This is Bloomberg Daybreak you up for this Wednesday, the nineteenth of April in London.
Coming up today, a double digit headache for the Bank of England. The UK's inflation rates stays red hot at ten point one percent.
Seven hundred and eighty seven million dollars. Fox settles with Dominion over bogus claims that it rigged the twenty twenty presidential electure.
All that glitters isn't Goldman the banks, traders miss out on Wall Streets, fixed income boom.
Top investor details, planters split, HSBC, coinbase plots, a UK move and central London house prices take a big hit. Those of the stories we're looking at in today's papers. And I'm Leanne Gerns.
Plus we're live at the Bloomberg New Economy Gatesway Europe in Ireland, where the ECB's Philip Blane has told us he expects another hike in May. I'm Stephen Carroll.
That's all straight ahead on Bloomberg Daybreak Europe. The business news you need to start your day in just one fifteen minute podcast on Apple, Spotify, the Blueberg Business app and everywhere you get your podcasts.
Go on for London and Caroline Hepka and Diana Edwards.
You're listening to Daybreak Europe. That's get to our top stories. We start with UK inflation. It has once again defied analyst estimates, staying in double digit territory for another month. March CPI came in at ten point one percent year on year. That's above the estimate of nine point eight percent. Jane Foley, head of FX strategy at Rabobank, says the data will add to pressure on the Bank of England to continue its quickest cycle of interest rate increases in four decades.
It's not just about May and whether or not we're going to get an interest rate hike then I think that's almost done and dusted already. Is whether or not we're going to have to see something else from the Bank of England after that, and it is our view that we could see two twenty five basis points news before the cycle is up in the UK.
Jane Foley also told us that she viewed the figure as a disappointment rather than a surprise. This after the Prime Minister Rihi Souona made cutting inflation in half by the end of the year a key priority.
Now Fox News has agreed to pay over three quarters of a billion dollars to settle a defamation lawsuit over the twenty twenty presidential elections. Dominion accused the USTv network of airing bogus claims that it rigged the election against Donald Trump. Here is Dominion CEO John Pulis.
Fox has admitted to telling lies about Dominion that caused enormous damage to my company, our employees, and the customers that we serve.
Nothing can ever make up for that.
The settlement is about half of what the Dominion CEO was seeking, but it avoids a potentially embarrassing six week trial for Fox. Fox argued that its broadcasts were protected as free speech under the US First Amendment.
Netflix miss Wall Street estimates after adding only one point seventy five million new customers in the first quarter, more from Bloomberg's Charlie Pellett.
Investors were expecting two point four to one million new customers. Netflix also predicted it will generate lower sales and profit in the current quarter than what analysts had forecast. It sees new customers in the current period is roughly similar to the first quarter, and Netflix will begin cracking down this quarter on US viewers who share someone else's account, Predicting plans to charge such customers will boost growth in
the second half of this year. In New York, Charlie Pellett Bloomberg Daybreak, Europe.
Goldman Sachs traders have failed to capitalize on a fixing Compananza. The Wall Street JANT was the only major bank to post the decline in the division. The first quarter fixed income trading revenue dropped seventeen percent. Total revenue also fell short of analyst estimates, but CEO David Solomon says that the bank is well positioned for the future.
As we figure today, it appears that the worst of the volatility is behind us. While it's impossible predict the exact form of market stress will take and we won't always execute perfectly, our risk management culture, strong liquidity, and robust capital position have allowed us to navigate a complex environment while also continuing to actively support our clients.
Solomon says the events of the first quarter demonstrate the resilience of Goldman Sachs and US large financial institutions. Elsewhere on Wall Street, Bank of America reported earnings. Traders there saw a thirty percent jump in fixed income revenue for the quarter.
The ECB's chief economist says he expects the Central Bank to raise rates at next month's meeting. Speaking exclusively to Bloomberg, Philip Lane said the size of the move will be dependent on data due in the coming week.
Q one suggests we are seeing a reversal of the negative supply shocks that so dominated the Europan economy last year, so easing of bottlenecks, much lower gas prices. So what I would say from all of that is, as of now two weeks away, I think the baseline is that we should indeed increase interest rates in May.
Philip Lane made the comments in an interview with our ahead of economic Stephanie Flanders at Bloomberg's inaugural New Economy Gateway Europe event in Ireland. Government SAX economists have now lifted their forecast for where ECB rates will settle and now see a terminal rate of three point seventy five percent.
While speaking of policymakers, Federal Reserve Bank of Atlanta President Raphael Bostic says that he favors one more twenty five basis point a rate increase before holding at five percent. In the US. Speaking to CNBC, he said that there's more work to be done, but added that tighter credit conditions may take care of.
Some of that.
Speaking elsewhere, the Saint Louis FED President James Bullard is calling for two more rate hikes. He told Reuters he believes fears of a recession overblown. Bullard and Bostick don't have a vote on monetary policy this year, but all FED policymakers take part in rate discussions.
Okay, those are our top stories now. Stephen Carroll is not in the studio with me this morning. You would have heard his voice at the top of the program, though he is with us in spirit. He is in Ireland for the Bloomberg New Economy Gateway Europe event. And Stephen, good morning to you. Where exactly are you? Not far from Dublin, I understand, no.
About twenty kilometers away from the center of Dublin. I've exchanged our London radio studio for a forty six acres of parkland in an estate house that powers course. Yeah, yeah, exactly. It's a little bit more space, a little bit more scenic, I have to say too. We're in next to the Sugarloaf Mountain in Wicklow here, which is the Garden of Ireland.
So we've had a very beautiful morning here so far, looking at the sun coming up over the mountain and these incredible gardens in this estate house, which settlement dates back to the thirteenth century, so it is quite the venue for this event where we're talking about bringing together both public and private sector leaders to talk about the
issues facing the European economy. Reglobalization is the umbrell under which we're having those conversations, looking at all sorts of the different aspects of challenges facing countries in this continent, whether it be dealing with technology, dealing with supply chain issues, talking about trade barriers, talking about geopolitical tensions, lots of broadway discussions. We're starting though with banks. We got Andrea Orchell from UNI Credit speaking here in the first event
in just about an hour's time. But this is the first Bloomberg New Economy Gateway event in Europe, so it's a regional focus but a pretty broad scope of discussions as well.
Yeah.
Absolutely, I mean you brought us an interview with the Foreign Direct Investment Group in Ireland just earlier this morning. We heard a bit of the interview with Philip Lane, who is speaking to Bloomberg Stephanie Flanders ahead of this event. So there are plenty of people, you know whose views are pretty important.
Yeah, that's right. Look at the conversation from Philip Lane was a great way to set up the exchanges we're having here today and tomorrow, because he's talking about the broader economic environment and saying that they are really sticking to looking at what the data shows between now on the next DCB meeting. In terms of rate hikes. He wouldn't be drawn by Stephanie Flanders as to whether he would his baseline would be a fifty basis points hike.
He said, there will be a rate hike, but the size of it will have to be determined by what we learn about things like inflation, but also credit conditions in the Euro Area, because they have their own lending survey that's due out before the next meeting of the ECBs.
That's something they'll be looking to see. Of course, the effect of the collapse of SVB, the termalol that we've seen abound, credit sweel and what all of that means for the I suppose business environment here in Europe something that's top of mind for many of those attending.
Okay, Stephen, thank you very much being by Stephen Carroll, joining us there live from the Bloomberg New Economy Gate where you're at. More from Stephen as we go through programming this morning onto what is top of mind here in London, and that is certainly inflation data. The UK's inflation data for March has just been released. Joining us now is our Bloomberg UK correspondent Lizzie Burton, who can give us the details. So ten more than ten percent.
We'd expected it to come down to a single digit figure and it did not, once again disappointing those at the Bank of England and the government.
What drove this well, it was driven down from last month by motor fuels, but it was kept high by food and non alcohol drinks. So that's going to be really painful for your average bit because of course they spend more on essentials as a share of their income. In fact, if you look at the annual rate of inflation for those goods specifically, it was nineteen point one percent, eyewatering.
It is the highest since nineteen seventy seven, and interestingly, one of the big drivers is bred according to the Office for National Statistics, and i've just been digging into the most recent speech and first speech actually from Swatti Dingro, one of the big doves on the Bank of England's Monetary Policy Committee, and she actually used the example of a loaf of bread to break down the component parts
of inflation. She used it to illustrate that actually we're underestimating the contribution of imported inflation, as you might expect. She's a trade expert, so that was incredibly prescient from her. But worryingly for the Bank of England as well, Services inflation two unchanged at six point six percent, So this is really sticky.
Yeah it is. What does it mean for the Bank of England then, is that rate ry baked in.
Now pretty much looks like it markets think. So you saw after the jobs data yesterday, Goldman Sachs and Bloomberg Economics, amongst other economists, changing their calls from a hold to a quarter point hike. The jobs data showed that you've got strong pay growth, signs of renewed momentum, especially in the private sector. So our economist Dan Hansen says, it's just impossible to ignore and today's inflation print just bakes it in.
Okay, Lizzie, thanks very much. Bloomberg Sir UK correspondent Lizzie Burden with the latest on the UK story up next Stop Investor details a plan to splice HSBC. Coinbase plots a UK move as the US squeezes crypto and central London house prices take a big hit.
Now the paper review on Bluebird Daybreak Europe. The news you need to know from today's papers.
Okay, let's start update you then with the newspaper roundup. On that note, Blue both Leanne Goerens joins me now LeAnn, so let's start with the headline then in the time. So this is around a story that we've tracked for quite a long time. Top Investor details planned to split HSBC.
Yes, indeed, Caroline, there's been a development, so that's why we're talking about it. Yes, yet again HSBC's larger shareholders accusing bosses of being closed minded about a breakup of the bank. So ping An publicly called for the creation of a separately listed Asia business headquartered over in Hong Kong in a statement yesterday. That's according to reporting from Bloomberg. In a strongly worded statement it was over two thousand words.
They criticized the British lender. The Chinese insurer says it was deeply concerned about HSBC's performance. According to the Times, a Chinese insurer also claims that the foot See one hundred bank had exaggerated many of the costs and risks surrounding its breakup proposals that it had given the bank last April. Had emerged that Pingan wanted HSB to HSBC to split off its huge Asian division and that was
really to boost the value for shareholders. But the board, led by Mark Tuck and the chairman who's the chairman and nol Quinn at CEO hit that publicly arguing that the breakup would be complicated also destructive. And I think from Bloomberg reporting and from the reporting in the Times today, I think it's clear to draw one conclusion that there is this fractious relationship between Europe's largest bank and one of its most important investors over in Asia.
Okay, let's go to crypto. The Telegraph has a story on this front, Lendley and saying that crypto champion coinbase is plotting a UK move as Biden quote punishes tech.
Yes, indeed, so the Coinbase CEO has floated leaving the US of regulatory clarity on crypto just a doesn't improve. Now the multi billion dollar crypto exchange coinbases considering this move, and he's basically saying that America is dragging its feet on crypto regulations. He said, there's failure to bring in a regulatory framework for cryptocurrencies and it's hitting the industry, which could push things like coinbase to relocate to places
like here in the UK. And Brian Armstrong actually made that warning while in conversation with the former Chancellor George Osbourne at the Innovative of Finance Global Summit over in the US, once again accusing America of not being quick enough when it comes to crypto regulation. He actually said that the UK has an advantage over the US because the f CEA oversees both commodities and securities, where in the States there's a turf battle between the two separate regulators.
So there we are Coinbase wanting quicker movement on crypto regulation.
Okay. And the latest when it comes to house prices, the Financial Times has a story Central London house prices suffer the biggest annual fall since twenty nineteen.
And Caroline, this is concerning because property values in places like Mayfair, Chelsea Kensington actually tend not to suffer from rising interest rates in these higher mortgage costs we're seeing that's because the market kind of mainly relies on cash rich foreign buyers. But speaking to the Ft, the Lonres managing directors said, buyers have just become so cautious over the concerns of the prices and really that they're going to fall even further over the bleak economic outlook. So
that's what's really concerning things at the moment. And the central London property prices have dropped five percent in twelve months to March, the largest four in three and a half years. But something else that Bloomberg has written a story up on today is sales and construction of London properties fill thirty in the first quarter from a year earlier to the lowes since twenty twelve, and that's from
data compiled by Mollia London showed. So lots of data happening in the housing market, but like we're seeing, you know, the wealthy areas really suffering the biggest annual four