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tv   Bloomberg Daybreak Europe  Bloomberg  November 23, 2023 1:00am-2:00am EST

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it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything.
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>>, this is bloomberg daybreak: europe and these other stories that set your agenda. beijing's biggest push to shore up the property sector. oil slides and opec sex -- opec tech delays a key beating. we will bring the latest pmi data from the u.k. and the wider euro area. will the numbers give the ecb because to pause. far right leaders secures a dramatic win in the dutch elections, promising a referendum on leaving the eu that sent shockwaves through the region. happy thanksgiving if you are stateside. u.s. markets are closed today. here in europe they are open but volatility will be extremely low. it's likely to be a quiet one. the king at euro stocks, ftse futures are flat. it follows the s&p 500's gain yesterday of .4%.
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resuming this in time for the holiday. that index up around 8%. on track for its best month since july. something to be grateful for. u.s. futures are pretty flat as well. meanwhile, the dollar weakening today. got pop yesterday from jobless claims coming in lighter than expected. that survey showing higher inflation expectations. the dollar pairing those gains this morning off the back of the yuan leading, asian currencies higher because of the strong fixing from the pboc. we will get more on asian markets with avril hong. in commodities, crude prices as well continuing to be pressured because of the squabbling over opec. saudi at its oil allies in dispute over quotas for african members, and that has forced a surprise delay to the opec meeting until the end of the month. in time for dubai, but this
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moment is to put in context, a big deal. it puts off the production cut we thought would void crisis. crude plunged by over 5% yesterday, though the price did recover through the day and crude currently trading at just over $76 a barrel. we keep it i out for more volatility there. japanese markets are closed for a holiday, but let's get over to avril hong and singapore furred update all the rest of the region. what's happening where you are? avril: plenty happening in my part of the world, even though japan markets are closed today on trading volumes were really thin at the start of this session. as we progress we saw more action coming from chinese stocks as there were developments from the asian giant. i just want to highlight how we were seeing the chinese currency hovering at at 714 level hanging
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onto gains earlier on in the week. but also, we are tracking closely the commodities prices, steel and iron ore under pressure on the back of news that chinese regulators are stepping up oversight of iron ore markets. they want to call the rally in the commodity and they are telling companies, do not speculate excessively. we are seeing iron ore prices retreat from their nine-month at i want to show you just how these commodities prices are coming down or being reflected in stocks down under. it's not just the lower idle prices but also lower energy prices. they are showing up in the likes of bhp, it drags the eggs to -- ax 200 about 10% to close today. lizzy: china property also it focuses sporting. avril: absolutely.
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this week we have been tracking that news that these chinese authorities have drafted a list of 50 developers that will be eligible for financing. we already digested the information to the week, but it's how country guarded in sino ocean already out big put on that very list at why this is significant is because these are among the most distressed developers in the country, and them being put on the list by signify that chinese authorities are taking a different stance towards providing financial aid it away for them. country guarded was sitting at the one hong kong dollar level earlier, peeking, shaking off its stock label. we are also seeing a gauge of the chinese developers surging by the most since early september -- early september. let's take a look at the chinese banks.
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there is report coming for the property sector and has to come from somewhere. china's parliament has told lenders, step things up in terms of funding support for these property names and the worry is really that they will be saddled with more nonperforming loans, more bad debt. they were coming under pressure early on in the session, paring some of the losses at the moment. lizzy: thanks avril hong in singapore. we will keep an eye on those countries. turning back to energy markets, opec less delaying its meeting as it was set for this weekend amid the pushback from african members on revised output quotas. bloomberg's anthony dipaola joins me now for more. the date -- the delay is only a few days but it seems to have a significant market impact. anthony: wheels come off on the news, market still like
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uncertainty in here the uncertainty is over the cohesion of opec and a potential decision. we've been looking at the prospect of saudi arabia just continuing its voluntary cuts. opec plus continuing its cuts and the potential of more cuts. that is up and down, what will happen, also the concern in the markets that opec sees something it does not like in terms of demand. china for the entire year has been the big question, is it back, is it coming back, what more can we see in terms of demand? these are issues in terms of uncertainty over the markets. we see product markets a little they week and then we get into the early part of next year where demand is generally week. there is headwinds going forward. i think that's why we see the oil price coming off because we don't see that cohesion and that movement moving forward as
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distinctly as it would a few days ago. lizzy: i have to wonder whether the delay means saudi can force the deal it wants out of the african members. what are analysts expecting at this point? anthony: the real issue is those african members were forced to take lower production quotas for next year because simply there hadn't -- they had up and producing enough or in meeting the quotas they had been giving -- given. you mention the walk-up is hosting the climate conference the same day as opec-plus meets. the uae has been given a higher quota. that is creating friction. analysts are expecting we go ahead with a rollover of cuts so we see the same kind of cuts that we have been planning. again, some people are looking for more out of saudi arabia because they want to see that price higher.
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saudi arabia has been carrying the can for open with a voluntary million barrel a day cut, and that has been necessary to get those other members on board to agree with these cuts. it may take lower production, but essentially they get the price higher. we will have to see how those work out. do the african countries expect the cuts. citigroup expects the deal to go ahead as planned. rbc says potentially it could come out because of this conflict. we will see how that pans out over the next coming week. lizzy: level oil markets in a precarious position. bloomberg's anthony -- anthony dipaola, thank you for joining me. and election victory that has sent shock waves through the region. the far right lawmaker coming in first in the dutch elections saying that he plans to leave the country's next government. let me bring in our reporter in
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amsterdam, diedrich. what were your key takeaways from this election? what were the winds that led here? >> i think you can rightly call this a -- we won the election yesterday. it's extreme right populist party, anti-islam. he wants to leave the eu. he wants to limit aid to ukraine. that's a big change for dutch policy. and then also a big difference between frexit. and that's 24% of the votes. so, he needs to find other parties to form a majority government with and then those extreme policies will be watered down. lizzy: i don't know whether we
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are calling it next it or text it, but is it likely? >> it is true that he wants to have a vote. like i said, you need more pockets to form a majority government. no other parties supports it and he has already said he's willing to soften his stance on the positions and i think he is definitely one of them. it is likely you will see a more in when will -- in were looking view from now on. lizzy: surly a concern for europe. thank you for across the election. in the u.k., yesterday we had the u.k. autumn statement from the chancellor. this was one of his last opportunities to try to narrow that gap with labor 20.0 lead.
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we are going to comb through all of the measures with the center for economic and business research later in the program. but the idea of this statement really was to lay traps for labor when -- if they get into power. and laying the foundations for tax cuts to give labor the choice between having to keep them or sacrifice their own public spending plan. the rabbit out of the hat from jeremy hunt was insurance from 12% down to 10%. it was a giveaway with an eye on the election that's likely to be called next year. the i ready here is that while richie sunak said on monday that tax cuts were possible because inflation has already been have this year, they were funded because high inflation has boosted tax receipts. although the chancellor presented this as a turning point towards tax cuts, the office of budget responsibility,
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the independent fiscal watchdog says the u.k. tax burden will reach an even higher level. meanwhile, the flashiest announcement for business was the confirmation that hunt will make full expenses on investment per minute something welcomed. even rachel reeves who this decision. but the reason it's necessary is because the opr has downgraded growth. the u.k. may avoid recession, but it will be flirting with it all throughout next year. plus, they said the bank of england will reach its 2% target for inflation one year later. so, is this budget inflationary when the chancellor told us he would not do anything to stoke inflation elsewhere today, u.s. markets are closed due to the thanksgiving holiday.
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in europe we have a host of abide data do to drop this morning from france, germany, the euro area in the u.k.. at 8:30 a.m. u.k. time, sweden's bank will deliver its interest rate decision and you could get a round up of those stories on the daybreak newsletter. today they are leading with china properties as avril was talking us through. you have the dutch election on the turkish and swedish decisions coming up, we will take a look at africa's biggest economies and why central banks looks set to keep rates higher for longer. this is bloomberg. ♪
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lizzy: welcome back to bloomberg daybreak: europe. it is a marathon for interest rate decisions in africa with them ski peak rates higher for longer. let's go to jennifer and johannesburg. we have this south africa rate decision. you have october cpi coming in higher than expected and economists are looking for a hold, why? >> looking for a whole because that's what we've seen over the past two meetings, but that cpi number is having an effect potentially on what we see in terms of what the government does today. just to mention their headline inflation number came in higher-than-expected, 5.9 percent. that is a year on year increase from 5.4%, which we saw on
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september. a lot of people are talking about the core inflation, which is x energy and food costs, which slowed down. the question is what does it look like going forward for inflation. we did see appreciation over the past month, but after this inflation print, we are seeing the rand weekend. the question remains what exactly will the south african reserve bank do, but also, what is the message we will hear from the governor. the expectation is that he will remain hawkish, especially that it went to the three percent to 6% range. in whether or not he decides to hike there is a different story. we will have to see how that pans out later this afternoon. lizzy: we have a great decision from will -- from rwanda, what
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are you expecting there? >> a couple of things have happened in the last couple of months. in august when we had our last interest rate meeting we saw the central bank raise it by 50 basis -- we've been seeing inflation being on the rise, it's up 11.2%. the currency has been depreciating against the dollar and has lost 13% of its value. there was heavy rainfall that came in also affected agricultural output. this force the country to begin in fording food and that contributed to -- lizzy: that was jennifer. we also have the rate decision from the zombie essential bank.
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it's lifting by the most in four years from 10% to 11%. a surprise to economists. we take a look at the state of the regions energy market next. this is bloomberg. ♪
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lizzy: welcome back to bloomberg daybreak: europe. i'm filling in for kriti gupta whose enjoying thanksgiving. term purchases are set to plunge in raising energy demand during the winter first cold snap. the power supplies on the continent will get a boost from soaring german wind outputs. let's take a closer look at the energy situation with
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bloomberg's nef. good to have you with the studio with us. this time last year we talked about europe's ability to keep the lights on. sky high electricity prices. compared to that it feels like everything is back to normal, is that right? >> prices have come down since last year. if you look at core european markets, prices or hovering around 100 euros per milliwatt. this is one third of the peak seen since last year. prices are still double compared to pre-energy levels. a large part is because they remain linked to gas prices and gas prices are still at an elevated level because traders are pricing in a risk to supply disruption. we are down but not back to normal. lizzy: one of the biggest
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drivers of the price spike was the fear of potential power shortages. do we face that same danger this winter? >> looking out power markets in fundamentals, they are in a better spot the last year. so levels have recovered and we have also seen a recovery in hydro levels across europe after a pretty bad drought. we tracked record high, solar and wind direction. and consumers install this to save on energy bills. as these sources come up, we are less reliant on coal and gas. lizzy: is there supply enough for solar and wind to plug the gap? you are talking to reliance on fossil fuels and scale up could be further. >> germany will shut down its
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corp. plans by 2030. wind and solar is in a good position to plug that debt because these are currently the cheapest of their capacity. they already have an economic advantage to be built. they face other challenges such as regulatory barriers. europe really needs to focus on easing out permitting challenges in speaking up greek connection processors so we can roll out on a timely manner and needs to focus on the flexibility by bringing more storage technology . we need to use it when we really needed. lizzy: what's the likely impact on prices in the long-term? >> this is going to push out the more expensive: gas part of the power supply.
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europe will see decreasing power prices and this is good news for consumers. lizzy: bloomberg's and afc -- thank you for being with me at this early hour. this years united nations climate summit will be the biggest in history. it will be the first in the oil-producing nation. they want to bring the fossil fuel industry into the climate for but they are backing a controversial solution. >> this is a carbon capture plant. his tackling climate change. it removes damaging co2 from the atmosphere. it's highly controversial because of its popularity for fossil fuel companies. united nations climate convention, cop 28 taking place
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in dubai. it has been a tiny drop in the ocean when it comes to delivering on technology. >> in 2022 technology captured global emissions. the international energy agency said we need 30 times more points of capacity by the end of this decade. >> it an ideal world renewable energy will solve all of our problems. >> the world needs infrastructure, bridges, we even need wind tunnels. those are the factors that are known. >> carbon emitting industries are going to take a logotype to phase out. carbon capture needs to be
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deployed effectively and soon. lizzy: subscribers can see that on the terminal and bloomberg.com. it will be posted on the youtube channel. definitely check that out. we were talking in the report about the cop and we know that the opec meeting has been postponed to coincide with it. this is because of the dispute with african opec members. and we are looking at crude prices currently trading just over $76 a barrel. the latest from the ecb's financial stability review in the early reg when people come, they say they've tried lots of diets, nothing's worked or they've lost the same 10, 20, 50 pounds over and over again. they need a real solution. i've always fought with 5-10 pounds all the time. eating all these different things and nothing's ever working. i've done the diets, all the diets.
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lizzy: good morning, this is bloomberg daybreak: europe. i'm filling in for kriti gupta. these are the stories that set your agenda. china's property developer search after beijing's biggest push yet to shore up the sector. oil size as opec plus has a critical reason. promising a referendum of leaving the eu. it sent shock waves around the region. we will bring the latest pmi data from the u.k. and the wider euro area. will the members give the ecb because to pause. happy thanksgiving. if you are stateside, u.s. markets are closed today. in europe we will have much lighter volumes, look like it will be a pretty slow session. european stocks futures are currently flat, just in the
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green and follows the s&p 500 gain of 4.4%. getting back to the november rally in time for the holiday. i index up around 8%, on track for its best month since july. u.s. futures currently also flapper just in the green. meanwhile, you have the dollar weakening. got a pop yesterday from the claims numbers, wider than expected. that survey showing higher-than-expected expectations. the dollar pairing those gains with yuan, leaving asian currencies higher off the back of the pboc. in commodities, we have been talking about the oil allies in dispute over the output quotas for african members. that has meant a surprise delay for the opec meeting until the end of the month. it puts off the production cut that would avoid prices and crude plunged by yesterday. you had a recovery in the price
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and you are looking at crude trading at over $76 a barrel. that's the latest in markets, now let's get to our top stories around the world. ecb's vice president is warning investors against what he calls wishful thinking on the strength of the euro area economy. he set a soft landing is difficult to achieve. >> this is one of the main risks because the outlook that the markets are taking to the evolution of the economy, it's all under wishful thinking. so, if growth is below what we are expecting, if you have any sort of additional geopolitical
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risk, that something that we have to take into consideration. the impact of markets has been quite limited. in that kind of situation, when you have a very low risk premium for property bonds and equities, any sort of deviation with respect to this scenario could give rise to promise and negative surprises and reactions in the markets because prices are very high. >> what about expectations for the first interest rate hike. is that too optimistic? >> i think it's premature to talk about that. we have kept rates. we will continue with this
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discontinuation of the portfolio and see what happens with that. and anything that we know we will be data-dependent. we will see how the different inflation evolves over time. we believe the disinflation process will continue. even though because of face effects you could have inflation . but in the medium term we expect the interest rates in our volatile policy will give rise to our important production in inflation and eventually it will converge to 2%. >> that was ecb's vice president speaking to bloomberg's -- in frankfurt. the european central bank were -- warned that sluggish growth is threatening to amplify risks to financial stability. for more on the review we are joined by -- in frankfurt.
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you've got banks saying they could whether higher interest rates and get a soft landing. one of the big ecb concerns about the environment in financial markets? >> the ecb is concerned that they could have high interest rates but the combination has very slow growth in is one of those elements that exacerbates the dangers from high rates. they are aware it could hurt banks but they thought banks can handle it. now it has been incredibly weak, there is a contraction in the euro area. that is something that raises red flags for the ecb. >> it seems they are being cautious at the moment. the ecb warning of risks of fiscal slippage even though you had the good news. but we have this raft of euro area economic data today.
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what are you looking for and what will it tell us? >> we get pmi's for germany, france and the euro area. we have to wait another week for that. those have been dismal for months. the euro area numbers are expected to behave similarly. it's one of those where the number we are looking for is anywhere under 50. 50 is a region that splits contraction and expansion in all of those numbers are expected to be under 50. maybe there will be site upticks, but as long as there's a contraction. that's something that reaffirms what happened yesterday in the bloomberg tv interview. lizzy: the leaders of germany
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and italy say that they are making progress on finding an agreement on the new e.u. fiscal rules. the fiscal impact limits debt across the area was suspended during the pandemic. with the rules coming back in, governments are looking to make changes to be existing. germany's government has indefinitely suspended the -- on the 2024 budget and that comes after the highest court declared last week. they plan to move 60 billion euros to acclimate fund break fiscal rules. it sets to close on december the 15th. the government could struggled to push through this year. let's dig deeper into what's happening in germany and italy's economy with our panel now. i will start with you. why are the relations between germany and italy so important?
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>> it is safe to say that oath countries are very relevant when it comes to decision-making on the european level. both are two big economies that are really key for the european union to come to a joint position and also, another reason is trade between the two countries. we have seen that after the outbreak of the covid 19 pandemic when the borders were shut down in supply chain's were disrupted. it had a very severe impact on basically the manufacturing sector, automotive industry. the bilateral ties between the countries to safeguard is really important. lizzy: do we have a read out of this meeting in berlin? >> the meeting went really well.
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lots of hugs, lots of handshakes. it is clear that she is changing her friendships across europe. italy and germany are two of the three biggest economies in the euro zone and are part of the small club taking some of the decisions that will change the discussion and debate in the conversation including new fiscal rules. that meeting was the first in several years. it was due, but whether there has been a real progress behind the scenes remains to be seen in brussels. lizzy: what are the bilateral issues that need to be cleared between the two countries? >> as you reference, one key point is definitely the fiscal position of both countries. with germany and italy in the past having been on the same page, to put it mildly.
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there have been contrary points when it came to fiscal decision-making. the other big point is migration. very relevant issue for all political leaders across europe. it's really important the two leaders find a common way to solve this really critical issue. lizzy: do we know whether the engine maker was discussed? >> talking about a specific company and was done during remarks is actually showing an example of how the talks are going. and they mentioned security concerns and it was interesting because it shows how the geopolitical changes in friendships change. lizzy: thank you to our guests.
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let's take a look at the other stories around the world we are following. they will invest 2.1 billion euros to expand production in france. the drug manufacturer has been facing supply bottlenecks due to high demand for its weight loss medicines. shares rose by more than half. to qatar where the date and time for the beginning of a four-day pause of the fighting in the gaza strip will be announced in the coming hours. israel's national security council said the hostage release when it begin before friday. under the terms how mossimo 350 hostages from gaza in return for the world's first low.
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115 palestinian prisoners will also be released. officials have been releasing the final details after the deal was announced yesterday. the u.s. as rates allocation with top officials in new delhi that india was involved in a plot. the white house says the issue is being treated with utmost seriousness. the allegations come months after they accuse the indian government after the involvement of the murder of a sikh separatist leader. we will discuss the fallout from the u.k. chancellor's statement yesterday. i will be joined by a special guest. this is bloomberg. ♪
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lizzy: welcome back to bloomberg
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daybreak here. i spent most of yesterday at westminster, a very chilly westminster waiting for the autumn statement by jeremy hunt. one of the key fiscal events ahead of an election. jeremy hunt says he plans to grow the economy and that those plans are working but there's more work to do. here are some of the key points from yesterday's statement. >> we premise -- we promise to cut inflation and we have. it fell to 2.8% before falling to the 2% target in 2025. we expect the economy to grow. after that growth rises to 1.4% in 2025 and then 1.9%, 2% in 2028. re-reduce that, cut taxes and reward work. i will increase the local
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housing allowance rate to the 30th percentile of local market rates. this will give 1.6 million households an average of 800 pounds of support tech steer. i have decided to freeze all alcohol duty until august the first next year. that means no increase in duty on pure, cider, ryan -- wine or spirits. i will invest 500 million pounds to fund further innovation centers to help make us an ai powerhouse. i will cut the main rate of employee national troops by two percentage points. that change will help 27 million people. it means someone on the average salary of 35,000 pounds will save over 450 pounds. the economy has grown, rather than falling as predicted, real incomes have risen. our plan for the british economy
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is working but the work is not done. lizzy: those are some of the 110 measures announced yesterday. joining me now is nina, ceo at the center for economics and business research. great to have you with me. this merely an illusion of tax cuts? >> the chancellor has taken away with both hands and he has given back with one. particularly on the cut of national insurance, this is only about a quarter -- she's giving a quarter of what he has effectively taken away by keeping thresholds frozen and keeping them in line with what has been a high level of inflation. even on the business front, that doesn't make up for the high
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increase in business taxes we have seen. i think the chancellor did his best to focus on the positives without necessarily presenting the full picture. >> he focus on fighting inflation and to credit for having it. is this an inflationary budget? >> the rhetoric on inflation was a pretty -- a peculiar one. there was this message of we have inflation. i've always said in the past month that they needed this to half inflation and it's a strange challenge to make. they really don't influence inflation that much. primarily into a shorter-term and then external factors is what has brought inflation down.
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in the longer term, there is an impact on whether you have expansionary or fiscal policy. if you look at it in isolation, you could say the limited tax cuts the chancellor has handed out could be inflationary, but i wouldn't want to put too much emphasis and criticism on that. if you look at it comprehensively, the tax cuts are a drop in the budget in terms of what's happening more widely. i don't think there will be that much more through in the higher inflation fears. lizzy: does it make any difference to win the bank of england can cut rates? >> the opr says that they expect inflation to be stickier for longer. we are expecting it to take longer to come down, so we are
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not seeing inflation come down to target until the late 20 20's. in terms of when the bank of england will cut interest rates, we are expecting summer of 2024, but we would not have change that assessment based on anything particular we heard yesterday. lizzy: you mentioned the growth measures, business rate cuts. there was also the capital investment. and that perhaps relates to the ob are downgrading its growth forecast. obviously investments are long-term products. i wonder how much more effective it could be without having an expiry date. >> it's not going to be helpful in the near term because this was already a measure in the near term that was happening. i do think it helps the kind of investments in its important to
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know this only benefits them companies in very large companies investing in fixed assets and some of those already decades long. i do think having that certainty will help over a longer time. in some sensor has been criticism that other measures were announced that were politically motivated with one eye on the election coming up. the full extent really cannot be a part of the criticism because it does seem to be a part in the right direction and not a politically motivated announcement. lizzy: that's the government, we heard from the shadow chancellor yesterday. would you listen to her, do you believe that labor can fulfill its spending commitments at the speed it's promising, giving -- given what they would likely to inherit -- be likely to inherit?
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>> i've heard three separate people use the same quote for this position of labor and that napoleon quote don't interrupt your enemy. and i think labor is basically trying to put forward a little bit of their vision but mostly what they are trying to do is yesterday speech was another example of this. they are trying to make sure general promises and they will figure out the specifics once we get into government. but for the moment things are so strongly in our favor, let's just not do anything or say anything to specific or dramatic to change that momentum. thank you to the ceo of the center for economics and business.
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great to get your analysis and we will have more analysis with another u.k. figure. now a member of the house of lords. wonder if you seen david cameron. that's in 9:30 this morning. we will unpack more. stay with us. this is bloomberg. ♪
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lizzy: welcome back to bloomberg daybreak: europe. it is 6:55 a.m. in the city of london. i want to talk you through a couple of charts we have on the docket today. 9:00 a.m. london time we get the pmi. more insight into the previous ecb hikes, whether it be out put contracting in the fourth quarter. our economists say will flatline. if you look at the manufacturing
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numbers, most of the countries have been in contraction for a year. over the 50 level in january. was crucial here is that the estimates are for eurozone region to see a moderate rebound even if the pressure does remain. we also have the riksbank with its decision. most economists reckon it will hike by a quarter .2 4.25%. our economists reckon it will hold. that decision at 8:30 a.m.. we have the turkey decision today at 11 -- 11:30 a.m. london time. i will headed over to the 18. they will take me through that. we have tom, mark and anna. stay with us for that. this is bloomberg. ♪
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