UK Budget Day, Trump & Biden Sweep Super Tuesday | The Pulse with Francine Lacqua 03/06

Summary

The video script covers a wide range of topics, including the UK Chancellor's upcoming spring budget, the U.S. presidential race, and market movements. As the general election looms, Jeremy Hunt is expected to focus on personal tax cuts, specifically a two percentage point reduction in National Insurance. In the U.S., Donald Trump and Joe Biden dominated Super Tuesday, increasing the likelihood of a rematch. Amidst conflicting signals from Bitcoin's record highs and gold's rise, markets await Jay Powell's testimony on Capitol Hill, where he's anticipated to signal no hurry for rate cuts. The script delves into discussions on the UK's fintech landscape, the importance of investing in women-led ventures, and the global energy transition.

Takeaways

• 👔 UK Chancellor Jeremy Hunt is expected to announce personal tax cuts, particularly a 2 percentage point cut in National Insurance, in his upcoming spring budget as a general election looms.
• 🇺🇸 In the US, Super Tuesday primaries saw Donald Trump and Joe Biden dominate, increasing the likelihood of a rematch between the two in the 2024 presidential election.
• 💰 Markets are closely watching Jay Powell's two-day testimony on Capitol Hill, with the Fed chair expected to signal no hurry to cut rates.
• 🌍 Global markets are receiving conflicting signals from the rallies in gold and Bitcoin, with one suggesting a risk-off appetite and the other indicating risk-on sentiment.
• 🇬🇧 The UK budget is significant for the ruling Conservative Party as they aim to woo voters ahead of the general election, but the opposition Labour Party questions the feasibility of tax cuts and increased spending.
• 🌐 London's role as a fintech hub is facing growing competition from Paris and New York, prompting calls for startup-friendly policies and investment in women-led ventures.
• ⚡ There is a need for increased investment in renewable energy and clean technologies to achieve global net zero emissions by 2050, with challenges such as permitting, public policy, and access to capital slowing progress.
• 🛢️ Oil supplies may be running ahead of demand due to rising US stockpiles, fears of slowing demand from China, and surging supply from non-OPEC producers.
• 📉 Emerging markets like Egypt are facing currency pressures, with Egypt devaluing its currency and implementing significant rate hikes to address a current account deficit and high inflation.
• 🇨🇳 Investors were disappointed by the lack of detailed plans from China to achieve its 5% GDP growth target, fueling skepticism about the effectiveness of policy support.

Q & A

What is the main topic of the video script?

The video script covers various financial and economic topics, including the UK Spring Budget, the US presidential elections, the testimony of Fed Chair Jay Powell, and global market movements like Bitcoin and gold prices.

What are the key expectations from the UK Chancellor's Spring Budget?

The Chancellor, Jeremy Hunt, is expected to announce a two percentage point cut in National Insurance, as well as personal tax cuts, to woo voters ahead of the upcoming general election.

How do Donald Trump and Joe Biden's performances in the Super Tuesday primaries impact the 2024 US presidential election?

With both Trump and Biden dominating the Super Tuesday primaries, a rematch of the 2020 presidential election is now looking more likely than ever.

What is the significance of Jay Powell's testimony on Capitol Hill?

As the Fed Chair, Jay Powell's testimony is being closely watched, as he is likely to signal that there is no hurry to cut interest rates, despite market expectations.

What mixed messages are Bitcoin and gold prices sending about the appetite for risk in global markets?

While Bitcoin has hit record highs, suggesting an appetite for risk, gold's rally seems to indicate a hedge against uncertainty, sending conflicting signals about the risk sentiment in global markets.

What challenges is London facing as a fintech hub?

According to Francesca Lacey, the new UK boss of Revolut, London's role as a fintech hub is under threat due to growing competition from cities like Paris and New York.

What initiatives are being discussed to support women entrepreneurs and increase female representation in tech?

The script mentions a government-backed task force calling for investment in women-led ventures to drive the UK's ambition of becoming a tech superpower, as well as efforts to inspire girls and provide role models in the classroom.

How does the script portray the UK's economic situation and the challenges facing the incoming government?

The script paints a bleak picture of the UK economy, with one guest describing it as "the worst fiscal inheritance that any party has had since the Second World War," highlighting the significant challenges facing the incoming government.

What is the role of public policy and regulation in supporting the transition to renewable energy sources?

According to James Darnowski, global co-head of energy power and renewables at JP Morgan, public policy, regulation, and permitting processes play a crucial role in stimulating investment and enabling the transition to low-carbon and renewable energy sources.

How do emerging markets like Egypt and China factor into the global economic landscape discussed in the script?

The script touches on the pressures faced by emerging markets like Egypt, which devalued its currency, and the lack of detail provided by China regarding its economic growth plans, highlighting the challenges faced by developing economies in the current global economic climate.

Outlines

00:00

📰 Newsmakers and Market Movers

This paragraph introduces the show 'The Pulse with Francine Lacqua' and previews the topics to be discussed, including the UK Chancellor's spring budget, the US presidential elections, and Jay Powell's testimony on Capitol Hill. It also mentions the conflicting signals from the rally in gold and Bitcoin prices, and the impact of these events on markets, currencies, and bonds.

05:01

🤑 U.S. Exceptionalism and Market Trends

This paragraph discusses the concept of U.S. exceptionalism and its impact on markets. It highlights the strength of the US economy, earnings, and tech productivity, despite geopolitical shocks. The conversation then shifts to market valuations, the conflicting signals from Bitcoin and gold, and the potential implications of the US election on Europe. The guest, Michael Stromberg, provides insights on investment strategies, favoring sectors like communications, staples, and energy stocks in the US.

10:03

🇬🇧 UK Budget and Labour Party's Perspective

This paragraph focuses on the UK budget and the opposition Labour Party's perspective. Darren Jones, the Shadow Chief Secretary to the Treasury, discusses the party's stance on tax cuts, economic growth, and fiscal responsibility. He outlines Labour's priorities, including stability, investment, and reform policies, while addressing concerns about balancing the books and maintaining public spending commitments if elected. The paragraph also touches on the potential impact of the budget on the UK economy and the views of businesses and investors.

15:05

🗳 US Election and Policy Implications

This paragraph explores the implications of the US presidential election and potential policy changes. It discusses the divergent approaches of Donald Trump and Joe Biden, particularly regarding trade policies and incentives like the Inflation Reduction Act. The conversation highlights the potential impact on Europe and the challenges faced by the opposition candidate, Nikki Haley, in securing support from grassroots conservatives and Wall Street donors.

20:06

🌍 UK's Position as a Fintech Hub

This paragraph discusses the UK's position as a fintech hub and the challenges it faces from competition in Paris and New York. It explores the efforts of the government and private sector to attract and retain talent, particularly women, in the technology and entrepreneurship sectors. The conversation covers initiatives to increase funding for female-led ventures, coding education, and the role of corporates in creating an inclusive environment.

25:14

🚀 Empowering Women in Tech and Entrepreneurship

This paragraph continues the discussion on empowering women in tech and entrepreneurship. It highlights the importance of role models and initiatives to raise the profile of women in these fields, particularly through education and media representation. The conversation also touches on the government's efforts to retain talent, increase funding, and create an inclusive environment for women to rejoin the workforce.

30:15

⚡ Energy Transition and Clean Tech Investment

This paragraph features a conversation with James Danowski, the global co-head of energy power and renewables at J.P. Morgan, at the company's Clean Tech Stars conference. Danowski discusses the need for investment in traditional energy sources as well as low-carbon, green renewables, and clean tech to achieve global net zero emissions by 2050. He highlights the challenges of scaling up capital investment to meet the required levels and the importance of public policy, regulation, permitting, and access to capital for these companies.

35:16

💸 Investing in Clean Tech and Renewable Energy

This paragraph continues the discussion with James Danowski on investing in clean tech and renewable energy. Danowski provides insights into the flow of capital across various subsectors, including renewables, grids, battery storage, EVs, and clean fuels. He highlights the encouraging growth in the number of companies and investor interest, despite the challenges posed by headwinds such as high interest rates, supply chain disruptions, and permitting delays. Danowski also emphasizes the role of corporate strategics in supporting the growth of smaller clean tech companies.

40:20

🇪🇬 Egypt's Currency Devaluation and Emerging Market Pressures

This paragraph shifts the focus to Egypt's currency devaluation and the pressures faced by emerging markets. It discusses the reasons behind Egypt's decision to devalue its currency, including a current account deficit exacerbated by the conflict in the Middle East and its impact on trade and revenues through the Suez Canal. The paragraph also mentions the central bank's rate hike and the possibility of an IMF deal, as well as the broader global story of capital outflows from emerging markets due to US rate hikes.

Keywords

💡Spring Budget

The Spring Budget is an annual fiscal and economic report presented to the British Parliament by the Chancellor of the Exchequer. In the context of the video, the Spring Budget being delivered by Chancellor Jeremy Hunt is a crucial event as a general election looms. It is expected to include personal tax cuts and policies aimed at wooing voters ahead of the elections.

💡Super Tuesday

Super Tuesday is a highly significant day in the United States presidential primary election calendar, when a large number of states hold their primary elections or caucuses. The video mentions that Donald Trump and Joe Biden dominated on Super Tuesday, indicating that a rematch of the 2020 presidential election between the two is becoming increasingly likely.

💡Federal Reserve (Fed)

The Federal Reserve, commonly known as the Fed, is the central banking system of the United States. In the video, markets are eyeing the testimony of Fed Chair Jay Powell on Capitol Hill, anticipating signals regarding the Fed's future interest rate decisions. Powell's comments are expected to indicate that the Fed is in no hurry to cut rates, which could have implications for the broader economy and financial markets.

💡National Insurance

National Insurance is a system of contributions paid by workers and employers in the United Kingdom to fund certain state benefits, such as the National Health Service and state pensions. The video discusses the possibility of Chancellor Jeremy Hunt announcing a two percentage point cut in National Insurance, which could be a significant tax relief for workers and a potential vote-winning measure.

💡Bitcoin

Bitcoin is a decentralized digital cryptocurrency, operating without a central bank or single administrator. The video mentions that the record high for Bitcoin, along with the simultaneous rise in gold prices, is sending mixed messages about the appetite for risk across global markets. This paradoxical situation is being closely watched by market participants.

💡Fintech

Fintech, short for financial technology, refers to the integration of technology into financial services and products. The video discusses the challenges faced by London as a fintech hub, with growing competition from cities like Paris and New York. The new UK boss of Revolut, a fintech company, is part of a Unicorn Council aimed at pushing the government for startup-friendly policies to maintain London's position.

💡Revolut

Revolut is a prominent fintech company that offers banking services, including a digital money app and card. The video focuses on the company's new UK boss, Francesca Lacey, who has joined a Unicorn Council to advocate for startup-friendly policies. Additionally, Revolut's pursuit of a banking license in the UK, which it has been seeking for three years, is a significant storyline discussed in the video.

💡Inflation Reduction Act (IRA)

The Inflation Reduction Act (IRA) is a major piece of legislation signed into law in the United States in 2022. It aims to combat climate change, reduce healthcare costs, and raise taxes on corporations. The video mentions the IRA in the context of its potential impact on the upcoming US presidential election, as policies like the IRA could influence voters' decisions.

💡Energy Transition

Energy transition refers to the global shift from fossil-based energy systems to renewable and sustainable energy sources. The video discusses the need for significant investment in technologies and infrastructure to facilitate this transition, with James Darnovsky of JP Morgan highlighting the challenges and opportunities in attracting capital for decarbonization efforts.

💡Gilt Investors

Gilt investors are those who invest in gilt-edged securities, or gilts, which are bonds issued by the British government. The video suggests that gilt investors may hope for an uneventful Spring Budget, as any unexpected or dramatic announcements could potentially disrupt the gilt market and impact the value of their investments.

Highlights

The UK Chancellor Jeremy Hunt is expected to put personal tax cuts at the center of his spring budget as a general election looms.

Donald Trump and Joe Biden dominated on Super Tuesday with a rematch of the 2020 presidential election now looking more likely than ever.

Markets are eyeing two days of testimony from Fed chair Jay Powell on Capitol Hill, where he is likely to signal there's no hurry to cut rates.

There are conflicting messages about the strength and risk assets in the economy from the rally in gold and Bitcoin.

The new UK boss of Revolut, Francesca Lacey, has signed up to a new Unicorn council to push the government on startup-friendly policies.

A government-backed task force has called for investment in women-led ventures to drive the UK's ambition of becoming a tech superpower.

There is a sense that the talent pool in London's fintech scene is diluting, with competition from New York and Paris.

Access to capital is a very big challenge for female founders, but recent reforms around pensions could enable businesses to access a larger pool of capital.

The shocking statistic is that only 81% of students were able to name a male role model in tech, highlighting the need to raise the profile of women in tech.

The UK government has set aside a significant budget to increase talent retention, particularly for women who have left the workforce for childcare.

There are still question marks around Revolut's plans, as they have been trying to get a banking license for three years.

The city of London wants stability from the budget, as they don't expect it to last given the potential for a change in government.

Entrepreneurs are looking for stability from the government, as it is challenging to make plans with the uncertainty about the future.

There is a need for a combination of traditional energy and low-carbon, green renewables to achieve global net zero by 2050.

Last year, $1.4 trillion of capital was invested in the energy transition and decarbonization, but scaling up to $4-7 trillion per year is needed between now and 2050.

Transcripts

Newsmakers and Market Movers. This is The Pulse with Francine Lacqua.

Well, good morning, everyone, and welcome to the Pulse and Francine Lacqua

here in London where the conversations that matter.

And here's what's coming up on today's programme.

The UK Chancellor Jeremy Hunt is set to put personal tax cuts at the center of

his spring budget as a general election looms for life in Westminster.

Donald Trump and Joe Biden dominate on Super Tuesday with a rematch of the 2020

presidential election now looking more likely than ever.

Plus, markets eye two days of testimony from Jay Powell on Capitol Hill.

The Fed chair is likely to signal there's no hurry to cut rates.

So first thing is first, let's take a look at the European markets map.

But frankly, a lot of things going on moving these markets.

One of the signals that we're looking out for the most is also the rally in

gold and Bitcoin, which are basically giving conflicting messages about the

strength and risk assets in the economy. And if you look at stocks, but also a

lot of the bonds, they're actually posting some pretty small moves.

The one thing we're watching out for is that testimony from Jay Powell and then

here in the UK, watch out for any movement in Sterling and of course,

gilts on the back of the chancellor giving that budget.

So it's a big day for politics on both sides of the Atlantic.

We'll bring you the latest on Trump and Biden's Super Tuesday sweep with critic

Gupta in a moment. But let's start here in the UK with

Lizzie Borden. As we build up to the budget, the

chancellor expected to give workers a two percentage point national insurance

tax cut when he delivers his spring budget this lunchtime.

The Jeremy Hunt, under pressure to present a pre-election giving away but

will also need to raise other taxes or cut spending to do so.

So, Lizzie, what are we expecting from the chancellor?

What's his rabbit out of the hat moment? Well, as you say, Francine, this is one

of Jeremy Hunt's last chances to woo the electorate before the general election.

So it's going to be a distinctly political budget.

We're hearing that the expectation is he'll cut national insurance again, as

he did in the Autumn Statement. You can hear them calling for a general

election here in Westminster. But if he cuts national insurance, on

the one hand, the thought is that it will be cheaper than income tax, it'll

be less inflationary, and it will also help to incentivise people back into

work because it only applies to people who are in jobs.

However, if you give consumers back £10 billion, it's hard to imagine that it

won't be at least to some degree inflationary and mean that the Bank of

England at least has to keep rates higher for longer.

If not, hike again, that seems a bit unlikely.

How is he going to pay for it? One measure could be that he ends the

non Dom's loophole, which currently means 70,000 people don't have to pay

tax on their overseas earnings. That would have the added benefit of

stealing one of Labour's ideas. And the big question really today is

will the bond vigilantes come for Jeremy Hunt like they did for Liz Truss?

The reality is, as long as he does the dance with the Office of Budget

Responsibility and lets the markets homework, it looks like the markets

could be pretty quiet. But let's see if he does anything

egregious today, Francine. Yeah, and let's see if anybody out there

loses their voice at Westminster. There's some, you know, pretty

enthralled singing behind you. Lizzie Borden there in Westminster.

Now, we'll speak to you in a short while.

President Joe Biden, Donald Trump have also swept the Super Tuesday state

primaries. Meanwhile, the former president's

remaining rival, Nikki Haley, scored her second win, this time in the state of

Vermont. Well, let's bring in Bloomberg's critic,

Gupta Christie. When you look at, you know, this

election, it feels like Americans aren't really enthralled by it and certainly

not enthused by it. And it looks like we're going to see a

rematch despite so many billionaires giving money to the game.

Yeah, friend, no protesters in here, but I'm sure there's plenty on the other

side of the Atlantic. Look, this is a really kind of tricky

question when we're talking about financing in particular.

And that's where Nikki Haley really matters here, where she has been out

front in terms of getting a lot of backing, not just from grassroots

conservatives, but from major Wall Street donors as well, who think that

neither President Trump or President Biden are the right fit.

But I think that's the exact point of it, that if she does end up dropping the

fact that there is this kind of neither is the right fit mentality across

America is really where you're starting to see the polarization, especially as

it applies to right here in Europe and what the policy actually looks like.

And that's the campaign rhetoric that we're expecting to kind of amp up from

President Trump, who. Believe it or not, has actually had a

fairly reserved approach relative to his last campaign, especially when it comes

to things like tariffs around what that might actually look like for Europe.

In addition to China, he's already mentioned that 60% on the Biden side.

It's a different story. He's using more of the carrot mentality

than the stick mentality through kind of his inflation reduction act, for

example, incentives really trying to bring production domestic.

Similar to President Trump, but doing it in a very different way that is still

angering some of his colleagues across the Atlantic.

Thanks so much, critic Gupta. There was a thorough look at the

elections Now to stock markets and how all of this plays into markets, of

course, and treasuries. We're joined by Michael Stromberg, chief

investment officer at Lombard O'Dea. Michael, so good to have you back in the

studio in person to talk about all of the good or bad things happening in the

markets. You still believe in U.S.

exceptionalism, but we worry about deficits, we worry about the cost of

money, and we worry about the US actually just having too much on their

hands. How do you play this still U.S.

exceptionalism in the markets? By betting on the US, which is doing

great, which is doing great, and its exceptionalism has paid off very

handsomely in markets. I mean, the US is leading the charts on

growth, on earnings, on tech productivity, productivity on growth.

Doesn't seems as if much has gone wrong for for the Americans.

But but it's more fundamental than that. U.S.

assets are sort of a strong core in today's global economy.

Look at Europe quite in sort of a perilous state.

Also because of the geopolitical uncertainty, China has materially slowed

down and the US has has held off the global economy coming out of two

geopolitical shocks, the pandemic and the war and and is showing little sign

of weakness. It's actually showing sign of of

strength as we sit here. So what does this tell you?

I mean, I guess the question is, is it everything priced to perfection, Right?

Is valuations, especially in the US, because of all the good news that you

lay out, you know, at peak? Well, it's certainly not cheap, but I

don't think in this market valuation plays a lot of role in investors

thoughts. I think it's more about safety.

I think it's more about quality. I think it's more about sort of

sustainability of earnings. There's a lot of stuff out there that is

very cheap, but it just keeps getting cheaper.

At some point, maybe has reached out to go down, will see a broadening of the

rally. But for now, it's really about focusing

on the winning business models that is tech, that is global firms, monopolies

that sit on enormous pools of profits, and that's very much in the US market

overall. And I want to talk a little bit more

about the US, given that we have the testimony of Jay Powell and also given

that we have a big election year. But overall, the markets, you know, you

have a record high for Bitcoin, you have gold moving in the other direction.

It seems to be a little bit jarring in how the markets look at risky assets.

Yes, that's that's quite sort of a conundrum to think about.

But Bitcoin obviously is still this speculative element that we have here.

We still have a system that is full of liquidity and where people are chasing

returns. Gold is quite a different story.

And I think of it still as somewhat of a hedge for for large investors.

Maybe right now people are piling into two gold to stock up in the US as a

physical asset. I think that's what keeping it quite

high. But on average, real rates, you seem to

have peaked and will be under pressure to go down a bit.

That's normally good for gold. So, Michael, in the U.S., what do you

buy? I don't know whether it's fixed income

or actually equities. Again, we have Jay Powell speaking today

and tomorrow. But then you also have this US election.

It's unclear. I know we're now focusing maybe more on

policies, but it's unclear what a Trump in the White House would do for the

Inflation Reduction Act and regulation. So number one you take is unavoidable.

We like communications sector services, we like staples in the US and also to

some extent, energy stocks. Trump would probably be good for that.

Treasuries. Absolutely.

I mean, we are in an environment of very materially higher interest rates, short

and long ones that we have been used to for the last ten years.

And that is an opportunity. It's not a threat, especially if, as

maybe Mr. Powell may suggest today, that they are

still on track. I think he'll be quite sort of tempered

and I don't think he's going to be seen as pivoting again in some kind of

direction. What in terms of being more aggressive

with cuts? I mean, there's always this mismatch

between the market's expectations in terms of the pace.

Yeah. And actually what central banks, you

know, wanted to do. Yeah.

Look, I think the rally that we've seen since October was really sparked by a

pivot. It was sparked by the fact rates have

peaked. They are coming down, inflation or

disinflation is here to stay. I think they need to be very, very

careful at this final stage of the battle against inflation, not move too

fast, not get ahead of themselves, but balancing very carefully what the labor

markets think. Goldilocks, it has to be just right on

the UK. Yeah.

Michael, are you excited? I mean, this is very important budget

for the Tories because we have an election looming.

Yes. Does it matter to the markets?

I don't think so. To me, from what I'm reading, it looks

like a smaller type deal. It can be undone by whoever wins the

next election and I don't think it matters a whole lot.

Michael, thank you so much. Michael Show back there, Chief

investment officer at Lombard O'Day, of course, staying with us.

And we'll talk a little bit about China next.

Coming up, could the UK chancellor be about to borrow policies from the

opposition party to fund tax cuts? We'll get reaction from the shadow chief

secretary to the treasury next. And this is Bloomberg.

That takes at a very high level in the UK at the moment.

That's because on the back of the 400 billion that was spent during the

pandemic supporting households and businesses and then of course, the extra

help of 94 billion that was given after Putin's evil invasion of Ukraine.

You know, that has meant that there's been more public spending than

anticipated. So you've got a high tax take.

But I think what you'll hear today is the chancellor takes steps to reduce

that further on top of the 2% that he cut in National Insurance back in

November that came into effect on January the sixth.

I think it's plausible that he'll do another 2% today.

Harry Baldwin there, chair of the UK's Commons Treasury Committee, speaking to

Bloomberg ahead of today's budget. Now, let's stick with the story.

Jeremy Hunt expected to announce a two percentage point cut in National

Insurance. There's speculation that he may borrow

some of opposition labour policies to fund it.

Well, our UK correspondent Lizzie Borden joins us live from Westminster with a

guest. Lizzie, over to you.

Thanks, Francine. Well, I'm joined by Labour's Darren

Jones. He's shadow chief secretary to the

Treasury. Darren.

Do lower taxes mean higher growth? Well, first of all, we in the Labour

Party have said for some time that the tax burden should come down on working

people, irrespective of the greatest assessment, because they're higher than

they have been since the Second World War.

But we've also got to get the economy back onto a trajectory of growth in

order to those to be sustainably funded. Now, this will be the 22nd budget from

the Conservatives since they came into office in 2010.

And every single time the Tories have said they're going to grow the economy.

And where are we right now? We're in the middle of a recession.

That's why growth is going to be at the centre of Labour's policies coming into

the general election. But everybody wants growth, so let's be

absolutely clear. If the Tories cut national Insurance

again today, if, as we understand, they cut income tax down the line, are you

going to maintain those pledges? So we support taxes coming down on

working people. That's why we supported them in

November. Let's see what the Chancellor sets out

today. Now, it's right to say that if people

have got a few extra quid in their pocket that they might spend, that might

stimulate some economic growth. But the fact of the matter is that when

people look at their tax bill, their mortgage or their rent, the cost of

their bills and how much money they've got spare at the end of each month.

Even with the announcements that we expect to see in the budget today, we

think the people will still be worse off and the cost of living will still be a

real problem for people. So the idea that that will flow through

to growing the economy when it's really just helping people kind of pay the

bills, I think is probably unlikely indeed.

But the bond markets question to Labour is how you balance the books, right?

If you maintain their tax pledges, how you continue your pledges on public

spending, you've already had to scale back the £28 billion pledge on the green

economy. So if you match what the Tories are

doing, will you have to scale back your plans even further?

Well, we will inherit what we inherited if we win the election this year.

We're very clear that if we do win the election, it'll be the worst fiscal

inheritance that any party has had since the Second World War.

That's the scale of the challenge. We can't really do anything about that

from opposition. It's the Tories who are responsible for

that damage where you can change your own plans and we can start to turn

things around. Our manifesto and our policies will all

be fully funded and fully costed in line with Rachel Reeves.

The fiscal rules, which is that we will not be borrowing for day to day spending

and we will get debt falling as the size of the economy.

But are you confident that the market will believe you can be both tax cuts

and public spenders? Well, you've got to get the balance

right. One of the big questions, of course, is

reform. I mean, if you look at what we're

spending money on, our public services, they're in enormous need for

modernisation, for reform, for efficiency savings, both to try to get

the public sector budget under control, but also to improve outcomes for people

across the country. So we will invest when it's prudent and

responsible to do so. But reform is going to be a huge part of

our agenda for public services in order to get that balance right.

Okay. It's a pretty bleak picture that you've

just painted of the UK economy, but actually lots of CEOs that Bloomberg's

been talking to are actually now pretty bullish on Britain are economists say

that we could be top of the league table of the G7 when it comes to economic

growth if people keep spending their savings.

Are you just talking down the economy? No, I'm just reflecting the facts that

we see in the April forecasts in the economic assessment of the country.

That's not to deny that we still have huge assets, huge strengths as a country

with huge opportunities for the future. But we know that when we speak to

investors and businesses, for example, that they can't invest or pay for the

things they want to because of other policy blockers, whether it's planning

reform or the energy system or the labour market or the apprenticeship

levy. There's a whole package of policies that

the government ought to be taking seriously to stimulate investment and

growth. And for reasons I didn't really

understand, the Tories are failing to do that.

And when you're having your smoked salmon and scrambled eggs offensive

wooing the city, what is it you're promising them that you think they like

what we think? There are three things that we're saying

to the private sector that Labour will bring.

One is stability. The second is investment and the third

is reform policies. Well, the policies that flow under those

themes. So stability is really important because

of course I can't remember how many chancellors we've had now and how many

times they've said tax rates are going to go up and go down.

It keeps moving around because of the chaos in the Conservative Party.

You will not get that from the Labour Party.

We want specifics and our five missions which are to grow the economy, to fix

the National Health Service, to tackle crime and antisocial behaviour, to

decarbonise the power sector by 2030 and to reform education and skills will be

the driving policies that will underpin that stability alongside our package of

investment with the private sector and reform.

Okay. Darren Jones, Shadow Chief Secretary of

the Treasury. Thanks, Will.

I'm sure you'll be covering the budget for us later today.

Back to you, Francine. Leslie, thank you so much.

Is the burden with Darren Jones now? We have plenty more, of course, on the

UK budget. We have special coverage plus reaction

and analysis. Our coverage begins at 12:15 p.m.

with the Chancellor's speech at around 1230.

You can. Watch that in the UK on the terminal or

follow our live blog on Bloomberg dot com and we'll be joined by John Step and

of course our very own Stephanie Flanders.

Now later today we'll also be speaking to the Chancellor of the Exchequer,

Jeremy Hunt. Don't miss that conversation this

evening here on Bloomberg TV. Much more to come.

Welcome back now. Still with us, Michael Straub, chief

investment officer at Lombard OD. Michael, thank you so much for sticking

around. We talked to a quite extensively about

the U.S., some of the opportunities there.

I don't know what you do with China and you have that you're a little bit

different to everyone else who says we need stimulus.

You say they need to be very cautious and what kind of stimulus?

And actually, they should focus on stability of the currency first.

Yeah, looks like China is in quite a precarious situation.

So growth materially has slowed down and they don't seem willing or quite sort of

grabbing the challenge of of that growth by stimulus right now.

I think it is driven by, as you say, stability.

They don't want to be seen as having overstated situations, default

situations like we've seen. And finally, and this is my thinking of

China in general. China is caught in this wind of change

of of the fracturing world, as we call it.

Obviously, they're feeling strong headwinds from from the US in terms of

maybe support for for the war in Ukraine or at least the tacit support.

But but more importantly, we're in a Cold War situation between the US and

China on tack. And I think they're taking stock of that

before they go forcefully on stimulus. So I've taken out Chinese assets from

from our strategic portfolios and we will look at it from a tactical

perspective on you make you also worry about deflation in China.

Is China kind of on its own or could it actually also impact, you know, world

inflation prices here? It absolutely can.

It may actually make the jobs slightly more easier for central banks outside

China. But China into deflationary tendencies

is not good in total. Maybe short term, it will help the

central banks, but long term, for sure, China cannot end up in a deflationary

scenario which is not not consuming. They are not consuming or saving and

they're not stimulating, stimulating. What's your take on Europe?

Caught in between. I would say needs to stand on its own

feet. Let's see what happens in the US if

Donald Trump comes back. Europe will feel a very strong cold wind

to take responsibility for its own security and defense.

Show more commitment to, if you will, the US as well, by the way.

And ultimately, I think the US election caught in between China is really

Europe's moment of truth to to look ahead ten years and get its houses in

order. Are there any tactical plays?

And I had a big Wall Street banks saying actually they've identified seven

companies that should rival the Magnificent Seven, but that that the

share price is just not following through because they're based in Europe.

Yeah, sure there I mean the fantastic companies in Europe.

My home country, Denmark, has has fantastic companies.

Switzerland, very large companies with solid business models.

Any sort of investor I think today needs to focus on a global business model, a

monopoly like situation. Strong balance sheet and strong

earnings. And there are some in Europe for sure.

Okay, Michael, thank you so much as always, for coming on, especially coming

in the studio. Michael Stromberg there, chief

investment officer at Lombard, OJ with a good conversation around the world.

Coming up, we'll look at London's environment for fintech startups as the

city faces growing competition from Paris and New York.

That is coming up shortly. Then we have a full roundup of some of

the big market moves. One theme that we really want to talk on

is record highs for Bitcoin and gold seem to be sending mixed messages about

the appetite for risk across global markets.

Now, Bitcoin has jumped 50%, of course, helped by inflows into recently minted

U.S. exchange traded funds.

What that means longer term is something we need to keep an eye on.

This is Bloomberg.

Now UK Chancellor Jeremy Hunt is set to put personal tax cuts at the centre of

his spring budget as the general election looms.

Donald Trump and Joe Biden dominate on Super Tuesday with a rematch of the 2020

presidential election now looking more likely than ever.

Plus, markets eye two days of testimony from Jay Powell on Capitol Hill.

The Fed chair is likely to signal there's no hurry to cut rates.

Well, good morning, everyone, and welcome to the Pulse and Francine Lacqua

here in London. Now, the new UK boss of Revolut said

London's role as a fintech hub is under threat with growing competition from

Paris and New York. Francesca Lacey has signed up to a new

Unicorn council to push the government on startup friendly policies.

Now, at the same time, a government backed task force has called for

investment in women led ventures to drive the UK's ambition of becoming a

tech superpower. Well, joining us now for more on all of

this on budget day as well, I should add, our city editor, Katherine

Griffiths, and June Angelides, an investor at Fabulous Investment.

So thank you both for joining us. First of all, can you paint the picture

of actually how June lives this day in and day out?

It's VCs is trying to raise money, giving women a better chance.

But how does it feel actually for for city people?

I think it feels in some ways positive. So Revolut has this new boss in the UK,

Francesca Alessi. She herself has been a founder before.

She created a digital mortgage business called Marlowe, and she's taken on this

really, really interesting role at Resolute running the UK business, which

is right in the spotlight of whether or not they get the banking licence.

And I think her kind of long experience, as she was saying, shows that London had

this amazing kind of time after the financial crisis.

There was this real sense that it was the place to be if you wanted to create

new start up banks. And that continued for a long time.

And she's still really positive about London.

She's very, very European. She's worked all over the world.

But she's. But she does think that in the last few

years, perhaps there's been this sense of the talent pool diluting a little

bit. That's New York, you know, kind of

counterintuitively, we think of New York as being this huge financial centre.

But in terms of fintech, that being a more recent thing.

And then of course, on the continent, to that sense of the Macron policies or

just that sense perhaps of whether people want to be inside the eurozone

and of course in London, we're not. Yeah, we're certainly not.

You know, you live this day in, day out, and I know you've called for, first of

all, more investment in women entrepreneurs, but also more angel

investors. What's hard?

Is it the access to capital when you start out?

Yeah, access to capital is a very, very big thing.

I mean, if you look at the stats last year, funding dropped significantly to

female founders, but in general the landscape is very hard.

But I think a few reforms that have been put into place recently, especially

around pension, hopefully will enable businesses to access a larger pool of

capital. And it's great for pensioners, but the

money will be put to work. Yeah, I mean the British I saw that we

were talking about, I mean there are complexities in that.

Does the Chancellor go through with it? In a few hours we will definitely find

out. Yes, I think I think probably we get

something on the British ISA and while the kind of name is jazzy, actually,

what that will really mean is maybe a bit more complicated because it might be

things that are listed in London, but of course that can be all sorts of things

all around the world. But that plus some other reforms to sort

of try and move pension fund money in particular into growth assets could

create some opportunities for for UK fintechs and other things too.

And Jean, what's interesting about what you've been trying to push for is also

it's actually at education level, so it's inspiring girls, you know, in the

classroom to not only have role models, but I guess to have task force that will

propel them in becoming high growth entrepreneurs.

Absolutely. I think the shocking statistic was that

only 81% of students were able to name a sort of a role model in tech and they

were male. And I think how do we lift that number a

big. And the objective of the task force is

to increase that number, putting more material in school, especially with

Women's Month. How do we raise the profile?

I think the media really helps with that.

I mean, one of the questions that we try and often, you know, discuss on the UK

show is actually what does the city of London stand for?

And I know the Chancellor has always tried to push this idea that the UK can

become the next NASDAQ that actually does want to focus on tech and

entrepreneurship. But is it still insurance and banking?

Yeah, I mean it is insurance and banking and professional services, but I think

everyone can see that, you know, the UK and London in particular is this

incredible hub of talent and that does stretch from tech to science, amazing

universities, great campuses. But I think we've heard a lot of

rhetoric from Jeremy Hunt, and he is pretty popular actually, out there in

the city, but really not a great deal of concrete action.

And I think it's going to be really interesting to see how people feel about

what is to come in the budget and if indeed we do get the national insurance

reduction and all the rest of it, whether actually people might prefer a

bit more focus on these sorts of topics which sort of propel us into the future.

And, you know, I mean, you have some great statistics, right, in.

For example, there are some task force that this government wants to put in

place. Now, there's a general election.

Doesn't look like they'll be around for much longer.

I could be wrong. But that, you know, they really want to

increase the number of female entrepreneurs.

And again, how difficult is that? We have a huge labour shortage in this

country. So does that accelerate things?

Yeah, I think there are a lot of great initiatives being worked on.

The government has put aside quite a big significant amount of money to increase

the amount of talent. And Minister Coalfield recently spoke

about a budget being put aside to help with retention.

I think we have an untapped a large untapped talent pool with with women who

have left the workforce for childcare and how to get them back in.

I think training them up is a great way, but we also need the corporates to play

a big role in making it an inclusive environment for them to join.

I mean, the other thing, so you also focus on coding for females, actually

for a lot of mums, but also females in general.

I don't know the interplay between coding and AI.

Is it, is it more necessary to have coding skills with AI or does it does

that get taken away? Well, I think AI and natural language is

made it a lot easier to be able to understand.

And I think what we need to see going forward is just people's interest,

curiosity. I think that's what excites me about

coding and how do we get people to think outside the box, How do we help them to

understand the power to transform their ideas and make an impact on society?

We're all a little bit obsessed with Revolut because of the banking licence.

And you know what happens to the. Were you impressed by the plans going

forward or so many still question marks? Yeah, and I think there are lots of

question marks still. Revolut It's been trying to get this

banking licence for three years, but I think one of the sort of

interesting dynamics of that is it's become so sort of big without the

banking licence. It has 40 million customers around the

world, 8 million of those in the UK. And of course not all of those people

are using Revolut all the time, but it's still quite a large number.

And so that that decision by the UK regulators about giving them the licence

is just a lot more loaded than when people get licences, when they're a bit

smaller and the stakes are not quite so high.

So I think they are showing signs that they are kind of ticking off their

problems. They're sort of trying to get in on in

control of their accounts and things like that.

But yes, questions still to be answered. You always have such a good pulse of

what the city wants. What are they expecting from the budget?

Is it I don't know whether it's a downbeat.

I had a big investor and they were saying like, look, the budget's fine,

but they're probably not in charge. Yeah, in a couple of months, certainly,

you know, by the end of the year. So does it really matter to the people

of City of London? I think I think that's the real

challenge. I think they definitely, you know, don't

want to see anything rash. You know, they don't want a sort of

Kwarteng style budget and they don't expect to get one.

But I think that's the problem. They don't really expect it to be a

lasting thing. June, Is there anything that

entrepreneurs like, you know, need from the budget?

Again, it's, you know, a bit prepared, precarious for this government right

now. I think in general what people are

looking for is a bit more stability. It's just an understanding that the

government is going to stick to the promise if it like what you've just

said, how do we how can they make plans if they're not

certain about what it's going to look like in a few months from now?

And, you know, back to that point of attracting talent and making the UK an

attractive place so people come and they can access the talent they need to grow

their businesses. Yeah, it's a tricky, but I think it's a

tricky budget yet because they have to probably win votes.

They don't have much money to play with and they want to make sure that the

markets are okay. Thank you so much for joining us today,

June. And to Leeds investor at CMOS

Investments and Bloomberg's city editor Kathryn Griffiths.

Now coming up, we're also joined by James Darnovsky, the global co-head of

energy power and renewables at Jp morgan.

He's live from the company's Clean Tech Stars conference.

So a good conversation on infrastructure and, of course, spending.

This is Bloomberg.

Well, oil supplies may be running ahead of demand after a report of rising U.S.

stockpiles for a six week in a row. Fears of slowing demand from China and

surging supply from non-OPEC producers are also weighing on prices.

Brent has risen by almost 7% this year due to tensions in the Middle East and

higher transport costs. Now to discuss all of this, we're joined

by James Danowski, the global co-head of energy power and renewables at J.P.

Morgan, and she joins us from the company's Clean Tech Stars conference,

which brings together the future leaders of decarbonization.

So, James, thank you so much for joining us.

I mean, one of the things that we keep on asking a lot of our guests and a lot

of head of commodities tell us is that we're running out of things.

And this is because there had been decades of underinvestment in old oil

and gas, but also in renewables. Do you worry that we're running out of

things? Good morning Francine, and thank you

very much again for for having me join this morning where I were hosting our

second annual Clean Tech Stories Conference here at our offices in

London. Its focus on private image companies

that are at the forefront of technologies that we need to achieve

global net zero by 2050. As you think about your question, am I

worried about right now, what we're worried about is making sure that we can

help these companies get access to capital, because we need both.

We need traditional energy, but we also need low carbon, green renewables, clean

tech. And the companies we have here, we have

over 45 companies, The founders and management of these companies that are

in hydrogen e fuels, battery storage,

energy efficiency, carbon capture, the technologies that we need in addition to

renewables and as we make the transition away from fossil fuels.

So it's a combination. But James, is the right investment going

to the right place? So again, I understand it's a

combination, but actually, what are you most worried about?

And then you also hear from, again, a lot of the big commodity producers that

even if you go through a transition and go for renewables, there's not enough

copper, there's not enough of these rare earths out there to make it viable in

time. So it's a combination of we need a few

things. We need public policy and regulation to

help be stimulating for investments. We need permitting to move faster, but

we also need access to capital for these companies to be able to develop the

resources, develop the technology, spend on the innovation.

So I the it's a combination. It's not just one element to make the

transition successful. Who's getting it right the most again.

How many investments or how much in terms of money pool of money needs to go

where? I think what's encouraging is if we look

at last year, we saw $1.4 trillion of capital for energy transition

decarbonization, which is a record. The challenge we have is to scale that

up to the 4 to $7 trillion a year that we're going to need between now and

2050. We've had some headwinds, obviously,

with high interest rate environments, energy supply shocks.

We've had supply chain disruptions, permitting being a bit slow.

So it hasn't stopped. It's probably is going slower than what

everyone would like as we saw the attendance at COP 28 and then even at

Davos, there's a lot of momentum for this from the corporate and the private

world public. So we're confident it's going to come.

We just have to have a little bit more patience as this evolves over the next

few years and this to change the global energy ecosystem, to make sure that we

have the ability to scale up to low carbon is going to take time.

It's not an overnight event. James, I know there's a lot of focus, of

course, on raising capital to go into infrastructure for renewables or

infrastructure for energy. Is this where the smart money is going?

The smart money is going across. So we continue to see capital being

raised across all subsectors renewables. So solar or wind, the grids, battery

storage, EVs, clean fuels.

As I said, some of the more emerging technologies capital is continuing to

go. The issue is just because of what's

happened. For the reasons I said about some of the

headwinds we faced last year, it's just slowed down the pace of capital coming.

We went from the 30 companies last year to 45 companies this year.

At our conference we went from roughly 200 plus investors last year to 250 plus

this year. That's to us quite encouraging that we

continue to see companies grow, be successful.

But investor interest would be there from, as you said, venture capital,

private equity. It's infrastructure, it's a combination.

I think the other thing we're seeing is the big corporates and the big

strategics are also continuing to put more and more capital into helping these

clean type companies or these smaller type companies grow up so that they can

scale up and also deploy their technology quicker.

And James, when you look at you know, you're basically the team's joining you

at this conference today. I think you have growth companies,

highly successful growth companies that raised some $7 billion of capital over

the last several years. Is it easy to raise capital across the

board or is there a region that actually is more in tune to raising capital in

the space? So the what we're seeing right now is

it's quite it is quite challenging. I mean, globally for the reasons I said.

But we're starting to see the green shoots.

We're starting to see the public equity capital markets open up, which is always

a good thing. We've seen policy in the US with IRA,

obviously be supportive. We've seen the UK and EU adopt new

policies and new incentives and subsidies.

The I wouldn't say it's one specific region.

What it is, is it comes down to companies that are able to demonstrate

that they have the technology, that they're beyond the pilot phase, they're

scaling up to be commercial and that they have an end market demand and that

those companies then are are able to go and say, you know what, I would like my

next round, whatever that is, a C round round in round of growth capital because

I've proven and there is demand, there's fiscal policy around it, those elements

are really just global. So it's not one region, it's quite

specific. But overall the fact that we saw more

capital raise last year gives us a lot of encouragement and the momentum just

in the market that we see talking to clients and investors is quite

encouraging. Great.

Thank you so much. Jim Czarnecki there, the global co-head

of energy power and renewables at Jp morgan.

Now coming up, as the U.K. chancellor prepares to deliver his

spring budget. We'll look at why Gilt investors will be

hoping the whole statement is actually uneventful.

That's next. And this is Bloomberg.

So just a few hours until the final UK government budget before the election.

But could disappointment for voters turn out to be a bonus for gilt markets?

Bloomberg's markets reporter Justin Alle is with us now.

I mean the U.K., this is a very important budget, frankly, for the

Tories. I don't know whether it'll have a huge

impact on the economy given the looming election, but what are you expecting to

see now? Yeah, I think the biggest headline, you

know, for all of us living in the UK has already been reported out in the press,

which is that everyone's expecting a cut to the National insurance tax rate and

perhaps not yet, you know, a cut to the income tax rate.

But I think that's going to be a really important part of the pitch that the

Tories are going to desperately bring to UK voters ahead of a potential election.

But, you know, it's kind of a difficult kind of dilemma for Jeremy Hunt here,

because on the one hand, I mean, they do kind of want to bring more perks to UK

voters, but on the other he's not working with a lot of fiscal headroom

here. So we're also going to try to see where

he's going to find some of that headroom, you know, potentially by

extending a windfall tax, you know, kind of on the energy companies that kind of

what he's going to do with the tobacco tax and kind of other parts of the

budget. So how is the market positioned ahead of

that? Yeah, I think kind of another big kind

of big picture, a structural question here is that is there going to be more

perks for kind of the UK financial industry in particular?

Because obviously going into this budget, there have been a lot of

concerns about the lack of listings in the UK and also the lack of domestic

investment in the domestic economy. And so there have been kind of a lot of

chatter about whether there's going to be a British ISA which could bring some

tax perks just specifically for investing in domestic stocks, and that

could, at least in the long run, provide some support for British stocks.

Now, just, you know, one of the most read stories on the Bloomberg terminal

is actually Egypt and the fact that they devalue their currency.

What can you tell us? Yeah, I think it kind of speaks to the

pressures that emerging markets are under at the moment.

And for Egypt's, it's been particularly difficult because they've seen kind of a

deficit in their current account for quite a while.

And that always brings pressure to the currency, but has also been especially

hard because with the conflict in the Middle East, I mean, that's hurt kind of

trade and Red Sea and revenues through the Suez Canal.

And so what we kind of got from the central bank today is, you know, a huge

rate hike of 600 basis points, as well as a devaluation of the currency, which

kind of will bring it a bit closer to the black market rate.

And also economists are expecting potentially a deal with the IMF coming

kind of very soon. Yeah, and we heard from the IMF that

they were encouraging, of course, you know, to tighten monetary policy because

inflation is around 30%. Yeah, exactly.

And I think part of that is kind of a global story, which is that with the

rate hike coming out of the US, a lot of kind of capital has left emerging

markets. And I think this is a particular kind of

dire case, but it's definitely the pressure that a lot of developing

countries are seeing right now. And then just, you know, we're watching

out for trying to pass that possible new policy coming from from there.

Yeah. I mean, speaking of emerging markets,

right, I mean, investors were a bit disappointed yesterday because even

though the GDP target has been kind of similar, you know, at 5%, I think a lot

of people were hoping for a lot more detail about the plan to get there.

And we still didn't really get a lot of that detail today.

I mean, apart from, you know, the central bank governor saying that there

could be more room for another, you know, reserve requirement ratio cut,

which is why we're seeing Chinese bonds rally today and also another ultra long

central government bond sale to support development.

But I think, you know, people kind of are a bit skeptical after the lack of

support that we've seen over the past year.

Just, you know, thank you so much as always for that.

Wonderful markets round up, Justin. Just now, another reminder for viewers

in the UK. You can join us later for special

coverage of the spring budget beginning at 12:15 p.m..

The chancellor's speech then scheduled for around 1230.

Now, later today, we'll also be talking to the Chancellor of the Exchequer.

Don't miss that conversation right here this evening on Bloomberg tv.

Up next, the bloomberg brief, Dani Burger and Manus Cranny in new york.

Have a great day, everyone.