all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. lizzy: good morning. this is "bloomberg daybreak europe." i'm lizzy burden in london. asian stocks are mixed after wall street's tech driven rally pieces out.

traders what were nvidia and the first reading on europe's economic performance for august. a bloomberg school. global chipmakers worn that huawei is building a secret network of semi conductor to skirt u.s. sanctions and boost china's tech ambitions. plus, nike shares dropped from the ninth session, the longest ever losing streak and concerns of sluggish chinese spending. good morning and welcome to wednesday. you are seeing treasury yields down in asia session. they have been positioning for the fed to keep rates higher for longer and more clarity should come over the next three days. the jackson hole summit kicks off today. the broader surge in yields has been the main reason that stocks have declined over the past few weeks. the s&p down rate of banks yesterday in macy's earnings did not help matters. this morning you are seeing u.s. futures pointing to a higher opening. traders are waiting nvidia's results later after the u.s.

fell. at this point, the earnings are basically a macro indicator on ai. shares hit an all-time high yesterday and turned lower and that slide is a reminder that there is plenty of room for disappointment today. let's get over to bloomberg's asian markets executive editor paul dobson was in singapore. he is going to tell us how all of this is faring in asia session. you have chinese stocks having a late run yesterday but back down today. what is going on there? paul: yeah, good morning, lizzie. at least on the mainland equity gauges they are weaker and china today. yesterday we had a couple of hours later than where we are now. your breakfast time and our mid afternoon. we had a pretty big rally in chinese equities, almost from nowhere. it really sort of set the chins wagon, was his a tacit support

-- was is a tacit support for the market? we were not able to speak to anybody who had evidence to support that notion. other people pointed to the technicals and chinese markets have been very oversold already. the mainland gauges are down again today and what reporters are pointing to now is the outflows from the blue-chip companies, which is the overseas investors that are putting money out of the biggest names in china. some of their favored trades earlier on this year. we have seen 12 days of outflows in a row, which is a record streak and amounts to several billion dollars as well. so, signs of some sort of bigger capitulation or exit and mass by major global investors there. they are pessimistic and the china market and this reflects that. lizzy: the csi 300 is down nearly 0.9%. the yuan pegs come in little changed for a third day.

is this the pboc drawing a line in the sand? paul: everybody starting to ask that same question as well over here. fixing it at that rate keeps it within the range on the onshore markets of 7.35 which is identified as a level that authorities are paying attention to. setting that market down there would indicate perhaps the reluctance for authorities to see the yuan go weaker than those sorts of levels. that said, we have seen a similar pattern of fixing c4 worry have had -- fixing before were we have had several rounds that has weakened again. yes, it might be a line in the sand but those can be redrawn. there is a sense at the moment, kind of confusion or maybe interest in just how long and how committed to that kind of level the authorities will be or

whether they will relent and allow for the weakness which would be in line with the economic fundamentals over the coming sessions. lizzy: meanwhile, we are all waiting for jay powell speech at jackson hole on friday. are you going to see shock waves in asia perhaps? paul: yeah, well we will have gone home by the time he starts speaking so it will not be until monday morning which is good news and bad news if you're a traders in asia. over the last 24 hours we have seen if you look at the shorter term treasury market, people have been pulling back their bets again for fed cuts next year. higher for longer mantra is still very much being priced in. probably the sort of consensus view on where powell will try to land, that does give the opportunity for him to surprise to the dovish side and may be trigger a bigger rally in treasuries. on the other hand, if he sticks

to his guns, then you can see that high interest rate environment tray continuing to play out for the rest of the summer. lizzy: or maybe nvidia will over shower -- overshadow it all. thanks to bloomberg's paul dobson for the update on asian markets. time for the morning roundtable. i'm joined by jill disis and hong kong, maria tadeo in london and jennifer zabasajja in johannesburg. i went to kick off with a bloomberg who. global chipmakers have warned that huawei is building a secret factory network skirt u.s. sanctions and boost china's tech ambitions. jill, let's start with you. how much do we know if this is funded by the chinese state? jill: this reporting is coming from a presentation that the semiconductor industry association, a washington-based global chipmaking leadership organization, this is a presentation they gave to their

members. we are learning that huawei is receiving an estimated $30 million of u.s. state funding in china from the government and from their hometown of shenzhen to build these factories. we are not sure if this is coming from cash incentives, loans or other incentives but to put this in context, that is an absolutely staggering amount of money. this is almost as much money as you see in the manufacturing incentives that we are putting into the u.s. chips act that was passed last year which went to multiple manufacturers. the scale of amount of money at play here to help huawei boost china's chipmaking ambitions, obviously a major priority for xi jinping and the chinese government. it is an absolutely massive amounts of money. lizzy: what can washington do and response when it is not there who is making what here? jill: that's a great point, lizzy. obviously, the secretive nature

of a lot of this comes down to the idea that huawei could be potentially obscuring its connections to these different facilities. obviously, they have been targeted with u.s. bans for quite some time here the u.s. government has prevented huawei from working with american companies on almost everything. that is a concern here. the u.s. commerce department is watching this and a key meeting to look out for is going to be next week when trade chief ramonda visits beijing. it is hard to not think this might be a topic of conversation at that point especially as the ties between the u.s. and china, they are trying to improve them where they can but as we know, the tensions between the world's two largest economies are simmering. we will have to see how that works is going forward. lizzy: speaking of the relationship between those economies, china's sluggish economic recovery which we have

been talking about every day has now weighed on nike shares. they fell for a ninth straight section wiping almost $13 billion off market value. jill, give us context on positive can the china market is 90 -- is bernanke. his longest losing streak since 1980. jill: china is a key growth market for nike, and this is a $6 trillion consumer market. a lot of retailers are trying to get into china and build business there. we have seen issues within china impact nike before. think back to 2021 when nike was one of the companies saying they were no longer going to use cotton sourced from qin gang. we saw the sales dropped due to nationalist boycotts in china. there's a lot of push and pull here the impact nike. right now the big concern and china is a slowdown in pullback in consumer demand. we saw a retail sales last month

grow just 2.5%, a major deceleration that was already short of what economists were expecting. consumers don't spend money on goods and they are saving their money and that is a continued concern with the economy that is going to impact nike and other manufacturers as we have seen. lizzy: thanks jill disis. i want to bring in jennifer zabasajja because we are staying in china but president xi jinping has attended the brics leaders dinner in south africa, but he did skip an earlier scheduled appearance at a business forum. we have been talking a lot about china's domestic problems. they have meant that the africa trip has been only xi jinping's second international trip this year. what was the read out from his meeting with the other brics leaders? jennifer: yeah, lizzy, it is not just second trip is here. this would have been his first speech made internationally overseas this year.

a lot of people were anticipating and especially because of what you and jill just talked about, hearing from the chinese president during this brics business council meeting. but instead, we heard from the commerce minister. throughout the day, we saw chinese president xi jinping later on at the leaders summit. earlier we saw him meeting with south african president cyril ramaphosa, talking about the importance of that relationship. a lot of people saying this is potentially a missed opportunity for him to tout his economy and helped the strength that they believe -- and tout strength to believe the economy has at this point. we did instead hear from the commerce minister during a business meeting. lizzy: thanks to jennifer zabasajja. closer to home we will get the euro area deposit pmi survey later today and that should give us more insight into the impact of monetary tightening in the area. maria, let me bring you in. what do economists expect on this data? maria: we went from china and

ended up here. when you look at the pmi it is a good way to get a sense of where things are. there are two themes. do we get the continuation of a real weakness that we saw play out in july with the numbers that we get today for august? there is a perennial theme about manufacturing and services. we know that european manufacturing is in a downturn in recession. the numbers are not good but what about services especially in the context of summer? that feeds into the service economy. a lot of that will feed here and the ecb looks out for inflation but we know that gdp and the overall sense of the economy always plays into the deliberations. lizzy: where will it leave the ecb and expectations? maria: that is a big question and is an open field. christine lagarde said we could hold our hike and whenever we do, it does not set a precedent going for. it does not single ace -- signal a sequence. we will pay attention to the cpi print and the core number's

matter and we will hear a speech from the ecb on friday. that will give us signals to the decision coming up in two weeks. lizzy: maybe christine lagarde will steal the show at jackson hole. great to have you with me maria tadeo. in terms of what is coming up today, we get euro area pmi for august at 9:00 a.m. london time. at 2:45 p.m. it is a u.s. global manufacturing pmi, expected to states and contraction. just for august. after the bell we will get nvidia earnings. the shares hitting an all-time high yesterday on optimism ahead of the results before turning lower. they searched to 12% -- 212% this year. in a sign of positive get this report is going to be the option market is bracing for a movable most 10% following these results. they could overshadow what is said at jackson hole if we get a big beat or big mess. you can get a roundup of the

stories you need to get your day going in today's edition of daybreak. today they lead on anticipation of the nvidia result and they also have huawei secret facilities and goldman pushing staff to return to the office five days a week. terminal subscribers can go to dayb. we discuss the rates debate ahead of the jackson hole summit and china economic weakness as well with our mliv team. we will have a check on the u.k. economy and speak to former economic advisor, kurt economic -- current economic advisor to the u.k. chancellor anna valero coming up. this is bloomberg. ♪

bloomberg is live from the annual jackson will economic symposium. our team speaks to the fed president and other economic leaders. >> what is the response is him?

it is not how fast we do but where we go. >> tune in for continuing coverage for the special edition of bloomberg surveillance live from jackson hole on friday starting at 8:00 a.m. eastern. bloomberg, your global business authority. lizzy: welcome back to "bloomberg daybreak europe." for more on the markets, bloomberg mliv strategist mark cranfield joins us now. we have nvidia earnings and focus today. we have talked about the potential implications for the s&p. what about for china tech? some are saying that nvidia overshadow jackson hole. mark: it is a big deal for the china market for sure. the last time nvidia reported quarterly earnings was in may and it was around that time that they had a good result and the stock performed extremely well. it flooded over into asia as well. the hang seng tech index which

is where most of the big china names are with alibaba and tencent, they are in the index. that started to rally pretty well off the back of nvidia and there was a good run. it has since given up some of those gains but still holding well above the levels that we saw back in may. certainly, nvidia has spurred a letter of interest in tech anthony's in the greater china area and also korea and taiwan. it is a big deal for people watching the tech space in asia. they will be glued to their screen tonight to see how nvidia trades because a good performance there will probably ensure that we get a decent move again the following dates and asian markets. lizzy: when it comes to jackson hole, the key questions are how high the fed takes rates and then how high -- how long they will stay there. do you reckon that jay powell going to sound more like alan greenspan or paul volcker in his speech on friday? mark: i think bloomberg

economics has his right and is more greenspan. greenspan was known as someone who achieved while fed chairman, the fed achieves a soft landing for the u.s. economy. jerome powell seems to be on that same path right now. it looks as though he will achieve that. last year story was all about eating inflation with things have changed. the dynamics are more international than they were a year ago. he will be very conscious of the fact that the european economy is slowing really fast and the chinese economy clearly is struggling in not performing as it should be. the international factors will weigh on his thoughts more than than they did a year ago. you will probably see that he sounds more cautious than he did and if anything, he may start telling people he does not want the fed overtightening compared to last year when they could not tighten fast enough. a different scenario compared to 12 months ago and by the end of the week, christine lagarde speaks and she will probably some dovish.

by the end of the weekend, traders will probably get the idea that the central banks around the world have done most of the heavy lifting that they are going to do and they will not be cutting rates straightaway but certainly the path towards rate cuts next year's beginning to open up. lizzy: when it comes to treasuries, it is not just potential fed policy that is affecting them but also the china and the action. the mliv pulse survey this week asks whether china if -- if it dumps treasuries to fund current intervention will that drive 10 yield -- 10 year yields higher? what is your take? mark: if china dumps treasuries yields will go higher for sure. it would go everywhere. it sounds like disorderly movements. i don't think the china authorities are smarter -- they are smarter than that and they will not going through bonds at the market in a disorderly fashion and create big waves where the yields rise quickly. that is not part of the strategy. more likely what they are doing actually is because there is

such a huge investor in treasuries, they will have maturities of bonds every month, and they are probably not reinvesting the money that is coming back to them. those dollars that come for maturity bonds they are probably using for other things and directing it back towards their own economy where they need to be spending. rather than actually selling bonds outright, they probably are not putting money back to work. that in itself is significant because they are such an enormous investor in u.s. treasuries. for them to aggressively go into the market, sell treasuries, and use those dollars to go support their currency, they probably don't need to do that. they have other avenues to support the currency. they can tweak short-term interest rates in their own markets start to protect their currency. yes, if they want to dump of course yields will rise with a will probably not do that. lizzy: thanks to bloomberg mliv strategist mark cranfield. we're going to get that update on jay powell's read of the health of

the u.s. economy on friday but the ceo of cain andersonville state advisor says that markets are in a part that are in for a rough road ahead. he believes the u.s. economy is going to experience a hard landing and that the fed has already gone too far. take a listen. >> i'm still in a hard landing camp and we have consensus around a soft landing but i think the reality is that we have already landed in core inflation is down to 3% plus core inflation my shelter is down to 1%. the reality my view is we have already landed in the fed will do what it has historically done which is wait too late to get started and then go too far. i believe they have already gone too far and we will see what mr. powell says on friday. we will see what happens in september but we have $79 of household debt in -- excuse me trillion. $17 trillion and $12 trillion of

mortgage debt. one trillion plus of student debt which will have to be paid sometime soon. we are a consumer driven economy and we are in for a rough road ahead. >> you look at the five year -- two year sorry at 5.04 nearly today and you think about the trajectory of race. what else has to break as the rates stay this elevated? where has the market not yet seen pain that you expect? albert: you were talking with a regional banking downgrade. we are very close to that we had a big real estate debt business and equity business. on the debt side we have 1.5 trillion of maturities coming in the next 18 months which will be difficult to do in an illiquid environment. regional banks are big provider of capital and now private credit is coming in private equity is filling so that gap. the reality is there is a lot of mortgage debt that has to be

refinanced and the rates are a lot higher. a lot of those excel spreadsheets just don't work. sonali: what about the default rates? you have seen a few defaults hit the market nothing so crazy yet. do you expect there is going to beat significant distress and you have made your name and some of the real estate distress. at what point do you find assets that are cheap enough to buy? albert: i lived through 88, 98, a weight in the pandemic. i've been through number of different crises. i don't see capitulation yet. it is a lagging indicator. the indicator is that you have a 12 month lag on shelter being factored in to the inflation narrative dynamic. i think we are going to see capitulation and prices that are interesting in private credit and real estate credits gets very interesting from a buyer perspective later this year and into the first half of next year. lizzy: that was kayne anderson energy estate advisor ceo and

managing partner albert. plenty. -- plenty more ahead. this is bloomberg. ♪

lizzy: welcome back. a new report says that more than one third of desks and offices around the globe are unoccupied or week. only 14% of cubicles and desks are used for five hours or more each day. however, meeting rooms for two or three people are 90% full on average. it brings me to one of our most read stories on the terminal. we all know that goldman sachs has been aggressive when it comes to demanding that it's staff from work and now it is ramping up the five day in office policy which has had for a long time but clearly, it is not happy with the current take-up rate. the nudge is becoming a shove

and is back to business after labor day. goldman has been a leader on wall street especially m&a and underwriting. the question is whether others will follow where it leads. citigroup and jp morgan have been tracking attendant and asking managers to enforce a three-day in office policy. coming up, huawei is building a secret network of chip plant in china. we will bring you the details of that scoop next. this is bloomberg. ♪ wow, you get to watch all your favorite stuff. it's to die for. and it's all right here. streaming was never this easy, you know. this is the way. you really went all out didn't you? um, it's called commitment. could you turn down the volume? here, you can try. get way more into what your into when you stream on the xfinity 10g network.

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>> good morning, this is bloomberg "daybreak: europe." these are the stories you're waking up to. asian stocks are mixed after wall street's text driven rally

pieces out. results from nvidia and a first reading on europe's economic performance for august. a bloomberg scoop, a warning that huawei is building a network of secret plants. the longest ever losing streak on concerns over slug is chinese spending. the morning, welcome to wednesday. treasuries steady in the asia session currently, investors have been -- respecting more clarity over the next three days because jackson hole kicks off today. the surgeon yields has been the main reason that stocks have declined over the past few weeks. s&p's downgraded banks yesterday did not do much to help matters. this morning you are seeing u.s. futures pointing to a higher opening, awaiting nvidia's results after the u.s. bell.

at this point they're basically a macro indicator on ai. you have the options market bracing for a move of almost 10% on these results. share seeing an all-time high yesterday, then turning lower. that side is a reminder that there is plenty of room for disappointment today. i want to go over to our asian markets executive editor in singapore for how all of this is faring in the asia session. paul: as you said, a little bit of optimism out there in the equity space right now, but looking across the market, it's not all a clear-cut picture of joy and jubilation. if you look at the mainland chinese stock market in particular, we are still seeing some pressure on companies there , and in fact sort of scrolling back a little bit, if you look at the performance of those companies over the last 12 days or so, what we've been struck with is a continuing stream of

international money flowing out of china on the trading's with hong kong. so 12 days in a row is a record losing streak, and what is even more remarkable is the companies we are seeing the outflows from, the hedge front privates or anything like that -- hedge fund favorites are the big firms that are investors favorites,, the darlings. that gives you the impression that what we are seeing with some of these outflows is people really giving up on the china story and looking to allocate their money elsewhere which only spells more doom and gloom for the outlook for those markets. lizzy: so that is the equity picture. the yuan peg came in little change for the third day. is this the pboc drawing a line in the sand? paul: it certainly feels like it could be. there is a lot of debate out there about exactly how strong the defense from the authorities is likely to be.

we heard from people last week, 735 is the level they are watching very carefully and what we are seeing with it being held in a steady ban is it will keep the market below that level within the trading range. an offshore markets were seen as a shot across the bow or warning. in fact the currency has shown more gains today but a little bit of the state backed banks chasing it higher again. so maybe there is a line in the sand, but analysts are saying lines in the sand tend to get redrawn, and at that market pressure really -- reemerges, they might relent but they will be happy that they have at least slowed the pace of appreciation. lizzy: when the boj last stepped

in, are there any murmurs of an intervention there? paul: what i think is really interesting, obviously you can never say for sure when they might bump up or anything like that. again, it's about the pace they're really worried about. this time the pace of the increase in the yields are the pace of the selloff in the bonds market. we rose to 3.66% yesterday, which was the previous high. we were on alert in case there was some action then. even with a sense of more complacency at the market -- with the market at current levels, or maybe they're waiting to catch the market at the next big move. you will have been talking about this nonstop i'm sure, jackson hole coming up at the end of the week and perhaps authorities are little bit less keen to be seen to be doing too much active interference and meddling in markets, with that key meeting

looming. maybe we will wait and see what the outcome of that is before we see or action from the authorities there. lizzy: paul dobson, thank you. i want to go now to that bloomberg scoop. saying huawei is building a secret network of fabrication facilities across china. joining me is debbie wu who leads to coverage for us. what do we know from the warning by the semiconductor industry association? >> the semiconductor industry association told its members in april that huawei is building or acquiring a bunch of chipmaking plants across china, and that includes three of these plants being built in huawei's hometown. by building and acquiring these

plants, it means that while way now has the potential to get the u.s. sanctions that prevented from securing advanced chips. back when the u.s. department of commerce put huawei on the list in 2019, they can only depend on other suppliers like qualcomm to get chips for some of their devices. but now by building plants in china, while way is helping itself and china to achieve --huawei is helping themselves to achieve their mission of being sufficient in chips. lizzy: of course markets are on the edge of their seats still waiting nvidia's earnings later. with the biggest nasdaq gainer

so far go even higher? >> it's a possibility. investors would be keen to hear what the that's what nvidia says about the demand for its ai chips in the second half and beyond. at the same time, it supplier indicated it cannot supply enough packaging capacity for these ai chips. i think investors will be interested in what the media has to say about whether it can get enough supplies -- about what nvidia has to say. lizzy: thanks to debbie wu in hong kong. china has public advance expansion of the bricks block. while president xi jinping skipped the business form, he did attend a dinner with the leaders of south africa, brazil, and india, and russia's foreign minister. joining me is jennifer who is at the summit in johannesburg now.

given the deteriorating outlook for china, what more did we hear yesterday? >> this would've been his first public speech abroad this year. so was very notable that he did not make the speech, especially considering as you mention the chinese economy has really been in the global focus at this point in time. despite that, in his absence, we did hear from the commerce minister of china, sounding upbeat about the economy, saying specifically that the economy has tremendous potential and great vitality. so in their mind putting to rest all the doubt we are hearing globally about this chinese economy. but we did see xi jinping appearing with the south african president earlier in the day for the only state visit we are seeing this week, talking about the expansion and how they support the expansion, which we know.

also talking about how they don't want to see block confrontation, as he said. taking a thinly veiled swipe at the usa, that they do not want to support unilateral actions without talking about the u.s.. so that was a little bit about what we heard yesterday. we saw him later in the evening at the gala dinner with the leaders. today we will see whether or not he's going to make appearances throughout the day. the expectation is of course yes. lizzy: so what else is on the schedule for today? what is the expected outcome? >> the focus today is really on brics and africa. we are in the one and only african country within the block of south africa. he talked about his focus and real strategy and he wants to make it a point to incorporate the rest of the african countries and see them also benefiting from the bricks block. we will hear number of the

leaders talking about that and what that might look like, talking about value add in african countries getting benefit for finished products and not raw materials. we will see the leaders throughout the day, and at the end of the day, the expectation is that the leaders will sign a joint johannesburg declaration, hopefully outlining some of the tangible outcomes to move forward and not just more statements. so that is what we are paying attention to today here in johannesburg. lizzy: thanks to jennifer in johannesburg. coming up, we will speak to the chairman of natural resources, we will ask about the impact of china's economic weakness impacting demand for commodities. don't miss that key interview at 7:30 a.m. london time. we have been talking about the chinese slowdown and it has been hurting nike. shares there have fallen for record ninth straight session. that's why they are seeing a

billing dollars off the companies get. meanwhile dick's sporting goods porting disappointing second-quarter results but investors are now looking toward footlocker earnings later today is another important signal for nike. let's also take a look at some of the other events we are following today. the summit is underway in south africa, the president will be delivering opening remarks and we are expecting a joint statement. and we are watching out for slew of european pmi data coming throughout the morning. the euro zone/meeting for august's due at 9:00 a.m. u.k. time with the u.k. coming in at 9:30 a.m. investors have their eyes on this data to see pressures from higher rates will seep beyond the manufacturing sector. in stateside at 3:00 p.m. london time, the july reading for u.s. new-home sales, and lastly we are expecting invidious second-quarter results, do after

the bell. coming up, we will talk about the outlook for the u.k. economy with an advisor to the chancellor german hunt. that is next. this is bloomberg. ♪

lizzy: welcome back to bloomberg "daybreak: europe." another bloomberg scoop this morning, sales of small businesses have collapsed by more than a fifth over the pasture, according to new research by accounting software provider sage. figures drawn from 85,000 s&p's showing there struggling with revenues and profits and cash balances. i'm joined by an expert, economic advisor to the u.k.

chancellor of the exchequer jeremy hunt and a distinguished policy fellow at the london school of economics. lee great to have you back with me. years specialist is economic growth. i mention the issues small businesses are facing at the moment. there really are the backbone of the economy. are you worried about the impact of higher rates and higher inflation on economic growth? do you worried that the bank of england perhaps risk going too far to trigger recession in order to get inflation under control? >> it is great to be here. of course any economist observing the u.k. economy at the moment is worried about the outlook. if you look at the recent data, there is some good news on inflation and also some bad news that there will be this balancing act about how we contain inflation while avoiding pushing ourselves into an

unnecessary reception. clearly as you said, small businesses make up the vast majority and also a large share of employment and revenues. the reality is they have been through a series of shocks against my difficult foundations. if you take the foundations first, innocence the financial -- financial crisis, there is a well-established, long-term of less productive small firms that have challenges, what we have seen is a series of shocks and challenges with such firms which culminates in this current situation we are in now. the changes due to brexit, obviously the pandemic, the energy shock. firms often find it harder to adjust, it's harder to have the skills in place that they need. this is concerning the u.k.

economy. we tend to talk about the high-growth economy, perhaps around 40,000 firms depending on how you define it that have high-growth attentional, so there is that side of it. the future, large companies that can be great source of dynamism and broader group we need to be investing in and the types of things that will make them more productive. lizzy: you mentioned that mixed economic data. yesterday we saw the u.k. public finance data coming in, actually before -- below official estimates. the autumn statement coming up around the corner, he said he's going to cut taxes when it is affordable and that he will make full expensing permanent when it

is a portable. what should he prioritize? >> i think upset on this program before, the permanence of the full expensing. what we need rather than short-term -- short-term tax cuts, targeting the things we need to improve the u.k. economy and hence productivity. business investment is the fundamental keep forgetting growth going again. we know that has been particular for the u.k. for some time. there are number of things we can do to improve allowances for investment. it won't solve the problem, but it is definitely a key part of it. if seen the pension reforms, and that's a step in the right direction. it's a key thing for removing barriers to investment. and as i mentioned, there is whole suite of issues around what is the appropriate support to provide there. lizzy: you mention pensions in terms of growing the economy,

but of course one of the other policies, it's increasingly looking difficult to afford it when it's got to go up by either 2.5% inflation or wage growth. wage growth is hot. would you advise the chancellor to look at that affordability on a triple lock? >> there's a big debate around this. obviously it is important for us to be protective and this is something that is designed to do. their issues as highlighted in terms of the baby boomers, the demographic trends of that generation, and of course there is high inflation environment making it more costly. so there are reasons from the perspective of sustainability of finances, we are looking at that, and the debate about intergenerational fairness and how actually younger people and working families are often in poverty and perhaps not getting the same supports.

whether a wholesale change to this at this point would be feasible is another matter. lizzy: of course when the prime ministers top priorities is to cut the national debt. we have seen this downgrade by fitch recently. are you concerned that the u.k. could potentially see the same, given how much of its debt is index linked? >> of course it is always a concern which is want so important to manage our public finances prudently. we've got strong institutions in the u.k., we have certainly reversed a lot of the damage we saw last year during a quite volatile time. i think that is why it is important now to be focusing on being really careful if there is any headroom, spending on something that can credibly be seen as expanding that productive capacity of the economy. the gdp part of the debts gdp

ratio, we need to get that growing. that is really an important part of the prospect and the outlook of the u.k. economy. lizzy: a distinguished policy fellow at the center for policy, brewing to have you on the program, thank you very much. there is plenty more head. this is bloomberg. ♪

lizzy: welcome back. we will get an update later this morning with pmi surveys for august and here in london we have bloomberg's europe correspondent or preview. what are we expecting, maria? maria: it's not a bearish or a bullish sign, i'm just here's a technicality.

overall when you look at the pmi's, there's three things we focus on today. obviously do we get the continuation of the weakness we saw play out in july, and it builds on the three months we have seen where the downturn has been almost entrenched now in the european economy. that points to deceleration of growth. we talk a lot about germany, and there's a reason for it, it is the biggest economy. this is not just a german story. then we go into what has been a fascinating economy between the manufacturing and services. we know european manufacturing numbers are pointing toward recession, they are not good. the german numbers for july were awful. they were really bad. do we get services to save the day, or does that also cool? all of it puts together -- put

together points or softening of the economy. lizzy: how does all of this fit into the outlook of the ecb? >> i think the speech on friday really kick starts what is the period where beasley ever european reporter will be focused on every little word that we get. where we left it is that it's about the data. the dead will decide which way we go. it's an open field now, they can either hike or hold. whatever happens after will depend on the data. to me, it's an interesting kickstart for that decision that will come up in a few weeks. i think that speech will really set the tone for a number of things. lizzy: maria, brilliant to have you with me in london. i just want to take a last preview with the nvidia earnings that we're expecting after the bell in the u.s.. it really could overshadow jackson hole if it is a big beat or a big miss. the shares at an all-time high

yesterday on this optimism ahead of the results. analyst raising the price targets, but then they turned lower. they have surged 212% this year. that optimism based on the ai princi, and it could affect many other stocks in the s&p 500. so we will keep a close eye on that later today. up next, markets today is coming. this is bloomberg. ♪

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>> this is bloomberg markets today. i am anna edwards with tom mackenzie. mark cudmore joins us from singapore to take us through the market action. tom: less than one hour away.