Crypto News: Damage done

Hi, I'm Lizzy Burden, UK correspondent on Bloomberg TV. Here is today's Readout.

To misquote Oscar Wilde, losing one member of your cabinet is unfortunate, two is careless, but three? That's a dire blow to Rishi Sunak.

The resignation of Dominic Raab this morning after an independent investigation criticized his "abrasive" treatment of civil servants will sting the most because the former deputy prime minister was such a close ally of Sunak's, as Alex Wickham and Emily Ashton note.

Dominic Raab (left) and Prime Minister Rishi Sunak in the House of Commons. Photographer: House of Commons/PA Wire

Is Raab's career over? There's no doubt civil service unions would like it to be. On today's episode of the UK Politics Podcast we spoke to Amy Leversidge, assistant general secretary at the FDA union, which represents senior civil service managers and is calling for an independent inquiry into ministerial bullying.

She said Raab was among "more than just one or two bad apples" and that civil service morale is at a decade low, with turnover at almost 14%. Perhaps not surprising given squeezed budgets, references to officials as "the blob" and sardonic notes left on their desks encouraging a return to the office.

As an aside, civil servants aren't the only ones quitting. A number of companies canceled their CBI memberships Friday as the lobby group fights for survival following a second rape claim.

The prime minister will hope he can get on with delivering the squeaky clean administration he promised in October. Local elections next month will tell whether the damage is already done.

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The stories you need to know about this evening

Royal Mail said workers will get a 10% salary increase over several years as part of a final deal which ends a year-long pay dispute.
UK businesses reported the fastest growth in a year as spending on holidays and entertainment powered a stronger-than-expected pick-up in momentum.
Glencore, which is in the middle of a fight to buy Canadian mining rival Teck, said it's on course for another bumper year of trading commodities.
The UK's burgeoning housing crisis has hit ethnic minority groups hardest, new analysis of census data shows.
A Vatican official said it would be a "grave sin" if the church was forced to turn over texts and emails in a UK trial.

To be a monetary hawk right now is like being a "fool in the shower," according to the Bank of England's arch dove.

Borrowing an analogy from Nobel economist Milton Friedman, Silvana Tenreyro told an audience at the US National Bureau of Economic Research's annual conference that voting to raise interest rates in the current economic climate overlooks the lag between central bank moves and their effect on the economy — rather like the scalded muppet who couldn't wait for warm water and kept turning the hot tap, Philip Aldrick reports.

Silvana Tenreyro Photographer: Samuel Corum/Bloomberg

Don't be rattled by this week's second consecutive upside inflation surprise, Tenreyro argued. Fear not that price growth remains in double digits, for central banks can only influence the future — about 18 months to two years away — not the present.

Her thesis goes that failing to recognize that the 11 straight hikes under the BOE's belt have yet to take full effect would be to repeat the mistake of rate setters heading into the inflation crisis, when they were preoccupied with deflation: focusing too much on the rear view, rather than the road ahead.

Yet the slew of data published this week has only strengthened conviction that at least one more rate increase is on the way, as Tom Rees and Andrew Atkinson write. Inflation and wage growth readings both smashed economists' expectations, signaling that a resilient economy will keep inflationary pressures on the boil.

Then, while the pound took a double battering today from Raab's resignation and worse-than-expected retail sales figures for March, GfK's latest consumer confidence index suggested sunnier days are on the way. It rose for a third month in a row for April, showing households are more upbeat about the economy's prospects and more willing to make big-ticket purchases. That could give Chancellor of the Exchequer Jeremy Hunt hope that Britain can continue to dodge a recession.

Meanwhile, S&P data showed UK businesses reporting the fastest growth in a year, with spending on holidays and entertainment bouncing even if manufacturing continued to decline. Again, that points to an economy accelerating rather than succumbing to soaring living-costs pressures and higher interest rates.

Back on the same page, markets and economists agree a May hike is now a done deal. The question is: Will it be the last?

New firms are raising more money — at levels not seen since before the pandemic. The 2024 crop could include one of the largest startups in years, report Hema Parmar, Katherine Burton and Nishant Kumar.

At least four new hedge funds are poised to eclipse $1 billion by the end of the year collectively bringing in at least $6.5 billion from investors.

Get ahead of the curve

Time to update legislation? MPs have urged regulators to take action to head off "significant risks" posed to workers by the boom of AI programs including ChatGPT.

Nearly over the line? Hedge fund manager Tom Wagner is close to buying a stake in Birmingham City Football Club.

Reflecting. Todd Boehly said mistakes had been made in his first year as co-owner of Chelsea FC.

Priorities. Europeans are rethinking their summer holiday plans because of overcrowding, according to new data.

Sherborne Investors. A former activist shareholder in Barclays has reemerged to raise fresh concerns about the way the bank's directors handled Jes Staley's links to convicted sex offender Jeffrey Epstein.

Stuck. Russian deliveries of military supplies to India have ground to a halt as the countries struggle to find a payment mechanism that doesn't violate US sanctions.

One key story, every weekday

The Petroleos de Venezuela SA (PDVSA) headquarters in Caracas. Photographer: Carlos Becerra/Bloomberg

For many years, Venezuela's oil auctions were rigged. A new investigation by Bloomberg Businessweek reveals the country was pillaged of billions for the benefit of a mysterious middleman and a handful of his clients at some of the world's wealthiest companies — and no one has been held to account.

Read The Big Take.

Please send thoughts, tips and feedback to readout@bloomberg.net. You can follow Lizzy on Twitter.