Good morning. It's Tuesday, the twelfth of September here in London. This is the Blueberg Daybreak here a podcast. I'm Caroline Hepka coming up today. JP Morgan Boss Jamie Diamond calls for more humility from regulators as he slams their capital plans. Apple gears up for a high stakes iPhone launch as fears of a China backlash grow, and we take a closer look at Thierry bruttof the EU enforcer who wants big tech to play by his rules. Let's start with
the roundup of our top stories. JP Morgan CEO Jamie Diamond has taken aim at US regulators, calling plans to hold more capital than international competitors a quote huge negative, and Diamond didn't stop there, pointing out that the Fed needs to be more aware of their own mistakes.
The fellow Reserve shall humility. They're the ones that called the world rach On going up. It wasn't the fellow Reserve in general, is each one of them in dependently factors, each central bank, the buyer them might have a little more humility over stuff like this.
Jamie Diamond's comments come as federal agencies push ahead with plans to require banks to add billions of dollars to their capital cushions after a number of smaller US lenders collapsed earlier this year. The Federal Reserve is done raising interest rates and will likely cut them by roughly one percentage point next year. That's according to chief economists at some of North America's largest banks. Bloombag's Charlie Pellett reports.
The latest forecast from the American Bankers Association's Economic Advisory Committee shows while the US will probably dodge a recession, economic growth looks set to slow markedly in coming quarters, pushing up unemployment while reducing inflation. According to their median forecasts, the committee sees economic growth slowing to less than an annualized one percent rate in the coming three quarters in response to the Fed's past interest rate increases and a
tightening of credit conditions. He in New York, Charlie Pellet Bloomberg Radio.
Now Bank of England policy maker Katherine Mann says that more rate hikes should be on the cards. In the UK, the most hawkish member of the Monetary Policy Committee warned that it's easier to fix a flagging economy than persistently high inflation. The Chancellor, Jeremy Hunt, told Bloomberg that price rises are weighing on fiscal decisions too.
When you're trying to bring down inflation, you have to be really careful not to pump extra money into the economy, much as you would like to not to pump extra money into people's pockets, because that can push up prices and keep inflation higher for longer. So the one thing I can absolutely say is that our focus at the autumnce statement will be on bringing down inflation.
Jeremy Hunt added that if the UK didn't improve its economic growth, taxes will rise, and you can hear the full interview with the Chancellor on the UK Politics podcast. Apple will attempt to regain the narrative later today with the launch of a new iPhone, updated Apple Watch and AirPods. The launch comes as the Coopertino firm confronts fears of a consumer backlash in China after Beijing band government employees
from using iPhones at work. Hayman Capital Management founder and CIO Carl Bass says he thinks Apple faces a rough ride in the country.
I think Apple is in for let's just say, a much much longer period of distress in China, and I think you've seen Apple try to move to India on the production side, and they've been successful in moving a very large portion of their production in a very short period of time. I just think that's going to be something they.
Have to do.
Carl Bass spoke to Bloomberg as the tech giant renewed a con tract to get modem chips from Callcom. The deal is a sign that Apple's efforts to build its own components is taking longer than expected. Bloomberg has learned that arms initial public offering is already over subscribed by ten times and bankers plan to stop taking orders later today.
That's a day earlier than planned. The offer for the British chip designer owned by SoftBank could end up fifteen times oversubscribed, and shares are due to start trading in the US on Thursday. The former head of MI six is that the UK needs to remain and maintain a dialogue with China, so Richard Dilov's intervention comes after a parliamentary researcher was arrested on suspicion of spying for Beijing,
something that he denies. Britain's former s by chief says that the situation needs to be handled delicately.
This issue is not black and white. You can be tough with China and you can show China that you mean business when they interfere in your internal affairs, but you can also trade with them. Look, this is not a cold war with China.
The former head of MI six is comments come as senior Tory MPs lined up in the House of Commons to pressure the Prime Minister to designate designate China as a threat to the UK. Responding to the initial story, Rishisunak called the relationship with Beijing a quote challenge, but stop short of going any further than that. Dangerous concrete has been discovered in the Houses of Parliament, adding to the list of the buildings affected Bloomberg's You and Pots reports.
Now, crumbling public buildings have been a big pr headache for Rishi Signac's governments. Now the contentious form of concrete that's forced over one hundred schools to close has been found in the Houses of Parliament. Mitigations will be put in place after a routine inspection uncovered so called reinforced rack. Bloomberg understands that structural engineers assess there is no immediate risk.
The discovery rack on the Parliamentary State adds to a growing list of aging buildings causing major political trouble for the Conservatives in London. I'm Une pots Bloomberg Radio.
Now though to the question of Apple is annual iPhone unveiling is going to happen today and usually on an unusual amount riding on the outcome. The iPhone fifteen is going to be unveiled today in California. So joining me this morning is quick takes. Alex Web Good morning, Alex, great to have you on the program. What are we expecting them from the new products, especially the price and the sales that they.
Could go on.
So the actual.
Hardware itself, as we've seen in recent years, the upgrades are sort of more iterative. You know, there's no sort of, at least to my mind, blockbuster new Leap. There'll be slightly thinner bezels around the edge. It's going to be USB sea port rather than a lightning port for charging. That is kind of not really Apple's own choice, that's being pushed by regulation in the European Union. And there'll be a few sort of what they call the intron
not to cringe it. It's name the dynamic island in the prone in the Pro models, which is the little sort of thing that replaced the notch at the top of the phone. That's going to be going into all models. But as you say, the key thing is going to be price, and in the Pro models they're going to be there's going to be titanium shells which will let them charge presumably a more premium price. And that's partly to your point then about sales. We have seen stagnating
unit sales. What we're then trying to do, what they're then trying to do is eke more dollars out of the units they are able to sell, therefore more premium pricing.
Okay, So if the unveiling and the kind of annual event to day may not be huge, what about Apple and whether it has a China.
Problem or not.
Yeah, I mean, we don't quite know yet, but there is concern that there might be. Essentially what we've seen in the past few weeks are report, not at least from our colleagues, that the Chinese state owned agencies and companies they are not allowed to own an iPhone as your work phone. Essentially in those context now that in and of itself is not going to be significant for
unit sales. The question is whether there is a broader issue with Chinese nationalism pushing people towards buying domestic manufactured handsets and away from iPhones. And in the past this has hurt Apple on occasion, but after each instance, iPhone sales have rebounded in that country, and in fact, China has been a relatively bright spot for them, where other companies have seen declining sales their Apple has been able to recover a little bit. But that is certainly something
that people are watching. It's not something that Tim Cook will comment on today. It's probably something we're going to have to wait until the next quarterly earnings call to get any real visibility over.
Okay, the industry wide slow down though in smartphone demand is not just Apple, is it?
No? And frankly, Apple's been doing better than a lot of the competition. The sales that Samsung have declined a lot more significantly than an Apple. If you look at the second quarter of twenty twenty two, Apple and Samsung have twenty two percent market share. It now has twenty percent market share. In that time, Apple's market share has increased by a percentage points. So we have seen it actually benefit from the trarails of its biggest competitor. And
crucially it's that pricing point. You know that Samsung tends to play in the slightly less premium category. It does still have some offerings up in the high end, but that really is dominated by Apple and that's where the pricing point really comes into play.
Yeah, okay, really interesting, Alex, Thank you so much for being with me this morning. Quick takes Alex Web. They're looking ahead then to Apple's annual iPhone unveiling in California. Well, Alex was mentioning that it was Europe that influenced Apple's charging system. Attitudes to US tech really are a big deal. And Tierry Burton is the bold, sometimes brash European politician who's made himself actually the face of a long list of legislation affecting big tech, particularly big tech in the
US Billion begs. Jillian Deutsch has been looking into the man who wants big tech to play by his rules. Jillien, good morning, Thank you so much for being with us. This is a very interesting piece for anyone who doesn't know who is Chieri Bruton.
That's a great question and thanks so much for having me. As Alex was mentioned, you know, this USB C charger, this is something that actually not just the EU, but really tier brit sawn champion. This was a great segue there. He is a former telecom CEO, former French finance minister and even a best selling sci fi author. But now he is the European Union's biggest tech regulator. He has a title of the Internal Market Commissioner and this is given him leeway us up into a whole bunch of topics.
So you see him talking about vaccines, energy, but really some of the most notable legislation that he is and part of is Digital Services Act, which is policing how platforms police content on their pleae content on their platforms, and the Digital Markets Act, which is a whole new list of anti trust rules. And like you mentioned, you know, he's really made himself the face of these rules.
Two big tech.
Companies and they really see him as kind of this new age of not just clipping their wings, the American tech wings, but really championing new legislation actually benefits European companies.
Yeah, that is really interesting. How is his different his approach different than from other EU politicians and you know people in Brussels. How has he viewed.
It's interesting, So I guess probably the best comparison is Margaret Vestiger. So anyone who's really ever followed any kind of European tech legislation or any of these you know, infamous indie trust or tax cases coming out of Brussels, it's been Investigar behind them. She was even labeled the American hating tax lady once by former US President Donald Trump.
But Pratona's really kind of taken that title of eu'll enforce her away from Vestiger, and only because she's just actually just got on leave to take another job or to Deviye for another job. But even before that, you know, over the past three and a half years, he's really made himself the face of legislation, excuse me. And he's also you know, really kind of pushed the boundaries of this legislation and in part by writing you know, rules
that actually give more advantages to European tech companies. But also has a very different personality. Investiger has this kind of intimidating calm and she presents very carefully crafted lawsuits, whereas Breton. It's quite brash. He really keeps CEOs on their toes. It's very unpredictable. He's definitely a character here in Russell's that has been quite divisive.
Yeah, and so how is he seen by companies and CEOs.
So companies and CEOs tend to write them off sometimes as like another anti American tech regulator, but at the same time they obviously see tons of legislation coming out of the EU. I mean, be honest with DSA and d MA, You've got cybersecurity rules, you've got artificial intelligence rules coming up. He's really the one who spearheaded the
chipsacked for example here in Russells. So they also are really trying to make it clear to him that they're taking him very seriously, and he believes them.
This is Bloomberg Daybreak Euroup, your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London DAB Radio, the Bluemberg business app, and Bloomberg dot Com. Our flagship New York station is also available on your Amazon Alexa device. Just say Alexa Play Bloomberg eleven point thirty. I'm Callen Hepga.
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