May 9, 2024 • 16 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Bank of England Governor Andrew Bailey may deliver a lift to British consumers with a stronger signal on when the central bank can lower borrowing costs from their highest in 16 years.
(2) Former Bank of England chief economist Andy Haldane was debanked like Nigel Farage, the one-time Brexit Party leader, because he was designated "politically connected."
(3) US President Joe Biden said he would halt additional shipments of offensive weapons to Israel if the country proceeded with a ground invasion of Rafah, decrying the potential loss of civilian life as "just wrong."
(4) London is missing out on a rebound in Europe's initial public offering market, in yet another sign of its waning prospects as a listing destination.
(5) John Ternus, the head of hardware engineering, is emerging as a potential successor to Tim Cook as the CEO of Apple.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Day bit Q podcast, available every morning on Apple, Spotify
or wherever you listen. It's Thursday, the ninth of May
here in London. I'm Caroline Hepki and.
Speaker 2 (00:18):
I'm Stephen Carroll. Coming up today, the Bank of England
weighs when to cut interest rates. After the FED pushes
its move down the road.
Speaker 1 (00:25):
President Biden warns that the US will hold back more
weapons if Israel invades Raffa.
Speaker 2 (00:30):
Plus, the apple doesn't fall far from the tree. We
have the inside story on who might one day succeed
Tim Cook at the Tech Titan.
Speaker 1 (00:38):
Let's start with a roundup of our top stories.
Speaker 2 (00:41):
Markets are poised for a stronger signal on when the
Bank of England will cut interest rates, although economists expect
the benchmark rate to stay at five hundred quarter percent.
Governor Andrew Bailey may provide clearer indications later on when
he expects to loosen policy. Bloomberg's chief UK economist Dan
Hansen says more MPC members could be warming to a
(01:02):
cost for me.
Speaker 3 (01:03):
Actually, what's been most interesting is what policy makers have
been saying, and we've had remarks from certainly Andrew Bailey
and Dave Ramsden that are you know, very much sort
of moving in I would say the duttish direction. There's
a little bit of uncertainty. I think about what Hugh
pill did or didn't say in his speech, but I
think the thing for us that we took away at
least is that he said that there's been little news
(01:24):
in the data, which is obviously clearly very important.
Speaker 2 (01:28):
That's Star Hanson from Bloomberg Economics. Policymakers also faced some
political pressure to lower borrowing costs as government ministers look
for a feel good factor for voters ahead of an
election expected later this year. The latest Bank of England
decision is due at twelve pm UK time, followed by
a press conference lad by Andrew Bailey, now.
Speaker 1 (01:45):
The former chief economist of the Bank of England, says
that he was denied a British bank account last year
because he was designated politically connected. Referring to the debanked
politician Nigel Farash, Andy Haldane says, we are all nigels now.
Speaker 4 (02:02):
More than one hundred and forty thousand companies have been
the banked across the UK, including me, so I tried
to open a bank account last year and the bank
was very nice, very straightforward process. It came back a
few weeks later refusing and they said your account's been
(02:22):
refused because you are politically connected by dint of working
for the Bank of England.
Speaker 1 (02:33):
Andy Haldane, speaking that the Rules Society of Arts, where
he's now CEO, how Dane blamed regulation like Barsil three
and Solvency two for chilling risk appetite and stalling investment.
He argues the UK needs to take more gambles if
it wants to boost growth, offering a partial endorsement of
Shadow Chancellor Rachel Reeves secure nomics policies.
Speaker 2 (02:55):
US President Joe Biden says he will start additional shipments
of offensive weapons to Israel if the country goes ahead
with a ground invasion of Raffa in Gaza. The comments
come as the US pause delivery of about three thousand,
five hundred bombs to Israel that could cause massive collateral
damage in the densely packed city. In an interview with CNN,
(03:16):
Joe Biden sought to highlight the potential loss of civilian
life if Benjamin Netanyahu's government opts to invade the area.
Speaker 5 (03:24):
If they go on to RAFA. I'm not for applying
the weapons that have been used historically to deal with
Rafa to deal with the city, to deal with that problem.
We're going to continue to make sure as you're as
secure in terms of iron Dome and their ability to
respond to attacks like came out of you the least recently.
But it's just wrong.
Speaker 2 (03:45):
Biden's decision on armed supplies was attacked by Israel, who
reportedly told US officials that pressure should be put on
Hamas rather than on their country.
Speaker 1 (03:55):
Shares in the chip designer ARM tumbled after a lukewarm
four past revenue for fiscal twenty twenty five, it's expected
to be three point eight billion to four point one
billion dollars. Now that is just shy of analysts expectations
of four billion dollars on the lower end. Konshan Sabane
from Bloemberg Intelligence says the slowdown is sector wide.
Speaker 6 (04:18):
The driver for the mislike miss in the fiscalier guidance
was coming really from two major areas. One is networking
and the other is the industrial IoT which most of
the semiconductor companies exposed to this are seeing weakness here.
So that's not companies specific. It's just that end market
is going through a cyclical bottom. There's higher inventories and
the demand is weak.
Speaker 1 (04:39):
Bloomberg's semiconductor analyst Kunshan Sabani, speaking there. The predictions raised
concerns that the tech industry's artificial intelligence spending spree is slowing,
but URM CEO Rene Haas says that the company remains
very confident in its long term growth.
Speaker 2 (04:57):
London is missing out on a rebound in Europe's ines
public offering markets. According to new data compiled by Bloomberg,
of the eleven point nine billion dollars raised in IPOs
in Europe this year, just over two percent was in
the UK. That compares to an average share of thirty
one percent over the past eleven years. With UK stocks
trading at a disc und to many foreign markets, it
(05:19):
believes that the London IPO market is being hindered by
the prospect of higher valuations elsewhere.
Speaker 1 (05:24):
A UK think tank says that Chancellor Jeremy Hunt has
run out of fiscal room. The National Institute for Economic
and Social Research says weak growth and sticky inflation mean
the government will need to raise taxes in the autumn
rather than cut them. Bloomberg's Tia Adebayo has more.
Speaker 7 (05:43):
There were already question marks about where the tax cuts
could really restore the Conservative Party's election hopes, but nissas
say not only can the Chancellor not afford them, government
deficits are so far into the red zone he will
need to raise taxes just to balance the books. Their
advice scrap the fiscal rules entirely and bring in a
(06:03):
longer term system that allows more public investment. There is
brighter news in the report. NISA expects a six percent
surge in living standards this year as inflation moderates in London.
Do you added by Bimberg Radio.
Speaker 1 (06:18):
Now in a moment we'll look ahead to today's Bank
of England decision and also speak to Bloomberg's chief correspondent,
Mark German, staying up very late for us in the
US to talk about who might succeed Tim Cook at Apple.
But also I just wanted to reflect for a moment
on Andy Haldane's speech. I mean, he's a hugely influential
economist of course here in the UK, and I think
(06:40):
across Europe as well, former a chief economist at the
Bank of England, and his speech in talking about everyone
being a Nigel. Look, this will get pick up right
in terms of the UK media being debanked, but I
think that some of his speech was absolutely fascinating. He
took talked about why stability and stasis is not enough,
(07:04):
not enough for the UK, all for the world, but
actually globally we need to take more risks. That there's
so much anxiety about change it's causing us not to
change rapidly enough. And this is absolutely I think where
the conversation is the kind of zeitgeist at the moment.
He talked about the stagnation in wages in the UK
over the past fifteen years, but he compared that to
(07:25):
the United States, where he talked about fifty years of
wage stagnation. And yet he was also very optimistic. He
didn't want to be all, you know, dooming gloom. That
wasn't his term, but he said that he wanted to
focus on the optimism and where there are opportunities. That
global trade is still growing, that levels of income around
the world have never been sort of higher, That people
(07:47):
are living longer and that is a huge opportunity for
this century. So there was a lot of kind of
optimism in his speech.
Speaker 2 (07:55):
Look It's always very interesting to listen to what Andy
hal Dane has to say, not only because of his
past position at the Bank up the Bank of England,
but also his views on where policy goes now as well.
We had him on the Blueberg gi Ge Poltics podcast
just a couple of months ago, and i'd point you
back to that episode as well if you want to
hear more from Andie hall Danes's views.
Speaker 1 (08:13):
Yeah, absolutely right, let's sign our attention then. Well, remaining
with the Bank of England, shall we It's expected to
keep blending rates at five and a quarter percent, but
the question is whether Governor Andrew Bailey gives strongest signals
on when the Central Bank are lower those borrowing costs
from their highest in sixteen years. Joining us now, Jamie Rush,
our chief European Economists, Good morning, Jamie. The rate path
(08:37):
and the signals from Andrew Braley. What do you expect?
What about the potential vote split at the Bank of England.
Speaker 8 (08:43):
Well, as traders are fairly split on whether there's going
to be a cut in June, and so today could
well be quite decisive and tilting that pricing one way
or another. On the vote split and the communications around that.
I think to see it cut, we're going to need
a couple to see it cup of things, possibly one
of the members of the committee deciding to cut, whereas
(09:04):
previously they've decided they've been on hold. So as you,
I mean, Dave Ramsen would be a good candidate for
that because he now sees inflation risks in the UK's
being to the downside, which is a change of position,
so we should probably expect him to favor a cut,
and then we'll also need to see that backed up
by some dubbish remarks from Bailey. Some of the data
have been surprisingly strong, like inflation is a little bit
(09:25):
or services inflation certainly is a little stronger, the economy
is growing a little faster, So we need to see
some evidence that they're not panicking as that data has
come through, and that'll probably be enough. But I mean,
if we want to a wild card, I mean, they
could explicitly say that they're minded to ease if the
data come in and line with their forecast. And we
(09:46):
don't think they'll do that because they're expressively data dependent,
but it's a possibility and if they want to send
a strong message, that's that's how they'll do it.
Speaker 2 (09:54):
What about the forecasts for inflation and growth? What all
you be watching out for?
Speaker 8 (09:59):
Well, again, I think the in the forecasts are always
a tool to communicate to markets about whether they're they're
thinking the same way. So last time they produced a forecast,
there was one hundred basis points of cuts in the
in the yield curve and inflation was roughly in line
with target in the medium term. This time there's only
(10:19):
fifty basis points of cuts in the in the forecast
probably and so they'll probably show that inflation is below
target in the medium term. It's to say that the
markets are too hawkish and that they should they should
they should expend.
Speaker 1 (10:32):
We're eating okay? What is in terms of the the
other stories that we're thinking about. The think tank NISSA
has weighed in on on tax cuts. I mean there's
also potentially in the back drop some pressure on the
Bank Fingland's cut rates. You know, that would be a
good thing for the government and so on. NISSA, which
(10:52):
is again a think tank in the UK, they have
forecasts which are very similar to the model used by
the Treasury and they show that any pre election give
away by the chance and in terms of tax cuts
wouldn't be possible that actually Hunt has to do more
in terms of balancing the books.
Speaker 8 (11:07):
Well, so I think there's a couple of points on
this one. I mean, the first is that there wasn't
rooms to do tax cuts last time, because the only
way that they're consistent with debt falling at the end
of the forecast is by penciling and ludicrously tight spending
settlements for government departments. So there was never any rooms
to do tax cuts anyway. But if you take them
(11:29):
at their word that they're going to do these spending cuts,
then yeah, it's probably it's reasonably likely that they'll have
less space when it comes to the next fiscal event.
But what I would say, though, is that spending taxes
are two huge numbers, and the difference between them can
be quite can be quite small, or surely these changes
(11:49):
in those numbers, it's basically impossible to forecast exactly where
the OBR is going to land. Regardless of which model
you have, it comes down to what the obr's judgments are.
As the people who run the OBR, who make decisions
about how strong the economy is going to be. A
model can't tell you that so I think there's we
should prove a skeptical about whether that we're able to
(12:09):
predict where the guy is going to land in the end.
Speaker 2 (12:13):
Okay, Jamie, thank you so much. I Chief you're of
economist there from Blooberg Economics. Jamie Rush talking us through
today's decision from the Bank of England.
Speaker 1 (12:21):
Now, it's a huge tech job and a dilemma who
will succeed Tim Cook as Apple's next CEO. Bloomberg's Mark
German has a long piece looking at Cook's tenure and
the growing questions about who might follow him leading a
multi trillion dollar company, and it's all in Bloomberg Business Week.
But Mark joins us now, good morning, Mark, thank you
(12:42):
so much for staying up so late and speaking to us.
Apple as a business has quite a lot to grapple
with right now.
Speaker 9 (12:49):
It's a busy time for Apple. Obviously, you're grappling with
the ever lasting search for a new innovative product after
the iPhone. You're grappling with the European Union in the
United States, with which both want to break up the
App Store, which by the way, generates twenty billion a
year in revenue. As smartphone sales are slowing. You're trying
(13:10):
to pull some of your manufacturing out of China while
also trying to not upset Beijing. So clearly Tim Cook
is very busy right now. He's got a lot on
his plate. But like you said, there are questions about
succession at Apple, given that Cook is churning sixty five
next year.
Speaker 2 (13:29):
And he's certainly rich enough to retire. So who could
be in the running to replace Tim Cook?
Speaker 5 (13:36):
Yeah?
Speaker 9 (13:36):
Cook, of course, like the rest of the Apple's executive team,
they're all rich and old enough to retire. But money
isn't necessarily the focus. They appreciate the power, right, They
appreciate the product work, the business side of it, right.
So it's not all about the money for them. If
it was, they would have retired by now. So who
is next in line? Well, if Tim Cook were to
(13:57):
step down in the very near future, look no for
other than Jeff Williams. He's Apple's chief operating Officer. He
was named that role nine years ago. That was the
same role that Tim Cook held for many years under
Steve Jobs. He's in charge of both industrial and user
interface design at Apple, the company's supply chain and Apple Care,
and he not only looks like Tim Cook not only
(14:19):
went to the same school as Tim Cook, and also,
like Cook, worked at IBM, but he is Cook's number two.
The other part of it is that he's only two
years younger than Cook. That's a problem. If Cook steps
down in five seven years or so, you can't pass
the baton to Williams. He's going to be pushing sixty seven,
seventy years old. You can't name a person of that
(14:41):
age as brilliant and as wise as they may be
as a CEO and expect them to be in the
role for fifteen years, like Cook and jobs before him.
That leaves us with someone else. That's John Turnas, the
senior VP of hardware Engineering.
Speaker 1 (14:54):
Okay, that's interesting. As you say, I mean that the
circle around Tim Cook has remained very tight for many years.
I mean, is it still your view that the succession
would come internally rather than externally.
Speaker 6 (15:08):
Yeah.
Speaker 9 (15:09):
My strong view is that the succession will happen internally,
and I do strongly believe that John Turnas, like I said,
the head of hardware Engineering, is the next person up
to be the CEO of Apple. He's about forty eight
forty nine years old, which means He's about fifteen young
years younger than Cook. If Cook steps down in the
(15:31):
next five years or so, that will leave pretty long
runway for Turnis to imprint his image on the company.
He comes from the hardware engineering side, so that would
be unique and new for the company the previous CEO. Obviously,
Cook is an operations focused executive and Turnis's biggest challenge
because I think Cook will deal with the smartphone and
(15:51):
the China issues and the regulatory matters before his tenures over,
We'll be finding that next big product category for the
company and to have a hardware person do that.
Speaker 2 (16:03):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (16:09):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 2 (16:15):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (16:21):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 2 (16:30):
And I'm Stephen Carroll. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg day Break. Europe
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Day bit Q podcast, available every morning on Apple, Spotify
or wherever you listen. It's Thursday, the ninth of May
here in London. I'm Caroline Hepki and.
Speaker 2 (00:18):
I'm Stephen Carroll. Coming up today, the Bank of England
weighs when to cut interest rates. After the FED pushes
its move down the road.
Speaker 1 (00:25):
President Biden warns that the US will hold back more
weapons if Israel invades Raffa.
Speaker 2 (00:30):
Plus, the apple doesn't fall far from the tree. We
have the inside story on who might one day succeed
Tim Cook at the Tech Titan.
Speaker 1 (00:38):
Let's start with a roundup of our top stories.
Speaker 2 (00:41):
Markets are poised for a stronger signal on when the
Bank of England will cut interest rates, although economists expect
the benchmark rate to stay at five hundred quarter percent.
Governor Andrew Bailey may provide clearer indications later on when
he expects to loosen policy. Bloomberg's chief UK economist Dan
Hansen says more MPC members could be warming to a
(01:02):
cost for me.
Speaker 3 (01:03):
Actually, what's been most interesting is what policy makers have
been saying, and we've had remarks from certainly Andrew Bailey
and Dave Ramsden that are you know, very much sort
of moving in I would say the duttish direction. There's
a little bit of uncertainty. I think about what Hugh
pill did or didn't say in his speech, but I
think the thing for us that we took away at
least is that he said that there's been little news
(01:24):
in the data, which is obviously clearly very important.
Speaker 2 (01:28):
That's Star Hanson from Bloomberg Economics. Policymakers also faced some
political pressure to lower borrowing costs as government ministers look
for a feel good factor for voters ahead of an
election expected later this year. The latest Bank of England
decision is due at twelve pm UK time, followed by
a press conference lad by Andrew Bailey, now.
Speaker 1 (01:45):
The former chief economist of the Bank of England, says
that he was denied a British bank account last year
because he was designated politically connected. Referring to the debanked
politician Nigel Farash, Andy Haldane says, we are all nigels now.
Speaker 4 (02:02):
More than one hundred and forty thousand companies have been
the banked across the UK, including me, so I tried
to open a bank account last year and the bank
was very nice, very straightforward process. It came back a
few weeks later refusing and they said your account's been
(02:22):
refused because you are politically connected by dint of working
for the Bank of England.
Speaker 1 (02:33):
Andy Haldane, speaking that the Rules Society of Arts, where
he's now CEO, how Dane blamed regulation like Barsil three
and Solvency two for chilling risk appetite and stalling investment.
He argues the UK needs to take more gambles if
it wants to boost growth, offering a partial endorsement of
Shadow Chancellor Rachel Reeves secure nomics policies.
Speaker 2 (02:55):
US President Joe Biden says he will start additional shipments
of offensive weapons to Israel if the country goes ahead
with a ground invasion of Raffa in Gaza. The comments
come as the US pause delivery of about three thousand,
five hundred bombs to Israel that could cause massive collateral
damage in the densely packed city. In an interview with CNN,
(03:16):
Joe Biden sought to highlight the potential loss of civilian
life if Benjamin Netanyahu's government opts to invade the area.
Speaker 5 (03:24):
If they go on to RAFA. I'm not for applying
the weapons that have been used historically to deal with
Rafa to deal with the city, to deal with that problem.
We're going to continue to make sure as you're as
secure in terms of iron Dome and their ability to
respond to attacks like came out of you the least recently.
But it's just wrong.
Speaker 2 (03:45):
Biden's decision on armed supplies was attacked by Israel, who
reportedly told US officials that pressure should be put on
Hamas rather than on their country.
Speaker 1 (03:55):
Shares in the chip designer ARM tumbled after a lukewarm
four past revenue for fiscal twenty twenty five, it's expected
to be three point eight billion to four point one
billion dollars. Now that is just shy of analysts expectations
of four billion dollars on the lower end. Konshan Sabane
from Bloemberg Intelligence says the slowdown is sector wide.
Speaker 6 (04:18):
The driver for the mislike miss in the fiscalier guidance
was coming really from two major areas. One is networking
and the other is the industrial IoT which most of
the semiconductor companies exposed to this are seeing weakness here.
So that's not companies specific. It's just that end market
is going through a cyclical bottom. There's higher inventories and
the demand is weak.
Speaker 1 (04:39):
Bloomberg's semiconductor analyst Kunshan Sabani, speaking there. The predictions raised
concerns that the tech industry's artificial intelligence spending spree is slowing,
but URM CEO Rene Haas says that the company remains
very confident in its long term growth.
Speaker 2 (04:57):
London is missing out on a rebound in Europe's ines
public offering markets. According to new data compiled by Bloomberg,
of the eleven point nine billion dollars raised in IPOs
in Europe this year, just over two percent was in
the UK. That compares to an average share of thirty
one percent over the past eleven years. With UK stocks
trading at a disc und to many foreign markets, it
(05:19):
believes that the London IPO market is being hindered by
the prospect of higher valuations elsewhere.
Speaker 1 (05:24):
A UK think tank says that Chancellor Jeremy Hunt has
run out of fiscal room. The National Institute for Economic
and Social Research says weak growth and sticky inflation mean
the government will need to raise taxes in the autumn
rather than cut them. Bloomberg's Tia Adebayo has more.
Speaker 7 (05:43):
There were already question marks about where the tax cuts
could really restore the Conservative Party's election hopes, but nissas
say not only can the Chancellor not afford them, government
deficits are so far into the red zone he will
need to raise taxes just to balance the books. Their
advice scrap the fiscal rules entirely and bring in a
(06:03):
longer term system that allows more public investment. There is
brighter news in the report. NISA expects a six percent
surge in living standards this year as inflation moderates in London.
Do you added by Bimberg Radio.
Speaker 1 (06:18):
Now in a moment we'll look ahead to today's Bank
of England decision and also speak to Bloomberg's chief correspondent,
Mark German, staying up very late for us in the
US to talk about who might succeed Tim Cook at Apple.
But also I just wanted to reflect for a moment
on Andy Haldane's speech. I mean, he's a hugely influential
economist of course here in the UK, and I think
(06:40):
across Europe as well, former a chief economist at the
Bank of England, and his speech in talking about everyone
being a Nigel. Look, this will get pick up right
in terms of the UK media being debanked, but I
think that some of his speech was absolutely fascinating. He
took talked about why stability and stasis is not enough,
(07:04):
not enough for the UK, all for the world, but
actually globally we need to take more risks. That there's
so much anxiety about change it's causing us not to
change rapidly enough. And this is absolutely I think where
the conversation is the kind of zeitgeist at the moment.
He talked about the stagnation in wages in the UK
over the past fifteen years, but he compared that to
(07:25):
the United States, where he talked about fifty years of
wage stagnation. And yet he was also very optimistic. He
didn't want to be all, you know, dooming gloom. That
wasn't his term, but he said that he wanted to
focus on the optimism and where there are opportunities. That
global trade is still growing, that levels of income around
the world have never been sort of higher, That people
(07:47):
are living longer and that is a huge opportunity for
this century. So there was a lot of kind of
optimism in his speech.
Speaker 2 (07:55):
Look It's always very interesting to listen to what Andy
hal Dane has to say, not only because of his
past position at the Bank up the Bank of England,
but also his views on where policy goes now as well.
We had him on the Blueberg gi Ge Poltics podcast
just a couple of months ago, and i'd point you
back to that episode as well if you want to
hear more from Andie hall Danes's views.
Speaker 1 (08:13):
Yeah, absolutely right, let's sign our attention then. Well, remaining
with the Bank of England, shall we It's expected to
keep blending rates at five and a quarter percent, but
the question is whether Governor Andrew Bailey gives strongest signals
on when the Central Bank are lower those borrowing costs
from their highest in sixteen years. Joining us now, Jamie Rush,
our chief European Economists, Good morning, Jamie. The rate path
(08:37):
and the signals from Andrew Braley. What do you expect?
What about the potential vote split at the Bank of England.
Speaker 8 (08:43):
Well, as traders are fairly split on whether there's going
to be a cut in June, and so today could
well be quite decisive and tilting that pricing one way
or another. On the vote split and the communications around that.
I think to see it cut, we're going to need
a couple to see it cup of things, possibly one
of the members of the committee deciding to cut, whereas
(09:04):
previously they've decided they've been on hold. So as you,
I mean, Dave Ramsen would be a good candidate for
that because he now sees inflation risks in the UK's
being to the downside, which is a change of position,
so we should probably expect him to favor a cut,
and then we'll also need to see that backed up
by some dubbish remarks from Bailey. Some of the data
have been surprisingly strong, like inflation is a little bit
(09:25):
or services inflation certainly is a little stronger, the economy
is growing a little faster, So we need to see
some evidence that they're not panicking as that data has
come through, and that'll probably be enough. But I mean,
if we want to a wild card, I mean, they
could explicitly say that they're minded to ease if the
data come in and line with their forecast. And we
(09:46):
don't think they'll do that because they're expressively data dependent,
but it's a possibility and if they want to send
a strong message, that's that's how they'll do it.
Speaker 2 (09:54):
What about the forecasts for inflation and growth? What all
you be watching out for?
Speaker 8 (09:59):
Well, again, I think the in the forecasts are always
a tool to communicate to markets about whether they're they're
thinking the same way. So last time they produced a forecast,
there was one hundred basis points of cuts in the
in the yield curve and inflation was roughly in line
with target in the medium term. This time there's only
(10:19):
fifty basis points of cuts in the in the forecast
probably and so they'll probably show that inflation is below
target in the medium term. It's to say that the
markets are too hawkish and that they should they should
they should expend.
Speaker 1 (10:32):
We're eating okay? What is in terms of the the
other stories that we're thinking about. The think tank NISSA
has weighed in on on tax cuts. I mean there's
also potentially in the back drop some pressure on the
Bank Fingland's cut rates. You know, that would be a
good thing for the government and so on. NISSA, which
(10:52):
is again a think tank in the UK, they have
forecasts which are very similar to the model used by
the Treasury and they show that any pre election give
away by the chance and in terms of tax cuts
wouldn't be possible that actually Hunt has to do more
in terms of balancing the books.
Speaker 8 (11:07):
Well, so I think there's a couple of points on
this one. I mean, the first is that there wasn't
rooms to do tax cuts last time, because the only
way that they're consistent with debt falling at the end
of the forecast is by penciling and ludicrously tight spending
settlements for government departments. So there was never any rooms
to do tax cuts anyway. But if you take them
(11:29):
at their word that they're going to do these spending cuts,
then yeah, it's probably it's reasonably likely that they'll have
less space when it comes to the next fiscal event.
But what I would say, though, is that spending taxes
are two huge numbers, and the difference between them can
be quite can be quite small, or surely these changes
(11:49):
in those numbers, it's basically impossible to forecast exactly where
the OBR is going to land. Regardless of which model
you have, it comes down to what the obr's judgments are.
As the people who run the OBR, who make decisions
about how strong the economy is going to be. A
model can't tell you that so I think there's we
should prove a skeptical about whether that we're able to
(12:09):
predict where the guy is going to land in the end.
Speaker 2 (12:13):
Okay, Jamie, thank you so much. I Chief you're of
economist there from Blooberg Economics. Jamie Rush talking us through
today's decision from the Bank of England.
Speaker 1 (12:21):
Now, it's a huge tech job and a dilemma who
will succeed Tim Cook as Apple's next CEO. Bloomberg's Mark
German has a long piece looking at Cook's tenure and
the growing questions about who might follow him leading a
multi trillion dollar company, and it's all in Bloomberg Business Week.
But Mark joins us now, good morning, Mark, thank you
(12:42):
so much for staying up so late and speaking to us.
Apple as a business has quite a lot to grapple
with right now.
Speaker 9 (12:49):
It's a busy time for Apple. Obviously, you're grappling with
the ever lasting search for a new innovative product after
the iPhone. You're grappling with the European Union in the
United States, with which both want to break up the
App Store, which by the way, generates twenty billion a
year in revenue. As smartphone sales are slowing. You're trying
(13:10):
to pull some of your manufacturing out of China while
also trying to not upset Beijing. So clearly Tim Cook
is very busy right now. He's got a lot on
his plate. But like you said, there are questions about
succession at Apple, given that Cook is churning sixty five
next year.
Speaker 2 (13:29):
And he's certainly rich enough to retire. So who could
be in the running to replace Tim Cook?
Speaker 5 (13:36):
Yeah?
Speaker 9 (13:36):
Cook, of course, like the rest of the Apple's executive team,
they're all rich and old enough to retire. But money
isn't necessarily the focus. They appreciate the power, right, They
appreciate the product work, the business side of it, right.
So it's not all about the money for them. If
it was, they would have retired by now. So who
is next in line? Well, if Tim Cook were to
(13:57):
step down in the very near future, look no for
other than Jeff Williams. He's Apple's chief operating Officer. He
was named that role nine years ago. That was the
same role that Tim Cook held for many years under
Steve Jobs. He's in charge of both industrial and user
interface design at Apple, the company's supply chain and Apple Care,
and he not only looks like Tim Cook not only
(14:19):
went to the same school as Tim Cook, and also,
like Cook, worked at IBM, but he is Cook's number two.
The other part of it is that he's only two
years younger than Cook. That's a problem. If Cook steps
down in five seven years or so, you can't pass
the baton to Williams. He's going to be pushing sixty seven,
seventy years old. You can't name a person of that
(14:41):
age as brilliant and as wise as they may be
as a CEO and expect them to be in the
role for fifteen years, like Cook and jobs before him.
That leaves us with someone else. That's John Turnas, the
senior VP of hardware Engineering.
Speaker 1 (14:54):
Okay, that's interesting. As you say, I mean that the
circle around Tim Cook has remained very tight for many years.
I mean, is it still your view that the succession
would come internally rather than externally.
Speaker 6 (15:08):
Yeah.
Speaker 9 (15:09):
My strong view is that the succession will happen internally,
and I do strongly believe that John Turnas, like I said,
the head of hardware Engineering, is the next person up
to be the CEO of Apple. He's about forty eight
forty nine years old, which means He's about fifteen young
years younger than Cook. If Cook steps down in the
(15:31):
next five years or so, that will leave pretty long
runway for Turnis to imprint his image on the company.
He comes from the hardware engineering side, so that would
be unique and new for the company the previous CEO. Obviously,
Cook is an operations focused executive and Turnis's biggest challenge
because I think Cook will deal with the smartphone and
(15:51):
the China issues and the regulatory matters before his tenures over,
We'll be finding that next big product category for the
company and to have a hardware person do that.
Speaker 2 (16:03):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 1 (16:09):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 2 (16:15):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 1 (16:21):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
I'm Caroline Hepka.
Speaker 2 (16:30):
And I'm Stephen Carroll. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg day Break. Europe
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