BoE Turns a Corner And Adani's Wealth Wipeout

of delaying chip strategy and pre payment meters controversy. Those are the stories we're looking at in today's papers. And I'm leanne Garon's plus triple A troubles, Amazon, Apple and

Alphabet get way down by cooling demand. That's all straight ahead on Bloomberg Daybreak Europe on DAB Digital Radio, London, Bloomberg eleven three oh New York, Bloomberg Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine six, San Francisco, cyrus x M Channel one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg Business Set. Good morning, I'm Stephen Carroll and I'm Caroline Hitker. Here

are the stories that we're following today. The Bank of England has signaled to the fastest pace of interest rate hikes in three decades, maybe drawing to a close. Speaking to Bloomberg's editor at large, Francine Laque, the Governor Andrew Bailey said, it's too soon to declare victory on inflation. We are going to react to the information and the

evidence that we see. We're not on We're not. We haven't pre announced an intention because we have reached a point and as I've said for I think we have started to turn a corner that's encouraging. There's a long way to go and there are a lot of risks. Yesterday, policymakers, led by Andrew Bailey, voted seven to two to raise the rate to four percent. That's the highest since two

thousand and eight. However, the bo's latest forecast show that inflation is likely to fall sharply this year to around four percent from a four decade high of eleven point one last October. The central Bank's outlook is for a shorter and shallower recession than it projected in November, well a fifty basis point hike is a near certainty in March.

That's according to the ECB president Christine Lagarde. Her comments came after the European Central Bank lifted its rates by a half a percentage point to two and a half percent. Speaking to journalists, Laguards sought to make her position on the matter clear. It should be fifty this time around. It intended to be fifty in March. Now you will say, well, yes, but what about after March? Does that mean that you have reached the pinnacle or the peak? No? No, no, no.

We know that we have ground to cover. We know that we are not done. As you heard their Leaguards sought underscore that hikes are likely to persist beyond next month. That echoed the message from the Fed. Ched your own Pal a day earlier, but as with Pal, investors were not convince. Your bond's extended gains and European stocks now are within striking distance of April run versus April of

last year. The value of Gajamdani's beleaguered empire has now more than halved the one and twenty five billion dollar wipeout comes less than two weeks after the accusations of fraud by Hindenburg Research. A short seller now veteran emerging markets investor, Mark Mobias told Bloomberg his firm didn't participate in the Adani stock offering due to concerns over how much the conglomerate had borrowed. It's all about debt, and company and its associates heavily in debt and that's what

sort of scares away. That was Mark Mobia speaking to Bloomberg Television. The Danni Group has repeatedly denied the allegations from Hindenburg, calling their report bogus. Whoever, the growing crisis of confidence has seen Gautamadanni's personal fortune dropped by close to sixty billion dollars. Now in the tech sector, three mega companies have reported earnings. For Apple, it was the first dropping courtly revenue in three and a half years.

The smartphone giant blamed supply snags and softening demand from the poor holiday A sales CEO Tim Cook says, it's a difficult period for the company as a result of a challenging environment. Our revenue was down five percent year over year. We remain confident in and focused on the long term opportunity well Cook's long term optimism is driven by China, where he expects the lifting of COVID restrictions to bring back demand. Amazon's earnings didn't quite deliver, with

the web giant warning of slow cloud computing sales. It's a troubling forecast because AWS Amazon Web Services has long generated most of the company's profit. CEO Andy Jasse told investors he's pairing back the business after a rapid expansion during the pandemic. Probably the number one priority that I spent time with the team on is reducing our cost to serve and our operations network. Amazon started a new round of upcuts last month that will eventually total eighteen

thousand employees. Meanwhile, Google parent Alphabet reported fourth quarter results which narrowly missed analysts expectations. CFO Ruth Poet tell Bloomberg that they too are looking to cut costs and slow harring. Charlie Pellett has the numbers. Alphabet said sales excluding partner payouts were sixty three point one billion dollars in the fourth quarter. Analysts had projected sixty three point two billion,

according to data compiled by Bloomberg. The lackluster results come as Google's core and business is under threat on multiple fronts, and not just because of a slowing economy. The U. S Department of Justice has called for a breakup of the Search Giants AD technology business over alleged illegal monopolization of the market, and the company's flagship search business maybe under threat from new entrants in New York. Charlie Palett Bloomberg Daybreak Europe. So those are a few of our

top stories. Um, there's lots of think about really today. I mean, not least that the now stack looks to beyond trap for bullmarket, but all of those disappointing earnings for the big tech sector. They did see after hours shares dropped for Alphabet, Amazon, Apple, all in the range of about four percent. So that's, you know, one of the big stories that we're thinking about today. You've also

got the US jobs report that's coming out. But plenty more you interesting hearing on those Amazons or those good Alphabet numbers, I should say, because of course there are still plenty of alphab employees waiting to hear whether their jobs are going to be safe enough. There still in the middle of announcing the who's going to be affected by the job cuts? Twelve thousand jobs and all that's going to They're not the only ones, though, who are

considering what's going to be happening with jobs. That's part of the story about Deutsche Bank preparing further further job cuts keep casts and check, but could be set to spare traders as it prepares that that reduction and staff numbers. Yeah, it could be focused on the retail branches in Germany in terms of job cards. I mean, Deutsche Bank did already slash what thousands, I think it was about eight

thousand jobs in twenty nineteen. I think the other story to think about is the consent continued pursuit also around bankers and money managers. In the US, the SEC is really getting tough on messaging, not just WhatsApp. Yes, they've issued a billion dollars worth of fines, but apparently now they're coming after people's mobile phones. They've asked certain businesses to look at the personal mobile phones of their employees just to make sure business isn't happening sort of somewhere

else in an avenue on people's personal mobiles. I thought that was really interesting. Yeah, definitely a story to watch given all of the regulator decisions we've had on that issue already up next Seago was out massive pay rise for a nurse, the risks of delaying chip strategy and controversy over prepayment meters. Now the paper review on bluebirdday Break Europe. The news you need to know from today's papers fusic again, so as it's now for a roundup

of today's papers. The Financial Times headline reads Soonac says UK cannot afford quote massive pay rises for nurses. This is the Prime Minister again laying things out, Leon Goins, What did he say? Yes? Indeed, good morning to you Friday Friday, Caroline. I was going to say Happy Friday and all just went into one. Say everyone out there, happy Friday. Now. Speaking to Pis Morgan on Talk TV last night, Caroline, the Prime Minister just continued to take

the super tough line on pay rises for nurses. Now. This comes ahead of strike action next week. The Royal College of Nursing is asking for this pay rise to really battle inflation and a demand. That demand has been rejected by both the Prime Minister, Rishi Sunac and also by the labor leader Kia Starmer. While speaking to Pis Morgan's, Sunac also insisted that the government can just not afford these massive pay rises at the moment and this is

due to inflation. Of course. Yesterday we saw a rise in int as rates and the economy is said to be going into the shallower recession, even though it's going to be shorter. And this leaves room really for Steve Barkley, the Health Secretary, to make nurses a big one off

payment or backdating a more generous pay rise. And according to the Financial Times, the wave of strike action across the country is really sapping support for the Prime Minister and our very own Kitty Donaldson has a really great place on the Bloomberg terminal today. It's called soon next Rocky premiership after one hundred days of strikes and scandals. The Prime Minister has only been in on what office

one hundred days and that was yesterday. So if you do read that piece, it's very interesting, Okay, Leon, Let's turn to the Times next. It says the chip industry delays pose and national risk. Yes, indeed, so the Chairman of the Commons Business Select Committee, that's Darren Jones, has a superstark warning when it comes to the chip industry here in the UK and the labor MP says a lack of national strategy to secure supply chains for semiconductors

is actually quote an act of national self harm. The Times newspaper reports that the UK needs to act swiftly to keep up with the US, the EU and Japan. The Department for Digital Culture and Media and Sport was supposed to lay out a plan for the microchip industry here in the UK last autumn. However, that has been delayed and it's very long overdue, and I just want to say one thing Darren Jones also mentioned is semiconductors are the brains of modern electronics, used in everything from

mobile phones to cars to wind turbines. So really knuckling down there, and the fact that it's so important we have our own industry in order to make sure those things are secured. There's also another striking story though in The Times, as a big photograph on the front page and the headline of art O debt collector reviewed by

Watchdog over gas meter breakers. Yes, indeed and Caroline we were discussing this early and it's a very very emotive piece that has been in the news for the last couple of weeks, and The Times is continuing with its investigation on this and on British Gas, and the company has been banned from force fitting pre payment meters to protect its vulnerable customers, and all other major energy companies

have also agreed to suspend this practice. Now, this follows the paper's deep dive into the situation and it has now been revealed the debt collection company used by British Gas is also been closely reviewed by the Financial Conduct Authority and this comes after the time alleged that Avarto obtained warrants gaining access to homes of vulnerable customers to force fit these energy payment meters when they just weren't able to pay for their energy bills. As we do know,

they have really skyrocketed. But the German company does not have a direct role in regulating the collection of utility debts. However, the f c A have said that any rogue behavior could have an impact on the company's overall fitness to practice. Now, a spokesman for the German parent company said yesterday that it expects a Varto to comply with the law and

to adhere to the company's code of conduct. And also the British Gas have made a statement apologizing for what has happened when it comes to vulnerable people and these pre payment meters. Yeah, I thought that was it was a very interesting story and it has dominated the news over the last sort of week, the investigations into pre payment meters at a time of very high energy costs. So, yeah, that's a very interesting one to follow in the Times newspaper.

Lean go and thank you so much for that newspaper review. Well, let's get back to our conversation around central banks. That there wasn't much caroline in Andrew Bailey's either commentary or interview to be optimistic about. No. I thought it was completely bleak. The economy is already in recession, pre pandemic levels of output are not going to come back until six The forecast for growth in Britain it's only seven

tenths of one for the next three years. It's a very very difficult moment, even though it does look like markets, you know, took it as read that the hiking cycle is coming to an end. Well, that key phrase was a corner has been turned a center bank speak goes. Markets are taking that line as cautious optimism from Governor Andrew Bailey. Bloom Books editor at large. Francy Lacque spoke to the governor yesterday and asked him where rates will

eventually settle. We don't have a view on the neutral rate, which actually shapes our decision making at the moment. And the reason for that. You might say, that's a interesting thing for me to say, But the reason is that there is such uncertainty at the moment. Uh. You know, in the landscape that we face, we've got very big move being parts. We've had very big shocks, and particularly

there are big shocks on the supply side. But if you look at the market reaction, so you hiked by fifty basis points and the market is taken this as a devish message, are they right? Well, the market, of course was expecting us to hike by fifty basis points. Sim don't think they will have been surprised by that. I think the market obos to be focused on what we do next and they will have seen some change in our language and they that's deliberate. I mean that

change is obviously deliberate. And the way I would interpret it is to say, we are going to react to the information and the evidence that we see. We're not on We're not we haven't pre announced an intention because we have reached a point. You As I've said before, I think we have started to turn a corner that's encouraging. There's a long way to go and there are a lot of risks. How soon do you think we'll see

it cut? From the Bank in England, we're not in We're not in a position of speculating on that at the moment. That's that's that's all. That's all somewhere in the future, not this year. We're not speculating on what it is I say in the future, because you know rates do go up and down in the long run, but when we have no date in our speculation. We've heard a lot from the Bank in England about the many sharks that this economy is facing. What's the prescription

to fix this longer term? Well, I think I mean there's a number of issues that come out of them. Obviously, some of those shocks are external and relate to very sadly, obviously the war in Ukraine, which is terrible. Um, we are beginning that the energy prices come down quite rapidly, Food commodity prices have sort of seemed to have reached at least a level, but it's not coming through and

yet in retail food prices, so obviously that's important. Um, Europe has had a much better winter from the point of view of energy than I think people feared, so that's important. And then domestically, labor supply is the big issue. I think just getting closer to the EU change that does it change the trajectory for the UK economy in the context of the of the EU, in the context of Brexit, well, I think what we were identified as is at least three big shocks that we can see.

There's been a there's been COVID, there's been energy, and has been Brexit. It's very hard to separate them out. But the judgment that we've we've we've sort of reached on rather tentative, but I think the evidence is pointing that way. Is that we identified that there would be, yeah, a shock to UK productivity from the reduced openness of the economy. We thought that might might emerged over a

rather longer period. You know, on our latest evidence, it's probably going to emerge over a rather shorter period and possibly by the end of the forecasts arising, so look forward to three years. This is Bloomberg Daybreak Europe. Your morning brief on this story is making news from London to Wall Streets and beyond. Look for us on your podcast feed every morning, on Apple, Spotify, and anywhere else

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