Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg DAYBAQ podcast, available every morning on Apple, Spotify or wherever you listen. It's Wednesday, the eighth of January here in London. I'm Caroline, Hepkip.

Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg DAYBAQ podcast, available every morning on Apple, Spotify or wherever you listen. It's Wednesday, the eighth of January here in London. I'm Caroline, Hepkip.

And I'm Stephen Carroll. Coming up today. Trump escalates his threats against Allied nations, as the EU's new industry chief tells Bloomberg, the block must be ready to defend itself.

And I'm Stephen Carroll. Coming up today. Trump escalates his threats against Allied nations, as the EU's new industry chief tells Bloomberg, the block must be ready to defend itself.

UK government boring costs continue to rise as a global debt sale frenzy draws yield hungry buyers.

UK government boring costs continue to rise as a global debt sale frenzy draws yield hungry buyers.

Plus Shean Blasted, the chair of the UK's Business and Trade Committee, says he has almost zero confidence in the fashion retailer's supply chain.

Plus Shean Blasted, the chair of the UK's Business and Trade Committee, says he has almost zero confidence in the fashion retailer's supply chain.

Let's start with a roundup of our top stories.

Let's start with a roundup of our top stories.

US President elect Donald Trump has made several bold and improbable statements as he detailed plans to seek control of Greenland, Canada, and the Panama Canal. During a press conference, Trump was if he would make clear he wasn't considering a military confrontation to achieve his aims.

US President elect Donald Trump has made several bold and improbable statements as he detailed plans to seek control of Greenland, Canada, and the Panama Canal. During a press conference, Trump was if he would make clear he wasn't considering a military confrontation to achieve his aims.

I can't assure you. You're talking about Panama and Greenland now, I can't assure you on either of those two. But I can say this, we need them for economic security. The Panama Canal was built for a military.

I can't assure you. You're talking about Panama and Greenland now, I can't assure you on either of those two. But I can say this, we need them for economic security. The Panama Canal was built for a military.

I'm not going to commit to that now.

I'm not going to commit to that now.

It might be that you'll have to do something. Look, the Panama Canal is vital to our country.

It might be that you'll have to do something. Look, the Panama Canal is vital to our country.

World leaders have already responded to Trump's threats. Panama has vowed not to give up the canal. Denmark says it has no plans to seed control of Greenland as self governing territory. Meanwhile, out going Canadian Prime Minister Justin Trudeau posted on Acts that quote, there isn't a snowballs chance in hell that Canada would become part of the United States.

World leaders have already responded to Trump's threats. Panama has vowed not to give up the canal. Denmark says it has no plans to seed control of Greenland as self governing territory. Meanwhile, out going Canadian Prime Minister Justin Trudeau posted on Acts that quote, there isn't a snowballs chance in hell that Canada would become part of the United States.

Speaking at Mara Lago, Tom also once again called for increased defense spending from NATO allies. The US president elect says that members of the Alliance should commit to spending more than double the current two percent target.

Speaking at Mara Lago, Tom also once again called for increased defense spending from NATO allies. The US president elect says that members of the Alliance should commit to spending more than double the current two percent target.

Well, I think NATO should have five percent.

Well, I think NATO should have five percent.

Yeah, well, you can't do it it too.

Yeah, well, you can't do it it too.

I mean at two percent every country, if you're going to have a country in a regular military, you're at four percent. I think they should be. You know, they're in dangerous charactor. I think you should be. They can all afford it, but they should be at five percent, not two percent.

I mean at two percent every country, if you're going to have a country in a regular military, you're at four percent. I think they should be. You know, they're in dangerous charactor. I think you should be. They can all afford it, but they should be at five percent, not two percent.

Trump's prior threats to abandon NATO and Russia's invasion of Ukraine have already driven many member countries to boost their defense spending. NATO Sexuary General Mark Rutter has signaled that the Alliance is likely to raise its target for defense spending to at least three percent of GDP, but no member of the Alliance currently spends five percent on defense. That includes the United States.

Trump's prior threats to abandon NATO and Russia's invasion of Ukraine have already driven many member countries to boost their defense spending. NATO Sexuary General Mark Rutter has signaled that the Alliance is likely to raise its target for defense spending to at least three percent of GDP, but no member of the Alliance currently spends five percent on defense. That includes the United States.

Trump's willingness to threaten US allies comes as the ease new industry chief tells Bloomberg the block must be prepared to defend itself against protectionist trade measures from the US and others. Speaking ahead of Trump's pras Con Friends, European Commissioned Vice President Stefan warned the EU's era of complacency on protectionism has ended.

Trump's willingness to threaten US allies comes as the ease new industry chief tells Bloomberg the block must be prepared to defend itself against protectionist trade measures from the US and others. Speaking ahead of Trump's pras Con Friends, European Commissioned Vice President Stefan warned the EU's era of complacency on protectionism has ended.

We will have a plan to protect the steel sector from global overcapacity while ensuring competitiveness. I'm prepared to explore both defensive and offensive actions with my colleagues at the Commission. This is a dialogue that we will have at the Commission. I still hope to convince the next US administration that we have everything to lose from a collective trade war.

We will have a plan to protect the steel sector from global overcapacity while ensuring competitiveness. I'm prepared to explore both defensive and offensive actions with my colleagues at the Commission. This is a dialogue that we will have at the Commission. I still hope to convince the next US administration that we have everything to lose from a collective trade war.

Stefan there speaking through a translator. Before Trump's re election, Bloomberg Villa, the EU had drawn up a list of American goods that could target with retaliatory tariffs to respond to any punitive trade measures from the incoming US administration.

Stefan there speaking through a translator. Before Trump's re election, Bloomberg Villa, the EU had drawn up a list of American goods that could target with retaliatory tariffs to respond to any punitive trade measures from the incoming US administration.

Now too other news, the sister of Sam Altman has accused the Open AI chief executive of sexually abusing her for almost a decade. In a lawsuit filed in federal court. Anne Altman alleges that her brother use them manipulated her while they were growing up in Missouri in the late nineteen nineties and early two thousands, and Altman has previously claimed on social media that Sam Aortman abused her. In a statement on behalf of himself, his mother, and his brothers, Sam Altman called the claims quote utterly untrue, adding that quote this situation causes immense pain to our entire family.

Now too other news, the sister of Sam Altman has accused the Open AI chief executive of sexually abusing her for almost a decade. In a lawsuit filed in federal court. Anne Altman alleges that her brother use them manipulated her while they were growing up in Missouri in the late nineteen nineties and early two thousands, and Altman has previously claimed on social media that Sam Aortman abused her. In a statement on behalf of himself, his mother, and his brothers, Sam Altman called the claims quote utterly untrue, adding that quote this situation causes immense pain to our entire family.

Governments and companies are flooding the debt market, raising one hundred and eighty four billion dollars in the first few days of the year. Bonds all around the world are being issued at a record pace as issuers take advantage of cam markets before Trump's inauguration. The level of supply has led some to worry about countries like the UK, which saw its long term borrowing costs at the highest level since nineteen ninety eight. On Tuesday, Procminnian columnist Marcus Ashworth says he thinks Chancellor Rachel Reeves will get away with us.

Governments and companies are flooding the debt market, raising one hundred and eighty four billion dollars in the first few days of the year. Bonds all around the world are being issued at a record pace as issuers take advantage of cam markets before Trump's inauguration. The level of supply has led some to worry about countries like the UK, which saw its long term borrowing costs at the highest level since nineteen ninety eight. On Tuesday, Procminnian columnist Marcus Ashworth says he thinks Chancellor Rachel Reeves will get away with us.

We expect next year they'll probably issue a further ten percent more guilts, so something like three hundred and thirty billion. There's a lot of pressure on the investors in guilt market. They are getting paid for it, though so in some senses, if the banking were to cut illustrates more than perhaps the market's currently brighting only two cuts, the banking is trying desperately to tell the market could be four ubs a saint could be as much as six.

We expect next year they'll probably issue a further ten percent more guilts, so something like three hundred and thirty billion. There's a lot of pressure on the investors in guilt market. They are getting paid for it, though so in some senses, if the banking were to cut illustrates more than perhaps the market's currently brighting only two cuts, the banking is trying desperately to tell the market could be four ubs a saint could be as much as six.

Ashworth warned that much of Europe's debt markets depended on the mood music from the United States. The UK and US governments are issuing nearly thirty billion dollars worth of death later today.

Ashworth warned that much of Europe's debt markets depended on the mood music from the United States. The UK and US governments are issuing nearly thirty billion dollars worth of death later today.

The UK's Business and Trade Committee says that it has almost zero confidence in she In's supply chain, with allegations of human rights abuses in China's cotton producing region of shin Jiang. Here is how the committee's chair, Liam Burne ended a public hearing with the Fashion giants EMEA lawyer after asking ten times if she In sources cotton from China.

The UK's Business and Trade Committee says that it has almost zero confidence in she In's supply chain, with allegations of human rights abuses in China's cotton producing region of shin Jiang. Here is how the committee's chair, Liam Burne ended a public hearing with the Fashion giants EMEA lawyer after asking ten times if she In sources cotton from China.

For a company which is seeking to float on the London Stock Exchange. The Committee has been been pretty horrified by the lack of evidence that you have provided today. You've given us almost zero confidence in the integrity of your supply chains. You can't even tell us what your products are made from. You can't tell us much about the conditions which workers have to work in, and the reluctance to answer basic questions has frankly bordered on contempt of the committee.

For a company which is seeking to float on the London Stock Exchange. The Committee has been been pretty horrified by the lack of evidence that you have provided today. You've given us almost zero confidence in the integrity of your supply chains. You can't even tell us what your products are made from. You can't tell us much about the conditions which workers have to work in, and the reluctance to answer basic questions has frankly bordered on contempt of the committee.

Burn a Labour MP, was referring to press reports that Shean has filed papers to potentially list in London. Bloomberg has reported Shean's IPO would potentially be worth fifty billion pounds, London's largest ever. Shean's lawyer, Yinanju, said the online retailer is compliant with all relevant UK laws, but declined to answer questions about its working practices.

Burn a Labour MP, was referring to press reports that Shean has filed papers to potentially list in London. Bloomberg has reported Shean's IPO would potentially be worth fifty billion pounds, London's largest ever. Shean's lawyer, Yinanju, said the online retailer is compliant with all relevant UK laws, but declined to answer questions about its working practices.

JP Morgan Chase is getting ready to tell it staff the era of work from home is over. Bloomberg has learned that America's largest bank is set to make working from the office five days a week mandator in the coming weeks. Bloomberg's senior finance reporter Sree Natarajan says it likely comes from the top.

JP Morgan Chase is getting ready to tell it staff the era of work from home is over. Bloomberg has learned that America's largest bank is set to make working from the office five days a week mandator in the coming weeks. Bloomberg's senior finance reporter Sree Natarajan says it likely comes from the top.

It's very fair to assume Jamie Diamonds on board. It does. Anyone on board is Jamie Diamond. Everyone else has to fall in line. But all the sense we're getting unless plans follow our last minute is sometime in the next few weeks, and then we could do. You could very well SEEGP moment come out and say they want everyone back in office five days a week.

It's very fair to assume Jamie Diamonds on board. It does. Anyone on board is Jamie Diamond. Everyone else has to fall in line. But all the sense we're getting unless plans follow our last minute is sometime in the next few weeks, and then we could do. You could very well SEEGP moment come out and say they want everyone back in office five days a week.

Natarajan adds it's part of a broader cultural move in the US, with some of Trump's top team attacking federal officials for working from home. Wall Street firms have diverged on their work from home policies as executives remain split on how flexible employees arrangements should be.

Natarajan adds it's part of a broader cultural move in the US, with some of Trump's top team attacking federal officials for working from home. Wall Street firms have diverged on their work from home policies as executives remain split on how flexible employees arrangements should be.

I KNOWO, so a few of our top stories for you this morning. Looking at the markets, the masci Asia Pacific indexes down six tenths of one percent. You also have sell off on the hang saying down by almost one full percentage point. There has been a major move, of course in bond markets, treasury yields jumping yesterday, ten year yields rising five points. We saw significant losses for UK guilt yields, ten year guilt yields rising seven basis points at one moment. In terms of stop futures, then, for where we stand this morning, US SOP futures are high at SMPF have found it, I mean futures up three tens, USS futures down two tens of one percent, the dollar flat at the moment, and the Euro currently trading at one sports zero three five seven. Those are the markets.

I KNOWO, so a few of our top stories for you this morning. Looking at the markets, the masci Asia Pacific indexes down six tenths of one percent. You also have sell off on the hang saying down by almost one full percentage point. There has been a major move, of course in bond markets, treasury yields jumping yesterday, ten year yields rising five points. We saw significant losses for UK guilt yields, ten year guilt yields rising seven basis points at one moment. In terms of stop futures, then, for where we stand this morning, US SOP futures are high at SMPF have found it, I mean futures up three tens, USS futures down two tens of one percent, the dollar flat at the moment, and the Euro currently trading at one sports zero three five seven. Those are the markets.

In a moment, we'll bring you the latest on Donald Trump and Elon Musk's various interventions on the world stage, plus the demand for global debt as UK bond yields continue to rise. But another story that we've been reading this morning is from our opinion columnist Dave Lee. You covers tech in the US, and he's been writing about that video published by Mark Zuckerberg yesterday in which he announced that they are dropping their their fact checking and verification team. This is a big shift from the world's biggest social media company and the Dave Lee's view is essentially that fact checking was always just a PR five leaf from Meta, and that Zuckerberg is a software engineer. It never really believed in it, even amount the time that he was announcing it being set up. And in response to the huge criticism the platform faced in twenty sixteen.

In a moment, we'll bring you the latest on Donald Trump and Elon Musk's various interventions on the world stage, plus the demand for global debt as UK bond yields continue to rise. But another story that we've been reading this morning is from our opinion columnist Dave Lee. You covers tech in the US, and he's been writing about that video published by Mark Zuckerberg yesterday in which he announced that they are dropping their their fact checking and verification team. This is a big shift from the world's biggest social media company and the Dave Lee's view is essentially that fact checking was always just a PR five leaf from Meta, and that Zuckerberg is a software engineer. It never really believed in it, even amount the time that he was announcing it being set up. And in response to the huge criticism the platform faced in twenty sixteen.

Yeah, absolutely, And the pieces a really interesting one and I think gives us good insight into what's happening in Menlo Park, what's happening across Silicon Valley, Davely writing about how we're seeing Silicon Valley above all sort of performance, kind of backlash against the accountability that we've seen in the Biden era, and also around the kind of journalism and the reporting around accountability on these platforms. Because I think it's a really interesting piece. But even though Zuckerberg is perhaps giving the impression of supporting Trump and his allies, that maybe it's not quite so simple as that, maybe Zuckerberg is not fundamentally changing actually his position, at least as far as Davely sees it. Have a look at that piece on the terminal.

Yeah, absolutely, And the pieces a really interesting one and I think gives us good insight into what's happening in Menlo Park, what's happening across Silicon Valley, Davely writing about how we're seeing Silicon Valley above all sort of performance, kind of backlash against the accountability that we've seen in the Biden era, and also around the kind of journalism and the reporting around accountability on these platforms. Because I think it's a really interesting piece. But even though Zuckerberg is perhaps giving the impression of supporting Trump and his allies, that maybe it's not quite so simple as that, maybe Zuckerberg is not fundamentally changing actually his position, at least as far as Davely sees it. Have a look at that piece on the terminal.

Well, let's bring you more in in our top story, and the comments made in Donald Trump's press conference yesterday threats again Canada, Greenland and Panama. These statements coming as Bloomberg has been reporting on how Elon Musk has been exerting his influence over politics here in Europe. Joining US Now to discuss Blomberg Senior editor Alan Crawford, Alan, good morning. The phrase that was used for Donald Trump's first term was to take him seriously, but not literally. How seriously should we take this idea espoused by Donald Trump yesterday of US territorial expansion.

Well, let's bring you more in in our top story, and the comments made in Donald Trump's press conference yesterday threats again Canada, Greenland and Panama. These statements coming as Bloomberg has been reporting on how Elon Musk has been exerting his influence over politics here in Europe. Joining US Now to discuss Blomberg Senior editor Alan Crawford, Alan, good morning. The phrase that was used for Donald Trump's first term was to take him seriously, but not literally. How seriously should we take this idea espoused by Donald Trump yesterday of US territorial expansion.

We're used to elements of his undiplomatic language, but I mean, this is unprecedented. I mean, it's very hard to ignore these claims, but it puts world leaders in an extremely difficult position.

We're used to elements of his undiplomatic language, but I mean, this is unprecedented. I mean, it's very hard to ignore these claims, but it puts world leaders in an extremely difficult position.

I mean, how do they respond?

I mean, how do they respond?

It's frankly unprecedented and very complex grown for them to trade.

It's frankly unprecedented and very complex grown for them to trade.

The idea of economic or military coercion against US allies is absolutely remarkable. Did we learn anything more concrete about trade tariffs, which is one tool that we know that the President elect Trump wants to use.

The idea of economic or military coercion against US allies is absolutely remarkable. Did we learn anything more concrete about trade tariffs, which is one tool that we know that the President elect Trump wants to use.

Well, it's certainly true that he has been consistent in warning of his intention to implement these tariffs that as we've seen, these are something in the order twenty five percent on the US's neighbors Mexico and Canada, as much as sixty percent on China. He's threatened.

Well, it's certainly true that he has been consistent in warning of his intention to implement these tariffs that as we've seen, these are something in the order twenty five percent on the US's neighbors Mexico and Canada, as much as sixty percent on China. He's threatened.

I mean, frankly, who really knows what the level may be. But there's no doubt that he has in the past enacted tariffs and he will do so in short order, and it looks very much. I mean, it's no secret that he wants to use these to exert pressure on governments, and he's convinced that it will work.

I mean, frankly, who really knows what the level may be. But there's no doubt that he has in the past enacted tariffs and he will do so in short order, and it looks very much. I mean, it's no secret that he wants to use these to exert pressure on governments, and he's convinced that it will work.

You've been reporting this morning about Elon Musk ramping up his criticism and attacks of the UK and German governments, latching onto far right but also criticizing their economic competence. How seriously do political leaders in Europe need to take this sort of criticism from Alan Musk.

You've been reporting this morning about Elon Musk ramping up his criticism and attacks of the UK and German governments, latching onto far right but also criticizing their economic competence. How seriously do political leaders in Europe need to take this sort of criticism from Alan Musk.

They're working on eggshells here because they, frankly don't know. They don't know to what degree he has Trump's ear. Of course, we know that Elil Musk is very close, that he supported Trump's campaign, that he's frequently at mar Lago, that he has this proposed informal position outside the administration, advising on efficiency. But I mean, frankly, the comments that you're making he's making that these are personal insults at the Chancellor of Germany, that the.

They're working on eggshells here because they, frankly don't know. They don't know to what degree he has Trump's ear. Of course, we know that Elil Musk is very close, that he supported Trump's campaign, that he's frequently at mar Lago, that he has this proposed informal position outside the administration, advising on efficiency. But I mean, frankly, the comments that you're making he's making that these are personal insults at the Chancellor of Germany, that the.

UK Prime minister. And it's really exceptionally delicate then, so you've seen leaders they're saying that.

UK Prime minister. And it's really exceptionally delicate then, so you've seen leaders they're saying that.

They try not to refer to Musk by name when they say that this.

They try not to refer to Musk by name when they say that this.

Is you know, beyond the line, or that it's you know, even.

Is you know, beyond the line, or that it's you know, even.

Billionaires have they you know, they're subject to freedom of speech, but they can also be wrong.

Billionaires have they you know, they're subject to freedom of speech, but they can also be wrong.

So it's very very delicate and difficult for world leaders.

So it's very very delicate and difficult for world leaders.

Yeah, and the calling I Love Schultz a fool and the German president a tyrant for example, calling for the prime minister here in the UK to be jailed, those are very strong, you know, accusations. What do you think my Musk's impact be on European politics, given that, of course Germany is holding an election next month.

Yeah, and the calling I Love Schultz a fool and the German president a tyrant for example, calling for the prime minister here in the UK to be jailed, those are very strong, you know, accusations. What do you think my Musk's impact be on European politics, given that, of course Germany is holding an election next month.

Yeah, I mean it's it's very unclear.

Yeah, I mean it's it's very unclear.

So far, there doesn't seem to be any impact whatsoever in the pools.

So far, there doesn't seem to be any impact whatsoever in the pools.

This could backfire.

This could backfire.

Remember that Musk has group's only Tesla Giga factories they call it, producing cars electric vehicles just outside Berlin. There have been there has been talk of some kind of boycott. You know, who knows whether that will actually come to it. In I think but it's and in the case of the UK, there isn't an election due until twenty twenty nine, so.

Remember that Musk has group's only Tesla Giga factories they call it, producing cars electric vehicles just outside Berlin. There have been there has been talk of some kind of boycott. You know, who knows whether that will actually come to it. In I think but it's and in the case of the UK, there isn't an election due until twenty twenty nine, so.

It really seems kind of un likely.

It really seems kind of un likely.

That he can bring about any change, which begs the question why he's doing this.

That he can bring about any change, which begs the question why he's doing this.

Okay, Alan Crawford, I've SEENI your editor, Thank you very much for joining us. The details of that story, and you can read more details of us on Bloomberg dot com and on the terminal.

Okay, Alan Crawford, I've SEENI your editor, Thank you very much for joining us. The details of that story, and you can read more details of us on Bloomberg dot com and on the terminal.

Now, the UK's long term boring costs have searched to their highest level in more than twenty five years, raising the prospect that chances of Rachel Reeves may need to raise taxes again. This is the government is ramping up borrowing to invest in public services. Our managing editor for e FX and Rates, Rachel Levins, joins us now for more on this. Rachel, good morning. Put the moves that we have seen in the last couple of days in context for us, Why have yields climb to these levels now? And the big question could they go higher?

Now, the UK's long term boring costs have searched to their highest level in more than twenty five years, raising the prospect that chances of Rachel Reeves may need to raise taxes again. This is the government is ramping up borrowing to invest in public services. Our managing editor for e FX and Rates, Rachel Levins, joins us now for more on this. Rachel, good morning. Put the moves that we have seen in the last couple of days in context for us, Why have yields climb to these levels now? And the big question could they go higher?

Yes?

Yes?

I think those two broad things that are really going on here.

I think those two broad things that are really going on here.

You have to look around the world.

You have to look around the world.

There is a global sort of bond route going on at the moment, particularly driven by what's going on in the US. You know, there, we obviously have kind of an incoming administration, Donald Trump, as we were just talking about, who's really sort of expected to kind of boost the outlook for more inflation. We're expecting more spending. We're expecting sort of tax cuts and deregulation. So there's a lot of fiscal concerns as we kind of start the year generally sort of setting the tone for markets. But then we come to the UK and these have also been issues here, so it's really kind of ringing true. I think with investors that we need to take another look at whether debt is sustainable and whether it's sustainable at the yields that the government is currently paying.

There is a global sort of bond route going on at the moment, particularly driven by what's going on in the US. You know, there, we obviously have kind of an incoming administration, Donald Trump, as we were just talking about, who's really sort of expected to kind of boost the outlook for more inflation. We're expecting more spending. We're expecting sort of tax cuts and deregulation. So there's a lot of fiscal concerns as we kind of start the year generally sort of setting the tone for markets. But then we come to the UK and these have also been issues here, so it's really kind of ringing true. I think with investors that we need to take another look at whether debt is sustainable and whether it's sustainable at the yields that the government is currently paying.

Because of course, the last time that we did see yields this high, least with thirty year, the UK's stat pile was significantly smaller. What does borrowing at these levels mean for the public finances? And is rachel is going to have to raise taxes?

Because of course, the last time that we did see yields this high, least with thirty year, the UK's stat pile was significantly smaller. What does borrowing at these levels mean for the public finances? And is rachel is going to have to raise taxes?

Well, it's clearly getting pretty expensive to borrow. I mean, we're definitely looking at kind of a higher burden in order order to kind of service debt when we are at a yield like these, So they need to find more money basically, so they need to have either more coming in or less going out, and that kind of brings them back to sort of the debate that they had prior to the budget. You know, you either need to be looking at cuts to reduce your outgoings or you need to be looking at taking in more through taxes or getting more through borrowing. They've obviously sort of set some very you know, strict guidelines for themselves via their manifesto or what they want to increase in terms of tax and how they want to be thinking about sort of the different sorts of public services that they can offer. But there is very limited room as well on the borrowing side. You know, we're already borrowing two hundred and ninety seven billion pounds this fiscal year, and you know, the budget announcement and back in October prompted sort of a little mini tantrum in the guilt market around that figure, even though it had been.

Well, it's clearly getting pretty expensive to borrow. I mean, we're definitely looking at kind of a higher burden in order order to kind of service debt when we are at a yield like these, So they need to find more money basically, so they need to have either more coming in or less going out, and that kind of brings them back to sort of the debate that they had prior to the budget. You know, you either need to be looking at cuts to reduce your outgoings or you need to be looking at taking in more through taxes or getting more through borrowing. They've obviously sort of set some very you know, strict guidelines for themselves via their manifesto or what they want to increase in terms of tax and how they want to be thinking about sort of the different sorts of public services that they can offer. But there is very limited room as well on the borrowing side. You know, we're already borrowing two hundred and ninety seven billion pounds this fiscal year, and you know, the budget announcement and back in October prompted sort of a little mini tantrum in the guilt market around that figure, even though it had been.

To be honest, really widely flagged.

To be honest, really widely flagged.

So we are sort of starting to push up against the limits of what the bond market will accept, which does then beg the question of where else do you find the money?

So we are sort of starting to push up against the limits of what the bond market will accept, which does then beg the question of where else do you find the money?

Yeah, indeed, at what level?

Yeah, indeed, at what level?

Though?

Though?

Does this actually become a kind of crisis I suppose for government, for the Chancellor.

Does this actually become a kind of crisis I suppose for government, for the Chancellor.

We're already back when we look at the charts to the levels we saw under Liz Trust. You know, that was obviously a bona fide guilt crisis. But I think we need to look at kind of the severity of the move. We'd be much more gradual, and this has been much more a kind of story of yields around the world rising rather than the UK being out of sync with the rest of the world. So I think that's going to be the key to watch to what degree is the UK kind of moving out of line from its other peers. We had an auction yesterday. It went reasonably well. It was still oversubscribed, albeit less than some other auctions in the past, and it priced pretty much in line with where yields have been.

We're already back when we look at the charts to the levels we saw under Liz Trust. You know, that was obviously a bona fide guilt crisis. But I think we need to look at kind of the severity of the move. We'd be much more gradual, and this has been much more a kind of story of yields around the world rising rather than the UK being out of sync with the rest of the world. So I think that's going to be the key to watch to what degree is the UK kind of moving out of line from its other peers. We had an auction yesterday. It went reasonably well. It was still oversubscribed, albeit less than some other auctions in the past, and it priced pretty much in line with where yields have been.

We've got another one today in another four.

We've got another one today in another four.

Hundred, sorry four point twenty five billion of debt being sold. You know, it's the job of the government to find a level at which those auctions go through, so we won't necessarily see those issues start to show up immediately, but it's definitely going to be something that you know, if yields continue creeping higher, and we're not yet back to kind of the cycle peaks that we saw in the US kind of a year or so ago.

Hundred, sorry four point twenty five billion of debt being sold. You know, it's the job of the government to find a level at which those auctions go through, so we won't necessarily see those issues start to show up immediately, but it's definitely going to be something that you know, if yields continue creeping higher, and we're not yet back to kind of the cycle peaks that we saw in the US kind of a year or so ago.

You know, we really could see kind of the pressure being ramped up in the UK.

You know, we really could see kind of the pressure being ramped up in the UK.

Is there a level that which a lack of demand becomes an issue in these upcoming sales your reference the auction taking place later today.

Is there a level that which a lack of demand becomes an issue in these upcoming sales your reference the auction taking place later today.

Yes, but I think, I mean, this is the sort of thing where you know, the the debt management office their job is really to come into the market and see what level will work. You know, you can get a full on bio strike where where you know, we don't see any bids coming in or enough bids coming in, and that comes real issue.

Yes, but I think, I mean, this is the sort of thing where you know, the the debt management office their job is really to come into the market and see what level will work. You know, you can get a full on bio strike where where you know, we don't see any bids coming in or enough bids coming in, and that comes real issue.

But those are very very.

But those are very very.

Rare, And I think a useful sort of comparison to look at is if you know, we look across sort of the English channel to France. France has had no real problems with its auctions despite all of the political issues over the last six months. So it takes a lot for auctions to become problematic because there's still a lot of different reasons why investors will want to kind of buy guilt, you know, they fit into their plans that they're running.

Rare, And I think a useful sort of comparison to look at is if you know, we look across sort of the English channel to France. France has had no real problems with its auctions despite all of the political issues over the last six months. So it takes a lot for auctions to become problematic because there's still a lot of different reasons why investors will want to kind of buy guilt, you know, they fit into their plans that they're running.

They need to replace securities that are maturing.

They need to replace securities that are maturing.

So for those auctions to really grow into a whole, we need to see something a bit more substantive and than we've seen this far.

So for those auctions to really grow into a whole, we need to see something a bit more substantive and than we've seen this far.

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