June 19, 2025 • 21 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Senior US officials are preparing for the possibility of a strike on Iran in the coming days, according to people familiar with the matter, a sign that Washington is assembling the infrastructure to directly enter a conflict with Tehran.
(2) Federal Reserve officials continued to pencil in two interest-rate cuts in 2025, though new projections showed a growing divide among policymakers over the trajectory for borrowing costs as tariffs make their way through the US economy.
(3) The Bank of England is expected to keep interest rates at 4.25% on Thursday and signal it is sticking with its one-cut-every-other-meeting approach as officials try to strike a balance between elevated inflation, higher oil prices and a slowing economy.
(4) London is seeking to attract more Chinese firms to list on its stock exchange as the city struggles with a shrinking equity market and a deal drought across Europe.
(5) The number of London homes for sale at £5 million ($6.8 million) or more rose to the highest on record last month, as the nation contends with the departure of wealthy foreigners looking to escape tax hikes.
Podcast Conversation: Gen Z Drives Britain’s Consumer Confidence to Highest This Year
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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 daybreakurate podcast, available every morning on Apple,
Spotify or wherever you listen. It's Thursday, the nineteenth of June,
in London. I'm Caroline Hepka. Coming up today, American officials
prepare for a potential strike on Iran, as President Trump
says he prefers to make a final decision one second
before it's due. The Fed keeps interest rates steady as
(00:31):
Jerome Powell warns of weak US growth and a pickup
in inflation ahead of today's Bank of England decision.
Speaker 3 (00:38):
Plus buyer's remorse.
Speaker 2 (00:39):
Non Doms rushed to sell their London homes as one
of the architects of the super Rich tax plan calls
its role out a mistake. Let's start with a roundup
of our top stories. Sources have told Bloomberg that senior
US officials are preparing for a possible strike on Iran
in the coming days. The reporting indo that the Trump
(01:00):
administration is assembling the infrastructure necessary to directly enter a
conflict with Tehran, while the situation is said to be
evolving and could still change. Some of those who spoke
to Bloomberg on condition of anonymity, pointed to potential plans
for a weekend strike. President Trump was asked yesterday if
he would be approving a strike on Iran.
Speaker 4 (01:23):
You do I seriously think I'm going to answer that, quay?
Speaker 3 (01:25):
Will you strike the Iranian nuclear component?
Speaker 4 (01:29):
And what time exactly?
Speaker 5 (01:30):
Sir?
Speaker 4 (01:31):
Sir would you strike it?
Speaker 6 (01:33):
Would you please.
Speaker 4 (01:34):
Inform U so we can be there and watch.
Speaker 3 (01:36):
I mean, you don't know that I'm going to even
do it.
Speaker 7 (01:38):
You don't know.
Speaker 4 (01:39):
I may do it, I may not do it.
Speaker 1 (01:40):
I mean, nobody knows what I'm going to do.
Speaker 2 (01:42):
The comment suggests that the US President's view has changed
significantly following Israel's bombardment of Iran's nuclear and ballistic missile facilities.
Iran had been in negotiations with the US over its
nuclear program for weeks and had a further meeting scheduled
when Israel attacked on Friday. Well since Israel's strikes started,
(02:04):
Iran has fired four hundred ballistic missiles and hundreds of
drones at Israel, killing twenty four people and injuring more
than eight hundred. At least two hundred and twenty four
Iranians have been killed by Israel's attacks. That's according to
the government there. The country's supreme leader, Ayatola Hamone, said
that the Islamic Republic will not surrender.
Speaker 7 (02:25):
In telling the Iranian nation to surrender is not a
wise thing to say. America getting involved in this would
be one hundred percent to its detriment. The damage to
America if it gets militarily involved would be an irreparable damage,
no doubt.
Speaker 2 (02:41):
The words of Iran's Ayatola Ali Haamane, spoken thereby a translator.
As Iranian Foreign Minister Abbas Arakchi said in a social
media post that his country remained quote committed to diplomacy
and had never sought and would never seek nuclear weapons.
Bloomberg unders sounds that foreign ministers from the UK, France,
(03:02):
and Germany are planning to hold nuclear talks with their
Iranian counterparts in Geneva on Friday.
Speaker 4 (03:09):
Now.
Speaker 2 (03:09):
Shell CEO says that GPS jamming in the Strait of
Hormuz is proving to be a problem for navigation in
the area. About a fifth of the world's crude output
passes through the narrow waterway at the entrance of the
Persian Gulf.
Speaker 3 (03:23):
Shell co WHYLEL.
Speaker 2 (03:24):
Swan says that while the route remains open, signal blocking
is a major hindrance for vessels passing through the area.
Speaker 8 (03:34):
What is particularly challenging right now is some of the
jamming that's happening on GPS devices and the like, which
is a concern. The Strait of Hormus is, at the
end of the day, the artery through which the world's
energy is flowing.
Speaker 2 (03:52):
Well el San. They're speaking to Bloomberg at Japan's Energy
summit in Tokyo. While there has not yet been any
indication that Iran will close the Strait of Hormuz, all
analysts hel Bloomberg an attempt to do so could push
prices above one hundred and twenty dollars a bowel. Moving
on to the Federal Reserve, officials voted again to hold
(04:14):
interest rates steady yesterday, but new projections highlight a growing
divide among policymakers. The FMC unanimously chose to keep the
benchmark federal funds rate in a range of four point
two five to four point five percent, This for a
fourth meeting in a row. After the decision, the Central
Banks chaired your own Powell told reporters the Fed is
(04:35):
in a good position.
Speaker 6 (04:38):
Despite elevated uncertainty, the economy is in a sourd position.
That is why we think the appropriate thing to do
is to hold where we are. The current stance of
monetary policy leaves us well positioned to respond in a
timely way to economic developments.
Speaker 2 (04:52):
That is chaired Jerown Powells speaking. The latest FED projections
point though to a split amongst members. Seven members now
foresee no rate cuts this year to signal one more cut,
whilst ten want at least two cuts before the end
of the year. The Federal Reserve did also downgrade it's
estimates for growth this year and projected higher inflation well.
(05:17):
The Bank of England is also set to hold interest
rates steady. During today's Monetary Policy Committee meeting, policymakers are
expected to keep borrowing costs at four point two five
percent for the UK and signal that they will stick
to the central banks one cut every other meeting approach.
Our chief UK economist Dan Hansen says that investors will
(05:38):
be focused on indicators of the rate path ahead.
Speaker 9 (05:42):
We watch the votes split, we watch all these things.
No one's expecting them to change rate, but I think
assigns that effectfully. Which side of the trade off that
central banks face. Is it, you know, high inflation or
is it the weaklave market. I think it's good that's
going to be what effectually gets revealed.
Speaker 2 (06:02):
That was Bloomberg's Dan Hanson speaking there. Bank of England
officials lowered rates by a quarter point in May in
a surprisingly close vote due to inflation concerns. Since then, though,
inflation has surged to its fastest pace in more than
a year, and escalating tensions in the Middle East are
now complicating matters by driving up oil prices. With only
(06:24):
four pending or trading IPOs so far in twenty twenty five,
London stock market is looking to Asia for new business.
Bloomberg's Ewan Potts has the details on that story.
Speaker 4 (06:35):
Now.
Speaker 5 (06:36):
If US stock markets have sent mixed signals to Chinese
companies in recent years, the message from London is clear,
your listing is welcome on the LC. Speaking to Bloomberg
in Shanghai, the City of London Corporation's chairman told us
we need more IPOs happening in London. He says the
corporation can provide opportunities for Chinese firms to secure customers
(06:56):
and funding in the UK. And drive them to list
in city via its connector scheme with Shanghai. China introduced
the Stock connect program with the UK in twenty nineteen,
allowing companies to issue depository receipts on each other's exchanges,
but six years later only a handful of firms have
taken advantage of the scheme. With the LSE facing a
(07:17):
rash of delistings and takeovers, its promoters are very keen
to get some new business through the front door in London.
I'm ewing pots Bloomberg.
Speaker 2 (07:25):
Radio also staying here in London. The number of high
end London homes up for sale is at a record
In the latest sign of wealthy people leaving the country,
Lawnres data for May shows a twenty two percent year
on year jump in properties worth more than five million
pounds on the market. The property site says that the
(07:47):
bump is linked to Labour's tax changes, but that few
of the listings are actually selling. Bloomberg's James Walcock has.
Speaker 10 (07:55):
The story the data from lnrez is the latest sign
there has been a sudden jump enrich people looking for
an exit from the UK. It comes as one of
the architects of the Labour government's non don policy tells
Bloomberg it was a mistake to ramp up inheritance taxes
from zero to forty percent overnight cent taxis Aaron ad
(08:15):
Varney says that created a sudden cliff edge for Britain's
wealthiest individuals, and there are now reports Chancellor vitel Reads
is looking again at the measures given the growing number
of data points suggesting non doms are on the move
in London.
Speaker 3 (08:29):
James Wilcock Bloomberg Radio.
Speaker 2 (08:32):
So those are top stories for you this morning. Thinking
about the markets, a check of oil prices seventy six
dollars fifty five for brak crewed futures. We've had a
very volatile trading week, but actually those brank creud futures
are now down two tenths of one percent despite the
uncertainty and the possibility of the US getting involved with
a direct strike on Iran. In terms of US stocks,
(08:53):
they closed little changed yesterday. Stop futures for the US
are in the red. European stock futures are currently down
by three of one percent. Also, you've got something of
a sell off in Asia, the hang saying is now
down almost two percent, and interestingly, Japanese companies I was
reading on Bloomberg today are delisting from the Tokyo Stock
Exchange at a record pace. The dollar, meanwhile, is stronger
(09:15):
against most major currencies. The Bloomberg Dollar Spot indexes up
by tenth of one percent. We have lots of great
decisions later today the UK, but also Switzerland, Norway, Turkey,
and remember that cash trading in treasuries is closed today
for the Juneteenth US holiday in America. So those are
the markets coming up. In a moment, though, we're going
to bring you to the latest on the events in
(09:37):
the Middle East, bring you all of the details, and
also mull over what happened with the Federal Reserve yesterday. Okay,
they didn't change interest rates, but there was a lot
that we could gain from the press conference and from
the projections and from the dot plot. But there's also
another story that I wanted to bring to you and
to talk about this morning. So UK consumer confidence has
(09:58):
jumped to the highest level this year, and we've been
thinking about why that is. Apparently it is down to
younger workers. So this is gen Z people born between
the mid nineties and twenty ten, so younger workers. This
is according to the BRC survey. This is the British
Retail Consortium. The CEO head and Dickinson says that it
may reflect the increase in the minimum wage from April,
(10:21):
so I had to go back look at what were
the was the minimum wage increase. Now, on the first
of April, the national living wage went up by six
point seven percent, so in percentage terms quite a lot.
Twelve pounds twenty one is the hourly rate. It actually
works out to only about seventy seven pence per hour though,
(10:41):
but even younger workers, so those sixteen to seventeen and
eighteen to twenty who have a separate minimum wage amount
in the UK, they also got big bumps higher sixteen
percent and eighteen percent high. It only equates like a
few pence per hour, but apparently it has made all
the difference. So yes, the pain for employers, the extra
burden really weighed on them, but it has done wonders
(11:04):
actually for how young people feel. Helen Dickinson saying that
their economic outlook and their expectations for their future finances,
they feel much more optimistic about those. So that was
one of the stories that I read this morning, and
I'll put a link to it in our show notes
as well, if you want to think about that. Let's
also turn our attention though to the Middle East. Senior
(11:26):
US officials are preparing for a possible US strike on
Iran in the next few days, but the situation remains
highly uncertain, both by design from President Trump and also
due to ongoing diplomatic talks. Joining US now has Binbig's
head of Middle East and North Africa coverage, Stuart Livingston Wallace, Stuart,
good morning. President Trump campaigned on the promise of being
a peacemaker, that was the word he used, keeping the
(11:49):
US out of Middle East wars. What do we know
about possible US involvement in the Israel Iran conflict?
Speaker 4 (11:57):
Yeah, good morning. I mean, it's certainly true to say
that they are preparing to do it if they feel
it's necessary. And you know, we do have to stress
here that as far as we can tell, no final
decision has been made. But I think Trump wants to
be in a position where he candoed if he wants to.
So what does that actually look like. I mean, it
means refueling capacity is being moved into the region. It
(12:19):
means a carry a strike group that's currently the Indo
Pacific that could be here fairly shortly. It's already got
one in the area, and then it's got additional destroyers
in the East and mead. So in terms of its capability,
it's certainly there. And when we think specifically about this conflict,
you know, and the so called targets in this conflict,
which are these specifically the nuclear sides, it really is,
(12:42):
as far as we can tell, only US capabilities that
would be able to eliminate them altogether, because specifically they
are buried so deep underground that you really need these
sort of massive munitions, the so called bunker busters, in
order to be able to get down that far and
really wipe them out.
Speaker 2 (13:01):
Yeah. Meanwhile, Ivan has rejected this idea of capitulation, the
demand from president from the foreign ministers also talked about
the country being committed to diplomacy. Can escalation be avoided
at this point? I know you've said that no decision
has been made by the US, but that's quite crucial.
Can diplomacy avoid escalation?
Speaker 4 (13:24):
I mean, I think a lot of the parties would
would hope that it can, you know, And when we
look at the sort of the actors involved in this,
it is you know very much the Gulf States, and
I think they're looking at this with a high degree
of anxiety because, you know, it has to be said
that most of them have grown up with just these
endless wars around them, and I think over the last
(13:45):
several years they've come to conclusion that that is no
way forward. They would much rather go after economic prosperity
than continuing, you know, this endless fighting. So I know
they are trying very hard to come to some sort
of agreement. You know, similarly of the Europeans, I think,
and we saw those comments from Macon, the G seven
(14:06):
and not just him, you know, really pushing for some
sort of diplomatic solution. But the truth of the matter
is that if the demand from the US in Israel
is that Iran gives up all enrichment of uranium on
any capacity that is even up to a civilian use level,
and the Iranian's red line is that they must absolutely
(14:27):
retain the right to do that, it's very hard to
see how you can brok us some sort of agreement
with those conditions being set by both sides.
Speaker 2 (14:35):
Yeah, indeed, and so if there is escalation, what does
that mean for the region.
Speaker 4 (14:43):
I mean, it's a sort of slightly facile answer, but
the truth of the matter is that it's not good.
And I argue also that it's not good for the
wider world because the rest of the world is so
dependent on this region for energy supplies. You know that, yes,
they have diminished in importance in terms of what few
the global economy, but the global economy cannot function without it.
(15:05):
So in a scenario where this widens out and you
have a disruption, for instance, to energy supplies, that is
going to have a profound impact on economies pretty much
across the globe. That in turn is going to have
an impact on trade, It's going to have an impact
on interest rates, is going to have an impact on everything.
So in terms of why the world should care, yes,
there is an immediate danger to the region itself, but
(15:27):
it has far greater implications.
Speaker 2 (15:30):
It's ours. Thank you so much, Stuart for being with
me this morning and for discussing this. Bloomberg's head of
Middle East and North Africa coverage, Stuart Livingston Wallace. Which
brings me to the next conversation around the US federal reserves.
They held interest rates, of course steady yesterday, but very
much thinking about oil prices, the inflationary impact as well
(15:52):
as tariffs, and ahead of other interest rate decisions from
the UK, Switzerland and others. Today, let me bring in
Bloomberg anchor you good to now on this Good morning Christy.
So look, the split in the FEDS dot plot is
also seen as very very key. This is what officials
expect interest rates to do. You know, they put it
up anonymously, but where they see interest rates going. Why
(16:17):
our views now so dispersed is that oil is it
character driven?
Speaker 9 (16:20):
What is it?
Speaker 11 (16:21):
It's a really fun combination of both, not to mention
the uncertainty that's being shown up in the markets as well,
and I think something that a lot of people preps
weren't listening to as clearly in the press conference but
also in some of the fedspeak leading up to this
moment has been that because financial conditions are so valid
on because you do see inflation expectations from the markets
being priced in to extremes on both ends, that actually
(16:43):
does have real consequences for the real economy. So that's
going to add into the other two elements that we're
talking about, which is that sustained oil pressure, and that's
of course going to be key for Americans who are
hitting the roads this summer. It is driving season in
the United States for the world's first BIGGAUS economy, but
also biggest oil consuming in the world. The other piece
of this is tariff's and if you look at the
last couple of months of data, we haven't seen that
(17:05):
show up in the CPI for example. We haven't seen
it shown up in the lab data as much. In fact,
the only crafts we've seen the labor data has been
the most recent job as claims number that have come
out in the United States, and even that was an
uptick that was ultimately seen as.
Speaker 3 (17:19):
Only one data point.
Speaker 11 (17:21):
Early indications of that tariff impact are starting to show
up in things like import prices, or factory prices or
producer prices for example, because you are now starting to
see that hard shipping data that we saw in terms
of fewer Chinese ships, for example, hitting those LA ports.
Speaker 3 (17:35):
That is starting to show.
Speaker 11 (17:37):
Up in the import data, but it takes a few
cycles for that to actually affect the end consumer. We're
not there yet because again, so many retailers have been
sitting and hoarding a lot of this merchandise in advance,
so it takes a little bit to kind of work through.
But that's the point that Chair Powell is making and
that we haven't seen it yet, but don't worry that
tariff impact is coming.
Speaker 2 (17:56):
Yeah. Absolutely, And so we have also seen the dollar
cashing a bit amid these concerns, I mean, and we
also saw the downgrade to growth and the increase in
inflation expectations from the FED. But in terms of the
oil and the dollar impact maybe from these Middle East tensions,
that could also be very significant.
Speaker 11 (18:14):
Absolutely, And the oil story is key here because, of course,
I think the highest we've hit in these latest rounds
of escalation in the Middle East has been a top
about seventy eight dollars a barrel intraday. That could there
are forecasts out there and hedges out there that suggest
it could go up to about one hundred. But the
flip side of that is that even though Middle East
tensions and specifically strikes coming from Vron create a floor
(18:37):
under oil prices, the teriff impact, the trade negotiations, that
risk to global growth creates a ceiling for oil prices,
which is why you continue to see oil spike but
not really cross at seventy eight dollars a barrel, and
I think it was at a high like sixty six
dollars a barrel before the Middle East, So only a
ten dollars change, which is a lot in the span
of a couple of days, but not a lot in
(18:59):
terms of the way to digest it. The risk is
when it is sustained at that level or even goes
potentially higher, and we saw an element of that in
twenty twenty one or twenty twenty two. This is showing
up in a really big way because this is where
that kind of split between the dot plot actually shows
up because we don't know for soft the escalation and
how long that'll last. It could be sorted out by tomorrow,
(19:22):
for example, and then negotiations would be on the table,
and that would bring oil prices right back down, and
we go back to a conversation that we had in
terms of trade negotiations in terms of driving that inflationary story.
Speaker 3 (19:32):
The other piece of this, of course, is the labor market.
Speaker 11 (19:34):
And again this is where even Neil Kashkari made the
point over at the Minneapolis Fed that it's very hard
to predict right now.
Speaker 2 (19:40):
Yeah, absolutely, brief word then on what we're also expecting
today we're going heading towards a Swiss National Bank of
rate decision and also the Bank of England. Some thoughts
on those two.
Speaker 3 (19:51):
They are both significant in very different ways.
Speaker 11 (19:53):
The Bank of England is far more reactive but expected
to hold as well, So keep an eye on kind
of how maybe they're leading the charge and things like
quantitaive easing or quantitative tightening, for example, following the case
of either the BOJ or the Federal Reserve. So they're
an interesting case study. The S and B is very
important because the expectations are going to cut to zero
and there's a couple of folks out there who are
saying their head into negative territory. We haven't seen that
(20:14):
since COVID really, so could the S and B now
be a case study for where Europe is headed?
Speaker 1 (20:20):
Broadly, this is Bloomberg Daybreak Europe, your morning brief on
the stories making news from London to Wall Street and beyond.
Speaker 2 (20:27):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (20:34):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (20:39):
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Speaker 1 (20:47):
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 day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg daybreakurate podcast, available every morning on Apple,
Spotify or wherever you listen. It's Thursday, the nineteenth of June,
in London. I'm Caroline Hepka. Coming up today, American officials
prepare for a potential strike on Iran, as President Trump
says he prefers to make a final decision one second
before it's due. The Fed keeps interest rates steady as
(00:31):
Jerome Powell warns of weak US growth and a pickup
in inflation ahead of today's Bank of England decision.
Speaker 3 (00:38):
Plus buyer's remorse.
Speaker 2 (00:39):
Non Doms rushed to sell their London homes as one
of the architects of the super Rich tax plan calls
its role out a mistake. Let's start with a roundup
of our top stories. Sources have told Bloomberg that senior
US officials are preparing for a possible strike on Iran
in the coming days. The reporting indo that the Trump
(01:00):
administration is assembling the infrastructure necessary to directly enter a
conflict with Tehran, while the situation is said to be
evolving and could still change. Some of those who spoke
to Bloomberg on condition of anonymity, pointed to potential plans
for a weekend strike. President Trump was asked yesterday if
he would be approving a strike on Iran.
Speaker 4 (01:23):
You do I seriously think I'm going to answer that, quay?
Speaker 3 (01:25):
Will you strike the Iranian nuclear component?
Speaker 4 (01:29):
And what time exactly?
Speaker 5 (01:30):
Sir?
Speaker 4 (01:31):
Sir would you strike it?
Speaker 6 (01:33):
Would you please.
Speaker 4 (01:34):
Inform U so we can be there and watch.
Speaker 3 (01:36):
I mean, you don't know that I'm going to even
do it.
Speaker 7 (01:38):
You don't know.
Speaker 4 (01:39):
I may do it, I may not do it.
Speaker 1 (01:40):
I mean, nobody knows what I'm going to do.
Speaker 2 (01:42):
The comment suggests that the US President's view has changed
significantly following Israel's bombardment of Iran's nuclear and ballistic missile facilities.
Iran had been in negotiations with the US over its
nuclear program for weeks and had a further meeting scheduled
when Israel attacked on Friday. Well since Israel's strikes started,
(02:04):
Iran has fired four hundred ballistic missiles and hundreds of
drones at Israel, killing twenty four people and injuring more
than eight hundred. At least two hundred and twenty four
Iranians have been killed by Israel's attacks. That's according to
the government there. The country's supreme leader, Ayatola Hamone, said
that the Islamic Republic will not surrender.
Speaker 7 (02:25):
In telling the Iranian nation to surrender is not a
wise thing to say. America getting involved in this would
be one hundred percent to its detriment. The damage to
America if it gets militarily involved would be an irreparable damage,
no doubt.
Speaker 2 (02:41):
The words of Iran's Ayatola Ali Haamane, spoken thereby a translator.
As Iranian Foreign Minister Abbas Arakchi said in a social
media post that his country remained quote committed to diplomacy
and had never sought and would never seek nuclear weapons.
Bloomberg unders sounds that foreign ministers from the UK, France,
(03:02):
and Germany are planning to hold nuclear talks with their
Iranian counterparts in Geneva on Friday.
Speaker 4 (03:09):
Now.
Speaker 2 (03:09):
Shell CEO says that GPS jamming in the Strait of
Hormuz is proving to be a problem for navigation in
the area. About a fifth of the world's crude output
passes through the narrow waterway at the entrance of the
Persian Gulf.
Speaker 3 (03:23):
Shell co WHYLEL.
Speaker 2 (03:24):
Swan says that while the route remains open, signal blocking
is a major hindrance for vessels passing through the area.
Speaker 8 (03:34):
What is particularly challenging right now is some of the
jamming that's happening on GPS devices and the like, which
is a concern. The Strait of Hormus is, at the
end of the day, the artery through which the world's
energy is flowing.
Speaker 2 (03:52):
Well el San. They're speaking to Bloomberg at Japan's Energy
summit in Tokyo. While there has not yet been any
indication that Iran will close the Strait of Hormuz, all
analysts hel Bloomberg an attempt to do so could push
prices above one hundred and twenty dollars a bowel. Moving
on to the Federal Reserve, officials voted again to hold
(04:14):
interest rates steady yesterday, but new projections highlight a growing
divide among policymakers. The FMC unanimously chose to keep the
benchmark federal funds rate in a range of four point
two five to four point five percent, This for a
fourth meeting in a row. After the decision, the Central
Banks chaired your own Powell told reporters the Fed is
(04:35):
in a good position.
Speaker 6 (04:38):
Despite elevated uncertainty, the economy is in a sourd position.
That is why we think the appropriate thing to do
is to hold where we are. The current stance of
monetary policy leaves us well positioned to respond in a
timely way to economic developments.
Speaker 2 (04:52):
That is chaired Jerown Powells speaking. The latest FED projections
point though to a split amongst members. Seven members now
foresee no rate cuts this year to signal one more cut,
whilst ten want at least two cuts before the end
of the year. The Federal Reserve did also downgrade it's
estimates for growth this year and projected higher inflation well.
(05:17):
The Bank of England is also set to hold interest
rates steady. During today's Monetary Policy Committee meeting, policymakers are
expected to keep borrowing costs at four point two five
percent for the UK and signal that they will stick
to the central banks one cut every other meeting approach.
Our chief UK economist Dan Hansen says that investors will
(05:38):
be focused on indicators of the rate path ahead.
Speaker 9 (05:42):
We watch the votes split, we watch all these things.
No one's expecting them to change rate, but I think
assigns that effectfully. Which side of the trade off that
central banks face. Is it, you know, high inflation or
is it the weaklave market. I think it's good that's
going to be what effectually gets revealed.
Speaker 2 (06:02):
That was Bloomberg's Dan Hanson speaking there. Bank of England
officials lowered rates by a quarter point in May in
a surprisingly close vote due to inflation concerns. Since then, though,
inflation has surged to its fastest pace in more than
a year, and escalating tensions in the Middle East are
now complicating matters by driving up oil prices. With only
(06:24):
four pending or trading IPOs so far in twenty twenty five,
London stock market is looking to Asia for new business.
Bloomberg's Ewan Potts has the details on that story.
Speaker 4 (06:35):
Now.
Speaker 5 (06:36):
If US stock markets have sent mixed signals to Chinese
companies in recent years, the message from London is clear,
your listing is welcome on the LC. Speaking to Bloomberg
in Shanghai, the City of London Corporation's chairman told us
we need more IPOs happening in London. He says the
corporation can provide opportunities for Chinese firms to secure customers
(06:56):
and funding in the UK. And drive them to list
in city via its connector scheme with Shanghai. China introduced
the Stock connect program with the UK in twenty nineteen,
allowing companies to issue depository receipts on each other's exchanges,
but six years later only a handful of firms have
taken advantage of the scheme. With the LSE facing a
(07:17):
rash of delistings and takeovers, its promoters are very keen
to get some new business through the front door in London.
I'm ewing pots Bloomberg.
Speaker 2 (07:25):
Radio also staying here in London. The number of high
end London homes up for sale is at a record
In the latest sign of wealthy people leaving the country,
Lawnres data for May shows a twenty two percent year
on year jump in properties worth more than five million
pounds on the market. The property site says that the
(07:47):
bump is linked to Labour's tax changes, but that few
of the listings are actually selling. Bloomberg's James Walcock has.
Speaker 10 (07:55):
The story the data from lnrez is the latest sign
there has been a sudden jump enrich people looking for
an exit from the UK. It comes as one of
the architects of the Labour government's non don policy tells
Bloomberg it was a mistake to ramp up inheritance taxes
from zero to forty percent overnight cent taxis Aaron ad
(08:15):
Varney says that created a sudden cliff edge for Britain's
wealthiest individuals, and there are now reports Chancellor vitel Reads
is looking again at the measures given the growing number
of data points suggesting non doms are on the move
in London.
Speaker 3 (08:29):
James Wilcock Bloomberg Radio.
Speaker 2 (08:32):
So those are top stories for you this morning. Thinking
about the markets, a check of oil prices seventy six
dollars fifty five for brak crewed futures. We've had a
very volatile trading week, but actually those brank creud futures
are now down two tenths of one percent despite the
uncertainty and the possibility of the US getting involved with
a direct strike on Iran. In terms of US stocks,
(08:53):
they closed little changed yesterday. Stop futures for the US
are in the red. European stock futures are currently down
by three of one percent. Also, you've got something of
a sell off in Asia, the hang saying is now
down almost two percent, and interestingly, Japanese companies I was
reading on Bloomberg today are delisting from the Tokyo Stock
Exchange at a record pace. The dollar, meanwhile, is stronger
(09:15):
against most major currencies. The Bloomberg Dollar Spot indexes up
by tenth of one percent. We have lots of great
decisions later today the UK, but also Switzerland, Norway, Turkey,
and remember that cash trading in treasuries is closed today
for the Juneteenth US holiday in America. So those are
the markets coming up. In a moment, though, we're going
to bring you to the latest on the events in
(09:37):
the Middle East, bring you all of the details, and
also mull over what happened with the Federal Reserve yesterday. Okay,
they didn't change interest rates, but there was a lot
that we could gain from the press conference and from
the projections and from the dot plot. But there's also
another story that I wanted to bring to you and
to talk about this morning. So UK consumer confidence has
(09:58):
jumped to the highest level this year, and we've been
thinking about why that is. Apparently it is down to
younger workers. So this is gen Z people born between
the mid nineties and twenty ten, so younger workers. This
is according to the BRC survey. This is the British
Retail Consortium. The CEO head and Dickinson says that it
may reflect the increase in the minimum wage from April,
(10:21):
so I had to go back look at what were
the was the minimum wage increase. Now, on the first
of April, the national living wage went up by six
point seven percent, so in percentage terms quite a lot.
Twelve pounds twenty one is the hourly rate. It actually
works out to only about seventy seven pence per hour though,
(10:41):
but even younger workers, so those sixteen to seventeen and
eighteen to twenty who have a separate minimum wage amount
in the UK, they also got big bumps higher sixteen
percent and eighteen percent high. It only equates like a
few pence per hour, but apparently it has made all
the difference. So yes, the pain for employers, the extra
burden really weighed on them, but it has done wonders
(11:04):
actually for how young people feel. Helen Dickinson saying that
their economic outlook and their expectations for their future finances,
they feel much more optimistic about those. So that was
one of the stories that I read this morning, and
I'll put a link to it in our show notes
as well, if you want to think about that. Let's
also turn our attention though to the Middle East. Senior
(11:26):
US officials are preparing for a possible US strike on
Iran in the next few days, but the situation remains
highly uncertain, both by design from President Trump and also
due to ongoing diplomatic talks. Joining US now has Binbig's
head of Middle East and North Africa coverage, Stuart Livingston Wallace, Stuart,
good morning. President Trump campaigned on the promise of being
a peacemaker, that was the word he used, keeping the
(11:49):
US out of Middle East wars. What do we know
about possible US involvement in the Israel Iran conflict?
Speaker 4 (11:57):
Yeah, good morning. I mean, it's certainly true to say
that they are preparing to do it if they feel
it's necessary. And you know, we do have to stress
here that as far as we can tell, no final
decision has been made. But I think Trump wants to
be in a position where he candoed if he wants to.
So what does that actually look like. I mean, it
means refueling capacity is being moved into the region. It
(12:19):
means a carry a strike group that's currently the Indo
Pacific that could be here fairly shortly. It's already got
one in the area, and then it's got additional destroyers
in the East and mead. So in terms of its capability,
it's certainly there. And when we think specifically about this conflict,
you know, and the so called targets in this conflict,
which are these specifically the nuclear sides, it really is,
(12:42):
as far as we can tell, only US capabilities that
would be able to eliminate them altogether, because specifically they
are buried so deep underground that you really need these
sort of massive munitions, the so called bunker busters, in
order to be able to get down that far and
really wipe them out.
Speaker 2 (13:01):
Yeah. Meanwhile, Ivan has rejected this idea of capitulation, the
demand from president from the foreign ministers also talked about
the country being committed to diplomacy. Can escalation be avoided
at this point? I know you've said that no decision
has been made by the US, but that's quite crucial.
Can diplomacy avoid escalation?
Speaker 4 (13:24):
I mean, I think a lot of the parties would
would hope that it can, you know, And when we
look at the sort of the actors involved in this,
it is you know very much the Gulf States, and
I think they're looking at this with a high degree
of anxiety because, you know, it has to be said
that most of them have grown up with just these
endless wars around them, and I think over the last
(13:45):
several years they've come to conclusion that that is no
way forward. They would much rather go after economic prosperity
than continuing, you know, this endless fighting. So I know
they are trying very hard to come to some sort
of agreement. You know, similarly of the Europeans, I think,
and we saw those comments from Macon, the G seven
(14:06):
and not just him, you know, really pushing for some
sort of diplomatic solution. But the truth of the matter
is that if the demand from the US in Israel
is that Iran gives up all enrichment of uranium on
any capacity that is even up to a civilian use level,
and the Iranian's red line is that they must absolutely
(14:27):
retain the right to do that, it's very hard to
see how you can brok us some sort of agreement
with those conditions being set by both sides.
Speaker 2 (14:35):
Yeah, indeed, and so if there is escalation, what does
that mean for the region.
Speaker 4 (14:43):
I mean, it's a sort of slightly facile answer, but
the truth of the matter is that it's not good.
And I argue also that it's not good for the
wider world because the rest of the world is so
dependent on this region for energy supplies. You know that, yes,
they have diminished in importance in terms of what few
the global economy, but the global economy cannot function without it.
(15:05):
So in a scenario where this widens out and you
have a disruption, for instance, to energy supplies, that is
going to have a profound impact on economies pretty much
across the globe. That in turn is going to have
an impact on trade, It's going to have an impact
on interest rates, is going to have an impact on everything.
So in terms of why the world should care, yes,
there is an immediate danger to the region itself, but
(15:27):
it has far greater implications.
Speaker 2 (15:30):
It's ours. Thank you so much, Stuart for being with
me this morning and for discussing this. Bloomberg's head of
Middle East and North Africa coverage, Stuart Livingston Wallace. Which
brings me to the next conversation around the US federal reserves.
They held interest rates, of course steady yesterday, but very
much thinking about oil prices, the inflationary impact as well
(15:52):
as tariffs, and ahead of other interest rate decisions from
the UK, Switzerland and others. Today, let me bring in
Bloomberg anchor you good to now on this Good morning Christy.
So look, the split in the FEDS dot plot is
also seen as very very key. This is what officials
expect interest rates to do. You know, they put it
up anonymously, but where they see interest rates going. Why
(16:17):
our views now so dispersed is that oil is it
character driven?
Speaker 9 (16:20):
What is it?
Speaker 11 (16:21):
It's a really fun combination of both, not to mention
the uncertainty that's being shown up in the markets as well,
and I think something that a lot of people preps
weren't listening to as clearly in the press conference but
also in some of the fedspeak leading up to this
moment has been that because financial conditions are so valid
on because you do see inflation expectations from the markets
being priced in to extremes on both ends, that actually
(16:43):
does have real consequences for the real economy. So that's
going to add into the other two elements that we're
talking about, which is that sustained oil pressure, and that's
of course going to be key for Americans who are
hitting the roads this summer. It is driving season in
the United States for the world's first BIGGAUS economy, but
also biggest oil consuming in the world. The other piece
of this is tariff's and if you look at the
last couple of months of data, we haven't seen that
(17:05):
show up in the CPI for example. We haven't seen
it shown up in the lab data as much. In fact,
the only crafts we've seen the labor data has been
the most recent job as claims number that have come
out in the United States, and even that was an
uptick that was ultimately seen as.
Speaker 3 (17:19):
Only one data point.
Speaker 11 (17:21):
Early indications of that tariff impact are starting to show
up in things like import prices, or factory prices or
producer prices for example, because you are now starting to
see that hard shipping data that we saw in terms
of fewer Chinese ships, for example, hitting those LA ports.
Speaker 3 (17:35):
That is starting to show.
Speaker 11 (17:37):
Up in the import data, but it takes a few
cycles for that to actually affect the end consumer. We're
not there yet because again, so many retailers have been
sitting and hoarding a lot of this merchandise in advance,
so it takes a little bit to kind of work through.
But that's the point that Chair Powell is making and
that we haven't seen it yet, but don't worry that
tariff impact is coming.
Speaker 2 (17:56):
Yeah. Absolutely, And so we have also seen the dollar
cashing a bit amid these concerns, I mean, and we
also saw the downgrade to growth and the increase in
inflation expectations from the FED. But in terms of the
oil and the dollar impact maybe from these Middle East tensions,
that could also be very significant.
Speaker 11 (18:14):
Absolutely, And the oil story is key here because, of course,
I think the highest we've hit in these latest rounds
of escalation in the Middle East has been a top
about seventy eight dollars a barrel intraday. That could there
are forecasts out there and hedges out there that suggest
it could go up to about one hundred. But the
flip side of that is that even though Middle East
tensions and specifically strikes coming from Vron create a floor
(18:37):
under oil prices, the teriff impact, the trade negotiations, that
risk to global growth creates a ceiling for oil prices,
which is why you continue to see oil spike but
not really cross at seventy eight dollars a barrel, and
I think it was at a high like sixty six
dollars a barrel before the Middle East, So only a
ten dollars change, which is a lot in the span
of a couple of days, but not a lot in
(18:59):
terms of the way to digest it. The risk is
when it is sustained at that level or even goes
potentially higher, and we saw an element of that in
twenty twenty one or twenty twenty two. This is showing
up in a really big way because this is where
that kind of split between the dot plot actually shows
up because we don't know for soft the escalation and
how long that'll last. It could be sorted out by tomorrow,
(19:22):
for example, and then negotiations would be on the table,
and that would bring oil prices right back down, and
we go back to a conversation that we had in
terms of trade negotiations in terms of driving that inflationary story.
Speaker 3 (19:32):
The other piece of this, of course, is the labor market.
Speaker 11 (19:34):
And again this is where even Neil Kashkari made the
point over at the Minneapolis Fed that it's very hard
to predict right now.
Speaker 2 (19:40):
Yeah, absolutely, brief word then on what we're also expecting
today we're going heading towards a Swiss National Bank of
rate decision and also the Bank of England. Some thoughts
on those two.
Speaker 3 (19:51):
They are both significant in very different ways.
Speaker 11 (19:53):
The Bank of England is far more reactive but expected
to hold as well, So keep an eye on kind
of how maybe they're leading the charge and things like
quantitaive easing or quantitative tightening, for example, following the case
of either the BOJ or the Federal Reserve. So they're
an interesting case study. The S and B is very
important because the expectations are going to cut to zero
and there's a couple of folks out there who are
saying their head into negative territory. We haven't seen that
(20:14):
since COVID really, so could the S and B now
be a case study for where Europe is headed?
Speaker 1 (20:20):
Broadly, this is Bloomberg Daybreak Europe, your morning brief on
the stories making news from London to Wall Street and beyond.
Speaker 2 (20:27):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (20:34):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (20:39):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 1 (20:47):
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 day Break Europe
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