>> this is "bloomberg daybreak:

europe." i'm dani burger in london with manus cranny in two so the stories that set your agenda. manus: message received. u.s. markets fall as wall street digests jay powell's warnings. neel kashkari says it is a sign investors are listening. >> actually happy to see how chair powell's jackson hole speech was received. people now understand the commitment to getting inflation back down to 2%. manus: the european union considers decoupling gas and electricity prices ahead of an emergency energy meeting in brussels. the u.k. chancellor tells bloomberg it's working on additional measures to help households and businesses with skyhigh energy bills. >> we know we need to do

more because by december, january coming into next year, there is ill -- i'm preparing options for the new incoming prime minister to be able to do even more. manus: it is a one point $5 trillion of an equity market implosion to get the fed to say, look, we are glad you are listening. i wonder how much more pain these markets have got to take to face the fed. dani: stocks have gotten the message but perhaps not fully capitulated if i can start using that word this early in the morning. we are seeing a more settled market today. let me get into the future session so far. european stocks futures, those up .6%. welcome back from the bank holiday. we are down about .25% so watch that perhaps continue to be the negative one today.

s&p 500 futures and nasdaq, both of those are of. there is still light positioning among professionals so this might mean there could be more pain or perhaps we don't need to add to the downside given we are already pretty short and the fix is still some 30, this -- the vix is still sub 30. manus: you robbed me. i hope you showed that as rates and not percentages. let me take you through the rest of the risk. i'm showing yesterday's movement in european gas futures because it is what politics and supply collided to take this market down by nearly 20%. it just encourages people to use more. it is not a solution. energy prices and gas prices will remain elevated. euro-dollar above parity on the back of the tanking in energy prices. the dollar remains obsolete -- absolutely responded and --

absolutely resplendent. copper i thought we would just do a genuflection to the metals market. people are genuinely worried about china and capital flows as you see the currency imploding and the pboc reacting. more of that from reporters around the world. stephen stapczynski will take us through the latest energy plans. enda curran through the latest reactions to jackson hole. dani: we also have juliette saly to break down the asian market moves but let's start with that energy story. the u.s. preparing to step into the energy market. ursula von der leyen and says short-term intervention will dampen soaring power costs. for more, let's get to stephen stapczynski, our energy reported from bloomberg. we have vada lyon talking about the need to separate the high gas prices from power prices. how would they even do that? stephen: not very easily.

it's a difficult situation. there's a few different options. gas is one of the most expensive forms of producing electricity. renewable energy is much cheaper. while it does cost a bit to build a solar farm or wind facility, when that electricity is being produced, it is essentially at a very low cost. nuclear power is cheaper. in these wholesale markets, generally, utilities will -- highest priced electricity to make the most profits and then save the cheaper stuff for their own customers. they are going to try to reverse that. when it comes to capitalism and the way electricity markets work, there is the merit order and upsetting that merit order will take some sort of regulation, some sort of rules. if you put a price -- a caps on gas itself. do you ration electricity to make sure the right people are getting it, the ones that you want to getting it? are industries going to have to

pay more? there are a lot of mechanisms they can do but right now, it's unclear. before then, the market will remain very volatile because who knows what will happen in the future. manus: and you have to consider the second-round effects as you intervene in the structure of the market. people have hedged, no hedges. what are the second round of facts in terms of the major utilities? nationalization of certain companies in germany and france. that is the black swan event. stephen stapczynski on the energy market. great a black -- gray to black. fed chair powell speech indicates investors have finally -- -- according to neel kashkari. speaking to bloomberg, kashkari added that it shows how firm the fed's commitment to getting inflation back down to 2% is. enda curran is with us. there is this line from kashkari

that he is happy to see the market essentially taking jay powell seriously. that is my read. enda: he's either saying he's unhappy to see the markets rally in july, happy to see the markets come off in response to chairman powell's speech, he warned the fed will not repeat the mistake of the 1970's when they began to ease up too soon, and he said he did not want to see them raising rates until inflation is licked. it is striking language for any fed official and it drives in how determined they are to keep ramming home this message to markets that they are not going to stop raising interest rates until inflation is well back down to within their comfort zone, closer to their mandate. we are starting to see global markets to as a realization -- too as a realization sinks in. dani: he stopped short of saying

markets need to go down. enda curran, our chief economics correspondent in hong kong. china has intervened to stem its weakening currency. let's get this weight is news from juliette saly in singapore. -- let's get the latest news from juliette saly in singapore. juliette: we are looking at my chart with the pboc setting the strongest yuan fix. stronger than what we were expecting and that was the second strongest we have seen. in 2018, really showing the authorities are not happy with this weakness in the currency. it's all about the diverging interest arrays. we are continuing to see the dollar rise, two. onshore and offshore yuan -- goldman sachs joining the likes of the yuan bears that we heard from last week, calling for seven to the dollar by the end of the year. let's take a look at what we are seeing in market moves.

it is a little bit more of a stable today than yesterday, being led by gains in japan. we got this concern about the overall china economy. the story really hanging in -- i am never very far away from a reopening story. the thai government saying they are expecting tourism revenue and the second half, 10 billion dollars, as they continue to see revenge terrorism. we are seeing terrorism stocks rallying today. manus. manus: i will see you in thailand. another six days, very happy to chill on the beach in thailand with you. get the passport out. see you on the beach. juliette saly keeping it real. we can bring dani, too. bring everybody. revenge terrorism is live on daybreak -- what show am i on?

daybreak era. american firms optimism about china has fallen to a record low. a little bit more brevity. xi jinping's covid zero policy is a top concern. let's get to colin murphy in beijing. good to have you with us. this has got some serious consequences, hasn't it? tell me how doom laden is it? what does this mean? >> i think maybe the main takeaway is to see how the concerns of covid have become the number one concern for u.s. businesses in china taking over geopolitics. even within covid, there is two separate areas that they were surveying. we continue to see lockdowns here in china. the restrictions on travel -- the executives cannot come into visit their branches here, cannot come into factories and

make plans for the future. dani: does this mean we will see an exodus of u.s. business in china? colum: one thing that they mentioned in the survey, which is of over 100 companies here, is that they are continuing to see profitability here. that is sort of, you know, a point to bear in mind, that their operations are still profitable. whether that will go on this year or not to the same degree, of course, remains to be seen, so i don't think we will see that. what we will see is increasing difficulty to bring in and attract especially foreign talent which is in many industries will required to bridge the talent gap between the local marketplace here and what is required to continue to push out top of the range products and services. attracting people of course, keeping the people here is also problematic so i think it is a

big headache for the organizations here, the companies here, how to resolve that and do that in a speedy way. dani: thank you very much. let's get you set up for the day, look at some of the key things we will be watching out for. 10:00 a.m. u.k. time, we will have this confidence survey, and then the cpi readings kick off at 1:00 p.m. we are going to have germany. manus: 3:00 p.m., u.s. conference board consumer confidence survey. later in the day, the ecb governing council member, robert, will be among the guests speaking on inflation. that is in austria. the new york fed president, john williams, speaking at an event hosted by the wall street journal. how much pain will he endorse and risk markets as kashkari did? the new york fed speaks. we really have got to listen. dani: we certainly do. what is our next --

coming up, we will be speaking to a capital management cio and founder on markets. manus: plus, the u.k. chancellor speaks to bloomberg, telling us new measures are coming. regardless of who replaces boris johnson. more to the story in this show. this is bloomberg. ♪

>> it was not exciting for me to see the stockmarket rally after our last meeting because i know how committed we all are to getting inflation down and i somehow think the markets were misunderstanding that and i was

happy to be how chair powell was received. people now understand the seriousness of our commitment to getting inflation back down to 2%. dani: that is the minneapolis fed president, neel kashkari, speaking to bloomberg for our podcast. joining manus and me now is the cio of smead capital management. kashkari stopping short of saying they want markets to sell off. he did not say that. he did a that the market are now listening to the fed. what are you hearing, bill? is this a market environment where you do not want to be holding risk? bill: well, we always are taking the risk of holding good-quality common stocks. how are you going to make your money? the fed is a year to 1.5 years behind where they need to be. we are in a very similar period to the 1970's where the

demographics in the united states, the amount of federal funds that have been sprinkled into the system before they started tightening credit and a lack of goods and labor at attractive prices. we have got will we used to have cost push inflation and that is what we studied in college in the late 1970's. manus: 1.5 years, a dollar short, and a day late. how much more aggressive do they need to get on rates? is raising rates the answer? every noble low it who appeared on this show 10 days ago said the fed has got it wrong. raising rates is not the cure. bill: the history is the federal reserve has to raise the fed funds rate above the inflation rate and for them to talk about 2% coming from 8% to 10%, it is

outlandish. it wasn't just about the price of oil and gas. laborers that were making $12 an hour are now being paid $18 an hour in the united states for fast food positions. god only knows what they are paying cokes. this is an interesting economic environment where people in the average and below average incomes are going to benefit greatly from this inflation because their incomes are going to go up faster. billionaires that own tech stocks are going to get less money. dani: there is an argument to be said that cost of things like food, gas are becoming more expensive for the normal person. people talked about this in the way a vacation eighth recovery. i want to take all of what you are saying and put this into the investment thesis.

you sound skeptical as to where monetary policy is headed to here. what does that mean for your portfolio here? bill: in the 1970's, you wanted to be in the oil business. when a scarcity develops, you are going to see higher prices. the body politic on both sides of the ocean would like to see a quick transition to clean energy but as elon musk said, it was today in the states, yesterday for you folks. he said we are going to need oil and gas for decades. that's not the way it's priced. those are the cheapest stocks with the fastest earnings growth and the expensive stocks have slowing economic growth. the two are going to meet in the middle somewhere. i don't want to be sitting around with 60 times earning stock or 30 times earning stock.

it's on its way to a 20 multiple and that is what happened. remember, do not forget we had a financial euphoria episode over the last couple years with everything from faangs, pelotons, beyond meats. that largess of money, the money the fed created just got thrown at everything that could walk and talk and chew gum. [laughter] manus: that is great. walk and talk and chew gum. with that in mind, a quantitative tightening, i take it you would be a seller of growth and a buyer of value. if so, beyond oil, where is the value? bill: land is. this is a great irony. we are actually bullish on the homebuilders because once the united states population gets very dissatisfied with owning common stocks, which they will,

right. u.s. households have never owned as large a percentage of their net worth in common stocks as they did a year ago. when they get dissatisfied that they will turn away from common stocks, they will turn toward the thing that they are the most likely to create wealth in the over their lifetime, which is homeownership. and we have 92 million millennials that decided it's a good idea to own a home. now, the challenge is getting them to spread themselves geographically across the united states. i would not be surprised if the same thing is going on in england. i was there for a wedding a few months ago. there is a lot of land there that you could build houses on. dani: you did not stop by and say hi. i'm only slightly offended. devastated. i do gotta wonder, so it's this trend you are talking about in terms of generational wealth

buying houses but are you not concerned that this aggressive push by the fed to tighten financial conditions in someway is targeted at a hot housing market? that we are going to see some cooling because of the push the fed is making? bill: there is a chart we have that goes back 60 years. the three biggest homebuilding, single-family homebuilding booms in the united states were 1972, 1978, and 1984. the interest rate -- the mortgage interest rate was dramatically higher than right now in all three of those. what there was was way more baby boomers than the prior generation that wanted and needed a house. stocks did poorly, inflation ran high for the average american household. the best defense against inflation is to be your own landlord. manus: ok, well, let's see

whether america -- hasn't it? it was 60% cheaper over a year ago. i will leave you with that. because i lived through a few cycles and housing myself. bill smead, cio at smead management. akeem is coming from the german economy minister about ursula von der leyen and talking about gathering everybody together to deal with the energy crisis. freeloaders should not be excluded from a german gas levy. he says a gas levy is needed. he is the energy minister there. he's talking about freeloaders. not quite sure what he means by freeloaders should be excluded from a german gas levy but this is the beginning of the european verbiage --, isn't it? dani: he is speaking in a local

radio interview. we heard from ursula von der leyen talking about the need to disconnect the price of nat gas and power. there's been questions about how they will do this. suggesting a levy is part of the steps but coming up, we will dive deeper into that because of course the cost of power surging past 1000 euros per megawatt hour. we will discuss the options that top officials are discussing. that is next. this is bloomberg. ♪

manus: it is "bloomberg daybreak: europe," with me, manus cranny, in dubai. dani burger at london hq. juliette saly is with the team. juliette: the ecb chief economist, philip lane, is

urging a steady pace of rate hikes to fight record inflation. he thinks this will help minimize any negative consequences. the comments seem to push back against some of his colleagues who floated the idea of a hike and next week's meeting. u.k.'s chancellor of the exchequer says he's working on additional measures to help restoring energy bills paid he says smaller businesses in particular will likely need assistance he hopes the proposal will help new prime minister hit the ground running when the winner is announced next week. >> we know we need to do more because by december, january, and into next year, those bills will probably go further so i'm preparing options for the new incoming prime minister to be able to do even more. juliette: the u.s. is urging for a controlled shutdown of the nuclear power plant in ukraine. it says that would be the safest option due to continued shelling

around europe's largest such facility. the international atomic energy agency is attempting an inspection. volodymyr zelenskyy is warning the situation remains dangerous. move over, green tea. a new report is seeing the benefits of bog standard black tea. those who speak several -- drink several cups each day tend to see lower risk of death compared to those who hardly drink it. the study tracked nearly half a million people over 14 years. higher t uptake was associated with lower risk of cardiovascular disease and strokes. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journa hi, i'm denise. i've lost over 22 pounds with golo in six months and i've kept it off for over a year. i was skeptical about golo in the beginning because i've tried so many different types of diet products before. i've tried detox, i've tried teas, i've tried all different types of pills, so i was skeptical about anything working

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manus: it is "bloomberg

daybreak: europe." i manus cranny in dubai. dani burger in london with the stories that set your agenda. dani: u.s. markets fall for a second day wall street is digesting jay powell's warnings. neel kashkari says it is a sign investors are listening. >> i was happy to see how jay powell's jackson hole speech was received. people now understand the seriousness of our commitment to getting inflation back down to 2%. dani: intervention intentions. the european union considers it decoupling gas and electricity prices ahead of an emergency energy meeting in brussels. the u.k. chancellor tells bloomberg he is working on additional measures to help households and businesses with high energy bills. manus, the energy story continues to grip europe in the u.s. and finally, we are seeing a calling of the equity market implosion. now, it is back to the usual's, back to recession watch, back to the dollar over everything.

manus: how much more pain does the fed want the rest of the financial markets to bear before they feel some of the air comes out of the tires? mr. smead was with us saying they will have to get a lot more aggressive. you have european energy crisis. dutch gas futures down 20%. took it back above one. can it indoor? -- endure? that is the fastest market check i have ever done. dani. dani: let's see if i can do faster. some stocks are down. just the u.k. catching up. u.k. markets are playing catch-up. elsewhere, it is a little bit of reprieve. let's keep in mind where we are after one point $5 trillion wiped out from u.s. market, probably not unusual to see a little bit of buying so far this morning. manus: the european central bank

chief economist, philip lane, has urged steady pace of interest rate increases in the fight against record inflation. he says that approach is needed to minimize the negative consequences. >> its high. it is extremely high compared to the targets and that kind of cyclical wisdom, even if you are fully confident, there is essentially an adjustment. manus: let's just check in on some of the markets that have been impacted. the chief economic advisor at -- do you have 10 year yields rising in germany, france, and italy? all repricing on the u.s. bond market narrative. that is a little bit more so than the chief economist said.

the chief economist -- we are going to reflect on it. welcome back to the studio. good to have you back in time, back where you belong. talk me through, first of all, the policy direction of the ecb -- that it needs to affect to steady the euro. good morning. dani: martin might be having a little problem with his earpiece. manus give you a wonderful intro so do not fear. i promise it was good. manus was asking about the euro. we saw it come back a little bit from yesterday during yesterday's session with energy prices but where does it go from here? does it fall further below parity? martin: it could do so but we have basically an inflation problem. the ecb is in a completely wrong place paid philip lane is actually wrong. he was the most dovish of the ecb board members and the ecb has to deliver a monetary shock just like the fed has done over

the last few months and they are quite behind the curve so they have to play significant catch-up and the currency markets are waiting for that ecb action. dani: can they really deliver that shock in a world where we are talking about rolling blackouts in europe and we are talking about a deep recession as inflation and energy costs really eat into the cost of living? martin: there's two points. one is the economic issue and one is the inflation issue and it's the ecb's job on the inflation, and its government's job on the energy issue. there's nothing the central banks can do on energy so there is a disconnect between these two particular issues and the ecb unfortunately will have to actually play with the inflation front and leave the energy side for the emergency meetings as all of these policy -- that all of these politicians are going to have. dani: we certainly have had a lot of government officials talking about the desire to solve something. he was speaking moments ago, saying we need to put a levy on

it. von der leyen says there's a disconnect for the price of natural gas with that of power. are these even possible? is this a way to solve the issues which europe is facing? martin: this is all a keen relation two decades of incorrect policies in europe and the u.k. and we will have to work them out so we have problems on nuclear, problems on gas, problems on oil, problems on coal. all of the governments will have to use fiscal policy to solve those problems in a short and medium-term basis. dani: i liked what goldman said. there is no reason essentially for natural gas prices to go down. nothing has been fixed. price caps will make matters worse. a low price means people will just consume more. do you think that is right that it's almost worsening the issue by making energy more affordable? martin: i would agree with them completely. governments are going to look at fiscal transfers with price caps. this actually is potentially

inflationary depending on what people will do with that money. they are fighting the wrong issue in the issue is actually to read correct energy markets to more proper levels with the proper increase in fossil fuel production, etc. dani: talk to me about the pound. i know he would ask this if he could. parity on the pounds? what is your call? martin: we have been bearish for the last year. it has gone down 15% and it is the flipside of the dollar. the u.s. has an energy independence policy. the u.k. basically has a new government that is going to start next week. unfortunately, they are going to come in with significant levels of crises that they have to solve. unfortunately, currencies are turkey and it's going to be left on the back burner. -- tricky and it's going to be left on the back burner. we will have to see if they will actually be as creative as they

need to be over the coming months and that's why we will remain negative the pound. dani: give me some price levels. martin: we have a very good chance of a 10% or 20% crash from here, a good chance to break the store close. february 1995. we have a chance potentially to break parity. if the u.k. government fails, we have a chance to get even to 85. dani: get to 85. it's interesting because we have officials from china, south korea, indonesia. they have already been thinking of ways to try to counteract the dollar's advance. the yen right be next. we are reaching towards 140. his currency intervention going to be the big theme of the second half of this year? martin: not at all. the currency has actually been driven by u.s. policy. yellen at the treasury department is forcing the dollar higher. we are up around 20% in the last 12 months and they are using

that as a counter inflationary policy. she is completely aligned with the powell strategy at the fed so we have a strong dollar policy and we have a significantly new fed which is basically aggressively going to push inflation significantly lower this year by 100 basis points, next year by around 200 lower. dani: within that push, specifically looking at the u.s., would you be a buyer of risk assets? would you be buying this dip we have seen? martin: we have a very good chance to get a 10% or 15% upside. dani: even if the fed is still pushing? martin: the issue is we can see the fed has delivered a monetary shock of 200 basis points over the last three months paid we waited over a year for them to do so. we now have to admit that the fed is solely focused on getting inflation down. this is extremely bullish for risk assets. so we can see in the first quarter of next year that the

policy rate would potentially surpass core pce at 3.5%. this is a bullish environment for risk assets and i think the bank -- that basically we even have a potential in the first quarter next year to get to 5000. dani: i feel like it feels very strange right now to be talking about that considering the selloff we are seeing. so the environment is good with risk but what does it look like until we get there? until we get the first quarter of next year, 5000, you say? would it not a painful on the way or are we seeing the worst of it? martin: we have actually seen the worst of the selloff and basically, the major factor is that we have to get away from short-term narratives. people have to realize that recessions are actually bullish. they are actually bullish for economic decision-making because it forces politicians to make tough decisions. they are actually economically bullish for markets because the corporate sector and the ceo's have to sit up and take notice.

they should be maximizing action in a recession, not after it. dani: great companies are born out of recession. i do have to squeeze this in because we are talking about e.u. energy policy. we talked about the u.k. and policy is trying to pass. is there a risk that fiscal policy in trying to help people avoid the worst of bills, high food prices, that they actually just increase demand? is this a big risk in the u.s., in europe, that could perhaps counteract what monetary policy is trying to do to bring down inflation? martin: that is the key risk factor and we don't want to have fiscal policy that is just a sickly bailing people out. we don't want basically fiscal transfers. that is what we had in the pandemic during the lockdowns. we basically had a fiscal transfer and that has created the inflation problem that we have today partially. what we need to see is fiscal policies focused on investment. investment is the key economic driver and fiscal policy, like

we are seeing in india, should focus the majority of fiscal easing on promoting investment for a more medium-term outlook rather than giving handouts for cheap energy. dani: so great to have you on the program. that is martin malone, chief economic advisor at all for book -- alphabook. juliette saly in singapore. juliette: the european union is planning to step into the energy market to dampen soaring power costs and break the link between gas and electricity prices. the recent power crunch fueled inflation and increased the economic burden on businesses and households recovering from the pandemic. >> we are going to have to reform the electricity market. gas dominates the price of the electric city market. many of you know that there's different sources of energy but gas dominates and marks the

price. that has been the case for a long time. with these exorbitantly high gas prices, we are going to have to decouple. dani: the fed's neel kashkari says he's happy to see investors finally got the message about how serious the central bank is in inflation. jerome powell's speech marks a stark excel often shocks hit he said markets were too eager to price in a policy pivot from the fed. >> i was not excited to see the stock market rallying after our last committee meeting because i know how committed we all are to getting inflation down and i somehow think the markets were misunderstanding that. i was actually happy to see how chair powell's jackson hole speech was received. people now understand the seriousness of our commitment to getting inflation back down to 2%. juliette: pakistan has secured a bailout from the international monetary fund.

political turmoil and deadly flooding threaten the country. they can withdraw the equivalence of around 1.2 billion u.s. dollars from the imf. the funds will be key in stabilizing the economy facing asia's second-highest inflation rate. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus. manus: thank you very much, juliette saly in singapore. glasses on so we can read what is in front of us. coming up, solving europe's energy crisis. e.u. plan steps -- e.u. leaders plan steps. we have the story on bloomberg. ♪

>> we are going to have to reform the electricity market. currently, gas dominates the price of the electricity market. many of you know that there's different sources of energy but gas dominates and marks the price. that has been the case for a long time. with these exorbitantly high gas prices, we are going to have to decouple. >> we are working more closely together in the area of the energy supply. just a few weeks ago, we adopted reduction targets for gas consumption. it is essential for the coming winter and germany -- solidarity. >> we only have one way to go, to curb our energy consumption. i sent just we organize this together. if we do not do this, everyone does not do their part. the sudden gas cuts -- overnight

with serious economic and social consequences. manus: the european union is preparing to step into the energy markets. ursula von der leyen says short-term intervention will dampen soaring power costs. eventually, they want to break the link between gas and electricity prices. lofty ambitions. how realistic is it to achieve that? stephen stapczynski joins us now. our last guest was very scathing of the ability to break that link between premarket gas prices and electricity prices. the challenge is huge, isn't it? stephen: it's in our mess -- eno rmous. when you look at electricity markets, they are very complicated and they have been built over decades, and there is a merit order to how electricity is sold to the wholesale market. gas is expensive.

gas buyer power generation is also expensive and that is why that dominates the market. there is the merit order. the most expensive electricity generation usually flows into that market. that is what utilities do and that is how the markets work not just in europe also in japan and all over the world. in the united states as well. to do that, they are changing the way these markets have been built and that won't be easy. one way through that could be putting a cap on gas prices that will then feed into the electricity market. that as well sort of slashes the purpose of the market and reduces the way that you can be hedged. a lot of them depend on that. by changing the fundamentals, changing the way this market works, a lot will fall apart and maybe folks won't want to trade it. dani: goldman's head of energy research saying that putting caps on prices would cause people to consume more

electricity which of course also defeats the purpose and makes things worse. i was reading -- over the weekend, saying governments are not being honest with their populace about how bad the winter will be. we have seen stockpiles meet targets sooner than expected. lay it out for a speed even with those stockpiles, how bad could the winter be for europe? stephen: stockpiles are a bit like a bandage on a really, really bad wound. the problem is just if you have stockpiles, germany wants to hit 95% by the end of november. they are ahead of target. even if you hit 95% by november, if russia were to cut supply, it doesn't matter how much gas you have in storage. there will be gas rationing. you cannot get through the entire winter with just your storage and zero flows from russia. it doesn't look like it is possible according to the research that has been done over the last few months. because of that, the storage situation, while in her and,

there is no doubt about it. it won't mean that rationing and big disruptions to the economy cannot be diverted. there will still be some problems if moscow does not turn the flows on from nord stream. it will shut for maintenance later this week if it doesn't return and it's not backed by the winter. there is a much more serious case affecting the streets and potentially even households. dani: stephen, thank you so much, laying it out there. there is the storage target picture there. bloomberg's stephen stapczynski on the energy stored. coming up, property asking prices fall the most in more than two years. more on britain's housing crisis, next. this is bloomberg. ♪

>> he can use energy, especially

gas, as a way of getting back at us. people, germany, the rest of europe, through the use of gas supply. that is something he's recognized. we have to remain resilient. the ukrainian people are facing a really tough time. illegal invasion of their country. so we have to make sure that back home, in the u.k., people have the help that they need. at the moment, we have 37 billion pounds put to work to help people. everybody will get 400 pounds off their energy pill from october through to december so that effectively halves the increase that has come through

through the energy price cap. we know we need to do more because by december, january, into next year, those bills probably go further. >> sub 2000 pounds in general average, energy pills going to 3.5 thousand. 400 pounds helps knock off that increase. this is still a consumer that is incredibly painful. stephen: a lot to come for those -- >> a lot to come for those households that have no question at all. the moment i walked in, we know they will continue to use this. we have to be able to withstand that pressure and send a message back to mr. putin that this is not going to work. therefore, we have to look at every option, at what more we need to do come december and january and into next year and

we are working up all the options. nothing is off the table but i want to be ready. on the fifth of september, when the new prime minister walks his number 10, they can hit the ground running. dani: the u.k. chancellor speaking to bloomberg and speaking with the u.k., of course. high energy bills and the end of cheap money bringing concern to the housing market in the country. let's get to lizzy burden on this. we heard warnings about u.k. housing, so what are we actually seeing at the moment? lizzy: double-digit inflation swallowing up wage growth and the bank of england responding with rate hikes, even if they are a recession risk, and the end of active guilt sales -- gil t sales, so the end of cheap, easy money. you are getting economists warning about a slowdown or potentially a crash in the u.k. housing market. you are seeing home markets in london almost -- almost half

falling. this is after almost a decade of nonstop growth in prices in the u.k. it's been boosted by quantitative easing but also government interventions. the pandemic holiday. they are at an end. the worry now is we have 80% of people on fixed-rate mortgages. they probably locked in rock-bottom interest rates during the pandemic. manus: and they will come off -- that is where the pressure comes to bear. thank you so much. lizzy burden keeping us abreast of the data that will drop. a crash to parity and beyond in the pounds. this is bloomberg. ♪

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