truss moment. freya: yeah, the budget is different from the -- from the liz truss budget.ll be inflationary because of national insurance contributions. what was done was to change rules to preserve the ability to invest, in fact turning to negative shocks it's the and ability at the supply side to respond to demands that creates the correlation, think of it as the hedging of the bond market is -- is reduced because inflation is coming into the system destroying -- destroying demand. everything is going in -- in -- in -- in the wrong direction. it should be a for preventing term premium, it's a little bit psychological. tom: market pricing in fewer than two cuts from the bank of england through this -- through this year. you see that is hawkish? freya: we should listen and the inflation is not systemic, the way in which we differ from the boe is inflation is a solution requiring rebalancing through immigration or other means so the -- the -- the inflation should work its way through -- through the system and in -- in -- in that medium is -- is -- is the wrong kind of infla

global investors were horrified by liz truss's kamikaze budget.ration was left out of control and there was a botched merger of this department under borisjohnson. and political gridlock under theresa may, and this undermined the negotiating ability that most of the world considers to be brilliant at. and of course our armed forces were damaged after david cameron plasma cuts. and the fcd oh was rudderless with seven foreign secretaries in seven years. second — we have to accept that there is no going back, we must stop there is no going back, we must stop the 1990s clouding our vision, the post cold war peace as well and truly over. this is a changed strategic environment. the number of conflicts higher than at any time since 1945, the spectre of famine from gaza to sudan and most refugees and displaced people on record. i have occasionally asked on my travels here and on the doorstep of the country, when will the kremlin threat, this upheaval we are experiencing end? when will things get back to normal? my answer is that they will not. europe's

him that part of this was the inheritance this government is having to deal with from the liz truss mini budgethi sunak�*s government. this is what he said in response to that criticism. the first thing we did in the government— the first thing we did in the government was— the first thing we did in the government was to - the first thing we did in the government was to talk - the first thing we did in the government was to talk the economy— government was to talk the economy down,. _ government was to talk the economy down,. they- government was to talk the economy down,. they then | government was to talk the - economy down,. they then ramped up economy down,. they then ramped up all— economy down,. they then ramped up all these — economy down,. they then ramped up all these taxes _ economy down,. they then ramped up all these taxes on _ economy down,. they then ramped up all these taxes on business - up all these taxes on business which — up all these taxes on business which has _ up all these taxes on business which has had _ up all these taxes on business which has had the _ up all these t

business confidence has dropped to its lowest level since liz truss's miniature budget more than twoey. in the majority of firms expect prices to increase as they pass on higher taxes -- taxes and a jump in the minimum wage. the lobby says business conditions are weak and more firms have slowed investments than accelerated it. and joe biden is set to ban new offshore oil and gas development across some 625 million acres of u.s. coastal territory. the move is designed to protect coastal waters in the communities that depend on them from fossil fuel development and the risk of oil spills. bloomberg understands biden is keeping the door open for new oil and gas leasing in the central and western portions of the gulf of mexico. shares of nippon steel are falling after joe biden blocked a planned takeover of u.s. steel siding a threat to national security. let's bring in kriti gupta. not unexpected, the decision from biden. what is next? >> this used to be the world's first million-dollar company that helps with the war effort in europe way back in the day. this is considered a company th

with liz truss in the mini budget. markets will react if they think you are likely to accelerate inflation. you will see that in interest rates, movements, spreads, and so forth. i don't have the nt is the right word, but i do think it's a right way to attribute policy when you think about inflation. investors and traders will be walking -- watching for heightened inflation risk if they decide the trump republican policies are likely to push inflation up. scarlet: do you see the 10 year going up as t. rowe price has warned? stephanie: anything is possible, but i'm not looking to see that sharp of a movement. scarlet: stephanie, always appreciate you joining us, thank you for coming into the studio. stephanie kelton, stony brook or. coming up, new alternative to cable after fumo in disney announced they would combine live tv business sees -- businesses. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elepha

having flashbacks to liz truss and to the budget.saw the pressure on the pound, those dynamics suggesting the fed is turning sour on u.k. assets. what is rachel reeves to do? >> let me give you the big picture, the labour party really contrasted themselves with the conservatives by saying remember the specter of liz truss? rachel reed has put herself in a straitjacket, she said there will be no more tax rises, no austerity, one physical event in gear and she will stick to her fiscal rules of only borrowing to invest. she has really box herself in here. this is high risk because at the october budget she left herself a big margin for error, really relying with a hope and a prayer that the economy was going to grow. we know that growth has been in the doldrums, so then after the budget, she sat down and had the yield spike and pretty much the headroom was evaporating. now we've got the global bond rout and she is really boxed in. so what is she going to do? she tried to calm the market yesterday, she's off to beijing at the weekend. th

the argument was the same one used by liz truss after the many budget which was not given much credencethe labor market. rachel reeves came in a government promising higher growth, economic stability and six months in her project is close to being in tatters as she struggles to maintain the confidence of financial markets. let's bring in lizzy burden for the latest. what we could spend for u.k. assets, a reminder of the pressure on rachel reeves. talk us through what's been happening with darren jones and the labor government response. will it be enough to assuage investors? >> it fell to jones to defend what was going on. he described the moves as orderly. the pound has been at its lowest in over a year. that plus the rise in long-term borrowing costs have drawn these comparisons to liz truss so orderly is not quite the language being used on the trading floor. you have citigroup jokes swirling that it is the great british peso. wells fargo saying there's room for the pound to drop even further. to be fair, sarah bredon at the bank of england also used the word orderly. that suggests t

budget deficit. annmarie: what does that liz truss moment look like in the u.s.? there is still significant budget deficits and we have significant issues with t-bills outstanding and short dated and need to be rolled over, we still have qt, and on top of that if we have new fiscal deficit spending at a number bigger than with the market is expecting, it raises the plitye might have some situation with the markets say that a lot of treasury issues. we have had discussions every day when we have a treasury auction around the metrics on the auctions and what are the numbers tell you in terms of the overall fiscal sustainability? jay powell keeps pointing that out that it is unsustainable. jonathan: you wrote about a closing out 2024. the risk of a 2022 repeat, how great is that risk? torsten: much higher than what the probability is signed by the market. the 60/40 portfolio underperformed. rates went up and inflation was going up and at the same time stocks went down. now the nike solution -- swoosh has been flattened out. we have a few cuts priced in. imagine this e

budget, the concerns are mounting with what is going on with the fiscal front. there are unfunded tax cuts that are familiar to uk listeners with what happens under liz truss and howhat all ended and how it will be funded and the bond market is telling us at the long end of the curve it will be a lot more issuance for headwind for treasuries. >> i want to talk issuance and before we get there, i want a call from you. will we test that 5% level >> is there there is a risk in market that we could test that level. we would prefer to be exposed to tips and inflation linked treasuries in the u.s. because of the concerns, the potential for upside surprise to inflation in the u.s in the uk, we think the outlook is much better not only because the outlook is different, but inflation which has been sticky in the u.s. and uk, we think there is room for inflation to surprise to the downside in the uk because it has been are driven by services that services inflation has been driven by wages. when you look at the jobs market which ultimately is going to dictate where wages are, it does show signs of material calling in the uk. anecdotally, we have seen the ceo from reed sayin

truss budget. before that, we didn't know whether— truss budget.e able - truss budget. before that, we didn't know whether they were able or - know whether they were able or wilting _ know whether they were able or willing to — know whether they were able or willing to do _ know whether they were able or willing to do so _ know whether they were able or willing to do so and _ know whether they were able or willing to do so and now- know whether they were able or willing to do so and now that i know whether they were able or. willing to do so and now that would be willing to do so and now that would he at _ willing to do so and now that would he at the _ willing to do so and now that would he at the hack— willing to do so and now that would be at the back of— willing to do so and now that would be at the back of the _ willing to do so and now that would be at the back of the minds - willing to do so and now that would be at the back of the minds of- willing to do so and now that would be at the back of the minds of the i be at the back of the minds

liz truss's mini—budget the conservatives mini—budget crashed, the economy sent mortgage rates spirallingut pensions in peril. i will never play fast and loose with the public finances because when you do so, you put family finances at risk in their clamour to cut taxes for the richest. they crushed the economy. >> well, she doesn't really have a clue, does she.7 read >> well, she doesn't really have a clue, does she? read rachel is now facing a government debt crisis all of her very own last week. the cost of borrowing reached the highest level it has been this century, surpassing the days of the truss—kwarteng mini—budget. debt to gdp is now over 100%. that means our debt is larger than our economy. for the first time since the 1960s, which is all a bit of a problem because we've found that the gilt market is the ultimate measure of confidence, and confidence is evaporating. and instead of focusing on her job and answering questions at home to reassure the markets over the weekend, she swanned off to red china to perform a ceremonial kowtow in the hope that it would yield a paltry £600

they highlight a report stating the economy, they say, actually grew faster after the mini—budget. trussnding that sir keir starmer stops repeating the claim or face further legal action. farmers are voicing their frustrations and protesting outside this week's oxford farming conference, with the government facing mounting criticism over their policies. concerns are growing about tax changes and a lack of support, with many in the agricultural community saying they feel overlooked. in his speech to the conference earlier, the environment secretary, steve reed, unveiled labour's long term vision, including a 25 year farming roadmap focusing on, he says, boosting profitability and ensuring food security. his speech follows strong backlash, though, from farmers over last year's budget, which included and introduced inheritance tax for agricultural businesses worth more than £1 million. weather, news and travel chaos continues to sweep across the uk as heavy snow and winds have caused widespread disruption. temperatures plunged to —11 c last night, with more snow and ice warnings still in pl

problem, you're seeing it elsewhere as well, but because we had that focus in 2022 with the liz truss budgete been on the uk for a while, and i think investors are not entirely convinced that we are on a secure physical —— fiscal footing and that his wife uk bonds underperform global peers. but make no mistake, this is a global trend... i mistake, this is a global trend- - -_ mistake, this is a global trend... ., ., ., trend... i was going to ask you whether we — trend... i was going to ask you whether we are _ trend... i was going to ask you whether we are seeing - trend... i was going to ask you whether we are seeing the - trend... i was going to ask you l whether we are seeing the cause of borrowing rising for other governments around the world as well? ., governments around the world as well? . ., ,, ., , well? yeah, we are. the us has had the highest _ well? yeah, we are. the us has had the highest increase - well? yeah, we are. the us has had the highest increase in - well? yeah, we are. the us has had the highest increase in the l had the highest increase in the cause of borrowing ove

the dispute focuses on the aftermath of truss's mini—budget in september 2022, which of course causedt turmoil but did not lead to an economic crash, according to her team. they highlight a report stating the economy actually, they say, grew faster after the mini—budget. liz truss is now demanding that starmer stops repeating the claims or face further legal action. and turning to the latest developments in los angeles, where they are battling a most, the most destructive wildfires in its history. with six blazes now raging out of control and five lives sadly lost, high winds of up to 100 miles an hour have spread flames across more than 26,000 acres and forcing more than 137 evacuations. it's also left hollywood streets in gridlock under thick smoke. firefighters face water shortages, taking supplies from swimming pools, while the mayor has defended cutting £17 million from fire budgets last summer. overnight, new fires also erupted in hollywood hills and in acton, with more evacuations now underway. royal news and the princess of wales is celebrating her 43rd birthday today, after p

what's been going on with the economy is any worse than liz truss's mini—budget of 2022.ord walney, the government's independent adviser on political violence and disruption, will be with me to discuss the latest on the grooming gangs, child rape scandal and why labour is still blocking a national inquiry. and we'll be looking ahead to president elect trump's upcoming inauguration and also reflecting on the devastating wildfires in los angeles, with jennifer ewing of the republican overseas group. another 90 minutes of punchy british politics lies ahead. don't go anywhere. but first, let's delve now into the sunday papers with former conservative special adviser james price, who joins me this morning. james, lovely to see you. good morning. right. great story on the front of the mail on sunday by the political edhon on sunday by the political editor, glen owen and his deputy, anna mikhailova, musk and cummings in plot to sabotage uk politics. so this is the suggestion that behind every elon musk tweet is dominic cummings, formerly or best known perhaps as boris johnson's

everyone will remember, of course, that after liz truss's mini—budget, whether or not you believe thatwas caused by the mini—budget, inflation rates jumped very high, causing a lot of mortgage pain for people. it's not looking like it's going to jump that high again, but we are expecting a little uptick. >> why do you say that? it's not very far away is it. it's i mean it's more of a slow motion thing than it was. >> yeah. it's definitely not a pretty picture at the moment. and there'll be a lot of concern in the markets that rachel reevesis in the markets that rachel reeves is in action on a number of issues, particularly around employers. and i from the budget, which is a huge pressure point on lots and lots of small and large employers will not will not help. yeah. >> isn't this all about confidence? doesn't the economy operate on confidence. and you know, we borrow money. we lend money. we do things because we have some degree of confidence. and i just got this feeling there was that speech that starmer gave. the things can only get worse. i mean, they both look miserable. there's

how does this compare to the bond market, the reaction to liz truss�*s mini budget in 2022?e chart here. the rise in recent weeks was not as sharp as in 2022 but of course now it is at a higher level thanit course now it is at a higher level than it was back then. so why does this matter? essentially, this blue line determines the rate at which the uk government can borrow money and the rate it has to pay on its debt bill. so the rise in this sense the budget last year is estimated to debt bill. so the rise in this sense the budget last year is estimé blue o this matter? essentially, this blue line determines the rate at which the uk government can borrow money and the rate it has to pay on its debt bill. so the rise in this sense the budget last year is estimated to be projected to cost the uk government an extra £10 billion a year by the end of the parliament on its debt bill. don't forget that rachel reeves in her budget gave herself only about £10 billion of headroom against her physical rules. so unless this picture changes, rachel reeves could be faced with a choice of

in what way is labour any different from liz truss and her own mini—budget when it comes to borrowingts? now they're the highest level they have been for 27 years. so isn't rachel reeves guilty? in labour parlance of quotes crashing the economy? >> that letter that liz truss wrote to the prime minister asking for an apology should have been a letter that she wrote to every mortgage holder and householder in this country apologising for what she did. when you've seen what has happenedin when you've seen what has happened in the trends over the last week, they are mimicked by what is happening in the us and elsewhere. we are in line with what liz truss did was unique to our country here. now. our plan for change, of course, involves fixing the fundamentals of the economy, which is what we saw in the budget. but we've crucially, if we're going to break this desperate cycle that we've inherited of high taxes and low growth, we have to start investing in the industries of the future. we're doing that by housebuilding. we're doing that by investing in the energy sector for the future. and w

oh it's there's no it's the mayhem about following the response to reevess budget because where's liz truss the sort of very quick dive bomb. reeves has gone for sort of very slow, gradual death of the economy. and that's thought to be better. so, i mean, i'm not an economic expert. i'm giving you the broad strokes. no, but it's a bit like ripping off a plaster or. yes. she's one of those slow. and i always did it slow myself actually, because i like i like the pain of slow peelers. do you want to do the islamophobia one, though? i feel like we started. no, absolutely. let's go. we started in this back then. you know, people will be tweeting. you backed out of islam. are you chickens? >> well, i watched headliners when i'm not on it, which i mean, it is quite genuinely. >> what's it like? >> what's it like? >> it'sjust >> what's it like? >> it's just saying >> what's it like? >> it'sjust saying i'm back >> what's it like? >> it's just saying i'm back to help. >> who's your. who's your favourite? who's your favourite headliner? >> oh i'm not i can't say i couldn't put me. i haven't seen it.

truss's lawyers have issued a cease and desist letter, calling the claim false and blaming it for damaging her re—election prospects. the dispute centres on her 2022 mini—budgetich caused market turmoil, though her team points to a report showing economic growth afterwards. >> rachel reeves has pushed this country to the brink of economic crisis through high taxes, high regulation and disastrous net zero policies. when i tried to fix these problems back in 2022, i was undermined by the economic establishment and i was forced to reverse the policies before they were even implemented. i was blamed for the ldi crisis, which the bank of england has subsequently admitted was their fault. >> downing street says the prime minister stands by his remarks, urging critics to ask the public about the impact on mortgages and inflation. now everton have sacked their manager, sean dyche, with immediate effect. in a statement, the liverpool based football club said under 18 seconds head coach and former player leighton baines and club captain seamus coleman will take charge of first team affairs on an interim basis. it's the second sacking of a premier league coach in under

truss's lawyers have issued a cease and desist letter, calling the claim false and blaming it for damaging her re—election prospects. the dispute centres on her 2022 mini—budgeth caused market turmoil, though her team points to a report showing economic growth afterward. downing street says the prime minister stands by his remarks, urging critics to ask the public about the impact on mortgages and inflation. and travel chaos continues across the uk as heavy snow and winds cause widespread disruption. temperatures plunged to —11 degrees overnight, with more snow and ice warnings in place affecting rail lines and airports. manchester airport was forced to close both its runways, and transport for wales has shut several rail lines due to damage from the weather. the health security agency has also extended its cold weather alert until sunday, warning of serious health risks. those are the latest gb news headlines. more in half an hour for the very latest gb news direct smartphone. >> sign up to news alerts by scanning the qr code or go to gbnews.com/alerts. >> thank you sophia. welcome to the show. we've got an absolute cracker ahead yesterday where our biggest

truss's lawyers have issued a cease and desist letter, calling the claim false and blaming it for damaging her re—election prospects. the dispute centres on her 2022 mini—budgetused market turmoil, though her team points to a report showing economic growth afterward. >> rachel reeves has pushed this country to the brink of economic crisis through high taxes, high regulation and disastrous net zero policies. when i tried to fix these problems back in 2022, i was undermined by the economic establishment and i was forced to reverse the policies before they were even implemented. i was blamed for the ldi crisis, which the bank of england has subsequently admitted was their fault. >> but downing street says the prime minister stands by his remarks, urging critics to ask the public about the impact on mortgages and inflation. those are the latest gb news headlines. now it's back to matt for the very latest gb news direct to your smartphone, sign up to news alerts by scanning the qr code or go to gbnews.com/alerts. >> welcome back to state of the nafion >> welcome back to state of the nation with me, matt goodwin. now, i said it would happen. and today it happened fo