July 11, 2025 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) President Donald Trump threatened a 35% tariff on some Canadian goods and raised the prospect of increasing levies on most other countries, ramping up his trade rhetoric in comments that weighed on stocks and boosted the US dollar.
(2) Markets are complacent on tariffs planned by US President Donald Trump, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has warned.
(3) Keir Starmer sealed a “one in, one out” migrant returns trial with French President Emmanuel Macron that highlighted the limits for now of the UK Prime Minister’s efforts to reset relations with European nations five years after Brexit.
(4) Since arriving at Santander in 2016, Javier Garcia-Carranza has pushed through sweeping change: ousting managers, slashing costs and overhauling traditional ways of working to become one of Chair Ana Botin's closest allies.
(5) French Prime Minister Francois Bayrou called on the European Central Bank to do more to support the economy as his government struggles to contain its budget deficit and address slowing growth.
(6) President Donald Trump said he plans to make a “major statement” on Russia, as the US prepares to send more American weapons to Ukraine via purchases from NATO allies.
(7) Ukrainian President Volodymyr Zelenskiy said a meeting with US and European allies in Rome stoked optimism that Donald Trump’s administration will ramp up military aid to the war-battered country, including air defense.
Podcast Conversation: Hotels’ Luxury Brand Pop-Ups Are a Key Summer Strategy
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg Day BAC podcast. Good morning, It's Friday,
the eleventh of July. I'm Caroline, hepkat in London.
Speaker 1 (00:15):
And I'm Stephen Caroline Brussels. Coming up today. US President
Donald Trump raises the prospect of higher global tariffs after
threatening Canada with a thirty five percent rate on some goods.
Speaker 2 (00:27):
JP Morgan's Jamie Diamond tells European leaders they're losing to
the US and China as he warns of market complacency
over tariffs.
Speaker 1 (00:35):
Plus bumping along the bottom, the UK economy shrinks for
a second month in a row in a fresh blow
to Ker Starmer and Rachel Reeves.
Speaker 3 (00:43):
Let's start with a roundup of our top stories.
Speaker 1 (00:46):
US President Donald Trump says he's now eyeing blanket tariffs
of fifteen to twenty percent on most trading partners. The
comments in a phone interview with NBC News would mark
a significant increase from the current US global baseline of
ten percent. The President also reportedly dismissed concerns that further
tariffs could negatively affect stocks or inflation, pointing to recent
(01:08):
rises in the US equity market. Stefan Hoffer, as a
chief investment strategist at LGT Bank, says that in the
long term, the impact of tariffs is far harder to assess.
Speaker 4 (01:18):
Frankly, we are in uncharted territory. We've never seen anything
like this.
Speaker 3 (01:22):
There is no playbook for this.
Speaker 4 (01:24):
We've gone from an effective import tariff pre President Trump's
second second presidency of just below two percent to the
Liberation Day twenty seven percent down to you know, it's
a moving target and these kind of distortions are very,
very difficult to map out onto model where we land.
Speaker 1 (01:44):
Finally, stefan Hoffer was speaking as US stock futures fell
on the dollar strengthened on the latest trade comments.
Speaker 2 (01:52):
Well separately, in a post on truth Social President Trump
said the US will impose a tariff of thirty five
percent on Canadian products on the first of August. That
would be ten percent higher than the current rate applied
to all goods not covered under the US Mexico Canada
Free Trade Agreement. Bloomberg's Jeal d Sis says the White
House is so far signaling that the free trade agreement
(02:14):
holds this.
Speaker 5 (02:16):
USMCA, that the trade agreement between the US and Canada
and Mexico that those goods aren't included in this thirty
five percent tariff threat. I think that's really really important
because what that ultimately tells us then is that what
Trump's ultimately doing, it appears, and again I have to
caution this is a very quickly evolving story, but what
that does mean potentially is that this is essentially a
(02:38):
ten percent tariff increase over a group of goods that
were covered already with a twenty five percent tariffs.
Speaker 3 (02:45):
Bloomberg's jeal desis.
Speaker 2 (02:47):
In response to the US person's threat, Canadian Prime Minister
Mark Carney said that he would continue to defend workers
and businesses. A large proportion of Canada's exports to the
US full under the rules of the USMCA, would be
unaffected by.
Speaker 3 (03:01):
The new rate.
Speaker 1 (03:03):
We're turning next to Jamie Diamond, who's sounding a warning
about the muted market reaction to the US trade offensive.
Speaking at an event in Dublin hosted by Ireland's Foreign Ministry,
the JP Morgan CEO said, Unfortunately, I think there's complacency.
The Wall Street Stalwort also weighed in and what he
believes is a major European competitiveness problem, as Bomberg's Chris
(03:24):
Pitt reports.
Speaker 6 (03:26):
You're losing. That's the stark assessment of Jamie Diamond, who
says the EU has a huge problem at the moment
when it comes to competitiveness. Citing the region's sluggish growth.
The JP Morgan Boss pointed out that Europe's economic weight
has declined significantly, falling from ninety percent of USGDP to
(03:47):
just over sixty five percent in the past ten to
fifteen years. He says the best way to reverse that
decline is to build an internal market that functions more
effectively across all industries. Diamonds comments come as the EU
seeks to conclude an intram trade deal with the US
that could allow the block to lock in a ten
(04:08):
percent tariff rate beyond the August first deadline as they
negotiate a permanent agreement in London. Crispit Bloomberg Radio.
Speaker 2 (04:18):
The UK economy shrank for a second month in a
row in May, has the country struggled to bounce back
from the blow dealt by US tariffs and a raft
of tax increases. GDP declined by tenth of one percent
in the month before last, after contracting three tenths of
one percent in April, leaving the economy at risk of
a contraction over the second quarter. The figures are a
(04:39):
fresh blow to the promise of Kirstarma and Transerrator Reeves
after a recent series of political setbacks. However, as inflationary
pressures is money markets are best in that the Bank
of England will cut interest rates in August and again
by the end of the year, with further reductions in
twenty twenty six.
Speaker 1 (05:00):
As Prime Minister Kiir Starmer says he's agreed on what
he calls a groundbreaking deal to return migrants arriving in
small boats from France. The pilot scheme was agreed with
the French President Emmanuel Macro at the end of his
state visit to the UK. Starmer says the agreement will
mean that for every person sent back, the UK will
accept an asylum seeker who hasn't attempted an illegal crossing.
Speaker 7 (05:20):
This will show others trying to make the same journey
that it will be in vain and the jobs they've
been promised in the UK will no longer exist because
of the nationwide crackdown we're delivering on illegal working.
Speaker 1 (05:36):
Starmer's been politically damaged by record numbers of asylum seekers
crossing the English Channel. Roughly twenty one thousand people have
made the journey in small boats so far this year.
Speaker 2 (05:46):
President Donald Trump says that he plans to make a
major statement on Russia on Monday, as the US prepares
to send more American weapons to Ukraine paid for by
NATO allies. In a telephone interview with NBC News, Trump
said that he also expects the Senate to pass a
quote biting sanctions bill on Russia after he criticized Lasimir
(06:07):
Putin for his continued attacks on Ukraine. Russia has been
pounding Kieven other Ukrainian cities with record numbers of drones
and missiles. Ukrainian President vlosimiir Zelinsky was optimistic about more
aid at a meeting of US and European allies in Rome.
Speaker 8 (06:24):
We must stop Russian droms and missiles, and the means
more air defense supplies and more investments in interceptor drowns,
air defense systems and of course missans, and I urge
all our partners increase your investments. When Russia increases its attacks.
(06:44):
We cannot have a shortage of funding for drum production.
Speaker 2 (06:50):
President Zolinski, speaking there at the Ukrainian Recovery Conference in Rome,
where Allies announced more than ten billion euros in additional funding.
The Ukrainian leader said that he'd since had a positive
dialogue with President Trump over the delivery of Patriot air
defense batteries.
Speaker 1 (07:06):
Those are your top stories on the markets. The pound
three tents weaker against the dollar one thirty five forty three.
The Bloomberg Dollar Spot Index is two tents stronger. On
equity markets, these stock six hundred up excuse me, down
by four tens of one percent, The forty one hundred
is flat. The catcurrent in Paris down by half of
one percent. Wall Street futures pointing lower as well, down
four tenths for S and p E many futures.
Speaker 2 (07:27):
Now in a moment, we're going to get more detail
on the latest tariff news with Bluebergs and Bill Ferries,
and also the UK economic picture with our UK economist
Dan Hanson. Are the difficulties that we face, But I
think it's time for something lighter, don't you. Hotels and
luxury brand pop ups. Sarah Appaport has been writing about this.
(07:48):
This is the crossover of fabulous hotels and scenery who
are now using the fabrics and luxury design of all
sorts of designers Dolcea and Goomar for one, and also
my personal favorite Mathsony.
Speaker 1 (08:04):
Yeah, I mean, look, some of the pictures are so fantastic.
So she has pictures of there's a pool basically at
the San Domnico Palace in Tarmina and Sicily which has
dodgingbana tels and umbrellas. Like it's quite a sight when
you see them all together in one go. It really
is kind of, you know, a pretty striking style.
Speaker 2 (08:24):
Statement, eye popping, absolutely and.
Speaker 1 (08:28):
I like it, I except that it might not beat
everyone's taste. I think that's what I'm trying to say.
Speaker 3 (08:32):
But like, yeah, absolutely, look.
Speaker 1 (08:34):
More is more, Caroline.
Speaker 2 (08:36):
I love the stripes Masni stripes on the pool deck.
You've got Okubetha and Callian Mikanos. Apparently hotels using those Yeah,
and I think, look, the idea is also that they
sell all of those goods in the fancy hotel shop.
I mean, six hundred pounds for adult sho DNG towel
(08:56):
is pretty eye watching also, but this apparently is a
hot trend for the summer.
Speaker 3 (09:01):
So I had to just tell everybody about it.
Speaker 1 (09:03):
Yeah, well, look, I mean it's something that particularly in
places like Making Us, the big luxury brands have been
doing pop up summer shops there for years to try
and make sure that, you know, those very high spending
tourists that are going to what are now very expensive
destinations like making Us in summer, you know, are getting
to see those high end products of once of them
as well, but interesting see them integrated into some of
the hotels too. So I've just seen the burbery themed
(09:24):
golf cart. This has gone too far. Okay, it's a
great piece of Motel's luxury brand. Pop ups are the
key summer strategy. Sarah Rappaport writing about it. You'll find
it on bloemberg dot com.
Speaker 2 (09:34):
Okay, right now we get back to the serious stuff.
And the dollar has strengthened as the US President has
again ramped up his trade rhetoric, threatening higher towers on
Canada and also a higher global baseline rate. Our senior
editor Bill Ferries joins us Now for more on this.
So it was a big number for Canada, but what
about the data? How significant is it?
Speaker 3 (09:55):
This? The idea of thirty five percent tariff.
Speaker 9 (09:59):
Yeah, five percent. Definitely a big headline number there, as
you mentioned. But the reality is, from what we understand,
is that it's not going to impact a lot of
the goods that are already covered under the USMCA Trade Agreement,
and that's really the majority of Canada's exports into the
United States. It won't affect big, big ticket items like
(10:22):
energy exports as well, which is subject to a i
think currently a ten percent tariff. So we're gonna have
to wait and see if and when this actually gets
implemented what the range of products is. But it is
not and across the board tariff like many other countries
are staring at at this point.
Speaker 1 (10:43):
Bill, this is something that we're watching at the same
time where we're looking at questions around the baseline tariffs too,
and whether or not that may end up being much
higher for countries that don't end up with a specific
deal as well. Is the sense that we are looking
at an escalation from Donald Trump, you know, as we're
getting towards that first of August days, it's certainly looking
(11:04):
that way.
Speaker 9 (11:04):
I mean countries since the Liberation Day reciprocal tariffs were
kind of postponed. Most countries have been facing this ten
percent tariff, which even that is much higher than the
roughly two percent tariff the US had in January before
Donald Trump took office. But the numbers he's talking about,
(11:25):
you know, fifteen to twenty percent is kind of the
overall general base rate. That's a significant increase compared to
what countries we're dealing with, you know, six months ago,
let's say, and it's you know, we're still waiting to
see if that trickles through to US inflation, but it's
certainly going to vastly change the trading system that the
(11:46):
world had grown accustomed to up up until January twentieth.
Speaker 2 (11:51):
Yeah, indeed, Bill, thank you so much for being with
us this morning, Our senior Edison, Bill Ferries. As we
think then about the trade rhetoric and how that's going
to translate in to reality, Yeah.
Speaker 1 (12:01):
Of course we're watching two to see what progress could
be announced on a deal with the EU as well.
We've been expecting movement towards it all this week as well,
and EU Trade Minister's meeting on Monday. The question is
what they will have to discuss at that point as well.
Let's turn to the story in the UK that we've
been following though, the economy shrinking for a second straight
month in May as the country has struggled to bounce
(12:21):
back from the blowdout by tariffs and a raft of
tax increases. The decline zero point one percent in May.
That's after contracting by zero point three percent in April.
Let's bring in our chief UK economist at Dan Hansen
for more. Dan, the difference between minus point one and
growth of zero point two that you were predicting, I mean,
(12:42):
what does that mean? Big picture, morning, Stephen. Big picture?
Speaker 10 (12:47):
I mean, I think the way we tend to think
about it in terms of quarterly growth, So three months,
the first three months of the year, second three months
of the year, and so on and so forth. Have we
changed our view of what we think will happen in
the second quarter of the year. The is no, And
that is for a couple of reasons. The main one
is that monthly GDP it's volatile, but it also gets revised.
(13:10):
And if you look at the past path of revisions
and you take account of what we've had today and
as you say, there wasn't misrelative to our forecast. But
the net effect of all of those things actually is
to leave the economy, at least relative to our forecast
in a similar spot. Now, one thing I would add
to that is that the Bank of England is thinking
(13:32):
that the economy would grow zero point three percent in
the second quarter, so that's what it said in its
June minute. So there is a bit of a gap
on that expectation, but we think relative to our expectation
of a growth of point one on the quarter, we
think we're still in the same place. And the other
The big part of the picture is that this is
obviously a huge slowdown relative to what happened in the
(13:52):
first quarter. We had point seven percent growth, and this
is about activity being displaced. So we had sort of
a lot of activity in in the first quarter of
the year in anticipation of tariffs, and now we're seeing
the effect of tariffs coming through. So I think if
you're going to take it in the round, you'd probably
want to average the two numbers to get a sense
of where the underlying growth rate of the economy is.
Speaker 2 (14:12):
Because there's been the other was such a hit and
so much uncertainty around tariffs. I suppose Britain is struggling
with low economic growth in low productivity. Are we in
a lost decade? How do we turn that around? And
that's the big question, isn't it for the Starma government?
Are we in this kind of underperformance? Do we stay there?
Speaker 10 (14:33):
So our view is that the recent history of UK
economic performance and I think I'm going back further than
the pandemic because obviously you can't take that in the
energy crisis and we've had this big rise in interest rates.
But if you go back, if you think of the
period from twenty ten onwards, and if you compare that
to say, the previous decade two ninety seven to two
(14:55):
thousand and seven, there has been this massive step down
in growth and I think if you're think about what
is the best guess for where things go from here,
it's the more recent period of time that is a
better gauge. Now, is that a lost decade? I'd probably
say that's that's probably slightly strong. But we're in a
We're in a world where growth is much much weaker,
(15:16):
And you're absolutely right to focus on productivity. Growth that
is the thing that has been lacking and has changed
since it's really since the financial crisis. It's not a
new phenomenon. Thinking about what the government can do and
how things have changed. I think it has done some
things that are good around planning reform, around boosting investment
public investment. The challenge with all of this is these
(15:39):
things take time to come through and impact, and in
the meantime it feels like we're every year we get
a new new near term shock, if you like, and
that feels like it's been the case since Brexits. You
had Brexit and speculation around that, then the pandemic, the
energy crisis, you had the rise in interest rates. Now
we've got tariffs, and the real challenge is moving from
(16:01):
the near term and having a solid base where sentiment
is solid. That gives you the base to move forward.
But we just keep getting knocked back with these various shocks.
As I say, I think the government should be given
some credit for the policies it's put in place. It's
just being hit back by these near term economic shocks.
And the previous government had the same challenge.
Speaker 1 (16:24):
This is Bloomberg Daybreak Europe. You're a morning brief on
the stories making news from London to Wall Streets and beyond.
Speaker 2 (16:30):
Look for us on your podcast feed every morning, on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (16:36):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:42):
Our flagship New York station, is also available on your
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Speaker 1 (16:50):
I'm Caroline Hepka and I'm Stephen Carroll. 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 (00:09):
This is the Bloomberg Day BAC podcast. Good morning, It's Friday,
the eleventh of July. I'm Caroline, hepkat in London.
Speaker 1 (00:15):
And I'm Stephen Caroline Brussels. Coming up today. US President
Donald Trump raises the prospect of higher global tariffs after
threatening Canada with a thirty five percent rate on some goods.
Speaker 2 (00:27):
JP Morgan's Jamie Diamond tells European leaders they're losing to
the US and China as he warns of market complacency
over tariffs.
Speaker 1 (00:35):
Plus bumping along the bottom, the UK economy shrinks for
a second month in a row in a fresh blow
to Ker Starmer and Rachel Reeves.
Speaker 3 (00:43):
Let's start with a roundup of our top stories.
Speaker 1 (00:46):
US President Donald Trump says he's now eyeing blanket tariffs
of fifteen to twenty percent on most trading partners. The
comments in a phone interview with NBC News would mark
a significant increase from the current US global baseline of
ten percent. The President also reportedly dismissed concerns that further
tariffs could negatively affect stocks or inflation, pointing to recent
(01:08):
rises in the US equity market. Stefan Hoffer, as a
chief investment strategist at LGT Bank, says that in the
long term, the impact of tariffs is far harder to assess.
Speaker 4 (01:18):
Frankly, we are in uncharted territory. We've never seen anything
like this.
Speaker 3 (01:22):
There is no playbook for this.
Speaker 4 (01:24):
We've gone from an effective import tariff pre President Trump's
second second presidency of just below two percent to the
Liberation Day twenty seven percent down to you know, it's
a moving target and these kind of distortions are very,
very difficult to map out onto model where we land.
Speaker 1 (01:44):
Finally, stefan Hoffer was speaking as US stock futures fell
on the dollar strengthened on the latest trade comments.
Speaker 2 (01:52):
Well separately, in a post on truth Social President Trump
said the US will impose a tariff of thirty five
percent on Canadian products on the first of August. That
would be ten percent higher than the current rate applied
to all goods not covered under the US Mexico Canada
Free Trade Agreement. Bloomberg's Jeal d Sis says the White
House is so far signaling that the free trade agreement
(02:14):
holds this.
Speaker 5 (02:16):
USMCA, that the trade agreement between the US and Canada
and Mexico that those goods aren't included in this thirty
five percent tariff threat. I think that's really really important
because what that ultimately tells us then is that what
Trump's ultimately doing, it appears, and again I have to
caution this is a very quickly evolving story, but what
that does mean potentially is that this is essentially a
(02:38):
ten percent tariff increase over a group of goods that
were covered already with a twenty five percent tariffs.
Speaker 3 (02:45):
Bloomberg's jeal desis.
Speaker 2 (02:47):
In response to the US person's threat, Canadian Prime Minister
Mark Carney said that he would continue to defend workers
and businesses. A large proportion of Canada's exports to the
US full under the rules of the USMCA, would be
unaffected by.
Speaker 3 (03:01):
The new rate.
Speaker 1 (03:03):
We're turning next to Jamie Diamond, who's sounding a warning
about the muted market reaction to the US trade offensive.
Speaking at an event in Dublin hosted by Ireland's Foreign Ministry,
the JP Morgan CEO said, Unfortunately, I think there's complacency.
The Wall Street Stalwort also weighed in and what he
believes is a major European competitiveness problem, as Bomberg's Chris
(03:24):
Pitt reports.
Speaker 6 (03:26):
You're losing. That's the stark assessment of Jamie Diamond, who
says the EU has a huge problem at the moment
when it comes to competitiveness. Citing the region's sluggish growth.
The JP Morgan Boss pointed out that Europe's economic weight
has declined significantly, falling from ninety percent of USGDP to
(03:47):
just over sixty five percent in the past ten to
fifteen years. He says the best way to reverse that
decline is to build an internal market that functions more
effectively across all industries. Diamonds comments come as the EU
seeks to conclude an intram trade deal with the US
that could allow the block to lock in a ten
(04:08):
percent tariff rate beyond the August first deadline as they
negotiate a permanent agreement in London. Crispit Bloomberg Radio.
Speaker 2 (04:18):
The UK economy shrank for a second month in a
row in May, has the country struggled to bounce back
from the blow dealt by US tariffs and a raft
of tax increases. GDP declined by tenth of one percent
in the month before last, after contracting three tenths of
one percent in April, leaving the economy at risk of
a contraction over the second quarter. The figures are a
(04:39):
fresh blow to the promise of Kirstarma and Transerrator Reeves
after a recent series of political setbacks. However, as inflationary
pressures is money markets are best in that the Bank
of England will cut interest rates in August and again
by the end of the year, with further reductions in
twenty twenty six.
Speaker 1 (05:00):
As Prime Minister Kiir Starmer says he's agreed on what
he calls a groundbreaking deal to return migrants arriving in
small boats from France. The pilot scheme was agreed with
the French President Emmanuel Macro at the end of his
state visit to the UK. Starmer says the agreement will
mean that for every person sent back, the UK will
accept an asylum seeker who hasn't attempted an illegal crossing.
Speaker 7 (05:20):
This will show others trying to make the same journey
that it will be in vain and the jobs they've
been promised in the UK will no longer exist because
of the nationwide crackdown we're delivering on illegal working.
Speaker 1 (05:36):
Starmer's been politically damaged by record numbers of asylum seekers
crossing the English Channel. Roughly twenty one thousand people have
made the journey in small boats so far this year.
Speaker 2 (05:46):
President Donald Trump says that he plans to make a
major statement on Russia on Monday, as the US prepares
to send more American weapons to Ukraine paid for by
NATO allies. In a telephone interview with NBC News, Trump
said that he also expects the Senate to pass a
quote biting sanctions bill on Russia after he criticized Lasimir
(06:07):
Putin for his continued attacks on Ukraine. Russia has been
pounding Kieven other Ukrainian cities with record numbers of drones
and missiles. Ukrainian President vlosimiir Zelinsky was optimistic about more
aid at a meeting of US and European allies in Rome.
Speaker 8 (06:24):
We must stop Russian droms and missiles, and the means
more air defense supplies and more investments in interceptor drowns,
air defense systems and of course missans, and I urge
all our partners increase your investments. When Russia increases its attacks.
(06:44):
We cannot have a shortage of funding for drum production.
Speaker 2 (06:50):
President Zolinski, speaking there at the Ukrainian Recovery Conference in Rome,
where Allies announced more than ten billion euros in additional funding.
The Ukrainian leader said that he'd since had a positive
dialogue with President Trump over the delivery of Patriot air
defense batteries.
Speaker 1 (07:06):
Those are your top stories on the markets. The pound
three tents weaker against the dollar one thirty five forty three.
The Bloomberg Dollar Spot Index is two tents stronger. On
equity markets, these stock six hundred up excuse me, down
by four tens of one percent, The forty one hundred
is flat. The catcurrent in Paris down by half of
one percent. Wall Street futures pointing lower as well, down
four tenths for S and p E many futures.
Speaker 2 (07:27):
Now in a moment, we're going to get more detail
on the latest tariff news with Bluebergs and Bill Ferries,
and also the UK economic picture with our UK economist
Dan Hanson. Are the difficulties that we face, But I
think it's time for something lighter, don't you. Hotels and
luxury brand pop ups. Sarah Appaport has been writing about this.
(07:48):
This is the crossover of fabulous hotels and scenery who
are now using the fabrics and luxury design of all
sorts of designers Dolcea and Goomar for one, and also
my personal favorite Mathsony.
Speaker 1 (08:04):
Yeah, I mean, look, some of the pictures are so fantastic.
So she has pictures of there's a pool basically at
the San Domnico Palace in Tarmina and Sicily which has
dodgingbana tels and umbrellas. Like it's quite a sight when
you see them all together in one go. It really
is kind of, you know, a pretty striking style.
Speaker 2 (08:24):
Statement, eye popping, absolutely and.
Speaker 1 (08:28):
I like it, I except that it might not beat
everyone's taste. I think that's what I'm trying to say.
Speaker 3 (08:32):
But like, yeah, absolutely, look.
Speaker 1 (08:34):
More is more, Caroline.
Speaker 2 (08:36):
I love the stripes Masni stripes on the pool deck.
You've got Okubetha and Callian Mikanos. Apparently hotels using those Yeah,
and I think, look, the idea is also that they
sell all of those goods in the fancy hotel shop.
I mean, six hundred pounds for adult sho DNG towel
(08:56):
is pretty eye watching also, but this apparently is a
hot trend for the summer.
Speaker 3 (09:01):
So I had to just tell everybody about it.
Speaker 1 (09:03):
Yeah, well, look, I mean it's something that particularly in
places like Making Us, the big luxury brands have been
doing pop up summer shops there for years to try
and make sure that, you know, those very high spending
tourists that are going to what are now very expensive
destinations like making Us in summer, you know, are getting
to see those high end products of once of them
as well, but interesting see them integrated into some of
the hotels too. So I've just seen the burbery themed
(09:24):
golf cart. This has gone too far. Okay, it's a
great piece of Motel's luxury brand. Pop ups are the
key summer strategy. Sarah Rappaport writing about it. You'll find
it on bloemberg dot com.
Speaker 2 (09:34):
Okay, right now we get back to the serious stuff.
And the dollar has strengthened as the US President has
again ramped up his trade rhetoric, threatening higher towers on
Canada and also a higher global baseline rate. Our senior
editor Bill Ferries joins us Now for more on this.
So it was a big number for Canada, but what
about the data? How significant is it?
Speaker 3 (09:55):
This? The idea of thirty five percent tariff.
Speaker 9 (09:59):
Yeah, five percent. Definitely a big headline number there, as
you mentioned. But the reality is, from what we understand,
is that it's not going to impact a lot of
the goods that are already covered under the USMCA Trade Agreement,
and that's really the majority of Canada's exports into the
United States. It won't affect big, big ticket items like
(10:22):
energy exports as well, which is subject to a i
think currently a ten percent tariff. So we're gonna have
to wait and see if and when this actually gets
implemented what the range of products is. But it is
not and across the board tariff like many other countries
are staring at at this point.
Speaker 1 (10:43):
Bill, this is something that we're watching at the same
time where we're looking at questions around the baseline tariffs too,
and whether or not that may end up being much
higher for countries that don't end up with a specific
deal as well. Is the sense that we are looking
at an escalation from Donald Trump, you know, as we're
getting towards that first of August days, it's certainly looking
(11:04):
that way.
Speaker 9 (11:04):
I mean countries since the Liberation Day reciprocal tariffs were
kind of postponed. Most countries have been facing this ten
percent tariff, which even that is much higher than the
roughly two percent tariff the US had in January before
Donald Trump took office. But the numbers he's talking about,
(11:25):
you know, fifteen to twenty percent is kind of the
overall general base rate. That's a significant increase compared to
what countries we're dealing with, you know, six months ago,
let's say, and it's you know, we're still waiting to
see if that trickles through to US inflation, but it's
certainly going to vastly change the trading system that the
(11:46):
world had grown accustomed to up up until January twentieth.
Speaker 2 (11:51):
Yeah, indeed, Bill, thank you so much for being with
us this morning, Our senior Edison, Bill Ferries. As we
think then about the trade rhetoric and how that's going
to translate in to reality, Yeah.
Speaker 1 (12:01):
Of course we're watching two to see what progress could
be announced on a deal with the EU as well.
We've been expecting movement towards it all this week as well,
and EU Trade Minister's meeting on Monday. The question is
what they will have to discuss at that point as well.
Let's turn to the story in the UK that we've
been following though, the economy shrinking for a second straight
month in May as the country has struggled to bounce
(12:21):
back from the blowdout by tariffs and a raft of
tax increases. The decline zero point one percent in May.
That's after contracting by zero point three percent in April.
Let's bring in our chief UK economist at Dan Hansen
for more. Dan, the difference between minus point one and
growth of zero point two that you were predicting, I mean,
(12:42):
what does that mean? Big picture, morning, Stephen. Big picture?
Speaker 10 (12:47):
I mean, I think the way we tend to think
about it in terms of quarterly growth, So three months,
the first three months of the year, second three months
of the year, and so on and so forth. Have we
changed our view of what we think will happen in
the second quarter of the year. The is no, And
that is for a couple of reasons. The main one
is that monthly GDP it's volatile, but it also gets revised.
(13:10):
And if you look at the past path of revisions
and you take account of what we've had today and
as you say, there wasn't misrelative to our forecast. But
the net effect of all of those things actually is
to leave the economy, at least relative to our forecast
in a similar spot. Now, one thing I would add
to that is that the Bank of England is thinking
(13:32):
that the economy would grow zero point three percent in
the second quarter, so that's what it said in its
June minute. So there is a bit of a gap
on that expectation, but we think relative to our expectation
of a growth of point one on the quarter, we
think we're still in the same place. And the other
The big part of the picture is that this is
obviously a huge slowdown relative to what happened in the
(13:52):
first quarter. We had point seven percent growth, and this
is about activity being displaced. So we had sort of
a lot of activity in in the first quarter of
the year in anticipation of tariffs, and now we're seeing
the effect of tariffs coming through. So I think if
you're going to take it in the round, you'd probably
want to average the two numbers to get a sense
of where the underlying growth rate of the economy is.
Speaker 2 (14:12):
Because there's been the other was such a hit and
so much uncertainty around tariffs. I suppose Britain is struggling
with low economic growth in low productivity. Are we in
a lost decade? How do we turn that around? And
that's the big question, isn't it for the Starma government?
Are we in this kind of underperformance? Do we stay there?
Speaker 10 (14:33):
So our view is that the recent history of UK
economic performance and I think I'm going back further than
the pandemic because obviously you can't take that in the
energy crisis and we've had this big rise in interest rates.
But if you go back, if you think of the
period from twenty ten onwards, and if you compare that
to say, the previous decade two ninety seven to two
(14:55):
thousand and seven, there has been this massive step down
in growth and I think if you're think about what
is the best guess for where things go from here,
it's the more recent period of time that is a
better gauge. Now, is that a lost decade? I'd probably
say that's that's probably slightly strong. But we're in a
We're in a world where growth is much much weaker,
(15:16):
And you're absolutely right to focus on productivity. Growth that
is the thing that has been lacking and has changed
since it's really since the financial crisis. It's not a
new phenomenon. Thinking about what the government can do and
how things have changed. I think it has done some
things that are good around planning reform, around boosting investment
public investment. The challenge with all of this is these
(15:39):
things take time to come through and impact, and in
the meantime it feels like we're every year we get
a new new near term shock, if you like, and
that feels like it's been the case since Brexits. You
had Brexit and speculation around that, then the pandemic, the
energy crisis, you had the rise in interest rates. Now
we've got tariffs, and the real challenge is moving from
(16:01):
the near term and having a solid base where sentiment
is solid. That gives you the base to move forward.
But we just keep getting knocked back with these various shocks.
As I say, I think the government should be given
some credit for the policies it's put in place. It's
just being hit back by these near term economic shocks.
And the previous government had the same challenge.
Speaker 1 (16:24):
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