Bloomberg Daybreak: Europe Edition UK Growth Downgrade, Powell In No Rush & Germany Confronts Trump Tariffs
Feb 12, 2025
Discover how the UK's downgraded growth forecast could lead to major spending cuts and a hefty £150 billion bill for taxpayers tied to the Bank of England's QE program. Hear concerns from the Bank’s governor about the risks posed by multi-manager hedge funds. Explore the implications of trade wars on Germany's bustling Hamburg port and the criticism of Trump's tariffs by Citadel's founder. Plus, learn about Jerome Powell's patient approach to interest rate adjustments, signaling a wait-and-see stance from the Federal Reserve.
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UK Growth Downgrade
- The UK Chancellor, Rachel Reeves, faces potential spending cuts after the OBR downgraded its growth forecast.
- This puts the government at risk of breaking its fiscal rules, according to Bloomberg's James Woolcock.
QE Program Losses
- UK taxpayers will pay an estimated £150 billion to cover losses from the Bank of England's quantitative easing program.
- This loss is a financial measure and doesn't reflect the program's benefits, like stabilizing growth.
Hedge Fund Risk
- Bank of England Governor Andrew Bailey warns that multi-manager hedge funds pose a threat to financial stability.
- Their rapid deleveraging during stress can amplify market moves, according to Bailey.