June 26, 2025 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) NATO leaders agreed to increase defense spending to 5% of GDP and renewed their “ironclad commitment” to mutual security in an historic move to push back against an increasingly belligerent Russia
(2) President Donald Trump said the US would hold a meeting with Iran next week but cast doubt on the need for a diplomatic agreement on the country’s nuclear program, citing the damage that American bombing had done to key sites.
(3) Worldline SA Chief Executive Officer Pierre-Antoine Vacheron blamed an orchestrated media campaign for the firm’s precipitous share decline in an effort to dig the company out of its current crisis.
(4) President Donald Trump said he has three or four people in mind to succeed Federal Reserve Chair Jerome Powell when his term expires next year.
(5) Chancellor of the Exchequer Rachel Reeves should resist the temptation to raise levies on UK companies further because of the risk of strangling economic growth, one of the country’s biggest business lobbies said.
(6) The UK is seeking to increase the recognition of British professional certifications abroad, a move aimed at boosting the nation’s service-sector exports by making it easier for highly skilled employees to work for clients overseas.
Podcast Conversation: Amazon Says Denis Villeneuve Will Direct Next James Bond Film
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg Daybreaker podcast, available every morning on Apple,
Spotify or wherever you listen. It's Thursday, the twenty sixth
of June in London. I'm Stephen Carroll. Coming up today.
Donald Trump recommits to NATO after European leaders agree to
hike spending on defense. Reports suggests the US presidents considering
naming Jerome Powell's replacement as FED chair early and.
Speaker 3 (00:32):
I'm Caroline hepkeat live at the City UK conference where
the industry body is warning that London's future as a
financial center is not guaranteed.
Speaker 1 (00:41):
Let's start with a roundup of our top stories.
Speaker 2 (00:43):
A landmark NATO summit has ended with a bold commitment
to all thirty two allies will raise military spending to
five percent of GDP. On his flight to the Hague,
President Trump voiced doubts about his willingness to honor the
alliance's commitment to collective defense. However, he later said the
discussions with other leaders had changed his view.
Speaker 4 (01:03):
When I saw the passion they had for the country.
Almost everyone and you probably have the tapes. It was
very public, but almost every one of them said, thank
God for the United States. Without the United States, it
couldn't really have NATO. It wouldn't work. It wouldn't work.
It will in the future because now they're paying much
more money, but it wouldn't work. It was great, and.
Speaker 1 (01:22):
I left here differently.
Speaker 4 (01:24):
I left here saying that these people really love their countries.
It's not a ripoff, and we're here to help them
protect their country.
Speaker 2 (01:32):
Whether all member states eventually reached the spending goal remains
an open question. Spain and Slovakia have already expressed doubts
about allocating that much money to defense. Spain's reluctance to
meet the five percent targets dree direct threats of economic
retaliation from President Trump. Thattro Spain's IBEX thirty five index
to its biggest decline since early April, closing down one
(01:53):
point six percent. President Trump meanwhile says that America will
hold talks with Iran next weeks. Came as the US
leader also cast doubt on the necessity of a diplomatic
agreement regarding Iran's nuclear program. Meanwhile, Donald Trump again disputed
an intelligence assessment from his own government which stated that
Tehran's nuclear program.
Speaker 1 (02:13):
Had only been delayed by a matter of months.
Speaker 2 (02:16):
His message was echoed yesterday by his Defense secretary Pete Hegseth.
Speaker 5 (02:20):
When you actually look at the report, by the way,
it was a top secret report, it was preliminary, it
was low confidence, all right, So this is a you
make assessments based on what you.
Speaker 1 (02:30):
Know that it said.
Speaker 5 (02:31):
It could be very devastating, very severe, and we believe
far more likely severe and obliterated.
Speaker 2 (02:39):
Pete Hesath speaking there is, Iran issued a statement claiming
its nuclear facilities had in fact been badly damaged, though
no further details were provided. The Wall Street Journal is
reporting that in recent weeks, the US President has toyed
with the idea of selecting an announcing Pal's replacement by
September or October. Yesterday, Trump publicly mused over who could
(02:59):
succeed Powell.
Speaker 4 (03:00):
Yeah, I know within three or four people who are
going to pick. I mean, he goes out pretty soon, unfortunately,
because I think he's terrible. We have no inflation, we
have a tremendous economy.
Speaker 2 (03:12):
The US President has referred to the Fed share as
too late Powell due to his reluctance to lower rates.
The Wall Street Journal says former Fed Governor Kevin Warsh
and any C director Kevin Hassett or on Trump's shortlist,
alongside former World Bank President David Malpass and the current
FED Governor Christopher Waller. Jerom Powell was back on Capitol
Hill for a second day of congressional testimony yesterday. He
(03:33):
said the US Center Bank is still struggling to determine
the impact of tariffs on consumer prices. In Vidia share
sorry to a record high on Wednesday, overtaking Microsoft to
become the world's most valuable company. The stock rose by
more than four percent, lifting the chip giants market cap
to three point seven seven trillion dollars. In Video has
(03:54):
gained sixty three percent since April, fueled by massive demand
for AI hardware and strong earnings. The Director General of
the British Chambers of Commerce has warned against raising taxes
further on UK companies. Speaking to Bloomberg, Chavon Havland said
a high could lead to an economic slowdown. In a
message to the Chancellor ahead of the BCC's annual conference today.
Speaker 6 (04:15):
We want the government to look at how they can
ease that cost of doing business. Taxes are really dragging
our businesses down. We need them to be released to grow.
So where's the long term roadmap forul is in the
cost of doing.
Speaker 2 (04:28):
Business, Chavon Havlan speaking there. Her warning comes as Rachel
Reeves faces pressure from her own party over planned benefit
cuts while also seeking to revive the country's flagging growth.
Taxes are raised by forty billion pounds in Reeve's last budget,
including a twenty six billion pounds height to the National
Insurance Payroll Tax which took effect in April, and as
(04:50):
the UK searches for fresh sources of economic growth. The
government says it's seeking to increase the recognition of British
professional certifications abroad and parts has more.
Speaker 7 (05:01):
With services making up more than eighty percent of the
country's GDP, the government is turning his attention to boosting
the sector's exports. It wants to make it easy if
highly skilled employees to work for clients overseas. Number ten
says it wants to use trade deals to expand acceptance
of professional accreditations outside the UK, opening up new markets
for law, accounting and other highly regulated sectors. Meanwhile, a
(05:24):
new report lays bare the economic challenges facing the government,
saying the twenty twenties are on course to be the
worst decade for living standards in the past sixty years.
According to the Resolution Foundation, a typical UK family's real
disposable income in the five years to twenty thirty is
set to rize just one percent after adjusting for housing costs.
Over the whole decade, the Think Tanks says, real disposable
(05:46):
incomes are set to see no growth whatsoever. In London,
I'm youwing pots Bloomberg Radio.
Speaker 2 (05:52):
Those are your tap stories on the markets this morning.
The Mascio specific endex up by four tenths of one percent.
We're watching marcus reaction though to that report that Donald
Trump is considering naming the FED chair early to replace
Jerome Powell in eleven months time when his term ends.
The Bloomberg Dollar Spot Index two tenths weeker this morning.
The ten year Treasury eel down to basis points four
point two seven percent is where that's trading. European stock
(06:15):
futures pointing slightly higher this morning, up a tenth of
one percent for eurostock's fifty futures.
Speaker 1 (06:19):
Nasdaq futures two tenths higher as well.
Speaker 2 (06:21):
Of course, in focus after the rally in Nvidia shares
yesterday as well well. In a moment, we will bring
you more on what came out of the NATO Defense
Summit as EU leaders meet in Brussels today. Plus Caroline
is at the City UK's annual conference. Will speak to
her in just a moment. Bought another story that caught
our eye this morning. The new director of the next
Bond film has been announced, the French Canadian Danny Villenev,
(06:44):
who has been announced by Amazon MGM Studios as the
director of the next Bond film as well. Of course,
he's the director and co writer of the June films
as well as Arrival, Blade Runner twenty forty nine in Prisoners.
He's been nominated for an Oscar for three of his
last four films. His appointment part of a shakeup of
the Bond franchise. The longtime producers, Barbara broccoley and Michael G.
(07:05):
Wilson had sold creative control of a too Amazon MGM
earlier this year, a deal report at the time to
be worth a billion dollars.
Speaker 1 (07:14):
Film of for his part, it says he's a.
Speaker 2 (07:15):
Die hard Bond fan that he intends to honor the
tradition and open the path for many new missions to come,
so plenty to watch out for in the next highly
awighted Bond film to come in the franchise. European leaders
are meeting in Brussels today after yesterday's NATO summits, where
many of them agreed to new defense spending targets a
five percent of GDP, and US President Donald Trump renewed
(07:36):
his commitment to the Alliance's collective defense principle. Let's speak
to our correspondent Oliver Crook, who was at the NATO summit.
Speaker 1 (07:42):
He's in Brussels today.
Speaker 2 (07:43):
Oliver, let's start with what happened at NATO then, A
win for Donald.
Speaker 1 (07:46):
Trump, but also for European leaders present.
Speaker 8 (07:49):
I think that in a sort of rare transaction between
European leaders and Donald Trump, this was really a good
win for everybody, with potentially the exception of Spain. But
you Donald Trump came in with this demand in the
sort of up to his inauguration for NATO to spend
five percent of their GDP on defense. Again, this is
a concept I think that was initially kind of shrugged off.
It was written as impractical, impossible, totally unrealistic. And what
(08:11):
Donald Trump achieved yesterday is to get all of the
NATO members to sign on to spending five percent of
their GDP on defense going forward. That is a massive
win for the President of the United States. I think
that it's fair to say that, you know, this would
not have happened without the presence of Donald Trump in
the Oval office. There's you know, there's been a lot
of complaints through the years that the Europeans have not
(08:31):
been pulling their weight on defense, and this is something
that he can, i think justly go around and say
has been a massive win for the President of the
United States. That being said, he did also highlight the
fact that Spain was reticent to sign on to that figure.
He then threatened, you know, more trade action against the Spanish,
which is really going to be one of the focuses
for EU leaders today because we go from the last crisis,
which was Article five and NATO going forward into the
(08:53):
trade negotiations with the United States as that deadline looms, just.
Speaker 2 (08:58):
Linking together, that's question of that I'm sure to come
up and the EU leader summit today as well. Around Spain.
Donald Trump critical of Spain for holding out on increasing
defense spending, saying tougher trade terms could be imposed in
the country as a result. What does that mean in
the context of the ongoing talks between the EU and
the US on trade.
Speaker 8 (09:17):
Yeah, I think right now it'll be treated a little
bit like noise. I mean, as you know, Steven, you know,
the competence of trade is something that has been delegated
from individual member states to the European Union. You know,
there's a sort of kind of Article five on trade
for the European Union. Attack on one as an attack
on all. So it's you know, it's not generally how
it happens. But I think that what is going to
be concerning for European leaders now is from all the
(09:39):
reporting we have done is there has not been a
huge amount of progress between the US and the EU
as they sort of limp towards that deadline of July
the ninth, and remember Donald Trump ratcheted up the pressure
on that. Now as of July the ninth, if there
is no deal, there will be fifty percent tariffs between
the United States and the EU. And so there's different
sort of ways in which different member states are suggesting
(09:59):
a approaching this or are those who are saying, listen,
we need to be very sort of hard with the
United States, even if they impose a baseline tariff of
ten percent, which is remember what the UK was still
stuck with, the EU should retaliate. Other members state say
this will only infuriate the president and this is going
to create a even more escalating trade war. And then
actually a fast deal, if imperfect, is better than no
deal at all. So I think that is going to
(10:20):
be one of the main focuses for the leaders that
assembled here in Brussels, is to sort of look at
the way that they are where they're willing to compromise.
Of course, there are also other issues, the fact that
basically the United States is apparently demanding, according to some
of the people we're speaking to, sort of unilateral terms
and really unbalanced practices within this trade deal.
Speaker 2 (10:38):
Okay, Oliver Krook in Brussels, thank you very much for that. Well,
let's go to Caroline this morning, who is at the
City UK's annual conference. The group represents UK based financial
services and it's a moment to hear from the industry
about what they want when it comes to UK competitiveness
and growth.
Speaker 1 (10:55):
Caroline, good morning. How supportive is the government then of
financial services? What's the mood for this.
Speaker 3 (11:00):
Conference, well, this is the financial industry gathering in the
heart of Westminster, so it's really a marriage of finance,
business and politics and we're into this labor government.
Speaker 1 (11:12):
Of course.
Speaker 3 (11:13):
Remember last year we were also here. There was a
lot of engagement with the government in waiting as it
was lots of optimism about a fresh start. Financial services
is one of the growth areas that the government has
earmarked in the recent Industrial Strategy, but there are others too.
Eight in all Kids Sarma's government said on Wednesday that
they're going to try to expand this recognition of professional
(11:34):
certifications abroad, so that could help things like accounting, a
law and other occupations and boost services exports from the UK,
but there is still a huge hill to climb. Speaking
to Mars Sellick, who's the CEO of the City UK,
he says he just wants action faster on regulation, on planning,
on attracting talent to the UK and it needs to
(11:55):
be delivered, he says, in a much more effective way.
So this feels to me like we might be getting
close to a scorecard from the financial industry on this government.
Have a listened to what Miles Seleik told me.
Speaker 9 (12:09):
We cannot be complacent on this. We have no god
given right to be a successful all of the world's
two most successful international financial centers and I do worry
about complacency. We cannot afford to be complacent.
Speaker 3 (12:22):
So that was Miles Seleik, the CEO of the City UK,
speaking to me ahead of this event today. The government
Stephen does have some huge issues sluggish economic growth. In
the last quarter. The UK did do a trade deal
with the US, but it still faces this ten percent
tariff and experts of the US have obviously gone down.
Additional taxes on business that the British Chambers of Commerce
(12:43):
said only today must not be repeated. A very difficult
fiscal position with much higher borrowing costs for this government
than let's say, on the continent. So there are really
huge headwinds and the government seems to be casting around
to lots of different industries to try to drive economic growth,
but it has to do more to deliver.
Speaker 2 (13:03):
What about Carolyn questions of deregulation as well, very much
to the forefront of the debate happening in the financial
services industry.
Speaker 3 (13:10):
Yeah, we've tracked lots of reviews and consultations from the
PRA from the FCA, the regulators here in the UK
on remuneration for banks and building society bosses on consumer
protections and financial address on politically exposed people. Perhaps lots
of issues, esg ratings, agencies, so many issues. But the
(13:32):
question is what does that amount to in total? What
is the actual drive on deregulation now? And it also
does feel like the government maybe is helping business with
one hand but then taking away with another. I mean,
the ending of the non dom tax benefit overhangs everything.
It's prompted something of a wealth exodus. We've seen also
(13:53):
swift delistings from the London Sock Exchange in the past year,
an area you know where again the government tried regulatory changes,
but have they really made a difference, And perhaps they
take a long time to take effect. So the question
is whether it's also too late to reverse that exodus
from the London stock Exchange or not. So deregulation is
(14:16):
happening bit by bit, what does it amount to, what
is it delivering? I think that's some questions really for
the panel that I'm going to be speaking on later.
Speaker 2 (14:27):
Yeah, indeed, and that's one of the key conversations that
we're watching and we'll bring it to our listeners on
Bloomberg Radio later as well. This Caroline, all ahead of
the Chancellor's Mansion House speech in a couple of weeks time.
Speaker 1 (14:39):
What should we be expecting. What are we expecting to
hear from the industry around that.
Speaker 3 (14:43):
Look, the Chancellor's under pressure, not just because of her
own MPs, but also because of the bond markets. Her
headroom is incredibly narrow and it is under constant scrutiny.
The Bank of England Governor Andrew Bailey recently warned about this,
So there will be lots to look at in the
Mansion House speech. Look, the City UK want more details
(15:04):
on how the financial services sector can deliver economic growth.
They want the actual sort of framework. Will there also
be maybe changes to visas, maybe an investment visa or
changes to isers that's also been floated. The bottom line
is will financial services make a difference to productivity and
economic growth? How is the government going to do that
(15:25):
when their fiscal room to kind of pick winners and
losers in the economy is very very limited. And when
you step away from that, why is it so important?
It's that Resolution Foundation report that we mentioned just earlier
household incomes are expected to stagnate this decade. And remember
you have Reform UK riding high in the polls. The
(15:47):
Labor government's polar rating has sunk rapidly, much more rapidly
than past governments have, and Reform UK has been swift
to offer things like a flat tax for wealthy people
wanting to move into the UK. All are flat tax
for people up to twenty pounds in income. So they're there,
you know, on the sidelines making their offers. As the
(16:09):
Labor governments it has to come up with their own answers.
So yeah, lots of expectation for the Mansion House speech
on the fifteenth of July two.
Speaker 2 (16:19):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 3 (16:25):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 2 (16:31):
You can also listen live each morning on London Dab Radio,
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Speaker 3 (16:37):
Our flagship New York station is also available on your
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Speaker 1 (16:44):
I'm Caroline Hepka and I'm Stephen Carroll.
Speaker 2 (16:47):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg day Break.
Speaker 1 (16:52):
Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg Daybreaker podcast, available every morning on Apple,
Spotify or wherever you listen. It's Thursday, the twenty sixth
of June in London. I'm Stephen Carroll. Coming up today.
Donald Trump recommits to NATO after European leaders agree to
hike spending on defense. Reports suggests the US presidents considering
naming Jerome Powell's replacement as FED chair early and.
Speaker 3 (00:32):
I'm Caroline hepkeat live at the City UK conference where
the industry body is warning that London's future as a
financial center is not guaranteed.
Speaker 1 (00:41):
Let's start with a roundup of our top stories.
Speaker 2 (00:43):
A landmark NATO summit has ended with a bold commitment
to all thirty two allies will raise military spending to
five percent of GDP. On his flight to the Hague,
President Trump voiced doubts about his willingness to honor the
alliance's commitment to collective defense. However, he later said the
discussions with other leaders had changed his view.
Speaker 4 (01:03):
When I saw the passion they had for the country.
Almost everyone and you probably have the tapes. It was
very public, but almost every one of them said, thank
God for the United States. Without the United States, it
couldn't really have NATO. It wouldn't work. It wouldn't work.
It will in the future because now they're paying much
more money, but it wouldn't work. It was great, and.
Speaker 1 (01:22):
I left here differently.
Speaker 4 (01:24):
I left here saying that these people really love their countries.
It's not a ripoff, and we're here to help them
protect their country.
Speaker 2 (01:32):
Whether all member states eventually reached the spending goal remains
an open question. Spain and Slovakia have already expressed doubts
about allocating that much money to defense. Spain's reluctance to
meet the five percent targets dree direct threats of economic
retaliation from President Trump. Thattro Spain's IBEX thirty five index
to its biggest decline since early April, closing down one
(01:53):
point six percent. President Trump meanwhile says that America will
hold talks with Iran next weeks. Came as the US
leader also cast doubt on the necessity of a diplomatic
agreement regarding Iran's nuclear program. Meanwhile, Donald Trump again disputed
an intelligence assessment from his own government which stated that
Tehran's nuclear program.
Speaker 1 (02:13):
Had only been delayed by a matter of months.
Speaker 2 (02:16):
His message was echoed yesterday by his Defense secretary Pete Hegseth.
Speaker 5 (02:20):
When you actually look at the report, by the way,
it was a top secret report, it was preliminary, it
was low confidence, all right, So this is a you
make assessments based on what you.
Speaker 1 (02:30):
Know that it said.
Speaker 5 (02:31):
It could be very devastating, very severe, and we believe
far more likely severe and obliterated.
Speaker 2 (02:39):
Pete Hesath speaking there is, Iran issued a statement claiming
its nuclear facilities had in fact been badly damaged, though
no further details were provided. The Wall Street Journal is
reporting that in recent weeks, the US President has toyed
with the idea of selecting an announcing Pal's replacement by
September or October. Yesterday, Trump publicly mused over who could
(02:59):
succeed Powell.
Speaker 4 (03:00):
Yeah, I know within three or four people who are
going to pick. I mean, he goes out pretty soon, unfortunately,
because I think he's terrible. We have no inflation, we
have a tremendous economy.
Speaker 2 (03:12):
The US President has referred to the Fed share as
too late Powell due to his reluctance to lower rates.
The Wall Street Journal says former Fed Governor Kevin Warsh
and any C director Kevin Hassett or on Trump's shortlist,
alongside former World Bank President David Malpass and the current
FED Governor Christopher Waller. Jerom Powell was back on Capitol
Hill for a second day of congressional testimony yesterday. He
(03:33):
said the US Center Bank is still struggling to determine
the impact of tariffs on consumer prices. In Vidia share
sorry to a record high on Wednesday, overtaking Microsoft to
become the world's most valuable company. The stock rose by
more than four percent, lifting the chip giants market cap
to three point seven seven trillion dollars. In Video has
(03:54):
gained sixty three percent since April, fueled by massive demand
for AI hardware and strong earnings. The Director General of
the British Chambers of Commerce has warned against raising taxes
further on UK companies. Speaking to Bloomberg, Chavon Havland said
a high could lead to an economic slowdown. In a
message to the Chancellor ahead of the BCC's annual conference today.
Speaker 6 (04:15):
We want the government to look at how they can
ease that cost of doing business. Taxes are really dragging
our businesses down. We need them to be released to grow.
So where's the long term roadmap forul is in the
cost of doing.
Speaker 2 (04:28):
Business, Chavon Havlan speaking there. Her warning comes as Rachel
Reeves faces pressure from her own party over planned benefit
cuts while also seeking to revive the country's flagging growth.
Taxes are raised by forty billion pounds in Reeve's last budget,
including a twenty six billion pounds height to the National
Insurance Payroll Tax which took effect in April, and as
(04:50):
the UK searches for fresh sources of economic growth. The
government says it's seeking to increase the recognition of British
professional certifications abroad and parts has more.
Speaker 7 (05:01):
With services making up more than eighty percent of the
country's GDP, the government is turning his attention to boosting
the sector's exports. It wants to make it easy if
highly skilled employees to work for clients overseas. Number ten
says it wants to use trade deals to expand acceptance
of professional accreditations outside the UK, opening up new markets
for law, accounting and other highly regulated sectors. Meanwhile, a
(05:24):
new report lays bare the economic challenges facing the government,
saying the twenty twenties are on course to be the
worst decade for living standards in the past sixty years.
According to the Resolution Foundation, a typical UK family's real
disposable income in the five years to twenty thirty is
set to rize just one percent after adjusting for housing costs.
Over the whole decade, the Think Tanks says, real disposable
(05:46):
incomes are set to see no growth whatsoever. In London,
I'm youwing pots Bloomberg Radio.
Speaker 2 (05:52):
Those are your tap stories on the markets this morning.
The Mascio specific endex up by four tenths of one percent.
We're watching marcus reaction though to that report that Donald
Trump is considering naming the FED chair early to replace
Jerome Powell in eleven months time when his term ends.
The Bloomberg Dollar Spot Index two tenths weeker this morning.
The ten year Treasury eel down to basis points four
point two seven percent is where that's trading. European stock
(06:15):
futures pointing slightly higher this morning, up a tenth of
one percent for eurostock's fifty futures.
Speaker 1 (06:19):
Nasdaq futures two tenths higher as well.
Speaker 2 (06:21):
Of course, in focus after the rally in Nvidia shares
yesterday as well well. In a moment, we will bring
you more on what came out of the NATO Defense
Summit as EU leaders meet in Brussels today. Plus Caroline
is at the City UK's annual conference. Will speak to
her in just a moment. Bought another story that caught
our eye this morning. The new director of the next
Bond film has been announced, the French Canadian Danny Villenev,
(06:44):
who has been announced by Amazon MGM Studios as the
director of the next Bond film as well. Of course,
he's the director and co writer of the June films
as well as Arrival, Blade Runner twenty forty nine in Prisoners.
He's been nominated for an Oscar for three of his
last four films. His appointment part of a shakeup of
the Bond franchise. The longtime producers, Barbara broccoley and Michael G.
(07:05):
Wilson had sold creative control of a too Amazon MGM
earlier this year, a deal report at the time to
be worth a billion dollars.
Speaker 1 (07:14):
Film of for his part, it says he's a.
Speaker 2 (07:15):
Die hard Bond fan that he intends to honor the
tradition and open the path for many new missions to come,
so plenty to watch out for in the next highly
awighted Bond film to come in the franchise. European leaders
are meeting in Brussels today after yesterday's NATO summits, where
many of them agreed to new defense spending targets a
five percent of GDP, and US President Donald Trump renewed
(07:36):
his commitment to the Alliance's collective defense principle. Let's speak
to our correspondent Oliver Crook, who was at the NATO summit.
Speaker 1 (07:42):
He's in Brussels today.
Speaker 2 (07:43):
Oliver, let's start with what happened at NATO then, A
win for Donald.
Speaker 1 (07:46):
Trump, but also for European leaders present.
Speaker 8 (07:49):
I think that in a sort of rare transaction between
European leaders and Donald Trump, this was really a good
win for everybody, with potentially the exception of Spain. But
you Donald Trump came in with this demand in the
sort of up to his inauguration for NATO to spend
five percent of their GDP on defense. Again, this is
a concept I think that was initially kind of shrugged off.
It was written as impractical, impossible, totally unrealistic. And what
(08:11):
Donald Trump achieved yesterday is to get all of the
NATO members to sign on to spending five percent of
their GDP on defense going forward. That is a massive
win for the President of the United States. I think
that it's fair to say that, you know, this would
not have happened without the presence of Donald Trump in
the Oval office. There's you know, there's been a lot
of complaints through the years that the Europeans have not
(08:31):
been pulling their weight on defense, and this is something
that he can, i think justly go around and say
has been a massive win for the President of the
United States. That being said, he did also highlight the
fact that Spain was reticent to sign on to that figure.
He then threatened, you know, more trade action against the Spanish,
which is really going to be one of the focuses
for EU leaders today because we go from the last crisis,
which was Article five and NATO going forward into the
(08:53):
trade negotiations with the United States as that deadline looms, just.
Speaker 2 (08:58):
Linking together, that's question of that I'm sure to come
up and the EU leader summit today as well. Around Spain.
Donald Trump critical of Spain for holding out on increasing
defense spending, saying tougher trade terms could be imposed in
the country as a result. What does that mean in
the context of the ongoing talks between the EU and
the US on trade.
Speaker 8 (09:17):
Yeah, I think right now it'll be treated a little
bit like noise. I mean, as you know, Steven, you know,
the competence of trade is something that has been delegated
from individual member states to the European Union. You know,
there's a sort of kind of Article five on trade
for the European Union. Attack on one as an attack
on all. So it's you know, it's not generally how
it happens. But I think that what is going to
be concerning for European leaders now is from all the
(09:39):
reporting we have done is there has not been a
huge amount of progress between the US and the EU
as they sort of limp towards that deadline of July
the ninth, and remember Donald Trump ratcheted up the pressure
on that. Now as of July the ninth, if there
is no deal, there will be fifty percent tariffs between
the United States and the EU. And so there's different
sort of ways in which different member states are suggesting
(09:59):
a approaching this or are those who are saying, listen,
we need to be very sort of hard with the
United States, even if they impose a baseline tariff of
ten percent, which is remember what the UK was still
stuck with, the EU should retaliate. Other members state say
this will only infuriate the president and this is going
to create a even more escalating trade war. And then
actually a fast deal, if imperfect, is better than no
deal at all. So I think that is going to
(10:20):
be one of the main focuses for the leaders that
assembled here in Brussels, is to sort of look at
the way that they are where they're willing to compromise.
Of course, there are also other issues, the fact that
basically the United States is apparently demanding, according to some
of the people we're speaking to, sort of unilateral terms
and really unbalanced practices within this trade deal.
Speaker 2 (10:38):
Okay, Oliver Krook in Brussels, thank you very much for that. Well,
let's go to Caroline this morning, who is at the
City UK's annual conference. The group represents UK based financial
services and it's a moment to hear from the industry
about what they want when it comes to UK competitiveness
and growth.
Speaker 1 (10:55):
Caroline, good morning. How supportive is the government then of
financial services? What's the mood for this.
Speaker 3 (11:00):
Conference, well, this is the financial industry gathering in the
heart of Westminster, so it's really a marriage of finance,
business and politics and we're into this labor government.
Speaker 1 (11:12):
Of course.
Speaker 3 (11:13):
Remember last year we were also here. There was a
lot of engagement with the government in waiting as it
was lots of optimism about a fresh start. Financial services
is one of the growth areas that the government has
earmarked in the recent Industrial Strategy, but there are others too.
Eight in all Kids Sarma's government said on Wednesday that
they're going to try to expand this recognition of professional
(11:34):
certifications abroad, so that could help things like accounting, a
law and other occupations and boost services exports from the UK,
but there is still a huge hill to climb. Speaking
to Mars Sellick, who's the CEO of the City UK,
he says he just wants action faster on regulation, on planning,
on attracting talent to the UK and it needs to
(11:55):
be delivered, he says, in a much more effective way.
So this feels to me like we might be getting
close to a scorecard from the financial industry on this government.
Have a listened to what Miles Seleik told me.
Speaker 9 (12:09):
We cannot be complacent on this. We have no god
given right to be a successful all of the world's
two most successful international financial centers and I do worry
about complacency. We cannot afford to be complacent.
Speaker 3 (12:22):
So that was Miles Seleik, the CEO of the City UK,
speaking to me ahead of this event today. The government
Stephen does have some huge issues sluggish economic growth. In
the last quarter. The UK did do a trade deal
with the US, but it still faces this ten percent
tariff and experts of the US have obviously gone down.
Additional taxes on business that the British Chambers of Commerce
(12:43):
said only today must not be repeated. A very difficult
fiscal position with much higher borrowing costs for this government
than let's say, on the continent. So there are really
huge headwinds and the government seems to be casting around
to lots of different industries to try to drive economic growth,
but it has to do more to deliver.
Speaker 2 (13:03):
What about Carolyn questions of deregulation as well, very much
to the forefront of the debate happening in the financial
services industry.
Speaker 3 (13:10):
Yeah, we've tracked lots of reviews and consultations from the
PRA from the FCA, the regulators here in the UK
on remuneration for banks and building society bosses on consumer
protections and financial address on politically exposed people. Perhaps lots
of issues, esg ratings, agencies, so many issues. But the
(13:32):
question is what does that amount to in total? What
is the actual drive on deregulation now? And it also
does feel like the government maybe is helping business with
one hand but then taking away with another. I mean,
the ending of the non dom tax benefit overhangs everything.
It's prompted something of a wealth exodus. We've seen also
(13:53):
swift delistings from the London Sock Exchange in the past year,
an area you know where again the government tried regulatory changes,
but have they really made a difference, And perhaps they
take a long time to take effect. So the question
is whether it's also too late to reverse that exodus
from the London stock Exchange or not. So deregulation is
(14:16):
happening bit by bit, what does it amount to, what
is it delivering? I think that's some questions really for
the panel that I'm going to be speaking on later.
Speaker 2 (14:27):
Yeah, indeed, and that's one of the key conversations that
we're watching and we'll bring it to our listeners on
Bloomberg Radio later as well. This Caroline, all ahead of
the Chancellor's Mansion House speech in a couple of weeks time.
Speaker 1 (14:39):
What should we be expecting. What are we expecting to
hear from the industry around that.
Speaker 3 (14:43):
Look, the Chancellor's under pressure, not just because of her
own MPs, but also because of the bond markets. Her
headroom is incredibly narrow and it is under constant scrutiny.
The Bank of England Governor Andrew Bailey recently warned about this,
So there will be lots to look at in the
Mansion House speech. Look, the City UK want more details
(15:04):
on how the financial services sector can deliver economic growth.
They want the actual sort of framework. Will there also
be maybe changes to visas, maybe an investment visa or
changes to isers that's also been floated. The bottom line
is will financial services make a difference to productivity and
economic growth? How is the government going to do that
(15:25):
when their fiscal room to kind of pick winners and
losers in the economy is very very limited. And when
you step away from that, why is it so important?
It's that Resolution Foundation report that we mentioned just earlier
household incomes are expected to stagnate this decade. And remember
you have Reform UK riding high in the polls. The
(15:47):
Labor government's polar rating has sunk rapidly, much more rapidly
than past governments have, and Reform UK has been swift
to offer things like a flat tax for wealthy people
wanting to move into the UK. All are flat tax
for people up to twenty pounds in income. So they're there,
you know, on the sidelines making their offers. As the
(16:09):
Labor governments it has to come up with their own answers.
So yeah, lots of expectation for the Mansion House speech
on the fifteenth of July two.
Speaker 2 (16:19):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 3 (16:25):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 2 (16:31):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 3 (16:37):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 1 (16:44):
I'm Caroline Hepka and I'm Stephen Carroll.
Speaker 2 (16:47):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg day Break.
Speaker 1 (16:52):
Europe
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