>> good morning, this is bloomberg daybreak: europe. i'm lizzy burden in london. chinese stocks are mixed as

investors digest manufacturing data raising hopes t measures are working. the yen strengthens as the boj keeps its benchmark rates unchanged. a bumpy day for european bank earnings. we will bring you results and we will be speaking to the cfo of the dutch lender img. plus, big tech disappointments. instagram and metafiles as they warn investors on ai and infrastructure microsoft's lives on the sewer forecast for cloud growth. a very good morning, welcome to the program. we kick off the program with breaking earnings out of paris. we have bnp paribas third-quarter results just across the terminal. net income, 2.87 billion euros. the estimate was for 2.8 9

billion euros, pretty much in line with estimates. the backdrop of course, the political uncertainty, ecb rate cuts as well, and we will be speaking to the cfo of b&p per bottle in an hour's time on the opening trade. interesting to digest the backdrop politically and economically. also in the context of socgen earnings this morning. we had broadly beating expectations. now looking ahead for that -- of french banks. we can also now turn to spain because we've already had the bbva earnings this morning. net income coming in for the third quarter at 2.6. 3 billion euros. the estimate had been for 2.3 9 billion euros. so a beat there. bbva in this takeover battle that has been ongoing since april, it is all styled. they are trying to fend this off in their reports this morning as well. sabado beating on profit as it

tries to avoid the takeover. bbva shares up 10% so far this year. worst-performing spanish bank. we keep an eye on both of those at the open and we will bring you an exclusive interview with the cfo of bbva, as well as the chief executive, both on the opening trade in just over an hour's time. as that tie up between the two spanish lenders comes under scrutiny. turning to some other earnings this morning, we have out of paris, st microtech, the worst-performing sector on the stoxx 600 yesterday looking into these resorts from st micro. they are seeing full-year net revenue at 13.2 7 billion dollars. they have seen it 13.2 billion to 13.7. so, pretty much in line there for a year growth margin, slightly below prior guidance is what they say looking ahead. these shares down 43% year to

date. will we see a further knock to the stock at the market open? let's check in on these broader markets. we did have those earnings out of the u.s. tech giant last night, now weighing on the futures picture when it comes to wall street. s&p e-mini's down .5%. nasdaq futures are lower. you see the misery looking to transfer across the pond into the european session as well. euro stoxx 50 futures down nearly .5% this morning. flipping the board over to the cross asset picture, we've had a lot of news out this morning already. not least from the bank of japan. holding interest rates steady. given the uncertain outlook politically in japan, internationally with the u.s. election on the horizon, and therefore economically globally as well. you've got the yen currently it at the handle. u.s. ten-year at 4.27 percent. we have had traders slightly trimming their bets on fed cuts after the latest u.s. eco-data.

we will dive into that later in the program. the pound at one dollar 29 off the back of rachel reeves first budget out of the u.k. yesterday. labor source in over 14 years. we will also digest what that means for the u.k. economy and you have brent at $72 a barrel. strongest .06% as markets digest the developments in the middle east. let's cross over to avril hong who is on standby in singapore with the latest in asian markets off the back of that boj decision. some interesting data out of china as well, what are you watching? avril: we are seeing asia stocks mostly lower. some of this in japan is a function of the earnings related news and investors are trying to digest a what's next for the bank of japan. the expectations are coming into today were very low. it was going to move next to nothing, given the u.s. and japan election-related uncertainties. so, that makes governor ueda's

press all the more important, given the backdrop, especially given how you think some expectation of how strong the japanese economy looks, the next move is likely to be a hike, and it's really a matter of the timing. the yen has been extending gains since the decision came out. let's also, as you say, highlight what we saw in the chinese data, because there was an expansion, this was unexpected on factory activity. in terms of stocks, it's looking flat. let's look at what we see in dollar yen implied volatility, one week, a reminder as well that it's not just about the boj, it's also about the u.s. events next week and u.s. jobs data. relatively high at 17%. >> avril hong, we thank you for that update on asian markets. i also want to bring you some more breaking earnings. we have the third quarter results coming out of paris. those shares currently down 1.7% so far year to date.

we are learning that organic volume growth came in at minus two point 4%. the estimate was for minus point 7%. much worse than expectations they are out of the drinks maker, another warning to keep an eye on at the open. let's go from the micro to the macro and over to the boj, which as april said, kept its benchmark rate unchanged this morning, given the uncertainty of the economic outlook in the ruling coalition's worst electoral results since 2009. our bloomberg economics reporter joins us now. this is by the expected but did we learn anything about what's next for the future path for rates when it comes to the boj? >> good morning, i think actually the time is not good for boj to make a policy move, i

don't think governor ueda would have very limited room to send a fresh signal in his press conference happening in 20 minutes or something. anyway, the great hold itself was mostly widely expected. however, we can learn something from its quarterly outlook report. in which the policy board maintained its inflation forecast around 2% in the forecast horizon until fiscal year 2026. and also they kept may policy centers that say of those forecasts are materialized, they will keep rising rates. therefore, they are in an opposing time for u.s. uncertainties. soft landing in japan politics. they are on stance for trying to hike rates is maintained. my expectation for the next time for the boj to move is when they have more clarity on u.s. economy, the markets as well as

the developments in wage negotiations happening in next year's spring. >> really interesting. we have to wait for january for that. what will be the focus for yen watchers for governor ueda? what will be the key factors for monitoring in the months? >> it's really important to hear what governor ueda will say about his assessment of the u.s. economy, which that data print suggest slightly a positive reading, as well as how he takes recent renewed yen selling pressure, which will also add pressure to japan's inflation and take the boj to hike rates in the near future. and also i don't think governor ueda will still -- steer clear. on japan's political situation it' important. i don't think the political situation doesn't get in the way

of back of japan's policy decision. on the results of the sundays election, which elevated japan's political situation uncertainty in the historically high level. so therefore, even for dependent boj, it's really hard to move. therefore the bank of japan wants to see more clarity in how the political balance will settle into a new minor ruling coalition and the cooperation with the coalition party. >> of politics holding the boj back from getting on with its hiking. we thank you for that analysis as we continue to watch the as we get towards this press conference. it is stronger now at 152 per dollar. but let's get back to europe. german inflation picking up more sharply than expected to 2.4% exceeding the ecb's target.

we will get cpi numbers for the wider euro area later today as well. crucial to the ecb rate path. let's get up preview now from bloomberg's valerie tytel. what you watching? valerie: that german inflation number grabbed the market attention yesterday. the survey estimate was for 2.1 percent in came in at 2.4 percent, very much above expectations and sets the groundwork for a hot eurozone inflation print later this morning. the estimate for the headline numbers that 1.9 percent. euro area core is at 2.6. this is an important one because of lagarde's emphasis on domestic driven service inflation. any upside surprise in the core number could lead the market to expect that we do not get this jumbo cut from the ecb come december. if you flip over to my next chart, i want to show you how much the front end pricing for that jumbo that has really been paired bag. we are now only pricing 26 basis points for january and 31 basis

points for december. so it's really paired bag. we were also pricing in a jumbo cut for the next two meetings. now we are basically just implying that we have new normal size 25 basis point cuts for the ecb. but it was a bruising day for the bond market. that's with the board and i just want to show you the big move we saw in the german front end. two year yields on germany were up nearly 12 basis points. you put that in combination with two year gilts also rising in yields and two year treasuries also rising in yield. there was a big reevaluation of the path forward for global and central banks. >> we thank you as we look at euro-dollar 108 and he steady this morning. a has to be said that the outlook for the ecb. we had the latest tech earnings weighing on u.s. futures this morning. they shed more light on the divergent themes in the chip sector. some numbers and others from semiconductor names in japan really indicate demand for ai

chips is still strong but legacy uses are struggling. we have the results for microsoft and meta giving us insight to the outlet. we can dive into it with our tech reporter, annabelle droulers, who joins us from hong kong. what stands out for you? anabel: it's really that divergent theme we see between ai chips that are still doing well, and legacy chips on the other hand on the weakness in the area. just looking at the names you highlighted. you had samsung, advances, the story of ai chips in particular, so that was the story for samsung was around hbm and when the earnings drop we saw the chief operating division. the profit really undershooting expectations operating profit, but when the company came out of it later and said it was looking and making progress on the hpm product we started to see the share price rising. that's the ai versus legacy theme. take a look, you can see they are jumping, that the company

that produces tools used to test ai chips or chips broadly, tools for ai, they also sold well. we saw that stock rising to a record high. that stock is slumping in them producers chip used for automotive's. we haven't seen very strong demand, the forecast was in great. just another signal because we seen it across earnings, even starting at couple weeks ago with asml. >> i just want to ask you, we may have a long supply chain, you talk to us about chips, but what about the services and how demand for ai services holding up? >> this is also a really big week for big tech when it comes to the cloud computing piece because we got earnings dropping from alphabet, from microsoft and amazon. they are the biggest suppliers of this. microsoft was just the latest overnight, and we saw it put out of forecast with cloud computing

business that was weaker than what was expected. it's not a demand story, it's more of a supply side and the company just hasn't been able to build on it quick enough. the concern as it races to catch up to that is that it could end up putting a little bit of pressure on its margin, so we sell the stock lower. a has been a company invested in openai and we haven't seen r.o.i. on that just yet. meta is another one to watch and we saw that stock weaker and after hours trade. in the company will continue investing heavily into ai infrastructure, but it could take some time to see the payoff as well. likes microsoft and meta down more than 3% in after hours. annabelle droulers, thank you for taking us through all of those tech earnings. we are going to have even more of them today, but that will get the euro area cpi numbers at 10:00 a.m. london time as valerie was previewing 12:30

p.m. it crucial to the fed's rate path, and then it is apple and amazon's earnings after markets, so feeding into this picture for big tech. coming up on this program to bring you more of the european bank resorts -- results coming through. ing boosting its forecast ahead of investments. we will speak to the dutch lenders cfo. that conversation next. this is bloomberg. ♪

lizzy: welcome back to bloomberg daybreak: europe. six: 17 a.m. in london and we have bank earnings to bring you this morning, including from ing. it's raises total income forecast for more than 22 billion euros ahead of estimates. the dutch lender also announcing

a 2.5 billion euros share buyback and i'm pleased to say i'm joined now by the cfo. great to have you with me. let's just jot through your view of how the third quarter has gone for ing. raising your outlook for 2024 total income. quick thank you very much, i think i would characterize the quarter is being very strong. we have printed a good set of numbers at this quarter, customer growth has been strong. i think lending growth has been strong, particularly in mortgages where we see growth across all of our markets. i think we recorded over a billion euros in fees, which is a record for our franchise over a three month timeframe, risk cost looks pretty solid, about the same as the previous quarter. and as you mentioned, these good set the result is a lot of investors do is share buyback, which we announced today with our results on with our improvement in our outlook for the rest of the year.

lizzy: 2.5 billion euros buyback, has the pace of buybacks peaked today? >> i think we will converge in steps from our current levels to around 12.5 percent. and i think to contextualize this two point 5 billion, we did announced and completed a 2.5 billion share buyback earlier this year. we have done over 5 billion around 5 billion euro in cash distribution to our shareholders, and we continue to believe and are confident we can operate profitably at a lower level capital then we operate today, given our current franchise in the outlook on race and macro pictures. so, that convergence to capital remains out plan. lizzie: you mentioned the macro picture, how do you feed into the outlook the fact that ecb is cutting rates? >> this is going to be a pretty sharp rotation from 4% to

approximately 2%. i think we are confident in terms of operating sustainably quite a profitable franchise in different rates environments. and i think what i look at it as a key is the net interest margin -- margin or liability, which is high at the moment at the 112. we expected -- we expect it at a lower level. there could be liability between 100 and 110 basis points. so we are confident in managing the balance sheet through a different rate cycle, so for what we expect to see in the next 12 months or so. lizzie: how do you see lending growth progressing? quakes lending is remarkably strong, we already this year, year to date have been growing lending at over 4%. we see demand from retail customers on mortgages remaining

strong and wholesale banking is a little bit more volatile, we have a little bit more growth this quarter but the macro picture is somewhat more uncertain in the impact of high inflation for long has the growth prospect in the wholesale being. lizzie: and what is fee momentum looking like, what is driving fee income? >> is a multifaceted growth, i think fee income is daily banking fees that are strong, a lot of our customers are opening investment accounts with us, investing in said management, insurance fees has also been strong and in the wholesale bank we sustain a pretty strong growth in terms of capital market. we don't rely in any one particular engine to drive out feed growth. i think everything that i mentioned drives the year on year growth of 11% in fees, so

it has been across the road aspects in terms of our work in developing multiple fee engines. lizzie: do you rule out m&a to grow that part of the business? >> no, not at all. i think what we look at is that organic growth is our go to strategy, we are always looking at the m&a situation that could accelerate the growth of our franchise that would lead to return on equity, so that's what we look out for and we have look from time to time, we just haven't found anything that meets our m&a criteria as of yet. lizzie: not ruling it out. interesting. cfo of ing. lovely to talk to off the back of those earnings this morning. we thank you, as always. coming up here on bloomberg daybreak: europe, could the u.k.

budget mean that rates from the bank of england stay higher for longer? we will break down the labour party's first budget in more than a decade. stay with us. this is bloomberg. ♪

>> assessing the scale of the challenges facing our services means that this budget reaches -- raises taxes by 40 billion pounds. any chance are standing here today would have to face this reality. in any responsible chancellor would take action. that is why today i'm restoring stability to our public finances and rebuilding our public services. lizzie: the first labor budget

in over 14 years, the first-ever in british history to be delivered by female chancellor, and this represents a fundamental growth of the u.k. state. 40 billion pounds of tax rises announced by rachel reeves. it's the most since norman lamont in 1993. so including tax rises on inheritance, capital gains, and employer national insurance contributions. controversial list given that labor had said there would be no tax rises beyond what was promised in its manifesto. and yet, for all of this, the fiscal watchdog predicts that the package is only going to marginally increase growth. indeed, looking out the statistics from the office of budget responsibility, the fiscal watchdog only sees the economy growing marginally, and it sees it smaller by not .1% that it was forecast to be in march under the conservative government. and even though this growth is

going to be anemic, the package is expected to slow the pace, which the bank of england could cut rates because of the inflationary impact via high minimum wage and via this 142 billion pound increase. we look at the gilt market reaction yesterday, you can see where rachel reeves was speaking on the first line when she sat down, the second yellow line, and then this pretty ferocious selloff in gilts. the 10 year gilt yield ending the day higher for basis points at four point 3% as it digested the repricing of boe rate cuts. we will have more on the u.k. budget later in the program. budget later in the program. but coming up, the - it's something about having that piece of paper. some people think that's worth more than my skills. - i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. - you gotta be so good they can't ignore you.

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lizzie: good morning this is bloomberg daybreak: europe, i'm lizzy burden in london and these are the stories that set your agenda. chinese stocks are mixed as investors digest manufacturing data that raise hopes that the measures are working. the yen strength and so they keep the rates unchanged. a day for european bank earnings, asset management and investment banking driving growth had bnp paribas out. the dutch lender also boosting its outlook. plus, the u.k. chancellor promises to rebuild britain and boost public spending in labor's first budget in more than a decade. we will break down all the details for you. let's check in on these broader markets. you are looking at u.s. futures, especially way down given the tech hit after hours. we were discussing that with annabelle droulers earlier. s&p e-mini futures down more than half a percent currently. we've had lots of thank earnings

to factor in already this morning. a 2 billion euro buyback. 2 billion euros, also results out of spain for bbva. we will have interviews with them later in programming as well. but if we put the port over to the cross asset picture, you are looking at the 10 year u.s. treasury yield low or three basis points at 4.27% currently. traders having trimmed best slightly out of fed easing off the back of the latest u.s. economic data. the yen, 152 handle as we digest the boj decision and await the press conference from governor ueda. the pound back at one dollar 29 off the back of yesterday's u.k. budget and print trading at $72 a barrel. stronger as we digest the latest developments in the middle east. as i say, ing results came out this morning. we were speaking to the cfo and

we should correct that the share buyback was indeed 2 billion euros, not 2.5 billion euros. the dividend, 500 million euros as well. so processing those results from ing as we head towards the market open. let's stick with european banks now. socgen third quarter net income beating estimates and that was really fueled by the french retail recovery. that spring in bloomberg's correspondent in paris. what are your key takeaways here? it looks like you've also got some changes at the top of socgen. >> it's great, let me talk to you about the main takeaways of bmp and socgen. both had very strong performance in trading. socgen really surprise positively in the retail bank, even though bnp had sluggish growth for the retail banking. so, if you compare trading at bmp and socgen in the third

quarter, bnp, as always, has been strong in fixed income, you need -- revenues rose nearly 12% in the third quarter. in line with deutsche bank for the revenues that were up also 6%. a bit better than barclays, for example. for equities trading now as you can see on these, bmp, more than 13%, socgen revenues, 10 percent. it seems that bmp on one side, any investment bank is turning a corner, and that's what analysts are saying. and for socgen, investors are also looking at the repo -- retail banker for recent disappointments, and clearly in the retail bank, huge recovery there with revenues up 19% in the third quarter for the french retail bank. as you were mentioning, we had some measurements with the

deputy ceo and cfo both stepping down, there will be a new cfo from january. he comes from seven dell. lizzie: you mentioned it continues to be plagued by these headwinds by getting a boost from trading. how do you see the longer-term outlook as we digest these results and look ahead? >> obviously there is still lots of potential headwinds in france because you remember the snap election, you remember the two month search for prime minister. of course they have no majority in parliament, so we could still see some volatility in france. then of course you have the headwinds at other banks have. we have lowered interest rates going into 2025 and the possibility of escalating conflict in the middle east,

especially. it will be interesting also to ask the cfo of bnp paribas in the next hour about the integration. i am in the last quarter, for 5 billion euros. the plan is to integrate in the middle of next year. but even if, even before this integration, they are already having inflows in their current asset management unit up nearly 8% for inflows in the third quarter. quite strong inflows for bnp there. as for socgen, you know there was a lack of trust with the new ceo who took over at socgen a year ago. perhaps with this set of earnings and the strong performance of the retail and the investment bank, there could be new investor confidence in socgen.

lizzie: out of paris, we thank you for taking us through those bank earnings out of paris, and we will be speaking with the cfo of bnp paribas just about half an hour's time, but need to ask on the macro outlet, given as valerie was talking about the changes to the ecb pricing. we also have exclusive interviews with the cfo of sabado. very much in focus of potential tie up so great to have both of those within an hour's time of each other on the opening trade. do stay with us for that conversation. but she was talking about the impact of the geopolitics in the middle east, potentially impacting these european banks. let's dive into that next. israel considering a proposed cease-fire with lebanon that would keep hezbollah fighters away from the border. prime minister benjamin netanyahu is hosting seeing

white house mediators today as part of talks on a pause. let's get more from bloomberg stan williams. he joins us from jerusalem. what would a cease-fire plan actually include? in parts discussion with >> some officials involved in this in washington, in jerusalem, and we are hearing from lebanon today some new cautious notes of optimism about the prospects of what appears to be a deal to begin with a 60 day suspension of hostilities between israel and hoss -- and has in lebanon during that time there would be a withdraw of israeli forces to the border between the countries. it enforcement would make sure that it's in the lebanese interior and there may be a role for the lebanese military in acting against any activity of

military buildup including bringing in weaponry and dismantling by the lebanese army of hezbollah infrastructure. had we discussed this a couple of months ago and might've seen high and the guy that has below's fortunes have changed, it has taken a dropping from israel over the last six weeks and its relative strength within lebanon may have waited for the point where lebanese authorities, foreign powers, you and peacekeepers feel that they have an ability to enforce a u.n. resolution from 2006 there was never fully enforce, it was meant to keep that group in check and bring more peace to the lebanese/israeli border. lizzie: a lot more hope for a cease-fire than there was a couple of months ago. but in the meantime, what's the possibility of continued fighting between israel and iran? >> that's an excellent question.

just last saturday we saw this unprecedented series of israeli airstrikes in iran as was called the retaliation for them three weeks prior. it would appear that that account is still open and there have been some indications for iran that it might carry out a strike. they could even happen before the u.s. election, which would up and with little stability the region that israel says it's ready to go in again with perhaps fuller force into iran. iran aside from its domestic interest from its national prestige vis-a-vis israel, also has interest elsewhere in the region mainly hamas in the gaza strip, hezbollah in lebanon. it may also be worried about prospects of hezbollah and hamas being defeated in gaza and this is an opportunity to open up a forefront with israel to derail the efforts and perhaps keep up

its own access or keep its access for being driven back to far on its latest developments close to israel's borders. quake three thank you for the update. as we look at brent trading stronger just shy of $73 a barrel. now to some other international news this morning. north korea has fired an intercontinental ballistic missile after south korea and the u.s. criticize pyongyang for sending troops to russia. japan says the missile flew for about 86 minutes, which is the longest flight time ever recorded. the u.s. condemned the launch is needlessly raising tensions. defense secretary lloyd austin says the decision to send troops to russia may widen the ukraine conflict. the pentagon believes pyongyang has sent 10,000 troops to russia. in other news this morning, airbus ceo says that the company has a difficult end of the year ahead. the world's largest plane maker

has been unable to build aircraft fast enough meet demand. this book to bloomberg about the challenges ahead. >> we are limited by some bottlenecks in the supply chain which are the engines. but also we have issues with seats, with interiors and to a limited extent they are being managed. we have difficulties to execute. we have a quite difficult end of the year ahead of us. as we anticipate to have more in the last two months of the year to which 770 is the guidance. so that's the environment we are in, it's a significant one. we deploy a lot of resources to our suppliers, but when it one of our important partners like

cfm and ge is heated by their hurricane in the u.s., that's the own ability to deliver. that's where we are. quake's radio expect to see meaningful improvements in the supply chain next year? could we get a resolution on the engines and the a320? quakes we know that the a320 relies on two engine makers, to engines. and the engine from cfm, they have different situations to manage. there is an ongoing campaign that is leaning towards a lot of our customers being refugees on the ground because the engines need to be fitted. that's a vast plan that they are managing on their plan, so the next year in the year after we will see the number of arg's going down and we will be able to have more engines for the delivery of our own planes and

when it comes to cfm, we think it's a more short-term crisis that they have to manage. they are very mobilized and focused. it will continue to impact us later this year, beginning of next year, but it will get much better by the second half of 2025. the suppliers, cfm are also managing those situations and we think it is something that is talked about. quakes that was the airbus ceo there. coming up on the program we are going to break down the labour party's first u.k. budget in more than 14 years. what is it mean for the economy, what does it mean for the market? that's next. this is bloomberg. ♪

>> welcome back to bloomberg daybreak: europe. 6:46 a.m. in london. we are digesting yesterday's budget from the u.k. chancellor rachel reeves. they plan to ramp up public investment in a plan that aims to revive the u.k. economy. a partner at the charter defense, good morning. heine individuals on their u.k. tax affairs. they are off the hook with worried clients. >> we have a lot of worried clients, particularly there is been a lot of speculation, we've seen fears that gdp rates would go to 45%, fears that we have much bigger changes to inheritance tax which would really affect them. in some ways the budget has been a relief. we now know what the changes are

we've had announcements on the coming years as well. and they should be wondering what they are shipping next. >> one of our colleagues, opinion colonists at the wall is lighter but at least it's got some money left in it. i wonder given those changes to capital gains and inheritance tax that you mention, we are going to see an exodus of wealth from the u.k. of some had worn. quake cs, and i think particularly the change that will lead to be believing are these changes of taxation. the announcements we have our around the government proceeding with the previous announcements, they have not rode back on any of those, so individuals we will see leaving, unfortunately. i think there were some positives and that with some individuals, particularly the temporary repatriation facility,

which has been made a lot more generous and that will encourage those who stayed to be able to bring their money to the u.k., spend it here, invest it here, and that's fantastic. but i think we will see a lot of the people leave because of other changes. >> what about the inheritance tax changes, do you think that the clients got off lightly there? quake say think probably the most widespread taint -- change will be pension funds no longer getting that inheritance tax relief, that same data encouraging people who spend those funds, which is the plan for pension funds retirement rather than keep those in hand them over, but the other changes we saw on the agriculture property business relief will affect some individuals quite heavily, but in terms of the general public, maybe not quite so much, the things we didn't

see on inheritance tax where changes to the lifetime gifts of tax and that was one of the things people were concerned about. lizzie: what about the clients who are business owners, we saw this rising insurance national contribution on the rise in minimum wage. do you think that those changes mean that people will have to lay off staff? >> yes, that's probably the biggest change, the rate increase from 13.8%, 15% does sound small, that makes a difference. but also bringing down the threshold from 9100, 5000 pounds , that's a really big extra cost, 4001 hundred pounds at 15% of every employee, we are going to see peoples of wage bills hugely increase. and i think that we will see a knock on impacts, potentially in

people being laid off, but may be just people not being us -- hired is quickly in the future. lizzy: it's interesting looking out the office for budget responsibilities forecast that came out alongside the budget on growth, on inflation, and when it came to growth, it's only marginally higher in the short-term and lower by 2029, if you compared to what the conservatives would've done. if you are talking to your clients about how this is all going to manifest, do you think labor is driving away the wealth creators, the business starters? quake say think absolutely. i think it would be more expensive to employ people, it would be more expensive for those wealthy individuals who come here and want to set up businesses and want to work and want to employ people. that's going to have a massive knock on impact. i think a lot of the talk around those changes were, are people leaving, are people going to stay? the real losses are the people

who don't come here in the first place, and that has to be the primary focus, and encouraging those people who will invest, who will create wealth and create jobs to move here, i think that hasn't really factored into the changes at all. lizzy: i'm sure your phone is going to be ringing a lot today. we thank you for that analysis of the impact on high net worth individuals on yesterday's u.k. budget. i also now want to turn to the bank of japan. we have had the decision to hold rates as expected this morning out of governor ueda, he's giving his press conference currently. when you are seeing the yen extending gains as we speak, stronger. 152 per dollar is where we trade . the stock market, little change really off the back of the decision, but governor ueda really avoiding giving hints on the timing of the next hike, he has also announced that the

boj's trimming its core inflation forecast for 2025, raising its gdp forecast and we continue to monitor this press conference very careful explanation really of the boj's next move, in the context, of course the political uncertainty in japan, as well as the impact of the political uncertainty in the u.s. the election on the horizon. where that leaves the fed and the feedthrough to the economy in japan. we will have plenty more on the program for you, so do stay with us. this is bloomberg. ♪

lizzy: 6:55 a.m. in london, welcome back to bloomberg daybreak: europe. let's look at what we got from chancellor rachel reeves in the first budget ever by a female

chancellor. a lot of it leaked ahead of time, but some of the key takeaways, we have the employer national insurance contribution rise, the rises to inheritance tax and capital gains tax as well. overall, this was a 40 billion pound tax hike, and enormous expansion of the u.k. state. and yet, if you look at the office for budget responsibilities forecast that came out alongside the budget, actually not that big a contribution to growth in the short-term. and if you compare to what the conservatives done by 2020 nine, actually growth falling. and yet you saw as well in impact to inflation, and that is what changed the bank of england pricing yesterday. even though growth anemic, you are seeing potentially in implosion area impact from the rise of the minimum wage, as well as this expansion of government borrowing. 142 billion pounds more borrowing from the u.k. government. hence you saw the gilt market reaction. if we flip the board over, we could show you where gilts yield

started when rachel reeves started talking where they ended when she finished talking. pretty steady, then came the digestion of this budget. look at that move after she sat down and richie sunak responded to the budget. the 10 year gilt yield ending the day higher for basis points at 4.3 percent. so, the gilt market reaction pretty ferocious. actually not exactly what rachel reeves wanted, but not quite a lose trust moma either. next up on bloomberg we will bring you the opening trade. it will be speaking with the cfo of bmp paradox after they reported a boost from trading in just over 15 minutes we will have the ceo shipping giant maersk. the opening trade is next.

anna: good morning from london. i'm anna edwards alongside kriti gupta. we are an hour away from the opening trade. another big day for earnings