276,000 UK Jobs Lost, Marines Deployed To LA, Europe's IPO Fight
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This is the Bloomberg Daybreak Europe podcast available every morning on Apple, Spotify or wherever you listen. It's Tuesday the 10th of June in London. I'm Caroline Hepker. And I'm Stephen Carroll. Coming up today, 276,000 jobs lost since the October budget. UK employment plummets.

as the rising cost of hiring hits the labour market. President Trump deploys Marines to Los Angeles. The White House escalates its response to anti-deportation protests as Democrats accuse the President of inflaming tensions. Plus a £14 billion power-up. The UK greenlights a major cash injection to help build the new Sizewell Sea nuclear plant. Let's start with a round-up of our top stories.

UK employment has seen the biggest monthly drop in five years after the minimum wage and tax changes. The number of employees on payroll fell by 109,000 in May, far more than the 20,000 economists had forecast. We got reaction from Bloomberg's chief UK economist, Dan Hanson. Really weak relative to at least what we were expecting and expecting.

I think consensus was expecting as well. If you're sitting across the road in Threadneedle Street, you're going to be pleased seeing that pay number come down a little bit further, probably a little bit further than they expected. It's still very high though. And I think that's something that you just have to bear in mind.

Dan Hanson adds that the data from the Office for National Statistics has been called into question after a series of failures at the public body. Despite concerns over the data's reliability, the figures suggest firms are cutting back on hiring after the government increased payroll taxes for businesses and hiked the minimum wage in its October budget.

Now, we also have the unrest in Los Angeles. The Trump administration says that it is deploying 700 Marines to the city as political tension with Democrats grow. The White House says that conditions in L.A. are spiraling and that federal forces are needed to support immigration agents and to restore order. President Trump and the California governor, Gavin Newsom, have clashed repeatedly over the response to the unrest.

with the state suing the Trump administration for mobilizing National Guard troops in the city. Here is the Los Angeles Democratic Mayor, Karen Bass. They're guarding the federal building here in downtown, and they're guarding the federal building in Westwood. That's what they're doing. So they need Marines on top of it? I don't understand that. That's why I feel like we are part of an experiment that we did not ask to be a part of.

Mayor Karen Bass speaking there as the United Nations on Monday warned against a further militarisation of the situation in LA. On Monday, largely peaceful daytime protests morphed into a fourth day of scattered clashes with police. The protests, which have largely been limited to a few small areas of the city, were sparked by a rising number of raids by immigration agents, which local officials argue have spread fear in immigrant communities.

Bloomberg has learned that Meta CEO Mark Zuckerberg is assembling a team of experts to achieve artificial general intelligence recruiting from a brain trust of AI researchers and engineers. Sources tell us that Zuckerberg aims to hire around 50 people for the new team, including a new head of AI research, internally referred to as the Superintelligence Group.

The Facebook founder's goal is for Meta to outstrip other tech companies in achieving artificial general intelligence, which could be woven into its suite of products, including social media and communications platforms.

Now, U.S.-China trade talks will continue for a second day here in London as both sides try to ease tensions over rare earth supplies and tech exports. Bloomberg understands that the U.S. is offering to ease some tech export controls in exchange for rare earth shipments from China, which produces 70% of global supply. U.S. Treasury Secretary Scott Best and Commerce Secretary Howard Lutnick have been leading the American delegation with Lutnick calling the talks fruitful, a sentiment echoed by President Trump.

We are doing well with China. China's not easy. I think we're doing very well. They're over there now. I'm only getting good reports. So that was President Trump. Although optimistic about the talks, Trump gave no clear answer on lifting export restrictions for China, saying we'll see when he was asked about it. The Chinese delegation was led by the vice premier, He Li Feng, who left without commenting to the media.

Europe's stock exchanges are fighting fiercely to win the few pending IPOs across the continent. Data compiled by Bloomberg shows Europe has just made up 8% of global issuance so far this year. That's against a yearly average of 16% for the last decade. Bloomberg's James Wilcock has more. You may not have heard of Visma or Verishaw, but the stock exchanges in Stockholm, London, Zurich and Amsterdam have. One's a software company and the other makes alarms.

But both are expected to list at valuations potentially worth more than €20 billion. Europe's capital markets are trying their best to charm these potential public companies after being starved of new listings. And for the exchanges who miss out, alarm bells will be ringing. In London, James Wilcock, Bloomberg Radio.

Now, here in the UK, the government says that it will invest £14.2 billion to help build the size well-seen nuclear power plant in Suffolk in eastern England, a project that has already been on the drawing board for more than a decade. Bloomberg's Ewan Potts has more.

When completed, the 3.2 gigawatt Sizewell Sea nuclear plant will generate enough power for 6 million homes, which the government hopes will usher in a, quote, golden age of abundant clean energy. The total price tag for this clean energy, though, is likely to surpass £40 billion. Today's announcement ahead of tomorrow's spending review brings the government's total commitment to Sizewell Sea to just shy of £18 billion, meaning there's plenty to do in raising funds from the private sector. In London, I'm Ewan Potts, Bloomberg Radio.

Well, the UK government has reversed an unpopular cut it made to pensioners' winter fuel benefits. Pensioners with an income of under £35,000 will now be able to claim extra money to heat their homes during winter. It's a U-turn the Chancellor, Rachel Reeves, says she can afford because she has stabilised the economy.

We did that with a number of difficult decisions, but because of those decisions, our public finances are now in a better position, which means this year we're able to pay the winter fuel payment to more pensioners, so 9 million will receive it this year.

The Chancellor earlier this year had to make last-minute changes to curb disability benefits to return her fiscal headroom to just under £10 billion. The governing Labour Party has seen an abrupt fall in popularity since taking office, with most polls putting the party now second place to Reform UK.

So those are our top stories for you this morning. In terms of the markets this hour, European stocks really not going anywhere flat, although the 5100 sees again a full tenth of 1%. It seemed to be that the sentiment in markets seemed to sour somewhat towards the end of the Asian trading session. US stock futures are in the red. You've also got sterling continuing to decline, actually accelerating the declines, now down six tenths of 1% on cable, 134.64 after the jobs decline.

We'll get more on that in a minute. The euro is also softer, almost four-tenths of 1% now, 113.82 with a stronger US dollar this morning. As for Treasury yields, down two basis points at 4.45 this morning. So it looks like...

Haven assets are seeing something of a bid still. And gold is stronger, a tenth of 1%, with Bitcoin also close to a record. Bitcoin trading at $109,400 this hour. Those are the markets.

Well, in a moment, we'll bring you more on the UK jobs data, plus the latest on events in Los Angeles. But another story that we've been reading today from our food editor, Kate Crader. She's been sifting through the latest ranking of the best restaurants in the UK and came out on top. The Ritz, a bit of a shift into fine dining. Yeah, absolutely. This is the chef John Williams' sort of classic menu and very elegant dining room, obviously, which has been awarded the

top spot at the UK's National Restaurant Awards, which took place last night. It's quite interesting because these awards are only, it's quite a small select group of people that choose them, only about 200 industry professionals and chefs and kind of food writers and others who make the decision. Most of them are in London, but yes, the Ritz is at the top of that list.

Yeah, and indeed, of course, you can play the game of how many of the top 100 have you eaten in, which is what I've been doing this morning. You'll find a link to the article in our podcast show notes.

Now, the latest UK jobs data has been published and it does show the biggest monthly drop in employment since the pandemic. Average earnings grew by 5.3% year on year. That was less than the estimate of 5.5%. Our chief UK economist, Dan Hanson, joins us now for more. Dan, we've had a moment to think about this, just a beat. So, what is your reading? How negative is this for the UK?

I mean, I don't think we should overplay it, but I think it's definitely weaker than we expected and everyone else expected, too. I mean, one thing to just mention, and this is where the number you mentioned there comes from the payrolls data, it does get revised quite a lot. So, you know, we have to just take it with a little bit of a pinch of salt. Nonetheless...

There is definitely a trend in the labor market, particularly in the employees data where we've had these falls in employees. And it's very clear the labor market is loosening.

that is beginning to feed through to the pay data. The pay data is beginning, pay growth is cooling, but it is still very elevated. So, you know, I think if you're thinking about this from a Bank of England perspective, you're thinking, this is things moving in the direction I want. I think what you have to be really careful of is that the jobs market is one of these things that it suddenly tips and it suddenly moves very quickly. And I think the bank just needs to be really careful that

it doesn't preside over that situation where it's held interest rates too high for too long. And it hasn't recognized that the labor market has shifted from a world of being extremely tight to a world where it's loose and actually now loosening quite quickly. So, I think that's the risk with this is that things move quickly and the bank has to basically catch up.

How much of this can be attributed, though, to the policy changes that were announced in the budget last October? Because it is a cumulative decline in employment that we've seen since October. Of course, the big changes would have increased the cost of employment for employers, with national insurance contributions for employers going up, as well as the increase in the minimum wage. Yeah, I think there are different elements to it, aren't there? I think the first six months of Labour's tenure in power...

We had this, we had basically had this confidence shock from with the, and that was not necessarily to do with policy. It was just to do with the rhetoric around the economy.

Then, you're right, Stephen, we had the budget and there were some policies in there that you would argue are negative for the outlook for employment, but also negative for the outlook for wage growth in terms of the increase in employer national insurance contributions. That's the main one. But also, of course, you've got the rise in the national living wage, which, of course, is positive for pay growth for the people who are earning the national living wage. But

It increases employers' cost base and obviously creates a question about whether they adjust their cost base in other ways, potentially through headcount. So, I think there is some element to that. To answer your question directly, I think there is some element to what the government has done has created some of this additional weakness in the labour market. So, I think, yes, there is certainly something there.

Okay, Dan, thank you so much for being with us this morning. Our UK Chief Economist, Dan Hanson. I thought it was also very interesting that we spoke to Manpower Group UK this morning and they were talking about how there is a lack of visibility around worker rights reforms that are coming to the UK and that that is also weighing on UK businesses.

Now, the Trump administration is sending about 700 active duty Marines to respond to protests in Los Angeles. California's governor, Gavin Newsom, has called the decision unlawful and has requested the White House revoke the order. Joining us now for more, our senior editor, Bill Ferrys. Bill, deploying active duty military within the United States is highly unusual. How has President Trump justified this?

Hi, thanks for having me. Yes, we've seen the reports now of about 700 Marines heading from the 29 Palms Base into Los Angeles in a full caravan of buses. That's on top of the 2,000 National Guard troops that the administration has authorized to be deployed in Los Angeles, although so far local officials say it's mostly been about 300 Marines.

that they've seen on the streets. It's highly unusual. The president basically invoked a provision of U.S. law that allows him to deploy active duty U.S. forces on American territory in the case of an invasion or a rebellion or a potential rebellion. So that's the point that California authorities, including Gavin Newsom, are really contesting at this point, saying it's an over-the-top idea.

decision that risks inflaming the situation on the ground. In terms of what has been happening on the ground, it looks like Monday and Monday evening were a little bit quieter, calmer than what we had seen over the weekend when you had a bunch of cars

that were set on fire, and you had some pretty large clashes between protesters and authorities. It was not nearly at that level on Monday night in L.A., and we'll have to see. It's still a very tense situation there, though.

Yeah, absolutely. The last time I can recall the Marines being used in the US is Hurricane Katrina. I looked that up. That is right, 2005. And that was used basically in a very different set of circumstances. In terms of what the officials in California are saying and what they're doing legally, I mean, the state leaders are suing the Trump administration, right?

That's right. California has put forward a 22-page complaint late Monday to the federal court in San Francisco with Governor Newsom urging a judge to void the president's orders and transfer the National Guard back from federal Pentagon control to the command of the state. You mentioned that situation in New Orleans. There was also the Los Angeles riots in 1992 when Rodney King was detained.

In both of those cases, I believe it was local authorities who requested federal help. What's particularly unusual about the situation now is that the White House is authorizing and deploying these forces without any request coming from state officials.

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts. You can also listen live each morning on London DAB Radio, the Bloomberg Business App and Bloomberg.com.

Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa, play Bloomberg 1130. I'm Caroline Hepke. And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day, right here on Bloomberg Daybreak Europe.

I'm Sam Coates from Sky News. And I'm Anne McElvoy from Politico. Every morning, before you're up, we're speaking to the key players, reading all the papers and working out the day ahead in British politics. Then we boil it down into just 20 minutes to give you an early morning shot of political conversation, prepped and ready by 7.45am every day. Hit follow on Politics at Sam and Anne's on your podcast app to get us every morning. This is an iHeart podcast.