October 7, 2025 • 16 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) President Emmanuel Macron gave his outgoing prime minister, Sebastien Lecornu, 48 hours to negotiate with France’s political parties in a last-ditch effort to prevent the country from falling deeper into crisis.
(2) President Donald Trump said he would negotiate with Democrats over health care subsidies, a move that could open the door to resolving the government shutdown that has stretched into a second week.
(3) Advanced Micro Devices Inc. landed a blockbuster deal with OpenAI to build artificial intelligence infrastructure, giving the chipmaker a chance to show it can mount a challenge to Nvidia Corp. in the AI computing industry.
(4) Citadel’s Ken Griffin said investors are starting to view gold as a safer asset than the dollar, a development that’s “really concerning” to the billionaire investor.
(5) Bank of England Governor Andrew Bailey said Britain must boost investment if it wants to reap the rewards from any economic boom triggered by artificial intelligence.
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Transcript
Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Day bakur At podcast. Good Morning,
It's Tuesday, the seventh of October. I'm Caroline Hepkat in London.
Speaker 3 (00:16):
And I'm Stephen Carolin Paris, where President macrl has given
his outgoing prime minister forty eight hours to negotiate a
deal to salvage the government as the political uncertainty hits
Francis stocks and bonds.
Speaker 2 (00:28):
And in other news, Citadel's Ken Griffin says he's really
concerned that investors are starting to view gold as a
safer asset than the US dollar plus facing a fork
in the road, while the UK government's one point five
billion pound Jaguar land Rover bailout is a high risk move.
Let's start with a roundup of our top stories. France's
(00:51):
President Emmanuel Macaw has given his outgoing Prime Minister Sebastiana
Locornu until Wednesday to negotiate a last ditch deal to
event a deeper crisis. The decision buys the president a
little more time to decide his next steps, which could
include fresh legislative elections, something opposition groups are demanding. Lecornu
(01:12):
unexpectedly resigned yesterday, blaming gridlock among rival parties, including his
own centrist group Leah.
Speaker 4 (01:22):
The various political parties continue to take a stance as
though each had an absolute majority International Assembly, and in
the end, I found myself in a situation where I
was ready to compromise for each political party one of
the others to adopt its entire program.
Speaker 1 (01:38):
Don't think I.
Speaker 2 (01:38):
Did, some out going Prime Minister Sebastiana and Lecorn, who
speaking there via Etan's later The government now faces the
very real prospect of missing an October the thirteenth deadline
to pass a budget. Failure to do so raises the
risk of emergency measures to avoid a shutdown in January.
France's gridlock is fueling a sell off for French assets
(02:02):
and driving up the country's borrowing costs relative to peers.
France's yield premium over a German ten year debt closed
at about eighty five basis points yesterday, the highest since
early January. The cat Garrt index also lost one point
four percent yesterday, as banks took the biggest hit. Meanwhile,
over in the US, President Trump says that he will
(02:24):
negotiate with Democrats over healthcare subsidies which could help resolve
the government shut down. Speaking to reporters, he predicted some
cooperation between the two parties. With the government shutdown in
its second week, we.
Speaker 1 (02:36):
Are speaking with the Democrats, and some very good things
could happen with respect to healthcare. I'd like to see
a deal made for great healthcare.
Speaker 5 (02:44):
Yeah, I want to see great health I'm a Republican,
but I want to see healthcare much more so.
Speaker 4 (02:48):
Than the Democrat.
Speaker 2 (02:50):
Donald Trump, speaking there previously, Republican leaders insisted that Democrats
needed to vote to reopen the government before they would
engage in negotiations over health insurance tax credits. Responding to
the apparent shift, Democratic leader Chuck Schumer said his party
is ready to make it happen if Republicans want to
collaborate on healthcare. Later today, the Senate will vote for
(03:12):
the fifth time on a stopgap bill to keep the
US government open through to the end of the twenty
first of November. Citadel's Ken Griffin says investors are starting
to see gold as safer than the US dollar. The
billionaire founder of one of the world's most profitable hedge
funds warned many are looking again at the US's safe
(03:34):
haven status.
Speaker 5 (03:36):
As you see sovereigns around the world, central banks around
the world, as you see individual investors around the world go,
you know what, I now view gold as a safe
harbor asset in a way that the dollar used to
be viewed. That's what's really concerning to me.
Speaker 2 (03:55):
In the wide ranging interview with Bloomberg's Fancis Lackwig, Griffin
also said the Trump administration had given quote a lot
of love too and a lot to hate. The US
government shut down on potential future rate cards have pushed
gold to another record high on Monday, close to four
thousand dollars an ounce. AI firms have continued their rally,
(04:17):
leading the US stocks to a record closed yesterday. Shares
in global semiconductor company AMD surched as much as thirty
eight percent after it signed a deal with open ai
to build infrastructure. Greg Brockman, president and co founder of
open ai, said they're still room for growth in the sector.
Speaker 6 (04:36):
I think that the world continues to underestimate the amount
of demand for AI compute. Right that we've seen this
explosion of demand with things like CHATCHBT. You know, we're
at eight hundred million weekly active users now. This product
didn't exists three years ago, and we're in a position
where we cannot launch features, we cannot launch new products
simply because of lack of computational power. And we see
(04:57):
these models continuing to get exponentially better, and I think
we're just heading to a world where so much of
the economy is going to be lifted up and driven
by progress and AI.
Speaker 2 (05:07):
So that was open Ais, Greg Brockman speaking there. The
deal also sets the stage for open ai to acquire
a large stake in AMD. Meanwhile, open AI's mentions of
other firms at is annual Developers event yesterday boosted shares,
with companies like Figma, HubSpot and Salesforce seeing gains. Now
(05:28):
to the UK, the Bank of England Governor Andrew Bailey
says that Britain has to spend more if it wance
to see any AI gains. The central banker told an
audience of investors that he believes AI could be the
answer to Britain's productivity woes if the country commits to
technological change. Blomberg's James Walcock has more.
Speaker 7 (05:47):
The head of Britain's Central Bank, thinks AI might be
the edge of a technological breakthrough which will put a
rocket under economic growth. It's rare to hear such optimism
from a central banker speaking in Scotland rather than Silicon Valley,
but that positivity has an edge to take advantage. Bailey
says Britain needs the right infrastructure, the right mindset and
(06:09):
the right people. Currently, the UK spends less on improving
its capital than almost all other G seven piers. Andrew
Bailey says he hopes coming changes to pension fund rules
might change that. In London, James Wilcock, Bloomberg Radio.
Speaker 2 (06:25):
And those are our top stories for you this morning.
Let's update you on the market. So gold was up
by one point nine percent on Monday. The run up
in bullion Goldman Sachs forecasting an even bigger game for
next year. Four nine hundred is their target for December
twenty twenty six. Asian equities climbing to a fresh record high,
Japanese shares extending their rally. You've got tech shares up
(06:47):
after that AMD deal. Also, you had a firm auction
for Japanese thirty year sovereign bond, so that helped stop
futures though in Europe expected to be very active, especially
for answer your stocks fifty futures though sinking this morning.
US stop futures are also in the red right now.
So those are the markets now, Stephen cal You're back
(07:10):
in Paris, I think, rather sooner than you or any
of us really imagined.
Speaker 1 (07:15):
Good morning, Good morning. Yeah.
Speaker 3 (07:17):
I don't think when we were here a month ago
that we thought we would be back so quickly to
see another prime minister on the brink of leaving the job,
being back in the job again and as heading towards
perhaps a deeper precipice of the political crisis here as well.
It all happened very quickly if you think about. The
cabinet was only named on Sunday night, and yesterday morning
(07:40):
we brought you the news Sebastian Lecorn who had resigned,
and then only for later in the day for him
to be given essentially a temporary reprieve, an extra forty
eight hours to try and do a deal with the
other parties as well.
Speaker 1 (07:54):
Things moving pretty quickly here.
Speaker 2 (07:56):
Yeah, absolutely, we were surprised when we broke the new yesterday,
weren't we. Well this forty eight hours, what is Lacurno
expected to be able to achieve in that time? And
Stephen crucy what happens if there's no deal.
Speaker 3 (08:12):
First of all, he has to try and get his
former partners back on boards. That was at the root
of his resignation yesterday morning. Essentially, they were unhappy with
the lineup of the cabinet, particularly the return of the
likes of Bruno la Mayer, the former Finance minister who
was appointed to the Defense Ministry, and that is where
Sebastian le'corn who felt he could go no further. He
couldn't advance on their key projectors, of course getting a
(08:34):
budget passed. So the meetings start this morning with the
center right parties, the current Interior Minister or outgoing Interior Minister,
depending on your point of view. Bingo Retio, who's the
leader of the Republicans, won't be there. He said he
wants to speak directly to the Prime Minister and doesn't
want to take part in a wider meeting. But essentially
he has to get them back on board first to
try and rebuild I suppose the point that he started
(08:55):
from when he became Prime Minister around a month ago.
From there, he then had to get back to the
substantive issue of trying to build some sort of consensus
around budget and spending plans.
Speaker 1 (09:08):
Now.
Speaker 3 (09:08):
In his resignation speech yesterday, so Astianaccorney talked about how
in private some parties were showing signs of perhaps some
flexibility on their red lines, but he had criticized opposition
parties but also the Centrist Macronus block members of for
not being on board with some of the key proposals
they had to make. So that's where the talks are
(09:28):
starting from today. He has until Wednesday evening. That's when
he said he will tell President Macron whether or not
sufficient progress has been made.
Speaker 1 (09:36):
To be able to go forward.
Speaker 3 (09:38):
The question of who is coming before the question of
what exactly they're going to try to agree on.
Speaker 2 (09:45):
Yeah, absolutely, So where does this leave President Macaw? Mean,
how much is his future in doubt?
Speaker 3 (09:53):
Look, the short term decision is going to be what
happens if there is no deal by tomorrow evening. The
likelihood or at least the option that would appear most
likely and that situation would be that there would be
fresh elections to the National Assembly. And that's something that
Emmanuel Macron is wielding as a threat over all of
the centrist parties from the center left to the center right.
(10:14):
Because he knows that none of those parties are, according
to current polling, set to do very well. In fact,
they could end up all losing quite a lot of
seats to the political extremes, and that would be the
fear that he's hoping will motivate them into coming to
some sort of agreement. For Macron himself, he does, of
course have the option of resigning. He's always ruled it
(10:34):
out before. There's no indication that that position has changed.
He still has a term that runs until twenty twenty seven,
and for now at least.
Speaker 1 (10:42):
It doesn't look like he's going anywhere.
Speaker 2 (10:44):
Yeah, okay, So then how should we read the market reaction?
I mentioned the stock drop and the widening yield spread.
How do you think that markets have reacted so far?
Speaker 3 (10:57):
Look, so, Lacorney's resignation was a shock, and that's what
we saw playing out on markets yesterday. If we think
about the widening of the yel spread, we didn't we
got to levels that were close to what we saw
in December of last year when there was a real
budget deadline, where it looked like that France would go
into their emergency measures at the end of last year,
as they did very briefly before a budget was eventually agreed.
(11:19):
When you look at the stock sell off, it's on
stocks that are focused on the domestic French economy. This
isn't something that's having spell over into other economies just yet.
It's also and this is something that our own economists
that Bloomberg Economics have pointed out before, this is not
a fiscal crisis yet. This is a political crisis, and
that is how markets are reading it for now.
Speaker 1 (11:38):
There still is time.
Speaker 3 (11:39):
Although we talked about that October thirteenth deadline, which is
the legal deadline to present a budget to Parliament, there
is some flexibility of what do you do if you
go past that point as well. The European Commission in
Brussels will be watching closely as well. They're also expecting
to get spending plans from the French government. But ultimately,
there is a budget that runs until the end of
this year, and we saw what happened last year. If
(12:01):
you didn't have a new spending plan in place by
the end of the year, it's not a government shut down.
There are certain effects in terms of how tax credits
will roll over into the next year, but essentially the
lights stay on and no political party has ever expressed
an interest in trying to do block Anything that would
stop that happening, would stop welfare payments being paid or
(12:21):
taxes being collected as well. So we're not in a
fiscal crisis yet, but that doesn't mean that there won't
be market pressure on the politicians to get some sort
of deal done.
Speaker 2 (12:32):
Yeah, really fascinating, Stephen cal Thank you so much for
your reporting life on Paris for us this morning. I
also really liked, and I know you've read it. Of course,
our colleague Lionel Laure opinion columnists talking about lame duck
Macro is now a French sitting duck, so he's got
a lot more in terms of his views on you know,
(12:52):
Manu and Macaw, the Last Chance man how he's going
to keep his presidency on the rails through to twenty twenty.
But for now, Stephen, thank you so much for being
with us. We're going to hear from you throughout the day. Thanks,
stay with us. More from Bloomberg Daybaquob coming up after this. Okay,
(13:13):
let's turn our attention to some business and news today.
You may remember that in late August Jaguar land Rover
was hit by a major cyber attack. It led to
them shutting down manufacturing sites across the world, and in
an unprecedented move, the British government stepped in there agreed
to guarantee a one point five billion pound emergency loan
(13:34):
to the company so that it could pay its suppliers.
But experts in our warning that that move could set
a risky precedent. Our global business reporter William Wilkes has
been writing about this. William, good morning. Just firstly on
the cyber attack. This has been rumbling on for weeks.
How sophisticated was this attack?
Speaker 8 (13:55):
It seems fairly sophisticated.
Speaker 9 (13:57):
A kind of disparate group of hackers managed to get
into Jaguar Landrover systems and disrupt everything from deliveries, software
through to kind of production. So it's difficult to compare
it yet, well, all the details aren't out comparing it
(14:18):
to other hacks, but there is certainly a deep degree
of sophistication and technical knowledge on behalf of the hackers.
Speaker 2 (14:26):
So then in terms of the UK government having to
step in and the warnings around risks, what is that risk?
How do you see it?
Speaker 8 (14:37):
So the government has stepped in to help the hundreds
of smaller smaller supplier to help Jaguar Lanrover, and it's
hoped that that helped will cascade down to smaller suppliers
to secure them and the risk there, there's a couple
of risks there. I think firstly, there's a kind of
a moral hazard risk. It seems possible that Jaguar Landrover
(15:00):
didn't have the very best in cyber defense practice and protocols,
and people asking the question, does the government then extending
alone incentivized companies not to do the best they can
to defend themselves if the government's always there to bail
(15:21):
them out. And then there's another concern that perhaps this
shows hackers that they can be more aggressive because the
companies will always pay knowing that the government in the
end will bail them out. So these hackers are used
ransomware that you know you have to send a payment
to them to unlock your software. And by making this loan,
(15:42):
has it made it more likely that companies will pay
up and pass the problem financial problem onto government.
Speaker 3 (15:49):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (15:55):
Look for us on your podcast feed every morning on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (16:01):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:07):
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 3 (16:16):
And I'm Stephen Carol. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg Daybreak Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Day bakur At podcast. Good Morning,
It's Tuesday, the seventh of October. I'm Caroline Hepkat in London.
Speaker 3 (00:16):
And I'm Stephen Carolin Paris, where President macrl has given
his outgoing prime minister forty eight hours to negotiate a
deal to salvage the government as the political uncertainty hits
Francis stocks and bonds.
Speaker 2 (00:28):
And in other news, Citadel's Ken Griffin says he's really
concerned that investors are starting to view gold as a
safer asset than the US dollar plus facing a fork
in the road, while the UK government's one point five
billion pound Jaguar land Rover bailout is a high risk move.
Let's start with a roundup of our top stories. France's
(00:51):
President Emmanuel Macaw has given his outgoing Prime Minister Sebastiana
Locornu until Wednesday to negotiate a last ditch deal to
event a deeper crisis. The decision buys the president a
little more time to decide his next steps, which could
include fresh legislative elections, something opposition groups are demanding. Lecornu
(01:12):
unexpectedly resigned yesterday, blaming gridlock among rival parties, including his
own centrist group Leah.
Speaker 4 (01:22):
The various political parties continue to take a stance as
though each had an absolute majority International Assembly, and in
the end, I found myself in a situation where I
was ready to compromise for each political party one of
the others to adopt its entire program.
Speaker 1 (01:38):
Don't think I.
Speaker 2 (01:38):
Did, some out going Prime Minister Sebastiana and Lecorn, who
speaking there via Etan's later The government now faces the
very real prospect of missing an October the thirteenth deadline
to pass a budget. Failure to do so raises the
risk of emergency measures to avoid a shutdown in January.
France's gridlock is fueling a sell off for French assets
(02:02):
and driving up the country's borrowing costs relative to peers.
France's yield premium over a German ten year debt closed
at about eighty five basis points yesterday, the highest since
early January. The cat Garrt index also lost one point
four percent yesterday, as banks took the biggest hit. Meanwhile,
over in the US, President Trump says that he will
(02:24):
negotiate with Democrats over healthcare subsidies which could help resolve
the government shut down. Speaking to reporters, he predicted some
cooperation between the two parties. With the government shutdown in
its second week, we.
Speaker 1 (02:36):
Are speaking with the Democrats, and some very good things
could happen with respect to healthcare. I'd like to see
a deal made for great healthcare.
Speaker 5 (02:44):
Yeah, I want to see great health I'm a Republican,
but I want to see healthcare much more so.
Speaker 4 (02:48):
Than the Democrat.
Speaker 2 (02:50):
Donald Trump, speaking there previously, Republican leaders insisted that Democrats
needed to vote to reopen the government before they would
engage in negotiations over health insurance tax credits. Responding to
the apparent shift, Democratic leader Chuck Schumer said his party
is ready to make it happen if Republicans want to
collaborate on healthcare. Later today, the Senate will vote for
(03:12):
the fifth time on a stopgap bill to keep the
US government open through to the end of the twenty
first of November. Citadel's Ken Griffin says investors are starting
to see gold as safer than the US dollar. The
billionaire founder of one of the world's most profitable hedge
funds warned many are looking again at the US's safe
(03:34):
haven status.
Speaker 5 (03:36):
As you see sovereigns around the world, central banks around
the world, as you see individual investors around the world go,
you know what, I now view gold as a safe
harbor asset in a way that the dollar used to
be viewed. That's what's really concerning to me.
Speaker 2 (03:55):
In the wide ranging interview with Bloomberg's Fancis Lackwig, Griffin
also said the Trump administration had given quote a lot
of love too and a lot to hate. The US
government shut down on potential future rate cards have pushed
gold to another record high on Monday, close to four
thousand dollars an ounce. AI firms have continued their rally,
(04:17):
leading the US stocks to a record closed yesterday. Shares
in global semiconductor company AMD surched as much as thirty
eight percent after it signed a deal with open ai
to build infrastructure. Greg Brockman, president and co founder of
open ai, said they're still room for growth in the sector.
Speaker 6 (04:36):
I think that the world continues to underestimate the amount
of demand for AI compute. Right that we've seen this
explosion of demand with things like CHATCHBT. You know, we're
at eight hundred million weekly active users now. This product
didn't exists three years ago, and we're in a position
where we cannot launch features, we cannot launch new products
simply because of lack of computational power. And we see
(04:57):
these models continuing to get exponentially better, and I think
we're just heading to a world where so much of
the economy is going to be lifted up and driven
by progress and AI.
Speaker 2 (05:07):
So that was open Ais, Greg Brockman speaking there. The
deal also sets the stage for open ai to acquire
a large stake in AMD. Meanwhile, open AI's mentions of
other firms at is annual Developers event yesterday boosted shares,
with companies like Figma, HubSpot and Salesforce seeing gains. Now
(05:28):
to the UK, the Bank of England Governor Andrew Bailey
says that Britain has to spend more if it wance
to see any AI gains. The central banker told an
audience of investors that he believes AI could be the
answer to Britain's productivity woes if the country commits to
technological change. Blomberg's James Walcock has more.
Speaker 7 (05:47):
The head of Britain's Central Bank, thinks AI might be
the edge of a technological breakthrough which will put a
rocket under economic growth. It's rare to hear such optimism
from a central banker speaking in Scotland rather than Silicon Valley,
but that positivity has an edge to take advantage. Bailey
says Britain needs the right infrastructure, the right mindset and
(06:09):
the right people. Currently, the UK spends less on improving
its capital than almost all other G seven piers. Andrew
Bailey says he hopes coming changes to pension fund rules
might change that. In London, James Wilcock, Bloomberg Radio.
Speaker 2 (06:25):
And those are our top stories for you this morning.
Let's update you on the market. So gold was up
by one point nine percent on Monday. The run up
in bullion Goldman Sachs forecasting an even bigger game for
next year. Four nine hundred is their target for December
twenty twenty six. Asian equities climbing to a fresh record high,
Japanese shares extending their rally. You've got tech shares up
(06:47):
after that AMD deal. Also, you had a firm auction
for Japanese thirty year sovereign bond, so that helped stop
futures though in Europe expected to be very active, especially
for answer your stocks fifty futures though sinking this morning.
US stop futures are also in the red right now.
So those are the markets now, Stephen cal You're back
(07:10):
in Paris, I think, rather sooner than you or any
of us really imagined.
Speaker 1 (07:15):
Good morning, Good morning. Yeah.
Speaker 3 (07:17):
I don't think when we were here a month ago
that we thought we would be back so quickly to
see another prime minister on the brink of leaving the job,
being back in the job again and as heading towards
perhaps a deeper precipice of the political crisis here as well.
It all happened very quickly if you think about. The
cabinet was only named on Sunday night, and yesterday morning
(07:40):
we brought you the news Sebastian Lecorn who had resigned,
and then only for later in the day for him
to be given essentially a temporary reprieve, an extra forty
eight hours to try and do a deal with the
other parties as well.
Speaker 1 (07:54):
Things moving pretty quickly here.
Speaker 2 (07:56):
Yeah, absolutely, we were surprised when we broke the new yesterday,
weren't we. Well this forty eight hours, what is Lacurno
expected to be able to achieve in that time? And
Stephen crucy what happens if there's no deal.
Speaker 3 (08:12):
First of all, he has to try and get his
former partners back on boards. That was at the root
of his resignation yesterday morning. Essentially, they were unhappy with
the lineup of the cabinet, particularly the return of the
likes of Bruno la Mayer, the former Finance minister who
was appointed to the Defense Ministry, and that is where
Sebastian le'corn who felt he could go no further. He
couldn't advance on their key projectors, of course getting a
(08:34):
budget passed. So the meetings start this morning with the
center right parties, the current Interior Minister or outgoing Interior Minister,
depending on your point of view. Bingo Retio, who's the
leader of the Republicans, won't be there. He said he
wants to speak directly to the Prime Minister and doesn't
want to take part in a wider meeting. But essentially
he has to get them back on board first to
try and rebuild I suppose the point that he started
(08:55):
from when he became Prime Minister around a month ago.
From there, he then had to get back to the
substantive issue of trying to build some sort of consensus
around budget and spending plans.
Speaker 1 (09:08):
Now.
Speaker 3 (09:08):
In his resignation speech yesterday, so Astianaccorney talked about how
in private some parties were showing signs of perhaps some
flexibility on their red lines, but he had criticized opposition
parties but also the Centrist Macronus block members of for
not being on board with some of the key proposals
they had to make. So that's where the talks are
(09:28):
starting from today. He has until Wednesday evening. That's when
he said he will tell President Macron whether or not
sufficient progress has been made.
Speaker 1 (09:36):
To be able to go forward.
Speaker 3 (09:38):
The question of who is coming before the question of
what exactly they're going to try to agree on.
Speaker 2 (09:45):
Yeah, absolutely, So where does this leave President Macaw? Mean,
how much is his future in doubt?
Speaker 3 (09:53):
Look, the short term decision is going to be what
happens if there is no deal by tomorrow evening. The
likelihood or at least the option that would appear most
likely and that situation would be that there would be
fresh elections to the National Assembly. And that's something that
Emmanuel Macron is wielding as a threat over all of
the centrist parties from the center left to the center right.
(10:14):
Because he knows that none of those parties are, according
to current polling, set to do very well. In fact,
they could end up all losing quite a lot of
seats to the political extremes, and that would be the
fear that he's hoping will motivate them into coming to
some sort of agreement. For Macron himself, he does, of
course have the option of resigning. He's always ruled it
(10:34):
out before. There's no indication that that position has changed.
He still has a term that runs until twenty twenty seven,
and for now at least.
Speaker 1 (10:42):
It doesn't look like he's going anywhere.
Speaker 2 (10:44):
Yeah, okay, So then how should we read the market reaction?
I mentioned the stock drop and the widening yield spread.
How do you think that markets have reacted so far?
Speaker 3 (10:57):
Look, so, Lacorney's resignation was a shock, and that's what
we saw playing out on markets yesterday. If we think
about the widening of the yel spread, we didn't we
got to levels that were close to what we saw
in December of last year when there was a real
budget deadline, where it looked like that France would go
into their emergency measures at the end of last year,
as they did very briefly before a budget was eventually agreed.
(11:19):
When you look at the stock sell off, it's on
stocks that are focused on the domestic French economy. This
isn't something that's having spell over into other economies just yet.
It's also and this is something that our own economists
that Bloomberg Economics have pointed out before, this is not
a fiscal crisis yet. This is a political crisis, and
that is how markets are reading it for now.
Speaker 1 (11:38):
There still is time.
Speaker 3 (11:39):
Although we talked about that October thirteenth deadline, which is
the legal deadline to present a budget to Parliament, there
is some flexibility of what do you do if you
go past that point as well. The European Commission in
Brussels will be watching closely as well. They're also expecting
to get spending plans from the French government. But ultimately,
there is a budget that runs until the end of
this year, and we saw what happened last year. If
(12:01):
you didn't have a new spending plan in place by
the end of the year, it's not a government shut down.
There are certain effects in terms of how tax credits
will roll over into the next year, but essentially the
lights stay on and no political party has ever expressed
an interest in trying to do block Anything that would
stop that happening, would stop welfare payments being paid or
(12:21):
taxes being collected as well. So we're not in a
fiscal crisis yet, but that doesn't mean that there won't
be market pressure on the politicians to get some sort
of deal done.
Speaker 2 (12:32):
Yeah, really fascinating, Stephen cal Thank you so much for
your reporting life on Paris for us this morning. I
also really liked, and I know you've read it. Of course,
our colleague Lionel Laure opinion columnists talking about lame duck
Macro is now a French sitting duck, so he's got
a lot more in terms of his views on you know,
(12:52):
Manu and Macaw, the Last Chance man how he's going
to keep his presidency on the rails through to twenty twenty.
But for now, Stephen, thank you so much for being
with us. We're going to hear from you throughout the day. Thanks,
stay with us. More from Bloomberg Daybaquob coming up after this. Okay,
(13:13):
let's turn our attention to some business and news today.
You may remember that in late August Jaguar land Rover
was hit by a major cyber attack. It led to
them shutting down manufacturing sites across the world, and in
an unprecedented move, the British government stepped in there agreed
to guarantee a one point five billion pound emergency loan
(13:34):
to the company so that it could pay its suppliers.
But experts in our warning that that move could set
a risky precedent. Our global business reporter William Wilkes has
been writing about this. William, good morning. Just firstly on
the cyber attack. This has been rumbling on for weeks.
How sophisticated was this attack?
Speaker 8 (13:55):
It seems fairly sophisticated.
Speaker 9 (13:57):
A kind of disparate group of hackers managed to get
into Jaguar Landrover systems and disrupt everything from deliveries, software
through to kind of production. So it's difficult to compare
it yet, well, all the details aren't out comparing it
(14:18):
to other hacks, but there is certainly a deep degree
of sophistication and technical knowledge on behalf of the hackers.
Speaker 2 (14:26):
So then in terms of the UK government having to
step in and the warnings around risks, what is that risk?
How do you see it?
Speaker 8 (14:37):
So the government has stepped in to help the hundreds
of smaller smaller supplier to help Jaguar Lanrover, and it's
hoped that that helped will cascade down to smaller suppliers
to secure them and the risk there, there's a couple
of risks there. I think firstly, there's a kind of
a moral hazard risk. It seems possible that Jaguar Landrover
(15:00):
didn't have the very best in cyber defense practice and protocols,
and people asking the question, does the government then extending
alone incentivized companies not to do the best they can
to defend themselves if the government's always there to bail
(15:21):
them out. And then there's another concern that perhaps this
shows hackers that they can be more aggressive because the
companies will always pay knowing that the government in the
end will bail them out. So these hackers are used
ransomware that you know you have to send a payment
to them to unlock your software. And by making this loan,
(15:42):
has it made it more likely that companies will pay
up and pass the problem financial problem onto government.
Speaker 3 (15:49):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (15:55):
Look for us on your podcast feed every morning on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 3 (16:01):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:07):
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 3 (16:16):
And I'm Stephen Carol. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg Daybreak Europe
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