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tv   Bloomberg Daybreak Australia  Bloomberg  December 12, 2019 6:00pm-7:00pm EST

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♪ >> election blowout. polls indicate a massive, 86-seat conservative majority. cable trading at 135 once more. thepresident trump approves trade deal with china to avert december tariffs. i'm anna edwards with guy johnson live from the city of london. guy: the pound is absolutely
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incredible this evening, but everybody could take a sharp when that poll came out. this changes so much as we look forward to what comes next for the brexit process. it gives boris johnson flexibility. the hard brexit is, i don't need you anymore. you are not going to stand in my way you potentially did. also the way you did with theresa may. dup, erg, noer the longer these factions, outside yet always in the conservative party able to dictate policy. as we hear from allison donnelly on twitter, she's talking about how this opens the possibility of a substantive brexit. bruegel, from reminding us there could be flux ability around that trade relationship, boris johnson saying he doesn't want that flux ability, things he said he would do but that didn't come to pass
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because he found other people standing it is way and he had to adjust course. and it is devastating for the labour party. the reflection it is going to take place there, i think there may be that jeremy corbyn steps down, others suggesting this was more about brexit that was about jeremy corbyn, but nevertheless the labour party will have a difficult time climbing out of the hole that it has found itself in. anna: we could hear in the next few hours, there will be an accounting in north london where jeremy corbyn has his seat. we will see what he says, whether he chooses to wait a little bit longer. but you made the point, a good one, that if jeremy corbyn is not the future of the labour party, who is? they have reshaped the membership of that party so much under jeremy -- under jeremy corbyn, that maybe they continue to pick what one of our guests described as leaders who won't win elections, but stand up for the causes some on the left believe.
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taken control, this hard left caucus in the party has taken control of the labour party. many of the potential leaders have been talked about over the past few weeks, pushed down by leadership, have been coming from that caucus. they are more left wing, more in the mold of jeremy corbyn, and you wonder therefore, whether the knee-jerk reaction will be to continue with that process. because that is where the levers of power are being pulled. let's get more details in terms of what we need to know about tonight. let's go to our reporter with key seats we are watching. >> we are going to get results shortly, we have people rushing about the polling stations. let's talk with dudley north, currently held by labor on a thin majority, just a 22 seats. this is exactly the sort of seat we expect to see go blue on the back of an exit poll. it fits that theme of a very
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offensive campaign by conservatives, going into the northern heartland labor has held so long and turning them blue, that is what we expected. the tories did lose seats in 2016 on a net basis but did gain a few, and this is one of those, and they were looking to defend that on a majority of just over 1000. the eyes down on southwest in , a brexita tory seat seat which makes it difficult, and given the exit poll, unlikely that is going to come through, thin majority tories will be looking to increase. and look at northeast fife in scotland, a majority of just two, held by the snp, another target, but given the exit poll, it looks like the snp will keep a hold of this one, perhaps increasing that really thin majority. and a three-way margin in london went to the labour party in 2017 on just 20 votes.
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this is a former conservative, the tories when it back and labor is looking to keep it as well. and finally belfast north, this is the dup, nigel dobbs defending this made a pact with the dup and sinn fein to get terms of the dup in the bigger picture is becoming less relevant if we do get that tory majority to come through. thanks, a look, at some of the seats we are going to focus on. because we just have exit polls so far. we are looking for confirmation polls.t -- of the exit we have 650 constituencies and will bring you the ones that matter and the ones that are either confirming or moving away from the exit hole. our guest, elizabeth martin at hsbc, and the head of sx sales will also join us at this late hour, five minutes after 11:00 in london. thank you both for joining us. 2.3%, it pound up by
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seems there was more upside on confirmation of a johnson majority. it was a best case but in terms of position, relatively light. expectations in the past few days have become subdued to the point where many investors think we could go to a hung parliament. the market recently only got out of a short position and moved to a light long, so it is far from being a crowded trade. continuation the of a higher pound. i think it cuts 140 relatively soon. we are at 130 five and were at 144 not too long ago, so there is further upside, pretty much because positioning is light, close to flat, it is light long if anything. the market will want to be long. there is nothing more bullish
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than of you without a position. investors, if there is a move in the foreign exchange and you have that view you have to have the positioning. the positioning is light. it is there for the shorter term, nothing longer-term investors. around the world there are many sit aside withll regards to the pound, awaiting for some electoral confirmation. and we are just beginning to get this now. so i would suggest there is deep pocket money globally ready to , on theiro the u.k. appropriate political backdrop, and in a brexit situation there is more upside for sterling. anna: we will talk about sterling for a moment. onzabeth, let me pick up what neil was saying. do you buy this idea there is money waiting to come in to invest in the u.k. if we get more certainty? certainty,ve 100%
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but we have a big step towards it. elizabeth: to some degree would buy that argument. clearly we spent three years with a knife-edge parliamentary race, not knowing what is happening from one week to the next. and now we have a government, it appears we are going to have a government which can implement its policies with comparative ease. that has to make for more clarity around where we go with brexit and yes, there is certainly a wisdom that conservatives in their manifest called a tidal wave of investment that is going to come through. there are couple of caveats. the global environment at this stage in the cycle, we are not where we were three years ago when the u.k. voted to leave the eu. there should be a pickup in business investment. oute the u.k. balances relative to developed markets is that we have had no growth in business investments in three years, so you have to think there will be some catch up. anna: regarding --
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guy: regarding the certainty around brexit, big majority, brexit -- boris johnson now has flexibility to do what he wants that he had took face in the early stages of his premiership. does boris johnson now tax back to the center or will the size of his majority allow him to deliver a softer brexit? elizabeth: it depends on what boris johnson wants to do. his majority allows him to go either way. at the bigger the majority, if it is confirmed as the polls suggest, the more he will be able to determine his own position. toimately his policy is negotiate a free-trade deal and implemented by the end of the year. he says we are not extending the he says we aref not extending the transition deal, that may be revisited over the last year, because having signed up for the deal, the u.k. is already paying a financial
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assessment and so forth, sewn extension may become a more appealing option. depends on the timing. the market is displaying confidence in the future here, yet we could be up against the possibility of a no deal exit at the end of 2020, but there is a longer time to go until we get there. guy: that is why there is some risk to the upside for the pound eerie will be expectation on january 31 and december 2020. my expectation now is there will be a sufficient backing within parliament. this is an area where boris johnson has struggled on the domestic front, and to date we had the eu bid on the table ready to go. passing that through the house of commons now will be relatively easy. so i would imagine january 31 gets done. in terms of free trade iteements, it is unlikely byl be ton -- be done
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december 2000 20, it will probably have to be extended in terms of an agreement. in terms of ratifying it and being implemented, it won't be extended again. an administrative point of view, that still limits the upside to the pound, but we have concern that very few things are better for a currency than certainty, and certainty is high now. that should put an underlying bid back into the pound. guy: what do you think is in the first budget? boris johnson will want to achieve some economic upside. part of that will come tomorrow morning with headlines that the pound is surging higher, but he will want that first budget to deliver to keep the momentum going. what do you see in it now that he has this kind of majority? anna: he hasn't had a budget since september. we had a budget review. what they want to do is some met
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what they want to do, all the extra money they talked about through nhs, and then of course promises from the manifesto as well. they are relatively modest on the tax cuts so far, although with this majority boris johnson could go further if he wanted to, but relatively modest tax day-to-daytle more spending as well, but the main increase was september. the interesting thing for us will be what they do with investment spending, because they said we will put a ceiling on investment spending of 3% of gdp. do they go to that ceiling or did they decide to rain it back? our guests are going to stick with us. we have seen sterling moving higher you can see on the chart the pound moving higher, eurosterling moving luck -- eurosterling moving lower. we are getting reaction around the world, not only to this but when thes. trade deal,
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market down under opens up we will watch treasuries to get a sense of what is going on there. a lot going on, the markets reacting. this is bloomberg. ♪
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♪ 330, maybe 350. its incredible. now some context. this exit poll is very good. it tends to get it wrong by maybe a 15 seat maximum. for this to be wrong, it has to be a historical error. ♪ anna: welcome back to our viewers and listeners on bloomberg tv on bloomberg radio. this is a u.k. elections special, "brexit and beyond." let's go beyond. let's get european reaction from our reporter who is live in brussels. maria, this is a brexit poll at the moment but in terms of
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certainty brussels was looking for, if this brexit poll proves reliable, it seems brussels has more certainty. maria: they do. and european leaders are meeting her behind me. they are keeping a close eye on the u.s. election. us if itofficials tell is confirmed, again this is a poll, but if confirmed it is good news for the eu. time,e for a very long european officials have wanted clarity from the u.k. we are always told the u.k. government and u.k. parliament speak with the same voice. now they believe that if the polis confirmed we will see the u.k. leave the european union in january. we are going to see that deal and it is going to be done in a way that prevents chaos. this is something the europeans were always crystal clear about, they wanted the u.k. to leave
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under the terms of a deal that is clear, and they want to focus from a european perspective the agenda on a number of issues. to move on, you have to get a resolution to brexit. if that poll is confirmed, they have clarity and that is good news for the eu. guy: a resolution to brexit. what expectations are there in brussels that we will see a trade deal done in december 2020? maria: that is where the mood music sounds different in brussels. so bigade deal will be and important, and for the eu this is key when they look at long-term perspectives. they do worry about the u.k. becoming a competitor to the eu, especially if they don't play by the same rules. they don't want to be undercut and this trade deal is a huge deal for the eu 27. they will ask for more time and to get a trade deal that is so big in just 11 months is very
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ambitious. they see it differently. they think this is going to be the same old story in which we will need more time and this is going to drag on. but a crucial point at that stage will become the june deadline. european officials are expected to do more in brussels and map out where we go from here, if again that result is confirmed. anna: incense of the timing and how long it takes to get a trade deal done, some analysts suggest the more the u.k. wants to divert on standards from the eu, the longer those conversations will last. is that the rule of thumb you here in brussels? maria: that is exactly what we hear. if you want to divert from the eu rules, really move away from those, that is something we have heard from the prime minister himself, who said, if i win the election i'm going to rip up the eu playbook and we are at to come up with our own. that is problematic for the eu.
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oftentimes we hear from officials, and this is crucial because this is a line i keep hearing, is that they do not want to be undercut by a u.k. that is not playing by those rules. they worry about the u.k. becoming a competitor to the eu going forward. they are crystal clear they want a good relationship, a close relationship, but also need to be aware that in the future, this is a country that is going to compete with the e.u. when it comes to trade in future trade deals. as i mentioned, for many europeans this is just an easy bid to get the agreement to leave the eu. what is tricky and much more crucial going forward for the eu long-term plan eu 27 is a trade deal. taddeo in brussels, thank you. sterling strength since the exit poll came out, a much bigger than anticipated majority for the conservative party translating into a significant
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jump for the pound. the conservative party chairman joining us now on the phone. give us your reaction to the result you see. are you certain this exit poll will become reality? >> well, we can never be certain about these things. what we are saying is that there are number of constituencies within those overall numbers that are too close to call. we are not taking anything for granted, and we will see what the actual results are when the actual votes are counted. but obviously, it looks like good news to start with, and shows the message it -- the message we put forward, was -- which was optimism about brexit getting done so we could move forward, resonated with the voters. if you have done well in the north, how badly do you think you have done in the south?
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james: as i said, we don't know exactly how those numbers will play out in reality. had put forward a message which was about unity, about literally making sure all parts of the country can see the benefit of the u.k.'s economic growth, and that means in the south, urban areas, north, rural areas, scotland, wales, northern ireland done across england. but until we see this play out seat by seat, we won't know exactly what the political revocations -- political ramifications look like for the u.k.. guy: with such a substantial majority, the prime minister will have significant room to maneuver. how do you think this changes the political calculation around that brexit process? getting brexit done is one thing, but what comes next is the trade negotiation. and the conversation we have been having tonight is whether this gives the prime minister
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significantly more flexibility, and maybe an opportunity to do a brexit deal that is a little softer, easier on the u.k. economy. how do you think the prime minister's going to use this majority, when it comes to not just the live ring brexit, turning it into a trade deal that is sustainable? : the prime minister has always been clear. through his political life he has been focused on protecting, enhancing on growing the u.k. economy. he is an internationalist at heart. he has developed a strong working relationship with lee over rancourt in ireland -- varadker in ireland and donald trumpian the u.s. he will want to see the u.k. an active player in the global trading world. he said we are looking to get a deal done promptly, no need to hang around, we have shown that
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with focus and determination you renegotiatet and the withdrawal agreement quite quickly. any's to see it deal -- and he wants to see a deal for the u.k., that is what motivates voters and that will motivate that for aeal to get deal to work for the u.k.. the: give us an idea of near-term timing. what does december hold in store , and how will january shape up in terms of the brexit timetable? the numbers play out the way they seem to be, and we get that stable working majority, then we get real busy real quick. so pretty much as soon as we get back next week, we will be
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presenting the prime minister's renegotiated withdrawal agreement to the house. that will need to be voted through promptly to get through that we canes, so have a legislative framework in place for the brexit date january 31. if we get good numbers, there will be a bit of celebration, no doubt. but only briefly, because we will then very quickly need to mode, to deliver on what will always remain a tight, deliverable timescale. ruled outanifesto has an extension to the process. we are trying to figure out whether that is a hard and fast rule. james, talk us through what your view of the next year looking like, and terms of a possible extension to the trade process. can it be delivered in the
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timetable the prime minister set? james: yes it can. yes it can. one of the things we have seen, you know, deadlines exist. your viewers work in business, they are business people, they work with deadlines all the time. and deadlines exist for a reason. they focus minds. they get people to make the tough decisions you need to make to get deals over the line. and what we saw with the withdrawal agreement was then it was -- was when it was constantly kicked down the road and deadlines got shifted and shifted, things were not resolved. when the prime minister made it clear there would be no extensions, then suddenly flexibility come about. and the same thing is true with our trade negotiations with the eu. those deadlines are there for a reason. they focus minds. they force the negotiating parties to deal with those tough issues that help us get these
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kinds of negotiations over the line. so we totally recognize it as a very tight timescale, but that is a good thing. anna: in terms of the free-trade to agreement, is no deal better than a bad deal? james: well, the point is we have got all the jigsaw puzzle pieces in the box, for a really good deal, a deal which is good .or both the u.k. and the eu and over the course of 2020 we will be putting those various pieces in place. but the bigger piece we have got is that we start from a position where we have a deal. this is unique. most trade deals around the world start from divergence and you have to come close together. we are in this wonderful situation where we have a model, template, a pre-existing relationship.
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and the questions we need to ask are, how much will we divert from that? notthat is a simpler, i'm saying its easy, but its a simpler process than most trade negotiations. anna: but are w ceeo rules -- wto rules still possible after 2020? -- wto rules are the default position, but it don't think we need to get there. and the reason is that the u.k. and eu will flesh out this trade deal. i'm not a game theorist, but when it is so clear that both sides of the negotiation table would be winners if we could get a trade deal done gives me every indication we will get this trade deal done. farage when this for you, james? the conservative party was able to unite the votes and the remaining vote looks like it was split.
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farage'says nigel decision may have been an important element in all that. how important, do you think? james: the person that has the biggest role in any success we have had this evening is boris johnson. i saw him on the campaign trail when he was fighting london elections twice, when he was delivering the olympic games, when he was campaigning for us to leave the european union. he is an incredibly effective campaigner, and that is what we saw during this election campaign. he was able to reach out and speak to people who don't ordinarily listen to conservative voices. if anyone can give themselves a pat on the back for what looks like a good result, it is without a doubt boris johnson. anna: but he is a different boris johnson. the leader of the conservative party and the persona he created
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around brexit is a different persona to the one in london. he wouldn't have one london, perhaps, if he had been this kind of boris johnson. james: boris has been absolutely insistent. he is someone that has that balanced agenda recognize the importance of business, he made that clear when he was mayor of london, but passionate about alleviating poverty, increasing opportunity, helping some of the poorest in society be protected and get on in life. he is the same boris he has always been. and because some people equate brexit with some other agenda, that is up to them. but boris has been consistent a one-nations been conservative who understands the symmetry, the symbiosis between a successful business sector and a successful public sector. that is what he is, what he is
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always going to be and i have no doubt he will deliver as promised. how does [indiscernible] -- how does he unite the country? we have to get past brexit, we have always made the case that we have to get brexit done so we can set about the job country, making people feel safe in their streets, secure in their jobs, with an economy that is growing. that is the thing. it is not the most complicated country, making people feel safeformula, but ite know will work. anna: looking at early results coming through, we have gone through a recount in blithe valley, seat held by labor since before world war ii. sunderland seems to have gone to labor. your reaction to that vote from sondland -- sunderland?
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james: we need to look at these things. it is such an early stage of affairs, but potentially winning seats like that is great news. i'mve speaking to you, but terribly sorry, i've got to head off. guy: we were surprised you stuck around for so long, but thank you very much indeed. we greatly appreciate it. james cleverly, conservative party chairman. let's go back to you sebastian and see some results. sebastian: they are trickling in. this poll shows the conservative majority we were expecting. the only results, going to labor, newcastle a 4% swing for conservatives, but it is being held by labor in newcastle central. we can show you where it is in the northeast of england. not quite the brexit tensions we were expecting in some of the other labor heart lands.
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sunderland south, just south of newcastle itself, a 12,000 majority is what we had last time. we have labor holding. it has been read since the 1950's and this is a seat we hope to see labor hold onto if they are going to have any showing tonight. blithe valley, anna was saying it has gone to a recount. -- iis the sort of place should say that has been taken by the tories, one of the first, in fact the first gain of the night ended actually went through recount. that is starting to show bad news for labor early on in this process. blyth valley voted for labor for 50 years and that has been taken by conservatives, if we see this exit poll proved to be correct. and there will be a few more of those, won't they, a few more than the -- a few more in the north? >> absolutely.
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this is a constituency that voted firmly in favor of leave conservativesseat have been courting as they potentially lose seats and the south. these are the types of seats they need to pick up in the north. anna: let's go to our guests for some further thoughts one and a half hours after that exit poll. we have the chief executive officer of city u.k., he brings us the financial services perspective. and elizabeth johnson from hsbc is still with us. your initial reaction, the size of the majority we are forecasting for the conservative party. >> it is a forecast and 65 seats are too close to call. these exit polls tend to be accurate, but sometimes they overestimate one party and under stress -- and underestimate the other. i don't think we should leap to
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conclusions. two things the business world has been looking for for some time, a deal on brexit and certainty on the domestic environment, a strong outcome from one party of the other will deliver that. like a big majority for the conservative party this evening, and they will certainly be looking at that with interest in europe. guy: brexit is going to happen, probably early next year. like a big majoritydo the bankl services companies who have been waiting for that final decision to be made on brexit, is this the point at which they say, you go to frank fort, dublin, you go wherever, but that process now starts to unfold. beenthink the industry has implementing contingency plans for sometime. we are as ready as we can be. the way the withdrawal process has been structured, the focus on the withdrawal agreement and then the focus on a future economic relationship, most of
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the novation -- negotiations have been around goods and services. is notthe u.k. economy figured, so companies have had to press a button on contingency plans. industry has largely gone through what it has to go through. anna: where does that leave us in negotiations. our services just ignored? that doesn't sound like a situation your membership would be happy with. now thate hope is that we have certainty on the u.k. side, remember conversations in brussels and berlin in the run-up to the 2017 election, there was hope that theresa may would get a big majority that would give the government the ability to negotiate and move this forward. if we see a big majority this evening, that will allow that to take place. there can be some certainty in the talks can move forward. the question is how quickly we get to the future economic relationship and what role if any, services will play in that. we hope to see services at the heart of that. guy: what does the new
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government need to do to make the u.k. more attractive? the next 100 days we will see a budget done under the -- a budget and other things. what else needs to be done? elizabeth: a lot of the work has been done in terms of the certainty. we are at a difficult point in the cycle. the economy has been slowing you might say that was political uncertainty, we don't know about brexit, the election, but you might also say hold on, the u.k. pmi charts and market charts look awfully light, the pmi's we are saying out of europe and other developed markets. anna: and they are affected by trade. elizabeth: exactly, but there's good news on that as well. but the government will want to make sure the economy is in a good position, given these indications of a slowdown. policy has to be
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part of that and i think there will be additional measures in the budget, and monetary policy may have to play a part as well. the next move in interest rates could still be down, even with a conservative majority, given where we are in the global cycle. ofa: miles, which will be most interest to your members from this point? withit be the trade deal europe or negotiations with the u.s. on a trade deal? nontariff deals and opening up access for u.k. services into the united states? things.hree first, negotiations with the eu. i was in washington last week talking about these issues, we are interested, we want to close relationship, people talk about a single market and financial services, i think that is a long-term aim, but they want to know the relationship between the european union first. there is a sequencing element here. you hear that in lots of places.
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i was in southeast asia not long ago, very similar conversations. but the under pending is the future shape of the regime and the u.k.. so people concentrated on the talks, we haven't thought so much about the netgear -- about the nature of regulation in the u.k. now. where are potential areas of diversions? there is talk of tweaking the system, reregulation rather than deregulation, and if the government has a majority for five years ahead, it needs to set out the future of regulation in the structure of regulation in the u.k. because whoever we are trading with, when it comes to nontariff bearers -- nontariff barriers, they need to know what they are ducking into in the u.k. guy: would about the bank of england? miles: that is a decision for
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the government to make. i won't cast my view on that. --: what kind of bank l bank of england governor do we need to see? the bank has a wide remit. it is not just about monetary policy, it is about regulation. that is going to be critical in determining what kind of regulatory divergence we end up seeing. miles: mark carney has done a difficult -- as dented terrific job in difficult circumstances. not only brexit, you have the scottish referendum as well, so he has a good hand on the tiller. industry would like to see a continuation of a steady approach but also a recognition that we will need inevitably an independent u.k. regulatory policy and approach, and a bank, a pra and ex ea and regulatory diplomacy at the government and international levels because these debates when it comes to banking regulation happen at an international level.
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therefore, you need the u.k. playing a really powerful role. englandom the bank of perspective, this has an impact in the sense that we have different fiscal projects or plans on the voting slip today, didn't we? ? so the bank of england is looking at the results. what does it mean for monetary policy? elizabeth: if we had seen a party when with the big fiscal program, that would have pointed to the upside of inflation. this could potentially point to the upside is well if it manages growth. we still have concerns around that. the other thing is the currency. we talked earlier about sterling our revisedalready, forecast is 145 against the dollar by the end of this year, and that will bring some stent -- that will bring inflation down substantially. yet bet move could
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downwards in interest rates. are we going to get the smooth brexit governor carney has talked about? could the result be a little easier to manage according to the bank of england perspective? that become does easier? elizabeth: i think it does. policy england november has already codified conservative government's plan for brexit in their forecast. the results if confirmed will make that even more. anna: when you say reservations about the u.k. economy, is that around exit uncertainty or global trade uncertainty? elizabeth: progress on both sides. it is more than just political uncertainty. downorry is that the slow we have seen is something deeper and tested do with the stage we
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are in, but if there is an uplift in the global economy, that certainly helps. our worry is the label market -- the labor market. rises, thatent could be negative. there is criticism that the city has not been given the degree of priority that such a --e industry requires guy: requires. guy: d think this is an opportunity to fix that? think part of it was inevitable because of the sequence of the talks, it was inevitable that we would end up here. the focus was on goods rather than services, and not just financial services and professional services. that broader part of the economy is what i am talking about. this is an opportunity for both
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sides to figure out what we can do now on services. the problem with free trade agreements is that they tend focus on goods and services is the underplayed end underperformed part of the negotiations. and the clock is also going to be a factor here. will have toarea see progress quickly, the risk is that there is a concentration on goods, because that is the eu part. guy: thanks for stopping by. evening,ncredible elizabetho and martin. we are saying markets wake up around the world, reacting not only to what is happening in the u.k. but the trade narrative. that is the table right now, 130 four/70 to come around key levels, technicals reporting with the pound. we are seeing a little bit of a
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move back in terms of euro-sterling, gotten into the 82 and that is the number, 147 point 42. the markets, reacting favorably. 1:43 minutes since we have -- one hour, poll 43 minutes since we have seen the exit poll. we are waiting to see the results from scotland, they seem to be up next. if you want to keep up-to-date with the election results as they come in across the u.k., go vote on your bloomberg terminal. this is bloomberg. ♪
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♪ voters, one
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long-term impact of this is that jeremy corbyn has got to be dead after this. ♪ anna: comments from our earlier broadcast. viewers andur listeners on bloomberg radio and tv. this is an election special, "brexit and beyond." we got the exit poll and hour and 47 minutes ago, forecasting majority for boris's conservatives, 368 seats, a in the house of commons. the pound jumping on the news, against the dollar, up by 2.3%. guy: certainly a move higher by the pound. the next three hours, it will be interesting looking at what is happening here and putting it side-by-side with the trade front.
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if we get the president confirming he is signing a trade deal with china, that will muddy the water. it will be interesting to tease apart how much of this is a dollar move -- pound move and what is happening in the bond markets. this will be interesting for the markets to deal with, but uncertainty is coming down significantly. exciting as it is for us here in the u.k., the australian equity market opening up by .5% has more to do with the trade deal when this -- then with the u.k.. guy: the bond market reaction 15 basis points australian bond market moving higher, big selloff going through in the australian bond market as yields go higher. is monitoring the e.u. reaction and brushes -- in brussels. sebastian is watching
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results. let's start with the latest results. labor has had one so far, blyth valley, or we are seeing a swing to the tories. labor can't rely anymore on people in the north and midlands voting for their party anymore, because they voted for brexit when they did and this seems now to be a more important thing. so it has really seen a redrawing of the map. we have seen all of these former safe seats for labor not the case anymore necessarily. they want to deliver brexit, that is the message we are seeing. if you look up in the northeast, newcastle, that stays labor but sees a swing of 10% or 11% that should concern labor tonight. anna: let's go to rodney jefferson in edinburgh.
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rodney, your reaction in the exit poll for scotland on the snp good night? rodney: if the poll is correct, it is an incredible night for the snp. you are talking about allegiances that have been torn valleyngland with blyth going conservative. in scotland it feels like, if the exit poll is correct, allegiances have gone back to where they were years ago, which is very much a case of scotland being in different to the dynamic and the rest of the united kingdom. it was a bad night for theresa may, and it was a good night from conservatives in good night for conservatives in scotland. now we see the opposite. a good night for boris johnson, and in an incredible night -- and an incredible night in scotland for the snp.
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guy: what does this mean for scotland's place in the union? rodney: it is early, we don't snp, but let's suggest the comes away with most of the seats they are predicted to the exit poll. we are headed into another confrontation. there will be renewed demands for another independence vote. wants that next year. they are not going to get it. scotland has parliamentary elections in 2021. that will be another renewal of the mandate, and what they will say is to have another scotch independence referendum. , with long boris johnson the majority he will have in the u.k. parliament, how long can he
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resist that? i don't know. but the thing is, this isn't going away. what could have happened was that maybe it was a less compelling not across the u.k. for boris johnson, but the tories were going to hold onto their seats, and they still may come of the tories may hang onto their seats in scotland, in which case it will be a lot harder for the snp to come over with that, vatican vote -- with emphatic vote. it is not like scotland hasn't said we would like to dictate our own cause. place, pollstakes suggest the gap is widening and more people actually want to remain in the united kingdom. in terms of where it leaves scotland' s place in the u.k., it is all up in the air again. exit pollof the
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experts who put together the exit poll is saying he is cautious about projections for scotland. we will bear that in mind as we look ahead to results coming through in the evening. let's get to maria tadeo with reaction from brussels. a headline on the bloomberg says there is a consensus on climate policy according to the e.u. council, interesting coming at this late hour, but let's stick with brexit. what does the exit poll mean for brexit from a european perspective? maria: european leaders are still meeting here. there is a lot on the agenda that is not brexit but they are keeping their eyes on the result, and we had a european official tell us that if polls are confirmed, this is in a way good news for the european union. because officials here really wanted clarity from the u.k.. we would often hear they wanted the u.k. to speak with one voice. that was a reference to the
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government, but also the u.k. parliament. the sun are rio here european leaders are operating under is the fact there will now be a deal, ande, -- brexit that the united kingdom is leaving with a deal. goodis a good -- that is news because the e.u. always said they wanted to avoid the chaos of a no-deal brexit. we understand european leaders will meet tomorrow for day two of the summit, and want to come up with the stages for the second phase of negotiation, the future relationship and the trade deal. when you speak to officials, the same official told us that this is what really is crucial for the e.u., the crucial, future relationship. this is what they think is key going forward, long-term priorities and getting this relationship correct.
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part and nowasy negotiations could really get tricky because that relationship is crucial for the e.u.. they want to make sure they have a close relationship and that they are not undercut by the u.k. that is something i hear time after time, we don't want to be undercut by a u.k. who plays by the rules, or our rules, i should say. in brussels,adeo thank you. if the exit poll is trusted, we are looking out a blowout for the conservative party by 86 seats. sterling was at 135 at one point. here is how some of our guests reacted. expected, 330,le maybe 350, so to see 368 is incredible. now some context. this exit poll is very good. it tends to get it wrong by maybe 15 seats maximum. in order for this to be wrong, it has to be a new, historical error. >> this is so unique an outcome
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that there has never been a that hasister, a party gone to the country for the fourth time asking, and increased its standing in parliament, its number of mps. so he is going to have his eye on the next election already. anna: reaction from sign guests here on our special coverage of the u.k., "brexit and beyond." we talked about what type of brexit this majority would mean, which type of boris we might get, which boris johnson prime minister we might get. talking to the chair of the conservative party, james cleverly, the tone he was taking, trying to appeal to business once again, not the line you have heard from the tory party of late as they tried to capture that labor and brexit vote. about wonder, people talk
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the end of the beginning of the beginning of the end when it comes to the brexit process. you look at the result tonight and if it is confirmed, we much -- we must keep caveating it, but this provides a much easier roadmap to what happens next. it gives boris johnson flexibility to produce the type of deal that is may be better for britain, better for the economy, the stories business has been talking about in terms of what they need to see delivered. this is the pivotal moment. the referendum, now this, now but a britain that now looks certain in the direction it wants to take. anna: and if the polls are to be leave, it was a decisive choice to take one path and not a number. we know the path britain does wet -- and weke, could see the worst result for the labour party in 1935.
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bloomberg news is keeping you up-to-date on the details. guy: markets certainly reacting, brussels and the trade deal coming out of the united states. thanks for watching. this is bloomberg. ♪
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>> good morning. good afternoon. good evening. i am anna edwards in london, where it is midnight, as we continue our special coverage of this crucial u.k. election. tories set for their biggest win since margaret thatcher if exit polls are to be believed. this gives the conservative party a big lead. more: there seems to be clarity on brexit and also on trade. i am shery ahn,


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