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This is the Blue Big Day Baqut podcast. Good morning, It's Thursday, the sixth of November. I'm Caroline Hepkitt in London and.
I'm Stephen Caroline Brussels. Coming up today, Markets expect the Bank of England to hold interest rates steady, as British businesses warned the Chancellor Rachel Reeves against death by a thousand taxes.
Donald Trump's global tariffs face a barrage of skeptical questions from the US Supreme Court.
Plus reassessing the business climate. In an exclusive interview, the EU's Economy Commissioner, Valdas Dombrovskis tells us the Block is listening to international concerns over its ESG rules.
Let's start with the roundup of our top stories.
The Bank of England is likely to keep interest rates unchanged today in what's expected to be a closely contested decision. Markets and economists expect the UK Central Bank to hold its benchmark rate at four percent. With this six to three split on the Monetary Policy Committee. The most common response in Bloomberg survey that would slow the once a quarter pace of cut that has maintained since August twenty twenty four. Here's our chief UK economist, Dan Hansen.
I don't think they will cut, but I think it's going to be a tight decision between a cut and a hold. I think the bank will want to know what exactly is in the budget, and they don't know that yet. They can assume, as we've all been assuming for the past, coming on for six months now, what may or may not be in the budget, and they
can obviously make assumptions, but they'll want to know. I also think, you know, bigger picture, inflation's nearly four percent is quite a difficult backdrop for them to cut interest rates. It doesn't feel like there's any need to.
Rush Dan Hanson from Bloomberg Economics there as the BOE today also rolls out a new look monetary Policy Report and minutes that for the first time, will show each of the nine MPC policy makers setting out their views individually. We'll have the decision live here on Bloomberg Radio at twelve pm in London, followed by special coverage of the press conference led by Governor Andrew Bailey half an hour later.
Well, the UK's biggest business lobby is warning against tax hikes in the upcoming budget. Instead, the group is calling for measures including improving skills and developing new technology. Bluebag's teaba Adebayo has the story.
Death by a thousand taxes. That's the fate which could await UK companies if the Chancellor hikes smaller levies. According to the Confederation of British Industry CBI, proposals to boost growth include first tracking infrastructure projects, lowering energy costs and promoting exports. The caution comes after Rachel Reeves set the stage for tax hikes in a pre budget speechless week
as she seeks to plug the fiscal hole. Lower productivity estimates from the Office for Budget Responsibility could mean a twenty billion pound hit to the government after the body was too optimistic about the economy in recent years. The situation could leave the Treasury needing to find as much as thirty five billion pounds just to restore the slim
headroom they had last budget. But despite the downgrade, reports in the Financial Times say the Chancellor will spare British banks from bigger tax bills, making clear she wants the sector to remain competitive in London to had a buyer.
Bloomberg Radio the.
US Supreme Court appeared skeptical of President Trump's signature global tariff regime, as Justice has questioned the use of an emergency powers law to collect tens of billions of dollars a month. The court hinted it was ready to put significant limits on tariffs for the first time since Trump took office in January. Hours after the hearing, the President gave his reaction on Fox News.
I heard the court case went well today, but I just heard that a little while ago, because, as you know, it's just two hours ago that they finished up. But I will say this, it would be devastating for our country if we lost their.
Devastating, President Trump, speaking there on Fox News a special report with Brett Bayer. Now, ruling isn't expected for several weeks, but a decision against Trump could force refunds and remove a major burden on US importer is blunting the effect of tariffs as a tool against trading partners well.
President Trump is hosting a summit with five Central Asian countries as Washington steps up its push for influence in the mineral rich region where China and Russia have long held sway. It comes as the EU's Economy Commissioner has told Bloomberg Radio the Bloc is now offering technology and financing to other countries to develop sources of those key minerals. Valdis don Bovski says that China's twelve month suspension of rare earth export curbs by his time, but it doesn't resolve the issue.
In a sense. It's address as short term concerns, but it also shows vulnerability which we are facing in terms of supplies and zerofour We also must work towards diversification.
Of Also, European Economy Commissioner of Eldis don Boskis. He went on to also signal that the EU is willing to accommodate international concerns about its ESG rules as the Bloc fields threats from the US and cutter.
In videos, CEO Janson Hwang has warned that Beijing is currently on track to take the lead in artificial intelligence.
Bloomberg's Euan Parts has more China is going to win the AI race. Those are the start words of the boss of the world's most valuable company. Speaking to the Financial Times and Videos, Jensen Wang says that the West, including the US and UK, was being held back by what he called cynicism. He says that lower energy costs
and looser regulations are adding to Beijing's advantages. Wang's remarks come after the Trump administration maintained its ban on in video selling its most advanced chips to China following the Trumps summit last week in London, i'm un pots Bloomberg Radio Now.
The US plans to cut domestic flight capacity by ten percent at forty major airport across the country if the government shut down continues. The Federal Aviation Administration made the decision to ease pressure on air traffic controllers, who have been reporting staff shortages and issues with fatigue. Transportation Secutory Sean Duffy says the situation is fluid, but safety is the priority.
I anticipate there will be additional disruptions, There'll be frustration. We are working with the airlines, They're going to work with passengers, but in the end, our sole role is to make sure that we keep this airspace as safe as possible.
Duffy added that any further restrictions on flights will be determined by data. The FAA said that flight reductions are expected to be staggered heading into the weekend, and international routes won't be affected.
Those are your top stories on the markets. We are seeing somewhat of a rebound and Asian stocks today, dip bio stepping in the mscis specific index up by one point one percent, the NICKA in Tokyo one point four percent higher, That Hangs Hangs up by one point seven percent. European stock future is pretty flat at the moment. On Wall Street. They're slightly lower two tents lower for Nasdaq futures after we saw that index rebound by seven tenths
of one percent yesterday. Elsewhere and markets, we're also keeping an eye on gold prices up two tents at three nine hundred and eighty six dollars at troyats.
Well.
In a moment, we'll look ahead to the Bank of England's rate decision and analyze what emerged from the US Supreme Court hearing over Donald Trump's tariffs. Plus, we're also going to bring you the special interview that Stephen has done with the EU Economy Commission of Aldis Dombrovskis, who's been speaking to us about Ukraine trade with China and the pressure on the EU to water down its climate rules. Stephen, I saw some nice photographs of US city, next of
Eldis Dombrovskis in the Brussels studio. You're getting to know the commissioners now, Yeah, I'm.
Just making my way around, you know, I have to meet them all eventually. It's a lot of handshaking to do, and you've got twenty seven of them to meet Caroline as well. Before we get into those stories as well, I wanted to mention another story that we've been reading this morning. For perhaps you know you're looking to make a new investment, and why not buy a sports team,
or at least part of one. This is something our colleague Ben Stubbles has been reporting on that he covers the ultra rich, and he says that super rich clients at JP Morgan are now being increasingly attracted to invest in teams because they see it as something that can provide them with decent returns. It's not just a passion project anymore. According to their figures, twenty percent of one hundred and eleven billionaire families that were surveyed by them
now and controlling stakes in sports teams. That's up from six percent three years ago as well. So an increasing number of interest institutional investors are also getting in on this as well.
Yeah, I think it's really fascinating. I mean just look at in the UK, people like Jim Ratcliffe are taking that controlling stake in Majesty United only last year. I mean that was one and a half billion dollars worth to buy about. Well, yeah, it's a team that has struggled somewhat, but no, I think it's very interesting that. Yeah, forget art, you know, cars or why maybe now it's at about the sports team.
I feel like this is real life ted Lassa was happening in front of us, so familiar with the TV series as anyway, let's turn to the Bank of England decision today. Now expected to hold interest rates steady. Policymakers likely to be cautious given the budget looming in three weeks time, despite assurances in the Chancellor that she won't add to inflation. Our UK correspondent Lizzie Burden is with us for more this morning. Lizzie set us up then for today's decision.
Well, Stephen, as you say, the expectation is that they're going to hold rates at four percent and that would break with the quarterly cadence of rate cuts that they've been in since last August, and it would break with the Fed. But do be on for a surprise cut today. It's what Nomura, Barclays and Goldman Sachs all see. And even if they do hold rates, it could be a really tight vote split. It could hinge on the governor. Even if most economists see a six' three. Split why
is it going to be so? Tight, well they're inching towards neutral, rates the race that neither constrains nor stimulates the, economy and we just don't know where that. Is most economists think it's three. Percent but as we get closer and, closer the more carefully and slowly The Monetary Policy committee is likely to want to. Move the other elephant in the room, here of, course is the budget On november
the twenty. Sixth then, yes The Chancellor Rachel reeves promised this week that it's going to be, disinflationary BUT i doubt that The Military Policy committee is going to want to vote as if it will. Be they'll want to see the policies for. Themselves and indeed it means that
the updated forecast today are somewhat. Moot the expectation is that the inflation outlook's going to be downgraded for this year and next compared to The august, projection and that the growth and unemployment outlooks are going to stay the. Same but we need to take that with a pinch of. Salt and we don't know what's in the budget. Yet But i'm really interested to hear what the governor has to say about The chancellor and her. Budget remember On tuesday she had some shots to fire at THE boe
for having rates at four. Percent she says it's straining business. Borrowing some have said that's a bit trum. Pesque SO i wonder What Andrew bailey has to say about.
That, yeah so what will the press conference be focused?
On, well we want to know when the next cut is. Coming if it isn't, today how long will this pause? Be is it next.
Cut coming In? December and for.
Clues about, That i'm really interested how the governor characterizes that latest inflation reading three point eight. Percent it's less than The bank Of england had, forecast it's less than consensus forecast, was but it's still nearly twice THE boees. Target how do they talk about the labor market the last time they had a, meeting there were lots of,
warnings hawkish hints about food price, inflation inflation. Expectations if the communications Today carolina are very, dubbish or indeed if they cut we could see this continued out performance for guilts that we saw all Through, october and one dollar thirty really is the key level for the pound that we need to.
Watch, lizzie you mentioned The chancellor's comments in terms of The bank Of england's rate where it is? Now is it a two way street from Thread Needle street To? Westminster are there signals that could come from The bank Of england that might be helpful or perhaps hindrance To Rachel reeves as we're counting down to the, Budget.
Well Rachel reeves could be the biggest beneficiary from what
The bank Of england. Does if the most optimistic forecasts are right and THE boe cuts rates to three percent eventually she could bank around ten billion pounds at next year's budget in lower borrowing costs when compared to the three point eight percent inter straight floor that's forecast by The office For Budget, responsibility the fiscal watchdog In, March and so she really needs The boe to cut, rates and that's WHY i reckon that her speech On, Tuesday
yes was aimed a bit at, Voters, yes was aimed a bit at bond, markets but the real target audience was across the road FROM us Thread Needle, street The bank Of.
England, lizzie thank you so much for being with, us so we look forward to the decision from The bank Of. England that is OUR uk, Correspondent.
Lizzibuden now THE Us Supreme court has hinted it's ready to put limits On President Donald trump's power to impose sweeping global. Tariffs the signals came during a three hour hearing, yesterday although ruling isn't expected for several. Weeks let's bring in Our chiefhasor Correspondent Rosalind matheson for more on this. Ross what was said then during this hearing and why is it being interpreted as potentially being bad news For Donald.
Trump, well as you were saying, that the court did appear a bit skeptical really Of Donald trump's tariff agenda and his approach to imposing many of these tariffs around the, world and people were passing that for clues as to how they might issue their final ruling likely before the end of the, year and the feeling that The court
is edging towards putting some limits On Donald. Trump that's because you did, have you, know across the, divide skepticism coming, in including from some of the more supportive members of the, court you would, say potentially For Donald trump's, agenda and the more conservative. Judges you had The Chief Justice Don, roberts you, know he called the tariffs an imposition taxes On.
Americans you had A trump, Appointee Amy Cony. Barrett she was asking pretty probing, questions albeit of both, sides but she wasn't holding, back and she was asking how refunds would work if the tariffs were to be, invalidating saying she felt it could be quite a. Mess and so you had really some fairly hard questioning coming from both
sides of the. Aisle it's not surprising to see that coming from the more liberal, judges but to see it from the conservative judges also just raising again the expectation that perhaps the, court in this, case The Supreme, court might decide to impose some limits On trump's. Agenda.
Yeah, ABSOLUTELY i mean the questioning the hearing last is something like three hours if the court were to rule That trump has overstepped in terms of his authority and imposing these global, tariffs what would that actually. Mean, well that's the big.
Question and, really you, know either, way you're going to see a lot of the uncertainty continue around tariffs And Donald trump's approach and the reality for companies and countries, alike because even if the court does go in the direction of imposing some, limits there are other, leavers arguably At Donald trump's, disposal that he can turn towards instead to try and keep the tariff regime. Going so there's the question of whether he uses other mechanisms to try and keep tariffs in.
Place or at least a part of.
It there's a question of what do you do if you've already been hit by tariff's and a company paying Those can you get? Restitution can you essentially get a? Refund and it's really not that easy for that to. HAPPEN i, mean it's basically paper checks and the government would have to be inclined to start issuing. Them you, know some of our reporters in THE us talk to some company owners who is actually, said we've written this.
Off you, know this is a sunk. Cost we're not going to get this money back either, way even if the court does rule in our. Favor so the reality of whether you, know companies get refunds or others get refunds if the court rules in that direction is very very. Unclear it could be an, impact of, course on countries
that are still negotiating trade deals with THE. Us did they look at this and, say, well hang, On perhaps the ball is a little bit in our court in the way that we negotiate or the kinds of things we're willing to agree on as part of. It so there's sort of three tiers potentially of impact, there depending on which way the court.
Goes we're very interested to see when we do get that, ruling which way the justices do decide to. Lean another strand of this trade, story, though we've been talking about the rare earth curves From china and that has meant for supplies of these critical. Minerals Donald trump's meeting representatives from Five Central asian countries as a global race for natural? Resources hearts up what should we be expecting from this?
Meeting AND i suppose how does it fit into efforts that others are making to try and woo mineral rich countries to secure.
Supplies, well that's.
Right everybody's racing for us these, days including THE, us and Certainly Donald trump has made it a key part of a lot of his negotiations with countries around the, world including his trade. Negotiations what are you willing to give us in terms of rare? Earth and he's hosting this, summit as you, say of these five, countries it'll be interesting to see it happen at The White. House it gives it that extra level of prestige potentially for these
countries and these. Leaders but arguably he's doing so also because he's wanting to hear from them what the relationship with THE us is going to be and whether THE us can get access to some of the rare earths
or the critical minerals that are residing in these. Countries but as you, say he's got some competition there because this is an area that has long been the, domain arguably Of china And russia and rivalry Between china And russia in that, region and some of the countries have been concerned Since russia's invasion Of ukraine of being sides wiped by.
Sanctions so they're.
Not necessarily all In russia's corner at the, moment But china is a very big presence there, also and even THE eu is looking to diversify and open conversations. There so there's quite a bit of competition in this region between all those powers for access to rare. Earth and perhaps that's some leverage for these countries in terms of whom or to whom they decide to ship these things.
Too, yeah absolutely is huge, question isn't it? Rare thank you so Much rolis for being with. Us that Is bloomberg's Chief asia correspondent was in, matheson thank you stay with. Us more From Bloomberg daybaqube coming up after.
This.
Well that global race for raw materials are particularly rare earth, minerals is a key part of the Conversation i've been having with the E's Economy, Commissioner Valdostan. Brovskis he joined me in Our brussels studio to talk about wide range of, issues including the push from THE us And katar for THE eu to water down some of its climate. Rules my conversation With Valdestan brovskis began With ukraine and The European commission's progress on a plan to use Frozen russian assets to Support.
Kiev So European consul tasks The commission now to work on a funding, Options so that's why we're currently. Preparing but also we held made clear that we see this reparation loan still as a main and most feasible, options so we continue also the technical work on preparation on reparations a, loan also engagement With belgium authorities concerning the guarantees which they need in a sense to agree to this reparation. Loan but in a sense this is a
proposal which addresses many. Issues first of, all they are very sizeable funding Needs ukraine is, facing SO imf is putting it at sixty billion dollars for the next two, years and that's without military, support which comes in a similar order of. Magnitude and also A memphi is concerned about depth sustainability In, ukraine so we cannot just continue
with giving. Loans obviously grants is an, option but a question Whether member states would agree to provide grants on that scale for this reparation, loan Which ukraine would only need to repay Once russia pays reparation is a good option because it Addresses ukraine's funding, needs it does not create problems with depth sustainability In, ukraine and it falls short of confiscation Of russian, assets which as we know is says a step too far for a number of member.
States what sort of engagements have you had With belgium SINCE fas meeting and have you had any indication that they are being reassured by the proposals that The commission is.
Developing we continue working on this in a, sense it's clear understunderstanding is there also On commission side that we need to be serious about those concerns and we need to find a good way to.
Otherism let's turned to some of the other major challenges facing THE eu economy as. Well The e's been negotiating With china over access to. Rarer it's after deal that we saw signed between THE us And beijing to export. Curves you said you've seen positive signals From china coming on those. Measures what more can you tell us about those?
Signals, Well china basically agreed now to suspend those expert controls or postpone those xpont controls by one, year so that obviously give us more time for engagement and addressing this issue in a forward looking. Way so there is in sense positive short term. Developments but obviously we must keep in mind that we need to work on diversification of our supply chains because, currently as Concerns rarere's critical, minerals many of those supply chains are eighty ninety more
than ninety percent dominated By. China, therefore we must work on diversification because that's how we achieve resilience of. Supplies that why we're accelerating work on our own materials. Strategy so that's Why i'm engaging in raw materials partnership with a number of countries around the, world and also coordinating this approach with like minded, partners including in a framework OF g.
Seven so are you satisfied that the supply chain for now is stable while that exemption has been. Granted i'm just wondering about the broader risk to The european economics from. This we've had warnings and the likes Of, volkswagen for, example about the IMPACT i could have on their supplies upcoming.
Too in a, sense it addresses short term, concerns but it also shows vulnerability which we are facing in terms of the supplies and therefore we also must work towards diversification of those.
Supplies where do you look for?
That, well, actually ALL i would say to put simple around the. World we have already engaged in raw material partnerships with various countries as diverse From canada To bakistan and then many many. Others but the issue right now is also to get more practical and more tangible to
start actually developing actual projects on the. Ground Where as a model of partnership we are offering resurfage countries is that THE eu is ready to provide, technology know, how financing and also help those countries to increase value added they are getting from their raw. Materials so it's not only about extraction but also also developing processing capacities in those. Countries so looking for mutually beneficial.
Solutions on the question of the Corporate Due diligence regulations that C S, triplt which is something there debate on going about with The European, parliament there's been a warning From katar's energy minister that If europe doesn't look at how they can water down or cancel this, regulation they'll stop delivering LER g To. Europe how worried are you about risks like that and the pressure that's being put on these sort of regulations.
Well as REGARDS c STRIPLE. D, indeed there are many businesses boss in THE eu voicing serious, concerns but also many partners outside THE, eu And qatari is just one. Example we have heard from many other countries and businesses
on those countries on the. Concerns but that's, Why but that's why A C s TRIPLE d was part of our first, omnibus where we are actually simplifying it quite substantially in including the question on reducing the scope so which companies will be covered BY c STRIPLE, d making requirements more, proportionate like obligation to follow only direct business, partners not all the value change up and, down obligation to do it once per five, years not every, year
and and and so. On so there are many tangible improvements and. Simplifications what would be now important that the legislative process moves forward and so simplifications actually become a.
Reality but is it a worry that you, KNOW l AND g supplies could be affected by these?
Changes in a, sense there are two, Elements so one obviously As European. Union we retain our regulatory autonomy and our regular businesses which are doing business and are active In. Europe on other, hand of, course we also need to listen and acknowledge concerns which various partners around the world are having and reflect on the. Implications so that was.
Wilder stan bravsk is THE Eases commissioner For economy And productivity and also in charge of, simplification which is part of that effort that we're seeing changes being made some KEY eu rules as, well speaking to me IN Oar brussels studio as. Well, look it's interesting to reflect on that debate that's playing out OVER eu climate rules as.
Well the, criticism of, course and this is particularly coming from parliamentarians in The European, parliament is that the only signs of simplification that people are seeing is in weakening of some of the climate. Rules you've had a pushback of the implementation, date for example on the anti deforestation, rules debate over the changing of the thresholds of what size of companies would have to report under some of
these due diligence regulations as. Well so interesting to hear From valdestanbrovskis that they are listening and acknowledging the concerns coming from outside of THE eu as, well and in particular the comments that we've had from THE us and From.
KATAR i thought what was the most interesting was the Rare earth elements that you discussed with Dom. POVSKISS i, Mean i'm totally fascinated by. This china has become so dominant in this. Area there are no Rare earth minds anywhere In. Europe it's very difficult to mine these. ELEMENTS i mean we call them Rare, earth so actually not that rare that they're really difficult to. Mine there are
seventeen of, them And china's imposed these. Controls, obviously in recent weeks they've agreed this one year pause with THE. Us but it is notable that THE Us Treasury Secretary Scott besson's been talking about how THE us is going to go at warp speed over the next one or two years And i'll just try to Break china's hold over THE us in this particular. Area but you, Know europe has still and THE, Uk i'll include THE uk as, well has got this massive challenge because these rare earths
are just used in so many things in. iPhones they're using cancer, treatments they're using. Semiconductors SO i, thought you, know the fact that you talk To Valdus Don groskis about rare earth is just another one of these massive challenges That europe.
Has this Is Bloomberg Daybreak, europe your morning brief on the stories making news From london To Wall street and. Beyond look for.
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