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Russian Jet Hits U.S. Drone, Forces It Down; One Killed, Seven Wounded In Kramatorsk Attack; Bank Panic Subsides On Wall Street, Stocks Rebound; Clashes Erupt As Police Try To Arrest Ex-Prime Minister Imran Khan; Breaking Storm Kills At Least 190 People In Malawi; Istanbul Residents Fear The Worst If Massive Quake Hits; Facebook Parent Meta To Lay Off Another 10,000 Employees. Aired 12-1a ET
Aired March 15, 2023 - 00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LYNDA KINKADE, CNN ANCHOR: Hello everyone. I'm Lynda Kinkade. Welcome to CNN NEWSROOM.
Coming up, the United States calls Russia's downing of a U.S. drone reckless and unprofessional. The incident fueling fears of an escalation in the war in Ukraine.
Plus, the U.S. government opens multiple investigations into the collapse of a bank led to a global financial panic.
And clashes outside the home of Pakistan's former prime minister as supporters try to stop police from arresting him.
ANNOUNCER: Live from CNN Center, this is CNN NEWSROOM with Lynda Kinkade.
KINKADE: Well, the U.S. Air Force says American and allied jets will continue to operate in international airspace after a confrontation with Russia over the Black Sea near Ukraine.
The U.S. military says Russian fighter jets intercepted an American surveillance drone on Tuesday, hitting its propeller and forcing it to crash. The Air Force reports the drone was a complete loss. U.S. European command says the drone was conducting routine operations over international waters, the White House calling the actions of the Russian pilots reckless.
(BEGIN VIDEO CLIP)
JOHN KIRBY, PRESS SECRETARY, PENTAGON: I mean, somebody could have gotten hurt. Nobody wants to see that happen. And it could -- it could lead to miscalculations between, you know, two militaries that are operating not obviously in Ukraine together but certainly in proximity in the region.
And we don't want to see this war escalate beyond what it already has done to the Ukrainian people. And so, this is -- this is -- clearly, this was inappropriate, unsafe, unprofessional conduct by the Russian pilots.
(END VIDEO CLIP)
KINKADE: Russia's Defense Ministry denies its Jet Ever came into contact with the MQ-9 Reaper drone. Moscow's ambassador to the U.S. says the drone was flying with its transponders off, and had been warned not to answer what Russia calls its special military operations on.
(BEGIN VIDEO CLIP)
ANATOLY ANTONOV, RUSSIAN AMBASSADOR TO U.S.: Drones can carry 1,700 kilos of explosives. This drone can carry a few booms, you'll see that what will be the issue of United States if you see such Russian drawn very close, for example, to San Francisco or New York. What will be the reaction of the United States? For me it's clear.
(END VIDEO CLIP)
KINKADE: Well, more now from CNN's Oren Liebermann at the Pentagon.
OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT (on camera): All of this plays out early Tuesday morning in international airspace over the Black Sea when the U.S. says its MQ-9 Reaper drone was intercepted by two Russian Sukhoi Su-27 fighter jets. That part is not that uncommon. These sorts of intercepts have happened in the past.
What is extremely rare is what happened as this played out over the course of 30 to 40 minutes. The Russian fighter jets according to the Pentagon repeatedly flew around and in front of the U.S. drone, dumped jet fuel in front of it and even collided with it, damaging the propeller and forcing the U.S. to take down its own drone in international waters in the Black Sea.
Now, the National Security Council's coordinator for Strategic Communications John Kirby told CNN that the U.S. took steps to protect its equities but it's unclear exactly what that is, whether that was some sort of self-destruct or some other steps to protect it.
Now the drone has not been recovered partially because at least there is no U.S. naval assets in the Black Sea to have carried out such a recovery. So, the U.S. took some steps to protect its own equities this MQ-9 Reaper drone, but again, unclear what that is.
Much of the response so far has been in the diplomatic lane, the U.S. summoning the Russian ambassador to the U.S. and carrying out at least a 30-minute conversation at the State Department, Russia giving an entirely different version of events saying there was no collision, there was no Russian jets firing at that U.S. drone. But Russia is saying it does not want confrontation.
So, at least -- it looks as if the response to this right now will be in the diplomatic lane. The National Security Council saying it will repeatedly and again continually as it sees fit fly surveillance drones and other assets in international airspace as it has the right to do as the Russians have the right to do so.
The U.S. saying it will continue to do what it has done and will do which is fly in international airspace in the Black Sea. We will see how this develops at such a sensitive time.
Oren Liebermann, CNN in the Pentagon.
KINKADE: Thanks to Oren. Well, joining me now from Washington is retired U.S. Air Force Colonel and CNN Military Analyst Cedric Leighton. Good to see you. Good to have you with us.
COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST (on camera): Good to be with you, Lynda.
KINKADE: So this of course is far from the first time a country has intercepted a foreign drone. Explain for us what is unusual about this incident?
LEIGHTON: Well, one of the key factors in this particular incident, Lynda, is that the Russians were very aggressive in this particular case, now, that in and of itself is not unheard of.
But the fact that they dumped fuel on the drone, and then probably inadvertently ended up hitting propeller of the drone, thus disabling it. That is highly unusual.
And, you know, it speaks to several different things. I think the fact that they hit the propeller was an accident. But I do think that the very deliberate acts of putting oil on the fuselage of the drone, that was a deliberate act designed to damage the system, and that, in and of itself is a violation of international procedures.
KINKADE: And so, what do we know about this particular U.S. drone, and what are U.S. drones doing there in the Black Sea?
LEIGHTON: So, the drones in the Black Sea are there to monitor various goings on in the Black Sea itself. One of the key things is the Green Deal that allows Ukraine to ship its grain out of its supports of Odessa and some of the other ports in southern Ukraine and it allows Ukraine to get some degree of foreign exchange, even during this wartime period for them.
It also is important from the standpoint of allowing the U.S. to keep track of what the Russians are doing in a military sense. This drone has the capability to see from its imagery intelligence perspective, what the Russians are doing in Crimea, they can see what some of the Russian naval activities are of the Russian Black Sea Fleet.
And they can also to some extent, determine troop disposition. It has both an imagery intelligence capability, as well as a signals intelligence capability. And those capabilities are very important for to not only understand what's going on in the Ukraine, theater of operations, but also to gauge Russian intentions, both to the Ukraine and internationally. KINKADE: So, is it likely that the U.S. will be able to recover this drone? Or what's the risk if Russia claims it?
LEIGHTON: Yes, it depends on where the drone actually went down into the waters and parts of the Black Sea are quite deep. So, that does make a big difference, Lynda.
I think that it's highly likely that the drone may never be found. But if it is found, of course, the Russians would love to take a look at it, because it has some unique capabilities. On the other hand the U.S. would absolutely want to get it back to prevent the Russians from exploiting it or possibly reverse engineering it.
KINKADE: And just finally, the Russian ambassador said the U.S. would have done the same if a Russian drone was operating in the same way off the east or west coast of the U.S. Is that a fair statement?
LEIGHTON: Not really, because, you know, when a foreign object or an unidentified object comes toward us, when that is not using its transponder, we definitely would go ahead and take a look at it. But we probably would not do what it did in international waters.
You know, when we look at the balloon incident with the Chinese surveillance balloon that was shot over the south of the -- well, off the South Carolina coast. That is because that particular object overflow U.S. territory.
So, this is a very different issue. We all recognize -- we are supposed to recognize international law allows reconnaissance flights to take place in international or over international waters. And that's the big difference. The United States would not have done that in this particular case.
KINKADE: Retired U.S. Air Force Colonel Cedric Leighton, always good to have you on the program, especially at this hour. We appreciate it.
LEIGHTON: You bet, Lynda. Thanks so much for having me.
KINKADE: Well, one Ukrainian soldier says the intensity of fighting in the eastern city of Bakhmut has increased significantly in recent days. It says Russian forces on the ground can overcome Ukrainian strongholds. So they're calling for artillery and air support, which means more shelling and airstrikes.
And as that battle rages on, Ukraine's Deputy Defense Minister says it's premature to draw conclusions. She says both sides are moving with Bakhmut remaining the epi-center of fighting along the eastern front.
When Ukrainian soldier who posted videos of himself in the trenches spoke to CNN about what he is experiencing in Bakhmut.
(BEGIN VIDEO CLIP)
[00:10:03] ROMAN TROKHYMETS, UKRAINIAN SOLDIER FIGHTING IN BAKHMUT: It's really hell on earth that what I can say just in few words. They have some units that stand near the -- behind the back and they shoot all of them who try to return.
So, Wagner have only one chance to survive is to take our position, our trenches, that's all. They have no choice to return to the position because they will be killed from their fellows.
(END VIDEO CLIP)
KINKADE: To the northwest of Bakhmut, at least one person was killed when a Russian missiles land into a residential area in the city of Kramatorsk. At least seven others were wounded.
CNN's Ivan Watson spoke with some who survived Tuesday's attack and has more from Kramatorsk.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (on camera): Just hours after what Ukrainian authorities say was a deadly Russian strike on this apartment block, ordinary people are already hard at work with the cleanup. There are no tears here, there are no complaints, even though at least one person was killed and several people injured.
When it exploded, boom, I was knocked on the floor and blood came down my forehead, 76-year-old, Simeon (PH) tells me. But I was lucky. These two pieces of shrapnel hit the wall and just missed my head.
It is simply part of life in this eastern Ukrainian city. It is located some 25 kilometers, about 15 miles away from a very active frontline. And Kramatorsk has been the repeated target of deadly Russian missiles and rockets.
The blast shattered nearly all of the windows across the courtyard from the main impact point here at kindergarten number 49. You can see that there are a lot of volunteers, a lot of school teachers who are here hard at work, cleaning up the glass shards, putting up plywood that's been donated by the administration here.
The director of the school tells me she says that she was knocked to the ground by the force of the blast this morning. Thankfully, mercifully, there were no children in this school when this explosion took place. The director says that the school has basically been closed for some six months now and that the children have all been evacuated to safer places.
This is yet another grim reminder of the terrible dangers, the hazards that people are living with every day here in Eastern Ukraine.
Ivan Watson, CNN, Kramatorsk, Ukraine.
KINKADE: Well, U.S. federal authorities are opening investigations into the collapse of Silicon Valley Bank. Sources say the Justice Department and Securities and Exchange Commission are preliminary -- are in the preliminary stages of their probe. They're looking into the banks failure and the actions by senior executives.
The mood on Wall Street was a little bit cheerier on Tuesday as markets began to surge and bank stocks rebounded.
First Republic Bank was up by more than 20 points, while PacWest was up by more than 30 points.
CNN's Rahel Solomon has been tracking the developments.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT (on camera): You can perhaps call it the calm after the storm, after a brutal session for regional bank stocks on Monday. On Tuesday, many of these same banks were sharply higher.
This all in the wake of the collapse of Silicon Valley Bank. SVB as it's called failed after many of its depositors rushed to withdraw their money on fears about the bank's financial stability. That fear then appeared to spread to other regional banks that investors worried might face some of the same risk factors that led to SVB's demise.
Those fears of contagion likely why we saw the U.S. government intervene so quickly to not only ensure that all depositors are made whole, but to also create a lending facility to other banks that may need it over the next year.
Although it's too soon to know if this is the beginning of a real stabilization in the banking sector. It does suggest that perhaps the U.S. government's efforts to restore confidence in the banking system have worked, at least for now.
Also sparking some of the market enthusiasm on Tuesday, new U.S. inflation data showed a further moderation in prices. Headline inflation growing six percent on an annual basis, that is the lowest level we've seen since September of 2021. Although still much higher than the Federal Reserve's target of two percent.
Rahel Solomon, CNN, New York.
KINKADE: Inflation how has reached dangerous levels in Argentina. New government figures show the new inflation rate topped 100 percent last month for the first time in more than 30 years. And it sold 13 percent in just the first two months of this year.
The items with the biggest price hikes are food and beverages, which went up nearly 10 percent from January to February.
Still to come, the death toll from cyclone Freddy soars in southeast Africa as people dig with their bare hands hoping to find survivors in the debris.
Plus, clashes breakout outside the home of Pakistan's former prime minister who police are trying to arrest. Now, Imran Khan is speaking out about why they're after him.
(BEGIN VIDEO CLIP)
IMRAN KHAN, FORMER PAKISTANI PRIME MINISTER: They know that if I come to power, they will be held accountable so they don't want me alive.
(END VIDEO CLIP)
KINKADE: Welcome back. A standoff of sorts is underway in Pakistan where police have tried and so far failed to arrest former Prime Minister Imran Khan. His supporters and authorities have been crashing outside his home in Lahore, using water cannons, tear gas and rocks. We're now hearing police have cut off the electricity.
Khan is accused of illegally buying and selling gifts from foreign dignitaries. It says the charges are politically motivated, and meant to keep him out of the upcoming general election. He was ousted in a no confidence vote last April.
Khan tells CNN Sophia Saifi he has -- he's convinced that he will be arrested.
(BEGIN VIDEO CLIP)
KHAN: They know that if I come to power, they will be held accountable. So, they don't want me alive.
They also know that even if I go to jail, we will swing the elections no matter what they do at the moment -- I mean, all you have to do is look at any of the opinion polls, this party is going to sweep the elections.
SOPHIA SAIFI, CNN PRODUCER: What do you think is going to happen if Imran Khan is put behind bars?
KHAN: Well, I'm all mentally prepared to spend the night in a cell or I don't know how many nights. I'm convinced they're going to arrest me because the number of police, you would think it is the biggest terrorist hiding in this house.
So, the determination is there. And you know, my only worry is I'm telling my workers that they must remain peaceful, the protest should be peaceful.
My worry is that if this gets violent, then they would use that pretext of violence to get out of the election.
SAIFI: Police are at the gate, do you think they're going to manhandle you? Or you're going to be dragged out? Or are you going to finish this interview, wrap up everything, walk out and give up -- give yourself up to the police? Is that what's going to happen? KHAN: I want a proper warrant of arrest. And I want to see that -- my lawyers want to see the warrant so far, rather than showing the warrant there's been this tear gas challenge (PH) and everyone in this house has been sort of, you know, protecting the face and the nose, eyes.
It's a matter of time, I'm convinced they will come and arrest me. I'm prepared for it. How long I stay arrested, I don't know.
But I know what the intention is. They want to get me out of the race. They want to get me out of the match so that they can win the elections. We know what is happening, or even the hope that this will promote protests, which will then be a pretext for them to get out of elections. So, I'm prepared. We're ready for consequences.
(END VIDEO CLIP)
KINKADE: Well, the Islamabad High Court has issued an arrest warrant for Khan to be presented before the court on Saturday.
The death toll from Cyclone Freddy has jumped to at least 190 in southern Malawi. And the threat from one of the longest lasting tropical storms ever recorded is not over yet.
CNN's Larry Madowo reports.
LARRY MADOWO, CNN INTERNATIONAL CORRESPONDENT (voice over): People dig through the mud in Malawi's commercial city, Blantyre, hoping to find bodies after Cyclone Freddy tore through the houses.
Over the weekend, the storm hit Southern Africa for the second time in a month, killing more than 200 people.
Cyclone Freddy has damaged roads, flooded neighborhoods, and triggered blackouts in the worst hit areas. The death toll keeps climbing in southern Malawi which suffered the most.
LAZARUS CHAKWERA, MALAWIAN PRESIDENT: It is one of those things that we look for help not just from people and partners, but even from God Himself.
MADOWO: The storm has left thousands homeless across southern Africa. The Malawi Department of Climate Change and Meteorological Services says the cyclone is weakening, but will continue to cause torrential rains associated with windy conditions in parts of southern Malawi.
Aerial footage shows homes submerged in water in central Mozambique, where the storm made landfall on Saturday.
Early warnings allowed some residents to flee their homes, but rescue operations continue to find those who stayed back.
UNIDENTIFIED MALE: Plenty of houses but they are all gone.
Plenty of bodies in the mud there. Plenty of bodies.
MADOWO: The Ministry of Health in Malawi has resorted to using beds built for COVID patients to overcome the number of people showing up at hospitals that are almost overwhelmed.
Freddy may set the record for the longest lasting tropical cyclone in history. It has at least the same energy as an average full North Atlantic hurricane season.
Malawi officials are on high alert for heavy flooding and wind damage over the next few days and have closed southern schools until Friday.
Larry Madowo, CNN.
KINKADE: Well, Syrian President Bashar al-Assad is in Russia right now is expected to hold talks with President Vladimir Putin in the coming hours. The meeting will come on the 12th anniversary of Syria's civil war.
Russia joined Mr. Assad's fight against opposition groups in 2015, hoping to turn the conflict in the government's favor.
The presidential office in Damascus says it's Mr. Assad's first official trip outside the Middle East since last month's devastating series of earthquakes, which killed more than 50,000 people in Syria and Turkey.
And part of Turkey is still feeling aftershocks more than a month after the devastating earthquake there. A 4.6 magnitude tremor was reported Tuesday in the central part of the country.
And while the city of Istanbul is more than a thousand miles away from the epicenter of those quakes, it faces its own grave earthquake dangers, our Nada Bashir reports.
NADA BASHIR, CNN REPORTER (voice over): The sound of concrete crumbling into rubbles. This time by design, this demolition part of a grand regeneration project, the City of Istanbul preparing for what experts warn is an inevitable earthquake. Tens of thousands of homes are currently in the process of being evaluated for their safety as residents grow increasingly concerned.
Honestly, I'm afraid Moosdah (PH) tells me. I think residents would feel more relieved if precautions were taken immediately. This is one of what officials say is more than 800,000 buildings in Istanbul built before earthquake regulations were brought into force in the year 2000.
And authority's say at least half of all buildings assessed so far have been placed under high risk categories. According to the damage estimation studies we held we foresee that approximately 90,000 structures will be subject to heavy and very heavy damage. Ozlem (PH) tells me.
BASHIR: Well, in this vast city of around 16 million people, the threat of a major earthquake looms large. A fault line beneath the Sea of Marmara, just 20 kilometers from the city at its closest point winds could cause untold damage if it were to break.
And while experts predict the magnitude of such an earthquake could be anywhere between 7.2 and 7.8, there is no telling when the earthquake might strike.
PROFESSOR CELAL SENGOR, ISTANBUL TECHNICAL UNIVERSITY: If a major earthquake doesn't happen in the next 20 years, we'd be really surprised.
So it took, it's that close, there is no way to predict it, the sensible thing is to get prepared for it.
BASHIR: But it's not just about ensuring the buildings are able to withstand a major earthquake but also preparing for what is said to be an enormous humanitarian response effort, with experts estimating the loss of tens of thousands of lives and potentially millions of residents left homeless.
It is an immense challenge for this metropolis, particularly when it comes to communities like this one, with many homes here built without permissions and without structural guarantees. Those who say that they trust their buildings are just consoling themselves, she tells me. Most buildings here are more than 30 years old, and most of them have had levels added to them.
I don't think they're sturdy buildings. I want to move. But in Turkey, rent prices are just too high. And with some of Turkey's most disadvantaged now struggling to even buy bread, many are left with no choice, but to continue living in high risk buildings.
Same what happened over in the Southeast we became very afraid over here Shukria (PH) tells me. What will happen to our house? What will happen to our children? What will happen to us? Questions many Istanbul residents are now asking themselves as concerns mount over how much time is left for this historic city to prepare for the unimaginable?
Nada Bashir, CNN, Istanbul.
KINKADE: Well, still to come, another round of mass layoffs at Facebook's parent company Meta. And the CEO Mark Zuckerberg makes a bleak prediction about the economic headwinds facing his company.
And amid strikes, high inflation and a cost of living crisis, the U.K. will soon unveil its new budget. (COMMERCIAL BREAK)
KINKADE: Hello, you are watching CNN NEWSROOM. I'm Lynda Kinkade, good to have you with us.
Well, Facebook's parent company Meta plans to layoff another 10,000 workers over the coming months, marking the second round of mass job cuts at the tech giant in just four months.
Now, between this round of layoffs and the 11,000 employees who lost their jobs in November, Meta has cut its workforce by about 25 percent. In a Facebook post Tuesday, CEO Mark Zuckerberg explained the decision. Writing, last year was a humbling wake up call.
The world economy changed, competitive pressures grew, and our growth slowed considerably. At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years."
Josh Constine is a venture planner at the venture capital fund SignalFire. He joins us now from San Francisco. Good to have you with us, Josh.
JOSH CONSTINE, VENTURE PLANNER, SIGNALFIRE: Thanks for having me.
KINKADE: So another 10,000 employees, just months after 11,000 were let go. Another 5,000 jobs that are open won't be filled. Was this expected at Meta, the parent company of Facebook?
CONSTINE: There has been a lingering sense of job insecurity at Facebook. Things just finally got very real for the company trying to build a fake world called the Metaverse.
It's been having huge problems here, with share price was down by two- thirds last year. Growth has massively slowed. And it seems like the company just had too many workers, too many middle managers, not actually getting anything done.
And so this effort, which Zuckerberg calls part of its year of efficiency, is trying to thin out the herd, get rid of those middle managers, ask them to become individual contributors and actually start doing work.
And it's going to be cutting a bunch of its product, as well, which could see less innovation and less ability to compete with the new start-ups coming out, and that actually could be good for the Silicon Valley ecosystem.
KINKADE: And this, of course, is just one of many. A string of major tech companies slashing jobs. Why are we seeing this, particularly in the tech sector?
CONSTINE: Funding has slowed down in the tech sector. A lot of companies have seen a tough time in the wake of the economic downturn last year. And now they're trying to figure out, how do we plan for the future and avoid having too many staffers on staff and paying too much out in compensation?
But what I'm actually excited about is, this could be great for the start-up ecosystem, because when Facebook fires, it's time to hire. It's flooding the market with great talent.
And while Facebook typically overpays and steals talent away from start-ups, now they're flooding the market with all these people that really know how to build big teams.
And our venture fund's own beacon A.I. data platform tracks these kind of layoffs to help our companies hire the best talent coming out of these big companies. So, while you might see innovation slow at the biggest companies, it could accelerate at newer start-ups.
KINKADE: I like that optimistic spin on it. But I do have to ask you what the future is for a Meta. Because Mark Zuckerberg has called this a year of efficiency. He's saying that people will be more productive.
It sounds very much like the Twitter owner, Elon Musk, who spoke about his staff now having to work hard core, potentially sleep on the floor in the office. What do you make of that?
CONSTINE: Inevitably, when people are laid off, their coworkers have to pick up the slack. And so it could get a bit more intense over there at Facebook. But it's trying to mitigate that problem by cutting a lot of its auxiliary products. It just canceled its portal, smart- screen products. It also has shut down its new NFT and some of its cryptocurrency-focused projects.
And that actually could be, again, good for start-ups, because Facebook has historically copied everything that gained traction coming out of the social app world. And now our venture firm, SignalFire, is seeing a massive uptick in social and consumer start- ups, who see the regulatory antitrust pressure against Facebook, and its budget cuts, as a perfect time to try to disrupt this aging social giant.
KINKADE: And speaking of disruption, Meta is also considering this new stand-alone platform that sounds a lot like Twitter, and that space certainly, it seems to be ready for a shake-up.
CONSTINE: You know, the disruptions at Twitter, everything from massive algorithm changes to huge outages, really leaves the company a bit vulnerable.
And Facebook actually tried to build a Twitter clone about a decade ago and failed. It found that people didn't want to share publicly, and it actually confused a lot of users.
But I think by building this into Instagram, were so many of the posts you see are actually these text-based memes copied from Twitter, that it could be a great moment for Facebook to try to seize control of that public interest graphs entertainment sphere and say, Hey, you know, Twitter is having a hard time, management's all out of whack. Now we can move in, and we can jump on this opportunity.
KINKADE: Opportunities. I like the sound of it. Josh Constine, good to have you with us. Thanks so much for your time.
CONSTINE: My pleasure.
KINKADE: I want to go to the U.K. now, where the government is getting ready to reveal its official budget and plans to revitalize the British economy.
The latest chancellor of the exchequer's announcement follows a very volatile year, with inflation, strikes, and fears of a recession looming large. CNN's Anna Stewart picks up the story.
UNIDENTIFIED MALE: Hello, Chancellor. Are you going to work?
ANNA STEWART, CNN INTERNATIONAL CORRESPONDENT (voice-over): It was a new budget from a new chancellor.
KWASI KWARTENG, FORMER BRITISH FINANCE MINISTER: Today we are publishing our growth plan that sets out a new approach for this new era.
A. STEWART (voice-over): Six months ago, then-Chancellor Kwasi Kwarteng, announced mega spending combined with major tax cuts at a time when the U.K. was facing its highest inflation in decades.
UNIDENTIFIED FEMALE: The pound stumbling against the dollar as the government takes an economic gamble.
A. STEWART (voice-over): Investors panicked. The pound plunged to a multi-decade low against the dollar, and government bond yields were so volatile the Bank of England made an emergency intervention.
SHAMIK DHAR, CHIEF ECONOMIST, BNY MELLON: And it clearly was very damaging at the time. And you know, for a period it looked like -- it looked like we might suffer some serious permanent damage to our reputation.
A. STEWART (voice-over): The IMF, the International Monetary Fund, issued a warning.
KRISTALINA GEORGIEVA, IMF MANAGING DIRECTOR: At this time, fiscal policy should not undermine monetary policy.
A. STEWART (voice-over): It was a long before the new chancellor was out, quickly followed by his boss, the prime minister.
LIZ TRUSS, FORMER U.K. PRIME MINISTER: Given the situation, I cannot deliver the mandate on which I was elected by the Conservative Party.
A. STEWART (voice-over): In came Jeremy Hunt, the fourth U.K. chancellor in as many months, to deliver an aggressive U-turn. JEREMY HUNT, BRITISH CHANCELLOR OF THE EXCHEQUER: Firstly, we will
reverse almost all the tax measures announced in the growth plan three weeks ago.
A. STEWART: Hunt is now ready to deliver the first formal U.K. budget in over a year, and against a pretty challenging backdrop.
Inflation may have fallen from its record levels, but it remains high. The Bank of England has been forced to raise interest rates ten times in a row.
And fears of recession, a cost-of-living crisis, and the biggest wave of strikes for decades, means the chancellor doesn't have all that much room to maneuver.
DHAR: The economic outlook isn't that terrific. You know, possible recession. Maybe we're going to revise down what we think the economy is capable of growing at over the medium term. And those two things mean that I think they'll play it very safe on this budget.
A. STEWART (voice-over): If last year's mini-budget has taught us anything, these announcements have a real impact, for better or worse.
Anna Stewart, CNN, London.
UNIDENTIFIED FEMALE: What do we want?
UNIDENTIFIED FEMALE: Fair pay!
UNIDENTIFIED MALE: Fair pay!
UNIDENTIFIED FEMALE: Fair pay!
UNIDENTIFIED FEMALE: When do we want it?
UNIDENTIFIED FEMALE: Now!
UNIDENTIFIED MALE: Now!
UNIDENTIFIED FEMALE: Now!
KINKADE: A short break. We'll be back in just a moment. Stay with us.
KINKADE: Welcome back. Two storms are battering opposite sides of the United States right now.
The latest atmospheric river event is bringing hurricane-force wind gusts and rainfall of up to three inches to parts of central California.
The rain will linger across Southern California until Wednesday. The overall threat of flooding is expected to diminish. Meantime in the northeast, more than 270,000 customers without power
in New England, New York, and Pennsylvania. And more snow, wind, and widespread power outages are expected Wednesday before the storm exits out into the Atlantic.
The Wizardry World of Harry Potter is headed to Japan this summer. One Above Us is launching a studio tour in Tokyo, showcasing the massively popular film and book franchise.
The company, that shares the same parent company as CNN, is looking to attract more fans across Asia and the Pacific, with its first exhibition outside the U.K.
CNN's Marc Stewart has a preview of the behind-the-scenes movie magic fans can expect.
MARC STEWART, CNN CORRESPONDENT (voice-over): Harry Potter's magic --
ROBBIE COLTRANE, ACTOR: You're a wizard, Harry.
M. STEWART (voice-over): -- is transporting to Tokyo. It's on this massive lot where fans will see some of the series' most iconic sets, like the great hall at Hogwarts, and the Forbidden Forest. It's part of the new Warner Brothers Studio, soon to open in Japan.
M. STEWART: What goes through your mind when you see the train, you see the sets, you see the costumes?
JEFF NAGLER, PRESIDENT, WARNER BBB: Wow. I can't believe it. And when I come here, I have to remember that I'm here on a business trip. And not to -- not to be looking at this as if I'm just a fan.
M. STEWART (voice-over): Jeff Nadler is president of Warner Brothers Worldwide studio operations.
M. STEWART: Why Japan?
NAGLER: I think that was one of the easiest decisions for us, actually, because of the whole global interest in Harry Potter after the United States and after the U.K., Japan is the third best area for Harry Potter fandom.
M. STEWART (voice-over): The Tokyo studio is modeled after the one in London and will be larger. A big draw, the Hogwarts Express train that was made in London, transported by land and by sea to its new home here in Japan.
M. STEWART: It's not just about the sets. It's about the accessories, the costumes, the props. Like the ones you've seen in the movies.
UNIDENTIFIED FEMALE (through translator): we normally don't get what goes on behind the scenes in movies, but here we get to see how films get made. For example, it shows us how the people who work in the costume, props, movie set departments, all work as a team.
M. STEWART (voice-over): A glimpse into movie magic, far from Harry Potter's roots in the U.K.
M. STEWART: Do you see Asia as a growth market for experiences like this?
NAGLER: Absolutely. We do look at China. We look at Japan. We look at South Korea. We have a big fan base in Australia and New Zealand, as well. All of -- It's not Asia; it's the whole Asia Pacific region.
M. STEWART (voice-over): Stories of imagination, appealing to audiences around the world.
Marc Stewart, CNN, Tokyo.
KINKADE: When the Ireland women's rugby team takes the field next weekend in the Six Nations tournament, they'll debut a new part of their uniform.
The women switching from white shorts to navy blue so players don't have to worry about anxieties around their period.
The move comes after some soccer teams and Wimbledon have all relaxed their white clothing rules in response to concerns from female players.
Uniform supplier Canterbury says it will allow teams at any level of sport to swap their white shorts for color once in a. Time world sport starts after a storm break. We'll be back at the top of the hour, with much more from CNN NEWSROOM.