Daybreak Europe: January 31st, 2023

billion pounds a year a brighter global picture. The i m F raises its growth forecast for the first time in a year, scrapping EU legislation, counting the cost of a new build, and the London Mayor presses ahead with U les. Those are the stories we're looking at in today's papers and I'm leanne Garin's plus the high price of Musque's Twitter interests social media firm makes its first three hundred million dollar payment after Elon's debt fueled buy out.

That's all straight Ahead on Bloomberg Daybreak Europe on DAB Digital Radio London, Bloomberg eleven three oh New York, Bloomberg on Washington d C, Bloomberg one, Boston, Bloomberg six, San Francisco, syrus XM Channel one nineteen and around the world on Blueberg Radio dot Com. And var the Blueberg Business. Good morning, I'm Stephen Carroll and I'm Caroline Heitke. Here are the stories that we're following today this morning. UBS says it plans to buy back more than five billion dollars in

stock this year. After posting better than expected results for the final three months of twenty two, the bank reported net income for the fourth quarter of one point six five billion. That's a beat on the analyst estimate of just under one point three billion dollars. In a bullish assessment of the results, UBS CEO Ralph Harmer has said the bank's performance proves that their strategy is the right

one and they're not the only bank reporting today. Car No, absolutely, We're just we've had our results from Swedbank fourth quarter net interest incomes a beat ten point nine to billion Swedish kroner. Estimates had been for nine point four eight billion Sweedbanks a full year dividend per share at nine point seven five Swedish chronas, so that's actually slightly below estimates.

And then UniCredit boosting two investor returns to five point two billion euros their fourth quarter net income two point four six billion euros. That is a big beat on the estimated one point zero three billion. Of course, that UNI credit had been in focus. The chief executive officer, Andrea or Cell had told Bloomberg just earlier this month that investors could expect higher payouts, So those results from

UniCredit for now. The i m F latest economic forecast there's only one G seven economy in recession this year, Britain, human parts has more. The International Monetary Fund says the UK will be bottom of the class this year, and his latest forecast, the IMF says Britain will be the only G seven economy to shrink in twenty twenty three, contracting by no point six percent. It says higher taxes and interest rates, along with government spending the strate will

exacerbate pressures on the cost of living. Taken together that saw the IMF downgrade is outlooked by a massive nine tenths of apsentage points from its forecast just three months ago. Separately, new analysis has found the Brexit it's costing the UK economy a hundred billion pounds a year, some four percent of g d P. The report by Bloomberg Economics says the effects span everything from business investments to the ability of companies to hire workers in London immune parts of

Bloomberg day break Europe. Well, that may be the picture in the UK, but there's better news globally. The International Monetary Fund has raised its economic outlook for the first time in a year. The IMF is now forecasting global growth of two point nine percent for the year. That's up two tenths of one percent on previous expectations, but chief economist Pierre Olivier Garinchas says that inflation is still

a major concern. The worry is more with what we call core inflation that excludes energy and food prices are typically more volatile, and this core inflation measures have shown more precise and they have not picked yet in many countries, and they are still far away from settle bank targets. So the job is not done. So the job not done. The i m F s cautious optimism, contrast with a

more die view from the World Bank. The Development Lender slashed its growth forecast for most countries and regions earlier this month. The sell off and the Danne Group shares has continued today, amid allegations of market manipulation. The embattled group has now seen some seventy four billion dollars wiped off its value in a single week. The route comes as a Danne seats to complete a multibillion dollar share sale as flagship firm. Bloomberg Markets reporter Annabel Drewler says,

there are signs it's not going as planned. A Danni Group has really been stuck relying on its existing investors, and a big portion of that is actually coming from the U a E. Because we have International Holding Co, which is controlled by a key member of the Emirates Royal family. It's going to be investing about four hundred million dollars in the share sales that represent about six

percent of the offering. Annibal drew says that all eyes are now on the final outcome of this fundraising Gamdany has now slipped out of the world's top ten richest people according to Bloomberg's Billionaires Index. And finally, Twitter has made its first interest payment of the twelve and a half billion dollar alone that was taken out by Elon Musk to help with the takeover of the social media firm.

Paying the estimated three hundred million dollar alone installment was seen as a key test for the firm after owner Elon Musk warned that the company could go bankrupt since his purchase. Twitter has failed to pay millions of dollars in rent though, and has been sued by multiple contractors over on paid services. So those are top stories this morning. Have to say. Looking around, the economic news is money. It's not a great day to be Britain as it

no the only G seven country to shrink this year. Terrible. Also, not only is the outlook slashed a massive nine tenths of one percent from the October forecast, but also the rm fcs are slow recovery in so basically two really bleak years for Britain overall stagnation. Jeremy Hunt, who is in this building on Friday to deliver a kind of big economic address, he suggested that the UK is going to do better than the MF expectations, but no, it's not.

It's not a particularly strong picture for Britain. And then to look add to that the Bloomberg Economics report about the cost of Briggs at a hundred billion pounds a year. It's a very stark figure. You know, four percent the economy's four percent. Our economists estimate that it might have been that's due to business investment, lagging worker or lagging

supply of workers in the UK as well. So I mean, look, it's it's not it's not a great picture to be waking up to this morning, certainly from the economic point of view. However, if you are looking to go on holidays, things are looking a bit brighter because there are more airlines. Airlines are now being told they have to use their their slots, the lad slots they have at airports in the UK. They had been given some flexibility on the

rules during the endemic. That means that there will be the possibility for airlines to schedule more flights this summer, perhaps will avoid travel chaos this summer. Yeah, well maybe you need to get away after that. Term what news we've just delivered to But look the other thing that I've picked out on the Rumberg Ternel this morning that

you must read. I learned so much from Mehir Sharma, Bloomberg opinion columnist senior fellow at the Observer Research Foundation in New Delhi about what is happening in India with the Adani issue. His columns, he points out that for many in India, it's actually less about where the money for a Danni investments comes from and much more whether they succeed in building these ports and airports and roads and railways that a Dani group has sort of specialized in.

I do encourage you to read the columns that he's got out on the Terminal. They'll give you great insight into what's happening in India. Yeah, and certainly and where a Dannie sits within the sort of Indian psyche as well as being this great hope for for so many areas of the economy. So yeah, definitely a fascinating read on the Terminal. Coming up next, scrapping EU legislation, counting the cast of a new build and London's Mayor presses

ahead with you les now. The paper review on bluebirdday Break Europe, the news you need to know from today's papers and joining us now has been based Lean Garin's to go through the newspapers, starting with the Financial Times, which has the headline the UK Review of EU Laws expanded after a thousand pieces of legislation added. So this

is about this phrase bonfar of legislation, isn't it? Yes, it is indeed, Caroline, And three years on from Brexit and the government's plan to review and revoke all these EU laws by the end of this year. Has now clearly become even tougher. The Ft says a discovery of another one thousand pieces of EU legislation that were found in the National archives have now been added to this massive pie that needs to be looked over and analyze. The plan is to review so much law so quickly.

This is attracting fierce, fierce criticism, but from lots of different places, so from business groups, legal experts, trade unions and even environmental groups, so widespread criticism there. However, the government standing firm says the review process will maximize the benefits of Brexit and test opportunities for reform. And I just want to point to one thing in the paper article to date, says a new Ipsos Mori pole found that forty five cent of people across Britain thought Brexit

was going to be worse than they expected. Now that's up from twenty eight percent in June twenty one, So it looks like attitudes are changing too. Yeah, certainly, that's something we've seen bearing out and polling for for months now, and a really interesting aspect of the attitudes to Brexit at the moment let's turn to the Telegraph next. Then it says homeowners is twenty two tho pounds as one in eight new build homes re sold for a loss.

I'm sorry if you're listening to this and you did buy a new home, but homeowners are twice as likely to resell new build homes at a loss, and that's compared with older homes. And this is all according to data from the estate agents. Hampton's data shows that eighty one percent of new build owners who made a loss were actually selling a flat and the average loss was

twenty two thousand pounds. And I hear everyone out there asking why, And that's because, as Paula Higgins, founder of the Homeowners Alliance lobby group, says, developers sell new builds at a massive premium and then all of a sudden they become in line with the area. Plus the government's helped a buy scheme clearly also inflated the price of flats.

Hampton says new build flats sold fifty five percent. That's a half since the scheme came in back in twenty And it wasn't as if people didn't warn that actually tinkering again with kind of an incentive to buy support for first time buyers. Wasn't just going to put prices up. There's the evidence, I thought. I think that's a really interesting piece from the Telegraph. Just finally, this is so controversial in London, I dare not speak its name. Eulers

the Guardian. The London Mayor vows suppress ahead with l as the Ultra Low Emission Zone plan at the launch of a scrappage scheme and it's also divisive in office today we mentioned it and I feel like the debate went on and on. So Sadi Khan is insisting this plan will go ahead in August despite opposition. Caroline and Stephen from councils and the public for London Boroughs have

actually threatened illegal action. Yesterday, the London Mayor said he was confident of defending any court case brought against the U LESS plans as he launched the scrappage scheme for poleting vehicles. The Ultra Low EMISSI next zone is going to be expanded to the Greater London boundary and that's going to be happening in August. The battle for cleaning continuous.

Garran's thank you very much. Now there are encouraging signs and much of the global economy according to the I m F. Bloomberg's Richards Salamash caught up with the Funds chief economist Pierre Olivier goren Shah to ask them about their forecast. We are looking at is what effectively is going to be still a challenging here. I mean, what we're projecting for three is two point nine percent growth

and then rebounding to three point one. These are still relatively low growth numbers for the global economy, well below what we averaged from two thousand to twenty nineteen, for instance, but still it's an upgrade compared to what we were expecting back in October. And this is due to resilience. Resilience, resilience. We've had more resilient households in the US and businesses as well. We've had resilience to the energy crisis in Europe.

A lot of economies have done better than was initially expected. Labor markets have been very very tight in many emerging and advanced economies as well. And then in addition to all this, you have the reopening of the Chinese economy that is promising to give a boost to global activity.

In h now that resilience Olivier it is making the job of center bank is perversely harder here And what's your take, Well, there is a little bit of good news on the inflation front, but we should not exaggerate it. So what we are seeing is that global inflation headline inflation has peaked already in and is coming down in

the vast majority of countries. The worry is more with what we call core inflation that excludes energy and food prices are typically more volatile, and this core inflation measures have shown more persistent and they have not picked yet in many countries, and they are still far away from

settle bank targets. So the job is not done. And you are right a point out that more resilience on activity could mean more price pressures, could mean that it's harder for centle banks to bring down inflation to target, and therefore they might need to do more. I think that your Busschristina Cristalina Georgieva said. Of course, the the COVID which I said, the post COVID zero China is going to perhaps to be one of the impetus is for growth, as you've just alluded to. But it's also

could be the next sort of inflation headache as well well. Certainly, as the Chinese economy reopens, that's going to put pressure on a number of primary commodities markets, energy markets, etcetera. But let's keep in mind that even with that China's reopening, we are grading China quite a bit. We're projecting five point two percent growth in that's Zual point eight percentage

point upward revision for China for for this year. It's still the global economy is slowing down and and in terms of the overall demand demand for energy and UH and commodities, that is really what is going to be the driving force. So China is doing better, but the global economy is still cooling off, and in our projections we are factoring in that we anticipate we expect prices of energy and UH and other commodities to actually decline

through the year. Now if also highlighted that the risks do remain to the downside, Why well, I've mentioned already that we are far from having won the fight against inflation. There could be a lot more persistence in inflation. We have had a few good prints. It's encouraging, it's in the right direction. But let's not think that somehow the job is done. Far from it. There could be price pressures that could be wage pressures. There could be an escalation of the war in in in Ukraine that again

sends energy and commodity prices through the roof. So there are a number of factors that could complicate the outlook in and I would make potentially a recession more likely. Global recession more likely, may require more tightening by central bank. We could have also a tightening of financial conditions. So far this has not happened too much, but this is a new environment. We have to be very vigilant in terms of the vulnerabilities in the financial markets, in the

non bank financial institutions and housing sector. This tightening of policy rates by centle bank is something that is really changing the environment here and we have to be very careful. This is Bloomberg Daybreak Europe, your morning brief on the story is making news from London to Wall streets and beyond. Look for us on your podcast feed every morning on Apples, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London d A B Radio,

the Bloomberg Business app and Bloomberg dot com. Our flagship New York station, is also available on your Amazon Alexa devices. Just say Alexa played Bloomberg thirty. I'm Caroline Hitka and I'm Stephen Caroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe