structure based on investor feedback. the withdrawal comes after the hedge fund manager slashed the anticipated size twice in just over a week. donald trump has thought to question vice president kamala harris's racial identity at a contentious roundtable with black journalists, fumbling an attempt to reach out to voters of color.

>> i have known her a long time indirectly. nctly very much. she was always of indian heritage. and he was only promoting indian heritage. i didn't know she was black until a number of years ago when she happened to turn black. now she wants to turn black, now is she indian or is she black? tom: harris later condemned his comments as divisive and disrespectful. ai investments might pay off. more on the upbeat earnings reports next. we bring you the details. this is bloomberg. with so much entertainment out there wouldn't it be great... ...if you could find what you want, all in one place? show me paris.

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♪

tom: good morning. this is "bloomberg daybreak: europe." i am tom mackenzie in london. these are the stories that set your agenda. >> a reduction in our policy rate could be on the table as soon as next meeting in september. tom: u.s. futures point to further gains for the s&p after the fed signals a rate cut as soon as the next meeting. on a knife edge. markets but the bank of england could vote for the first interest rate cut since the start of the pandemic. plus, meta beats on sales as facebook delivers on insta results. we will have a look at apple and amazon later today. to the autofocus story in europe and a focus on the journal oddsmakers -- german auto makers.

a miss for bmw and they can blame china for that. a miss coming through for bmw of around, in terms of the revenues i should say, 32 billion. the revenues in terms of the second quarter marginally above estimates but in terms of the margin, that's the miss. 8.4%, the estimate had been for 8.5%. we know china has been a challenge. in terms of their full-year margin guidance, we know analyst have been watching for this. they are maintaining that margin range of between 8% to 10% for the full year. second-quarter earnings coming in in terms of earnings before interest and tax, ebitda, at 3.8 8 billion. the estimates have been for 3.9 3 billion. in terms of earnings before interest and tax for the second quarter, that's a miss. in terms of margins for bmw for

the second quarter, that is a miss as well. we know consumers are raining back in terms of spend on big-ticket items in the chinese economy, of course, given the challenges around the real estate sector. they have warned around the sales outlook for that market. again, these are the lines around the margin squeeze and around earnings before interest and tax. volkswagen is also in focus for us as well. returns falling on restructuring charges. we know the ev segment around vw is in focus. in terms of the second quarter revenue for vw coming in above the estimates of 83 billion euros. operating profit for the second quarter for vw is coming in slightly higher as well, 5.46 billion. let's get the take now from someone who follows this industry very closely indeed. with that lens and with that scrutiny, bloomberg's oliver

crook standing by. what stands out from these numbers? oliver: we saw from the pre-release from both volkswagen and bmw that this was not going to be a great quarter. stellantis, everybody giving a lot of bad news for the auto industry. for volkswagen, they've managed to maintain guidance. i have to say there is some doubt within the analyst community about whether or not they will be able to deliver on that. looking at the different sort of categories of vehicles that volkswagen cells, because of course, they've got their core group, which is sort of the mass volume vehicles, which has been challenged for a very long time. the progressive, the audis, and sort of the luxury and sports, when you look at the margins across all those divisions from a year ago versus now, it really tells you the story you see in the auto market now. the core brand was up 5.5% last year, now it's at five. progressive brand was at 10, now 6.4. sports and luxury at 19, down to 16.

this is a question in the auto industry where you see command come down -- demand coming down. that means automakers would need to be able to preserve margin in the only way they can. they need to look at costs. volkswagen have already said they will have additional cost this year, 2.6 billion euros, which is material. something else we should flag and something we will talk to the cfo about later, volkswagen is talking about closing a factory in europe for the first time ever. this tells you it's a story about uv demand because it is an ev factory -- ev demand because it is an ev factory one line on bmw that stands out is this, in china in particular, and i'm quoting revenues were impacted by heightened competition and weakened consumer sentiment. weak consumer sentiment and a heightened competition. deliveries in the chinese market falling almost 5% in the second court. that's pretty substantial. china, competition, and of

course, the softness in the consumer not to mention what's happening in terms of ev's. oliver: absolutely. you saw the same thing in volkswagen. it's not one for one. if you look at in aggregate, vw sales in china were down double-digit percentage. volkswagen will go further" ever been in terms of their outlook. they say in china, the company expects the economic situation to begin to stabilize in q3. there is a bit of a running joke, we are always expecting the recovery in the next half of the year in china and that has not happened really across the board. when you look a little bit further into bmw, margins coming under pressure. you mentioned ev's, when you look at the ev number for sales in terms of mercedes and bmw, mercedes and volkswagen, they were down in the first half of the year. the only german car company that really has a positive story to tell in terms of the ev's is actually bmw. while mercedes in the front half

of the year, ev sales were down 23%, almost a quarter. bmw that same time frame,. up. 22% in terms of sales revenues, in terms of really being a driver, ev's already bright spot for bmw in a moment where really that's not the case for most of the rest of the market. tom: that's why we get oli crook to cover the autozone, because you bring out that distinction. it's easy to say ev sales growth is falling, but you point to that important divergence between bmw, vw, crucial. we appreciate it. we are going to be speaking with volkswagen's cfo following their earnings. don't miss that conversation later today, 8:00 a.m. u.k. time. let's check in on how the asian markets are faring. avril hong is standing by in singapore. toyota is part of the mix. and the japanese equity story as well fascinating on yen strength. avril: absolutely.

i mean, we are keeping a close watch on these auto stocks. this part of the world as well, toyota showed their climb in profit, 17% from a year ago thanks to the weekend, strong u.s. sales -- week yen, strong u.s. sales. operating sales was a miss. china is a pinpoint. also -- pain point. also, what you see. is really interesting this decline is the biggest since 2016, helped along, or not helped along i should say by the strengthening in the japanese currency, given how the boj sounding hawkish, a dovish federal reserve, the yen at the strongest level since march against the greenback. let's flip the board and take a closer look at what we are seeing a japanese equities. because the hawkishness from ued a a day ago is something markets were not prepared for. the topix seeing its

biggest decline since the early days of the pandemic. this green coming through thanks to what we heard from jerome powell. tom? tom: avril hong in singapore with the asian market. it's a pretty fascinating day in terms of how these asian markets are reacting to yen strength and what we have been hearing from jay powell. with the toyota focus as well, in terms of their earnings story on that automaker. we saw some significant moves, particularly around technology, yesterday. nasdaq 100 posting gains of around 3%. s&p 500 index ending higher by about 1.6%. futures pointing higher by about 0.3% on european futures. ftse 100 futures, we build up to that decision on the boe, traders expecting the first cut of the cycle and ftse 100 futures pointing to gains. s&p futures looking to add to the upside of yesterday, up 0.6%. nasdaq futures pointing higher by 0.8%. nvidia added $330 billion in market value in a single session.

let's look across asset. there have been moves into treasuries on the back of the signaling by jay powell about september is very much in play for the first cap. at the front end -- for the first cut. japanese yen strength. some point to 1.40 as potentially the next level to watch for the japanese currency. $81.48 right now on brent. let's get more details on the tech earnings story. with the details and the focus on meta-overnight. shares jumping after reporting better-than-expected sales and displaying evidence that ai is helping sell more targeted ads. the ceo of the company, of course, mark zuckerberg, spoke on the earnings call. mark: the are all the jokes about how all the tuxedo's get awning -- all the tech ceo's get on these earnings calls and talk

about ai all the time. tom: at this point, let's bring in matt bloxham, tech analyst at bloomberg intelligence. the ads business being powered, to some extent at least, by some of the integration of the ai. talk to us about what we are seeing. at >> revenues were about 2% better than people expected. i've seen lots of positive commentary about how ai is kind of affecting the business. you have to put in context that through this year, all of the big media investment companies, added agencies have been upgrading their full-year forecast. the ad market is doing better-than-expected because of the election, olympics, just in general, brands spending more. it is a stronger-than-expected market. so it's not surprising that meta, given that pretty much all of its revenue comes from ads, is benefited from that. they are doing lots of things, including ai, to make their platform better. they've also done a lot of work

on instagram and whatsapp integration and reels. we saw about a 10% year on year improvement in revenue per ad. so they are getting much better quality impression from the business. they are spending a huge amount of money on ai investments. the good news was yesterday was although they kind of nudged up the lower end of their range, the top and did not leave. they did point to a further big amount of investment next year to support ai. tom: the capex spending continues for meta, in terms of spending for that ai infrastructure. that takes us to some of the chipmakers, not necessarily directly linked. we had arm, and qualcomm as well, smartphones and mobile's. are they two distinct stories? what did you see from those? >> both of them a bit more muted. not releasing improvement in the revenue outlook. there is a softness with

qualcomm around the broader smartphone market. higher and smartphones are doing well, and that's an overlap with arm. the broader smartphone market is not recovering in the way they kind of expect it to. that's kind of keeping their expectations for kind of forward growth tempered. the ev segment you just talked about, certainly for arm, they are seeing some softness in some of those auto segments, too. that does not relate directly to ev's, because ev's have so many chips in them. that's going to affect of the licensing revenue you get from someone like arm. tom: that's interesting in terms of the link happening in terms of the softness with ev's. matt bloxham with the deep dive, from bloomberg intelligence. we will be speaking to the ceo of arm, coming up 4:00 p.m. london time. coming up on a knife edge. will the u.k.'s central bank

vote for the first interest-rate cut since the pandemic? we will get the latest on that big central-bank decision in focus today. stay with us. this is bloomberg. ♪

♪ tom: welcome back. markets are pricing a more than 50% chance the bank of england will vote for the first interest-rate cut since the start of the pandemic today. our u.k. correspondent lizzy burden joins us for a preview of that decision. talk to us about whether or not there is a lot of uncertainty around this decision. it seems like it is fairly finally balanced. traders and economists have their views. what do we know leading up to this decision by the boe? lizzy: very finally balanced indeed, tom.

market pricing has been creeping towards the 60% level over the past few days. on no speeches, no news to base that on. but even economists reckon the votes but today could be a 5-4 split so really a tight decision. the reason traders are so in the dark is because, first of all, we have not heard from the governor, andrew bailey, since may. because that snap election was called. you've got an unknown entity in the form of the new deputy governor. we don't know how she's going to vote. most importantly, the data have been mixed. yes, you've got headline inflation back at 2%. but beneath that, services inflation came in hotter than expected. although, if you strip out the volatility, you could say it's coming down. and on top of the, since the start of the year, growth has been rebounding more strongly than anticipated. it's a difficult picture. but the point is, if they do not cut today when you've got the

opportunity to explain it through the press conference and the updated forecast, they could miss the window if inflation rebounds before the end of the year. tom:. you touched on politics how does the decision today tighten, if it does -- tyee in, if it does, to u.k. politics? lizzy: you've had lots of conservatives tearing their hair out on rishi sunak for calling that election and handing keir starmer the first rate cut. we will see if he gets it today. on top of that, we've got the updated forecast coming. they could be potentially pretty awkward for the new prime minister, keir starmer. he's targeting 2.5% growth. , but actually the boe could see long-term growth potential in the u.k. actually below 2%, which would create more of a fiscal headed for the chancellor, rachel reeves when it comes to deciding between tax write-offs and cuts. finally, we could get an update on asset sales, not actually

expected until september. but economists increasingly saying we could get one today. instead of slowing down the pace of asset sales, they could maintain it, 100 billion pounds a year, or even accelerate it, which really would add to the fiscal nightmare for rachel reeves. because of course, the treasury covers a losses, and therefore, she would be choosing even more between tax rises and spending cuts on that october 30 budget. tom: lizzy burden outside the bank of england tying end the ramifications for the labor government. that decision comes later today from the boe. lizzy will be covering that throughout the day. let's bring in chatham financial managing partner jackie bowie on what to expect from this boe. do they go with a cut? jackie: it certainly feels like the market is pricing that. but interestingly, there is still a 40% chance based on other market indicators that

they stick with a hold. i think what we are seeing through the inflation data is that there are not clear signals that inflation has been beaten. i think everyone is using the knife edge. it really is the most finally balanced decision -- finely balanced decision the bank of england. . has had this year it really feels like they could surprise the majority and stick with interest rates at 5.25. and following the lead we got from the fed last night. tom: we are going to get an update on forecast. we are going to get a lot of data from this bank of england after this decision. on the inflation part of that story, what are the risks in terms of the upside risks to inflation? what would get inflation to come back again? i mean, we have made progress. we lift the lid and it's a bit more complicated. but surely, the risks around higher inflation have abated, have they not? jackie: well, it's that services

inflation that are really causing concern for the bank of england. at 5.7%, that's, you know, way above where they would really needed to be to justify an interest rate cut. whilst we have nothing the impact of -- not seen the impact of some of the statements the new government has made around public-sector wage increases, you know, they are indicating that they are likely to be pre-substantial. the bank of england will say they cannot take into account government statements. it won't be until it actually hits policy that you will see inflation. there are a lot of concerns that what the government are seeing from a fiscal perspective could be negative for inflation and justify interest rates staying on hold. tom: if they cut today or hold until september, posted that decision, how do they sequence cuts going forward? jackie: it still looks like by the time i get to the end of this year, u.k. interest rates will be about 4.77 so that would be -- 4.75, so that would be two

25 point cuts. that seems the most likely scenario. i would say that the inflation number coming on the 16th of august, so going back to what i said at the beginning, we are absolutely not out of the woods yet. think where we were at the end of last year with regard to interest rate cut forecast for the u.k. and u.s. and none of that has been delivered and we are more than halfway through the year. so there is still definitely room for that inflation data to surprise and for interest-rate cuts not to come through as the market is predicting. tom: ok come interesting. with those assumptions, and briefly, jackie, where do you see growth in the u.k. by the end of the year? jackie: we are going to get the new numbers from the bank of england today and we've already seen some economist, and but their numbers up a little bit -- bump their numbers up. i don't think it's going to. be great. the good news it's it's moving in the right direction.

we are doing a lot better than some of the other european countries. i think you might find a little glimmer of good news but the absolute number is still not going to show amazing growth numbers for the u.k. tom: ok, managing partner and ahead of emea at chatham, jackie bowie.special coverage of the press conference, 12:30 p.m. u.k. time. do not miss our interview with the bank of england government andrew bailey at 5:00 p.m. u.k. time today. this is bloomberg. ♪

♪ >> my colleagues and i remain squarely focused on achieving our dual mandate goals of maximum employment and stable

prices for the benefit of the american people. inflation has eased substantially from a peak of 7% to 2.5 percent. we are strongly committed to returning inflation to our 2% goal in support of a strong economy that benefits everyone. we have made no decisions about future meetings and i close a september meeting. the question will be whether the totality of the data, the evolving outlook on the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market. if that test is met, a reduction in our policy rate could be on the table as soon our next meeting in september. tom: fed chairman jerome powell, of course, speaking, handing the baton to andrew bailey and the boe. markets pricing and 51 basis points. expecting the rate to go from 5.25 to 4.75 by the end of the year. if they cut today, listening to any forward guidance in terms of

the sequencing going forward. we know this decision is finely balanced from this u.k. central bank. that's the context in terms of the market pricing. we will also get the forecast in terms of the data update from the boe. let's have a look at the central bank story and how the expectations of lower rates are tying into the tech story. nvidia has been volatile. the moves substantial. gaining more than $300 billion in terms of market cap just in a single day. that was one day after the stock fell 7% and dropped about 200 billion. this is more volatile, nvidia, right now than bitcoin. it's a massive day for central banks. credit agricole, shell, haleon all have earnings today. we speak to the ceos of all of those companies. this is bloomberg. ♪

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