i think the bank of england _ of england move. gland are guilty of delaying and stepping in and putting up interest rates _ stepping in and putting up interest rates in _ stepping in and putting up interest rates. in terms of what happened with happened last friday with the bank of— with happened last friday with the bank of england intervention, they not only— bank of england intervention, they not only did absolutely the right thing. _ not only did absolutely the right thing. i— not only did absolutely the right thing, i think the explanation today is absolutely spot on. i don't think that is_ is absolutely spot on. i don't think that is alarmist, i think it is factually— that is alarmist, i think it is factually accurate. rememberthis, factually accurate. remember this, once it _ factually accurate. rememberthis, once it started it was a self—fulfilling prophecy. pension funds_ self—fulfilling prophecy. pension funds have to keep so much liquidity. _ funds have to keep so much liquidity, they have to be able quickly— liquidity,

tom: the bank of england governor triggers a selloff after confirming the end of market support. hours later, ft reports the central bank could extend emergency bond buying. cable and futures pare earlier losses. president biden admits a downturn as possible. the president also says saudi arabia will face consequences for the opec+ output cut. francine: we had governor bailey commenting get ready for purchases to stop in three days, then privately saying to ft they are not. i'm sure he is having a bad day. we will have a lot of boe speakers try to unpack what is going on. tom: it's the bailey bamboozle. the way the markets adjust, the report suggested the support could be extended but the whiplash suggesting they might step back on friday, and then the ft report, a bailey bamboozle rippling across markets. after five straight days of losses in europe and the u.s., a bit of a turnaround. ftse 100 currently up .1%, the spanish ibex down .2%, and gaining four or five points on the cac 40. let's see how things are adjusting. when it comes to the u.s., the latest official saying there

give me a sense of how long the bank of england can _ painful. bank of england can continue to intervene in this way? has it got unlimited reserves to buy what it needs to? ~ a ., unlimited reserves to buy what it needs to? ~ ,, ., ., needs to? well, the bank of england ultimately if — needs to? well, the bank of england ultimately if it _ needs to? well, the bank of england ultimately if it needs _ needs to? well, the bank of england ultimately if it needs to _ needs to? well, the bank of england ultimately if it needs to come - needs to? well, the bank of england ultimately if it needs to come is - ultimately if it needs to come is capable of creating money, that is what central banks do. the problem is that if you do that, and if you are doing it in order to stabilise a situation greeted by a government which is effectively spending more thanit which is effectively spending more than it can afford, you can run into all sorts of problems, not least inflation, which is already at a high level, starting to run out of control, to the bank of engla

the primary concern for _ bank of england. the primary concern for the _ bank of england. uk _ bank of england. the primary concern for the uk right - bank of england. the primary concern for the uk right nowl bank of england. the primary. concern for the uk right now is battling the cost—of—living crisis and the bank of england's mandate is by stability, so i think on the one hand they are due to increased interest rates. on the other hand they are somewhat engaging in easier monetary policy by providing a backstop as a purchaser of bonds, so it is a bit of a contradictory mandate which i think the bank is trying to resolve by concluding the first programme by buying bonds before it can continue with the interest rate hike pass, in order to bring prices under control. ,., , , order to bring prices under control. , , ., control. the pound is up a little hour _ control. the pound is up a little hour against - control. the pound is up a little hour against that - control. the pound is up a| little hour against that fall, straight after andrew bailey's comments, so we should k

the bank of encland that ten year period. the bank of england has _ that ten year period. d _ that ten year period. the bank of england has said it _ that ten year period. the bank of england has said it is _ that ten year period. the bank of england has said it is going - that ten year period. the bank of england has said it is going to . that ten year period. the bank of i england has said it is going to step in again today, what has that done? has a column the markets? yesterday, what we saw — has a column the markets? yesterday, what we saw was _ has a column the markets? yesterday, what we saw was a _ has a column the markets? yesterday, what we saw was a very _ has a column the markets? yesterday, what we saw was a very big _ has a column the markets? yesterday, what we saw was a very big rise - has a column the markets? yesterday, what we saw was a very big rise in - what we saw was a very big rise in guilt yields and particularly in index guilt yields, the bank of england responded to that this morning by expanding its programme and announcing it would be buying ind

the bank of england has supported them in that process. have also seen them selling other assets as well. has the bank of england done enough that it can withdraw this policy and monday morning we will see reasonably stable market? let's ask that question now of the mercer head of asset allocation. has the bank of england done enough? >> probably. pension funds over the last little while have been selling assets in order to raise cash to support their ldi programs. it's not absolutely certain that there's not more to go, but an awful lot has already been done. things should be reasonably stable next week. that's not to say we won't see some upward pressure on bond yields, but i would be surprised if we saw the sorts of moves that we saw a couple weeks ago. other thing worth noting in relation to that is the one thing that didn't happen it was perhaps odd to weeks ago is the traditional asset managers whether in the u.k. or overseas or hedge funds and the like, they didn't start coming in to the bond market to bite gilts. if gilts on monday

bank of england have two core — the bank of england. of england. bank of england have two core roles. the _ the bank of england. bank of england have two core roles. the first - the bank of england. bank of england have two core roles. the first disc- have two core roles. the first disc financial stability in the second is price stability, inflation. their message both in public and private is that theirjob on financial stability is nearly done. they've done what is needed to make sure pension funds have the space to get themselves sorted. on price stability, they been clear that in november when they next make an interest rate decision that will be a significant move and that will come after the government's economic plan. markets are pricing both of those things in. the key moments for the markets will be on monday morning i think rather than tomorrow to pension funds and financial institutions feel the action has been enough or are there still problems? and then keeping an eye on the politics. will things change? i think between now a

if the bank of england has to extend _ time. if the bank of england has to extend it _ time. time. if the bank of england | has to extend it doesn't look good on the bank of england governor who has adamantly said this week in washington, dc he will not do that? it is encouraging - will not do that? it is encouraging the - will not do that? it is i encouraging the private will not do that? it 3 encouraging the private sector to —— to get back to order, they don't affect the solvency of the pension funds but it does affect fluidity, you have a vast amount of transactions going short. and he is trying to put that through quickly if it does succeed in the timeframe of a week or two doesn't matter, what matters is that present —— pension funds get into the position they want to and markets become stable, going forward. to the us now, where there looks like no end to the strong dollar that's putting so much pressure on currencies around the world, not least the uk pound. minutes from last month's meeting of the us federal reserve showed policymakers determined to keep raising inter

let's switch over and talk about the bank of england. two parts of the bank trying to do two contradictory things. they have to sell gilts starting the end of october very distinct in approach of the monetary policy and financial stability. to what extent can the pound be supported by the bank of england next interest rate decision on november 3rd >> the bank of england finding it difficult with sterling since the may interest rate hike they hiked as expected in may it was 25 when sterling went down. interest rate hikes which have been coming at great increments have not necessarily been supportive of the currency that is largely, of course, because of the mighty dollar and interest rate hikes expected from the fed in terms of the uk, there is a little bit of a credibility issue here it comes backing to the original question the deficit. this is really important if international investors that need to fund this account deficit don't like the lineup of the fundamentals they see, they will not want to fund that deficit unless uk is cheaper

you do not want to be an opposition, but it is a different issue area because the bank of the blend is -- the bank of england depending on the central bank and doing things for them -- and straight down on them as well. i think the bank of england can probably intervene in the right way and do things easily then would be the case if greece had a difficulty. ♪ >> let's move to ukraine which endured a third day of russian missile strikes. dass is -- it's exhalation -- mass in -- cruelty on the war we will get moren the attack shortly. but let's look at the diplomatic developments in 50 western countries having a meeting at the headquarters of nato defensive alliance in brussels. they have pledged to continue sending ella terry hardware to ukraine for as long as it takes let's hear a little from secretary of state. >> ukrainian forces have used -- use weapons that -- helped ukrainian forces seized the initiative during counteroffensive. so we will continue to -- help ukraine in the current fight. i commend the contact group members who have moved heaven and earth to get weapons and equipment into the hands of t

i think it comes from bank of england sources — it comes from bank of england sources.ould _ sources. must be quite worrying you would think— sources. must be quite worrying you would think for the markets and for the government. there is also more criticism _ the government. there is also more criticism from the imf saying the uhfuhded — criticism from the imf saying the unfunded tax cuts are going to make the inflation situation worse. so there _ the inflation situation worse. so there is— the inflation situation worse. so there is nothing good in this for there is nothing good in this for the government. and it keeps the pressure — the government. and it keeps the pressure on the chancellor and the prime _ pressure on the chancellor and the prime minister. 1 pressure on the chancellor and the prime minister.— prime minister. i wonder what you both think of _ prime minister. i wonder what you both think of andrew _ prime minister. i wonder what you both think of andrew bailey's - both think of andrew bailey's decision to intervene again in public tonight. he was speak

now we are seeing the bank of england taking a step back. ere is a little bit of contamination of monetary policy. the bank of england are doing this at the behest more or less of the government we are seeing a situation where the bank of england is trying to prop the markets, they won't comment on pensioners funds could this is not sustainable down the line for -- down the line. we will see fears kick in and the recession will kick in and we will see the market reverse back to risk aversion in the u.k. manus: that is breathless, tom jump in. tom: it is fascinating, you talk about the boe and the reason to step back is to raise rates and tackle inflation. the governor has talked about that. what needs to come through to push that risk premium on u.k. assets lower? saed: i think what you would need to see -- one of the main issues we have to look at is the future of liz truss. if the p.m. stays liz truss, we will see considerable pressure on the u.k. as the integrity of the p.m. has been threatened. we haven't seen a government full apart so f

what we see with bank of england is this form of qe, which is a form of intervention. l see a lot of central banks worried about financial stability. they may have higher rates, but they will have to do some form of intervention on the longer term of the curve. war includes debt monetization and yield control, so i think central banks will be quick to the test in how they contain inflation pressures and anchor expectations, and that includes through balance book. you don't call it q. week, it is balance sheet intervention. . tom: always excellent, ludovic subran, allianz chief economist on the bankruptcy risk. we look ahead to key data, it is u.s. cpi day and how it can impact the fed's next moves. this is bloomberg. ♪ >> it's a pretty amazing environment, not to discount there is lots of risks in the world, we've never seen this kind of volatility. >> up and down, the ups and downs inter-day. >> there is a hunger, a risk appetite. >> equities and credit in a more bottoms up way is a journey we have been on, and you can expect us to keep mining that direction. >> we are

turmoil, the latest news follows the bank of england stepping up 4.6 billion pounds of gilts yesterday. let's bring in our chief rights correspondent for asia -- rates for spun it for asia. the bank having lived -- of england restrained the gilt market. what happens tomorrow when they close up shop on threadneedle street as buyers? >> some of the answer to that, what level of thermal we get, depends on what cpi we get and the way the u.s. treasuries market reacts. what we get out of the fed with guards so that -- regards to that and how much that plays into increased or decreased fed hawkishness. there is the possibility we get a fairly quiet finish to the week in the gilt market if uscp i can set the right stage. bailey's comments on wednesday or tuesday did seem to lead to a lot of selling overnight in the gilt market, and the boe came in and did a lot of buying and ultimately they settle down. they have gone the market used to the idea that yes, they really will step away, and if there are doubts about whether to sell gilts, now is the time to do it the concern is after they finishe

i have grave doubts about the bank of england policy. they are raising rates -- that's not what they should be doing. someone made a point that they should be the market maker of last resort not the buyer of last resort and i think that's right. i think many of the problems are self-inflicted. the pension industry loading up on derivatives to enhance yields then when the market moves a lot, suddenly it comes to a standstill. i don't think the bank of england should be the buyer of last resort. in the u.k., it's a foregone conclusion it's going to be a deep recession. kriti: thank you as always for your time and insight. we are getting headlines from neel kashkari speaking at a forum on food prices saying inflation is too high. we will bring you those headlines as they come forward. for now, a turbulent week ahead as the bank of england bond by plan is set to end. this is bloomberg. ♪ guy: the market bracing for a turbulent week when the bank of england this time next week exits the bond buying it is been doing not every day but some days

the bank of england could be looking to buy 5 billion pounds of additional gilts in its final day of ation. pricing in a fiscal u-turn, the bank of england's intervention set to end in a matter of hours. this is bloomberg. ♪ francine: welcome back to the open everyone. 30 minutes into the european trading day. risk on returns, european stocks extended their remarkable rebound that began yesterday on wall street. while guilt yields slide among u.k. government plans for abandoning tax cuts. kwasi kwarteng, the chancellor, flies back early from his u.s. trip. u.s. core cpi comes in at the hottest level since 1982 with inflation spreading deeper into the economy. a 75 basis point hike next month is all but solidified. markets seem to defy this rates outlook and the gloom in the economy. tom: it's remarkable given that hotter than expected cpi print out of the u.s. we were talking to is dean aquino -- kristine aquino earlier about three basis point hike sub 75 from the fed in november. maybe they are washing out short positions or there are technical factors at play, everyone trying to wor

this is tricky for the bank of england. e they decide on the wednesday, so three days afterwards. they are talking. they have the bank of england and treasury that get on the phone and talk to each other. area yes, the circumstances that they are happening are worrying. having to talk that much suggest something is not quite right. let's not forget history. i think the current prime minister and chancellor have more credibility. the market is looking very carefully at this pair and needs some strong signals on which direction we're going to go in. francine: do they need to work together? the fact that they spoke on the phone yesterday? how promising is that? not aggressive enough, an interest rate hike. a timid hike. they don't know what is coming up p. >> that is the central role. in a situation where it didn't know what is coming down the pipeline, it can't come up with policy decisions. it does leave the market in a difficult place. who does it pay attention to? how do you value u.k. assets when you don't know what the bu

jonathan: how is qt going to work at the end of the month for the bank of england? priya: exactly. we are waiting for october 31, i think the bank of england has to push out or be thought qt was priced in, but not now. i am started to see how the gilt market starts to stabilize. i think we will get something between now and october 31, so maybe qt exists but we would've had more details from the government as to if they are sticking to the other parts are other more u-turns to come. qt is a week stress point for october 31 but let's see. jonathan: i think a week is a long time and it is two weeks away. something happened this week and i can't remember it happening. the last time is when the thai baht -- bond -- when the italian bond market crashed. is this difficult transition we need to get used to? george: the backstops are gone. there is certainly an upsurge of selling, and much of what we have seen has been forced selling the central message for us is twofold. number one, fiscal policy matters and that came through loud and clear over the last couple of weeks. the central banks

there was a new report the bank of england is explored possibly extending. omes one day after the bank's governor said on the record they have no intention of extending the program, but in a statement in the last hour or so, the bank of england confirmed it will end its emergency program on friday. yes, a lot of back and forth let's take a look at what's happening with uk assets the benchmark 10-year gilt or treasury yield, 4.49%. you can see over the course of the last few days, just between 4.25% and 4.50% on the upside. there the british pound seeing some whipsaw action. we're up three-quarters, almost one full percent that's a lot higher. $1.57 will be what it costs to buy a british pound. >>> now let's get to this morning's top stories with president biden speak out on a number of issues at key play in the markets. silvana is here with that now. hi, silvana. >> hi, 2k078 the president is downplaying talks around a possible recession. in an interview last night, president biden didn't fully discount the odds of a fullback happening but said they were very

we had this intervention for mark carney, who was the governor of the bank of england. day, having a partial budget in the circumstances of the tough global economy, tough financial market position, working at cross—purposes with the bank, has led to dramatic moves in finance markets. is there a perception that the bank and the government are doing two contradictory things? it is more than a perception. the bank had to intervene to correct the damage the government had caused, by buying back bonds and by raising interest rates. it is moving in the opposite direction, but if it had not, who knows where we would have ended up if there had not been an intervention? this goes back... what the bank did was to try to restore confidence in both the economy and the currency. and this was necessary because the government itself had removed all the guardrails. the 0br and... nobody believes in this plan. but the fact that they had not published and still have not published any assessment from 0br means that what we are seeing is magical thinking. we are not seeing an objective ass

october prior to the bank of england's end of support on friday. 0ctober14. the bank that support will continue. —— hints. the statement from andrew bailey meant to be a wake—up call? i think so, the bank of england communication is very closely watched by the markets and traders of all types and they are all different levels of communication. in a way it is confusing but not necessarily surprising we get this public message of a warning, get your house in order, you've got three days to get this done and privately, a reassuring that they are not going to just let things go under, if it were. as you mentioned, the comments from the regulator this morning, that comes after the pension and life term savings association has called for support in the bank of england to be extended beyond friday, essentially saying though that is sitting most concerning, pension funds, essentially the pensions regulator have to respond to the public comments, not the private reassurance, and they've said it really is time in the next few days to sort out the balance sheets, to wor

the inflationary challenge, even though the bank of england is tackling it, will take a long time to come under control and a lot of it is not within the bank of england's gift. perhaps it is not too far away before the inflation delta starts moving in a more favorable direction. francine: thank you so much. coming up, we will have a full round of markets and why it is getting harder to justify the fed's independence. we will discuss that next. this is bloomberg. ♪ tom: welcome back to the open. gains of 0.5%. the futures stateside .2 further gains. 1.4% on the s&p. the boe will push out its plans to start qt. a little movement in the gilts space. let's get back to the fed. it says it is getting harder to justify the independence of the fed. controversial comments. he said an independent federal -- joining us now or staying with us is ben gutteridge from invesco asset management. fred independence, he was out early and outfront criticizing the fed for not addressing the inflation challenges. is this a challenge to independence? ben: i would not question his opinion so relative to my o

the bank of england spoke today of a �*material risk�* to the uk's financial stability, but tonight, d that its emergency support programme for the bond market would end on friday. the chancellor will be in washington tomorrow to meet officials of the international monetary fund, so let's join our economics editor, faisal islam, in washington with the latest. another day of unwanted drama in those financial markets, particularly the markets for uk government's debt. in the morning and emergency action. unprecedented. the bank of england says it is to shore up the market and to secure certain areas of the pension fund industry. by the evening, the bank of england saying to an audience of bankers on the margins of this imf summit that there were limits to this emergency action. that had an impact on the stirling market but there might also be a consequence for the government, too. facing the markets directly, andrew bailey meeting with the world's top bankers in washington, dc on a day of a further emergency intervention for the financial market. the source of the issue remains the mark

yesterday at the imf meetings, andrew bailey, the governor of the bank of england, came underfocus. he bond market to help ensure the viability of many pension funds. he insisted that the current bond buying programme would come to an end this week, a move not welcomed by the markets. sterling has fallen in response to what you said, that they have three days. does that complicate matters? no. i'm afraid this has to be done for the sake of financial stability. since the mini budget on september the 23rd, the pound has slumped in value against the dollar and the cost of government borrowing has risen dramatically, which has sent a fixed mortgage rates rising at record speeds. the city is desperate for clarity on how the chancellor's proposals will add up, and although he has brought that date forward to the end of this month, to many, that is not soon enough. the first thing is that the chancellor needs to reveal his plan. the government is playing its cards either very close to its chest, or literally doesn't know what its hand of cards is. growth right now also looks hard to come by

bank of _ mini budget. ultimately, do you think the bank of england's - mini budget. will continue beyond friday? we have heard pension funds for example saying theyjust need some support to get through the next few weeks until the 31st of october when we are expecting to hear more detail from the government on how it's going to pay for its plan. isn't essentially the job of the central bank to offer that sort of support? we have had these mixed messages from the bank of england, there is what andrew bailey said yesterday that he would have thought was extremely clear, they have been reports as you mentioned in the morning financial times that the bank is prepared to continue with support in some form. my guess is what that means is the support will continue in some form if it is needed, and it will be more closely targeted, but the bank wants to end the scheme it announced just after the scheme it announced just after the mini project. the scheme it announced “ust after the mini pi’oj'ect-h the scheme it announced “ust after the mini project-h the scheme it announced

bank of — outlook? this dilemma is with the bank of england _ outlook? ok? this dilemma is with i the bank of england moved more slowly than market is expected last time around, if the bank of england terrified in the long—term damage of inflation and may view an economic slowdown has the short—term pain with paying for the long—term going of bringing inflation back, the government probably wants some growth out there and may view a recession is a bigger danger than bashan because inflation means unemployment, voters will be unhappy about inflation but were unhappy they lose their jobs, so you have a tension between the two, bank of england more worried about inflation, government more worried about recession another reason why the pound is under pressure because you have this divergences between the two leading institutions that control the economy. minister yesterday _ control the economy. minister yesterday interviewed - control the economy. minister yesterday interviewed by i control the economy. minister yesterday interviewed by my l yesterday interv

>> markets uprising 96 basis points of rate increase november 3, the bank of england have already been hawkish in the past few days. and the bank of ireland governor has said they will raise rates as needed. the inflation print we got this morning, retail price inflation which is the measure of inflation -- has already gone up 12%. the boe does not have time on its hands, it needs to raise rates, the sooner the better, the interest rates and the u.k. benchmark are not in neutral territory yet. the bank of england -- before the economy starts showing pressures, and therefore the back will raise rates 100 basis points on november 3. francine: they are pretty decisive on going ahead with qt a couple of days before the november meeting, how much will that change financial conditions? how much effectively is a tightening the economy? ven: at the pace they are going, i don't think it will be too much for markets. previous estimates are that team lead to increases for the entire year four quarters will be roughly equivalent to one hike of 25 basis points, so i don't think markets will -- back

the bank's _ of england. we heard this from the imf. the bank's focus _ of england. something before the 315t of october because markets are just not really happy. for the latest information on the economy and politics, go to the bbc news website or the bbc news app. a nurse accused of murdering babies on a neonatal ward tried four times to kill a premature baby girl before succeeding, a court has heard. lucy letby is charged with murdering seven babies and attempting to murder 10 others at the countess of chester hospital in 2015 and 2016. she's denied the charges. our reporter rowan bridge has been following the case at manchester crown court. today is day three of the prosecution outlining their case against lucy letby who was accused of murdering seven children and attempting to murder a further ten. the babies in question all have anonymity orders in place, so we are addressing them by letters of the alphabet, and there was more traumatic and disturbing evidence of the jury heard this morning and much of the morning was spent dealing with a child described as chi

this bank of england letter, talk us through that.— bank of england letter, talk us through that. ingj through that. this is the bank of. england explaining its reasoning for what happened last week. in the wake of the mini budget, which wasn't all that mini, essentially the uk's financial credibility was trashed on the international markets which made uk debt far less attractive than it had been, which meant people were trying to off—load it and sell it quickly, which could potentially have put uk pension funds at risk. not to be alarmist because i know digby will gets upset about that, but it could have triggered a new financial crisis. if you have these financial crisis. if you have these financial institutions trying to

it reflects andrew bailey, the cover of the bank of england morning through the night he said somethingarlier this afternoon that the governments... sorry, the banks of funds rescue for pension funds, they're willing to buy guilds up to 65 billion will end on friday. absolutely, that's the deadline. and so pension funds have got to get their acts together before then. a warning. and it has sparked a certain amount of turmoil in the markets again. it tells us two things. one, this isn't over. in fact it is still running as seriously and probably as it was straight after the many budget. and second,it straight after the many budget. and second, it points out that there are some really difficult problems down the line. because within a few weeks the line. because within a few weeks the chancellor has to explain how he's going to find 62,000,000,000, some say of public funds to pay for these tax cuts that he has promise. that's going to be extraordinarily difficult. some of the turbulence in the market is i think markets just don't believe he's going to be able to do it. �* , , ., :: :: to

is it because they want to give the bank of england the room to hike more? m curious. 10:00 a.m., the bank of canada rate decision and will there be a step down? canada has been a front runner when it comes to setting the tone. the highest levels going back decades at 4.2%. after the bell, meta-earnings come out. it's facebook but this follows what you were talking about with google and microsoft. i am curious about how much meta-will confirm the advertising slow down. the twitter deal is getting done and that's interesting. jonathan: i wonder how the banks feel about that. lisa: resigned. it will be about a $500 million charge offer them and it seems like they are not pushing back stop jonathan: if they realize the losses, will they sit on this for a long time? lisa: elon musk was participating. jonathan: we will see how this turns out. the portfolio manager for the black rock fund joins us now. we've had some bad news for a couple of days and treasuries are rallying. what is your understanding from the data and the way the market is responding? >> good morn

of how long the bank _ extremely painful. give me a sense of how long the bank of _ extremely painful. give me a sense | of how long the bank of england to buy what it needs to?— what it needs to? the bank of encland what it needs to? the bank of england ultimately _ what it needs to? the bank of england ultimately if - what it needs to? the bank of england ultimately if it - what it needs to? the bank of england ultimately if it needs| what it needs to? the bank of l england ultimately if it needs to come is capable of creating money, thatis come is capable of creating money, that is what central banks do. the problem is that if you do that, if you are doing it in order to stabilise a situation created by a government which is effectively spending more than it can afford, you are going to run into all sorts of problems, not least inflation which is already at a high level, starting to run out of control. the bank giving that is in charge of keeping things stable, that is what it wants to do. it will intervene as much as necessary to avoid a crisis but ultimately, it is the government�*s job to balance but ultimately, it is the govern

of the fiscal plans in the u.k. this will be done in coordination with what central banks, bank of england is trying to implement. ank of england has been trying to do, it's been trying to do its job, maintain price stability as it should as an independent central bank, and at the same time, addressing financial stability issues. we are trying to address this localized market dysfunction, and at the same time, fiscal policy moving in a direction that is more consistent with what the bank of england needs to do. dani: how much does it need to move from where it currently is? we saw them back off of the 45% tax bracket, no longer doing that. but we have the institute for fiscal studies saying that kwasi kwarteng need to find 50 billion pounds in savings to shore up confidence, which means slashing public spending. is that enough to give you comfort, do you need to see a full u-turn of policies from this u.k. government? pierre-olivier: too early to say because we have not seen the details of what is in the u.k. plan. they will announce later this month. the general point from our perspective is, of course, there is

the questions i asked were about the bank of england. red the chancellor and the prime minister that they are there as well. that doesn't mean that you don't need to review the remit of the bank of england. it was due for a review before the change of government. that is not an outlandish thing to say. that has been critical for confidence in the markets, and independent bank assessment. that has cap lower interest rates. lizzy: anthony browne, member of the treasury select committee, thank you for joining me. for now, we wait for kwasi kwarteng's speech. i am sure investors will be on every syllable. alix: we will get you back in the next hour to preview that. expecting that to happen around 11:15. great work from there, lizzie borden. back to the markets here, opec-plus considering cutting oil output by more than one million barrels a day when it meets in person on wednesday for the first time in two years. oil is climbing. this is bloomberg. ♪ >> this is bloomberg markets. coming up, this is bloomberg. keeping you up to date with news

government is planning to take will actually spark more inflation, which will make the bank of england'sder. right now we have the government and the bank of a glint -- england really working against each other. it is hard to predict how that will play out in the next six months to one year. if the government persists and cannot find the cuts it needs, or they are politically rejected, inflation may get worse. lewis: thank you. stay with us on "outside source ." still to come, y strikes on iran's oil factories could have a big impact on the economy. and an update on the protest movement. ♪ >> in the marina area where most of the damage was done, they are more conscious than ever abo how much was destroyed. >> since he was last year, he has gone from a little man revolutionary, to an experienced diplomatic operator. >> it exploded on the fifth floor of the grand hotel, ripping a hole in the front of the building. >> this government will not weaken. democracy will prevail. >> it filled me with humility and gratitude to know that i've been chosen as the recipient. >> this catholic nation he

he is the deputy governor of the bank of england. we have to leave it there, thank you. _ let's get some international perspective on what's going on in the uk now. japan has a massive national debt — far more than the uk, at around $12 trillion. it's 2.5 times the size of its economy. seijiro takeshita is a former banker here in london — now teaching at the university of shizuoka. there is a big difference between japan and there is a big difference betweenjapan and the uk, namely that the people who own japanese companies, they are japanese companies, they are japanese people themselves, whereas here in the uk, we are very much at the behest of foreigners. how much difference does that make, and is there such a thing as taking back control and taking back sovereignty?— control and taking back sovereiun ? ., , sovereignty? well, actually, that is one _ sovereignty? well, actually, that is one of _ sovereignty? well, actually, that is one of the _ sovereignty? well, actually, that is one of the reasons i that is one of the reasons ja

the bank of england intervenes again to buy more government debt in an attempt to calm investors. the bank said it acted because of a material risk to financial stability — as the fall—out from last month's mini—budget continues. as unemployment drops to its lowest level for 50 years, some businesses are asking — where's the staff? we were 30—a0% short of people in may, and that resulted in us losing some of our asparagus crop, and also some of our spring onions, which actually cost us, as a business, quarter of a million. we'll be asking what's going on in thejobs market and the financial markets — as mps return to westminster today. also on the programme... a second day of long—range air strikes by russia on ukrainian cities and infrastructure. the supreme court considers whether the scottish government in holyrood can call an independence referendum without the agreement of westminster. and the prince and princess of wales at radio 1's newsbeat — recording a special episode on mental health. as we said at the start of this special newsbeat, this is all about having a meaningful

francine: kristine, how does that tie into the bank of england and their qt program on november 3? kristine: it is going to be another communication challenge for the bank of england after a series of challenges on that front already. they are going to have to navigate what we are going to be seeing from the government, whether that 31st the school statement will proceed and what they will be doing from that -- 31st fiscal statement will proceed and what they will be doing from that. andrew bailey has been reassuring markets because this is what investors are looking to at the moment despite the political turmoil in terms of the new prime minister. they want to see that the institutions of government and policymaking are still intact. it will be key what we hear from andrew bailey following if we do get a delay to the fiscal statement. francine: thank you both for joining us. stuart wallace and kristine aquino looking at the markets. we will have plenty more from westminster and london. coming up, we discussed the u.k.'s political turmoil and what it means for growth prospects with

this is not the bank of england banking -- buying everything you want to sell them. it and be choosy of what they buy. they are not buying everything. i think i has been a less useful product. they are running out of time. i think it reinforces the idea that there is still a long way to go. maybe not has -- not as much as been unwound is because the market is looking for more time that will not be delivered. i think it is huge amounts of confusion. lisa: i feel for guy essie tries to parse through this. this is young trying to explain policy that is a paradox. they are allowing and an easing or unwinding and will find inflation using similar types of tools in terms of raising rates. it is mind spending. jonathan: i can see where they are sensitive about the dominance of the fiscal dollar. will they accommodate what this government will do. when they first came up with the gilt market, they were accommodating what fiscal markets would decide to do. i think this is why we are seeing this kind of language from governor bailey. since i get from him and the way he spoke ye

the bank of england will start late bond sales early next month, but it will initially exclude long-datedt at the heart of the recent market turmoil. the announcement comes as the central bank is on the defensive, the recent mini-budget forced it to start buying gilts in order to prevent a fire sale by pension funds. global news, 24 hours a day, on air, and on bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus: it's day break europe, i'm manus, with dani. dani: liz truss faces a crucial showdown. netflix can chill. shares shot up after posting a beet in new subscribers after a year of lower results. european earnings getting into gear both asml and nestle sales beat estimates. manus you arved i had an eye on the bank of america showing we're near capitulation but our guest said there's too many risks with a u.s. mid-term, maybe the worst isn't over. manus: there's a desperation in the air. look at back-to-back gain, nasdaq up over 4 hct, i think when you look across the asset classes it is that desperation that ther

remarkable language from the bank of england. >> absolutely. in and of itself, that is quite worrying, the fact that they are referring to what they are seeing in markets is a firesale. that is partly probably why we are not necessarily seeing the intended effect of the boe's measures in the market. they do continue to selloff. recent action prompted by yesterday selloff in index link to gifts specifically. quite a large proportion of holdings by a lot of pension funds. the fact that we are seeing the selling off as well, clearly worrying the boe as they decided to step in with more measures. it will be interesting to see how far the boe is willing to go in terms of its support for bond markets and whether this does factor into their longer-term policy trajectory when it comes to the process of quantitative tightening or rolling those previous bond purchase off their balance sheets. francine: we will talk about the bank of england, but do you think there is a willingness for central banks to do more or does this just hang in itself? >> there is

you have three days left, you have to get this done. >> the bank of england can talk tough but fundamentallyhave to extend this. >> they are trying to hold things together as best they can. >> the confusion i think comes between the financial side of the bank of england and the monetary side, which are trying to do two different things. >> monetary and fiscal policy being across words with each other is a very dangerous cocktail for a markets. >> it has been trying to maintain price stability and at the same time address financial stability issues with its other instrument. >> this is not yet looking to me like a very steep and deep recession. >> i do not think we are at risk of a financial crisis. >> i think they have to come up with their version of whatever it takes. >> by this time next year the bank of england will probably be cutting interest rates. shery: economists and bankers giving their take on the boe and what is next for the u.k. economy. our next guest says the british pound is currently a fast moving target. let's bring in ray attrill at national bank of australian. good to ha

it made a lot of sense for the bank of england to do with the dead. hat happened the following day. it's worth adding that the bank of england also announce on that day when it raised rates that it was going to start selling bonds it had acquired during the period of supporting government in this fiscal expansion. and in covid in particular so they were going to start selling those bonds, about 60 billion for this financial year, the markets i think would have accepted that. then of course gain the extra tax cutting measures, which i think gave them market a bit of indigestion. we saw what happened with the guilt. of indigestion. we saw what happened with the guilt-— with the guilt. indigestion is a aood with the guilt. indigestion is a good word- — with the guilt. indigestion is a good word- i _ with the guilt. indigestion is a good word. i wonder- with the guilt. indigestion is a good word. i wonder if- with the guilt. indigestion is a good word. i wonder if there i with the guilt. indigestion is a | good word. i wonder if there is with the guilt. in

for economy is the independence of the bank of england.— economy is the independence of the bank of englandr bills, apply for a mortgage, one showing their pensions drop? i’m one showing their pensions drop? i'm not one showing their pensions drop? i�*"n not pretending we are in an easy circumstance also dealing with inflation is one of the hardest things central banks and governments have to do. the tightening of monetary policy the bank of england has embarked on leads to higher mortgage rates. that is a decision quite rightly taken permanently by the bank of england but it's hard to see it had any choice against the background of rising inflation. as regards pension funds, there does seem to be a problem with some pension funds having invested in a low probability product and that has affected some of them. with the valuations, the valuations of bonds, there is the interesting question of whether you should value them on the basis they are going to be held to maturity because a lot of pension funds that are matching assets and liabilities will in fact be holding assets to maturity rather

jon: what about the world bank and the billions of people in the world who huge of the bank of england of england? david: people in developing countries are seeing their currencies get weaker and a lot of their debt is in dollar terms. as the currency gets weaker, the burden goes up, interest rates go up. it's a trifecta of triple burden going on in those countries. many of them have built up debt at the moment because that was the cyclical, the countercyclical response. there has been a lot of talk the past couple days about how to have a better debt restructuring process for the countries that hit the wall. tom: somehow seeing from currency to jacob frankel and the foreign exchange, that modern equivalent in the derivatives space with the immediacy of overnight swap and your bear stearns tenure, do you feel we have a stronger structure now with swap agreements with rich guys, the fed, to allow the world bank community to have liquidity in these distorted times? david: developing countries have this challenge with finding a swap by but for the poorer countries in general they don't. t

that means the bank of england on the back of the u-turn we have seen, but the bank of england would need to do in the immediate future is less than what was feared. all of that perfectly makes sense. that said, we need more details for the market to stabilize at these levels. guy: do you think the bank of england can conduct qt in this environment? >> i think it is up to the markets. it is still up for debate. conditions from a week ago to now have improved. there is a fairly complex arithmetic to deal with. we are not in clear waters yet. that just means we need more details to come on the fiscal front and to be focused on what the bank of england would say in the next meeting. alix: especially when there were problems before this. you mentioned the bank of england. how much do you think they will be able to hike? many were looking at 100 basis points. do you think they can hike less? what do you foresee? >> our economists expect 75 basis points. alix: do you think that is priced inappropriately -- in appropriately? >> i think it is much closer to being priced in at this point. guy:

the bank of england is announcing an expansion of the emergency bond buying operation as it looks to restore calm in the bond market. jpmorgan chase ceo jamie dimon is warning the economy will fall into recession in the next few months all due to inflation and quantitative tightening by the fed. speaking to julianna tatelbaum in england, he says this could be more to the down side for the s&p. >> where do you see the s&p? >> i don't know. it may have a way to go. it really depends on the soft landing or hard landing. it is hard to answer that. it could easily be another 20% the next 20% will be more painful than the first rates going up 100 basis points. people aren't used to it i think negative rates all of a sudden will be a complete failure. >> it could be an easy 20% drop says dimon we will have more from julianna's interview with jamie dimon later on this hour let's bring in chief investment officer and josh wein at the hennessey funds. peter, we will start with you. we know the bank of england has intervened to stabilize the bond market there we see some of the effects play out

>> the bank of england is in a difficult position. hard to say which of those will be the worst scenario. i think that is why you were getting these mixed messages coming out from the bank of england. broadly, what they will be trying to do is ensure that pension funds have got necessary liquidity on an ongoing basis to make sure we don't have a financial accident happening in the u.k. at the same time, the bank of england is trying to raise interest rates in the economy across the curve to tighten financial conditions broadly and reduce inflation which is what sparked all of this. two objectives could be in conflict if governor bailey says this will be open-ended. that is part of why giving these comments to say this is temporary, while in reality probably going to extend liquidity provisions on a non-determined basis if pension funds continue to have liquidity challenges. dani: can they really do both? can he attempted to tighten financial conditions at the same time he is trying to ensure that financial stability remains in check? t