May 13, 2025 • 17 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) UK pension fund managers have agreed to invest at least 5% of their assets at home, marking a win for the Labour government that’s seeking to boost the economy by drawing billions of pounds into local startups and infrastructure projects.
(2) Most Asian stock markets rose, following a rally in US equities, on optimism the US-China trade truce marks the end to an all-out tariff war.
(3) Xi Jinping’s decision to stand his ground against Donald Trump could hardly have gone any better for the Chinese leader.
(4) UK counter-terrorism police are investigating a fire that took place in the early hours of Monday morning at a residential London home owned by Prime Minister Keir Starmer.
(5) Apple is planning to use artificial intelligence technology to address a frequent source of customer frustration: the iPhone’s battery life.
Podcast conversation:
Samsung Debuts $1,099 S25 Edge, Kicking Off Wave of Thin Phones
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the BlueBag Day BAKR podcast failable every morning
on Apple, Spotify or wherever you listen. It's Tuesday, the
thirteenth of May in London. I'm Caroline Hepka.
Speaker 1 (00:18):
And I'm Stephen Carroll. Coming up today. UK pension funds
agree to invest at least five percent of their assets
in Britain in a win for the Chancellor.
Speaker 2 (00:26):
Rachel Reeves, the S and B five hundred and NASAK
make huge gains as US China tariff cuts fuel, the
return of a Buy America trade.
Speaker 1 (00:35):
Glass, police investigator, fire at Prime Minister Kier Starmer's house,
and possible links to two other blazers.
Speaker 2 (00:41):
Let's start with a roundup of our top stories.
Speaker 1 (00:44):
Britain's largest pension funds are agreeing to invest at least
five percent of their assets at home in a new
deal with the labor government. The seventeen funds who've signed
up to the Mansion House Accords say the deal will
inject as much as fifty billion pounds of new investment
over the next five years. Bloomberg's James Wilcock has more.
Speaker 3 (01:02):
It sets funds who manage nine to ten UK savers,
direct contribution pension pots a target keep five percent of
your assets in Britain's private markets. It's a significant amount
of money, but it is voluntary and it's not the
first use of the name. A previous mansion House Compact,
signed two years ago, has been criticized for only leading
(01:24):
to a limited amount of investment. This new version comes
as the government weighs legally forcing funds to invest more
domestically as it seeks more money for infrastructure projects in London.
James Wilcock Bloomberg Radio.
Speaker 2 (01:38):
Global stocks have made huge gains on optimism that the
decision to slash US China reciprocal tariffs for ninety days
marks the end of an all our trade war. The
S and P five hundred jump to three point three
percent to take it back above the level when President
Trump first announced those sweeping global levies on the second
of April. Meanwhile, a surge in Big Text put then
(02:00):
as that one hundred back into a bull market, just
about a month after it plunged twenty percent from a
previous record high. Investors also moved out of defensive positions
and reduced expectations for Federal Reserve interest rate cuts. Kathy Jones,
chief fixed income strateist that Charles Schwab says there is
reason for traders to feel more confident.
Speaker 4 (02:22):
The market has been so valerable because it keeps trying
to recalibrate what the outlook is right and now it
seems as if the worst case scenario is probably behind
us because China was the big one to get a
deal with. So if we've dialed back the rhetoric, if
we've dialed back the limit on China, maybe we dial
back limits on everybody else and we get more of
(02:44):
a soft landing.
Speaker 2 (02:45):
Kathy Jones speaking there following the announcement of the US
China trade truce. On the markets right now, the MASCI
Asia Pacific indexes up by four tenths of one percent,
US SOX fifty futures are down two tenths of one percent,
and tenure US treasure yields down one and a half
basis points are trading at four forty six.
Speaker 1 (03:03):
The massive gains across equity markets and the dollar follow
carefully coordinated joint statements issued yesterday from Beijing and Washington.
The US announced it would slash duties on Chinese products
to thirty percent from one hundred and forty five percent
for a ninety day period, while Beijing reduced its levy
on most US goods to ten percent. The rollback in
(03:24):
tariff s appears to validate Cheating Ping's decision to stand
firm against Donald Trump's tariff offensive. Speaking this morning, the
Chinese president warns that acts of coercion and dominance ultimately
lead to isolation. May there are no winners in tariff
wars or trade wars. Bullying or through hegeminism only leads
(03:45):
to self isolation. The Chinese President's remark, spoken thereby a translator,
come as President Trump said he could speak with she
as early asn't it the end of this week, touting
what he called a total reset in US China relations.
Speaker 2 (03:58):
US drug may because meanwhile, have avoided a worst case scenario.
After President Donald Trump signed an executive order asking them
to lower prices for Americans voluntarily. Farm's futuel companies had
feared action on drug prices, but analysts saw the order
as less severe and vague, looking for cuts of between
sixty and ninety percent. President Trump said that the cost
(04:21):
of US drugs should match the lowest prices in developed nations.
Speaker 5 (04:26):
Starting today, the United States will no longer subsidize the
healthcare of foreign countries, countries where they paid a small
fraction of what for the same drug that what we
pay many many times more for, and were no longer
tolerate profiteering and price gouging from Big farmer. But again,
it was really the countries that forced big farmer to
(04:49):
do things that, frankly, I'm not sure they really felt
comfortable doing.
Speaker 2 (04:53):
President Trump suggesting that other countries should pay more for medicines.
Shares of Farm's futul companies have rebounded in Asia this
morning after the S and P five hundred Pharmaceutical and
Biotech Index, which includes names like Gilead Sciences, Murk and
Eli Lilly, close up three point seven percent on Monday.
Speaker 1 (05:12):
Counter terrorism officers are leading an investigation into a fire
at a home owned by the Prime Minister in North London.
Emergency services were called to the property in the early
hours on Monday, but nobody was hurt. The building has
been targeted by protesters in the past. Three people were
convicted of public order offenses last year after carrying out
a pro Palestine demonstration outside. While the home is owned
(05:34):
by Kerstarmar he has not lived there since taking office
last year. Police now say they're looking at whether two
other fires last week could be connected to the blaze.
Speaker 2 (05:44):
And lastly, could artificial intelligence be the secret to more
efficient phone charging. Apple thinks that the technology could answer
a frequent source of customer frustration, the iPhone's battery life.
Bloombig cba Adebayo has the story.
Speaker 6 (06:00):
Howard battery management mode is set to be included in
the latest iPhone software update, due in September. Bloomberg understands
the enhancement will analyze device use and make adjustments to
conserve energy. The move is part of Apple's ongoing bid
to integrate AI into its core features, building on the
first version of Apple Intelligence, which rolled out last year.
(06:21):
Behind the push for battery efficiency is the soon to
be released slimmed down iPhone seventeen, which will have fewer
hours of life due to its size. In London to
at a bio Bloomberg Radio and.
Speaker 1 (06:33):
Those are our top stories and a moment more on
that promise by UK pension funds to invest more here
in Britain, plus the US China tariff cut which turbocharged
global markets. With another story that caught her eye this morning, Carlin.
Recently I did one of those things where you clean
out that drawer of technology that you just kind of
gather as it just.
Speaker 2 (06:51):
A draw I've got buckets and buckets of tech at home.
Speaker 1 (06:54):
But again marveling at how small my old phone was
versus the one that I have now. And this is
a trend, perhaps not smaller, but definitely thinner phones are
coming back. The latest model from Samsung going to be
thirty percent thinner. This is the S twenty five edgephone,
and sort of creates a nostalgia around Do you remember
(07:14):
when phones used to be tiny? Yeah, not to change ourselves,
of course, Kyline the nock your.
Speaker 2 (07:19):
Eight to ten comes to mind. It was absolutely tiny,
the buttons were minute, and look, I think this is
amazing that the phones are going to be thinner and thinner,
and yet of course the perennial problem of never having
a pocket large enough for your phone.
Speaker 1 (07:32):
It gives me a strange sense of like, I feel
like my hands are giant when I've changed the size
on my phone because I keep dropping it ab it's
the wrong size. And I mean, it's worrying how much
you've become accustomed to holding one piece of technology in
your handholes.
Speaker 2 (07:44):
Yeah, and it is the race to also lighter phones
as well. I mean, okay, so the S twenty five
from Samsung is coming out, but then we know that
the iPhone, the latest version, is going to come out
later this year, and surely that will also be a
point of competition. BS phones getting lighter, thinner and with.
Speaker 1 (08:01):
Good battery life, which is the other challenge of course,
as well as we've been reporting. We'll put a link
to that article in our podcast show notes. Well, now,
the Chancellor ray To Reeves is unveiling a new mansion
house accord today with the pension industry that could possibly
unlock as much as fifty billion pounds of investment into
the UK. Seventeen large workplace pension providers have pledged to
voluntarily invest ten percent of assets into private markets and
(08:24):
five percent specifically in the UK, joining US now for more,
our asset management reporter Leo Ken share earlier, Good morning.
What is in this agreement and what is it aiming
to do? Yes, good morning, Stephen. So the large pension
providers you know, names like Aviva Legal and General Phoenix,
they have all signed up to this voluntary commitment to
invest ten percent of their assets into private markets, half
(08:47):
of which or five percent of the total would be
going to the UK, so to you know, on list
of businesses and also infrastructure projects and MNG one of
the signatories. They have actually sent over some helpful examples
of what they already doing, so you know, their lender
to Gales, the rather nice bakery chain, if I may
say that, and Belfast International Airport, and essentially that's what
(09:09):
the government wants to see more of. And I think
it's really important to note that this is definitely a
step up. The initial compact was signed than a little
less than two years ago with the previous Conservative government
and there the goal was to invest five percent into
private markets, and now that's up to ten percent. There's
more signatories as well, and there's also a specific allocation
(09:31):
to the UK.
Speaker 2 (09:33):
So, as you say, it's focused on private assets, so
it doesn't include listed stocks I suppose. My question is
why not? And it's voluntary not mandatory.
Speaker 1 (09:42):
Why Yes, that's a good point.
Speaker 7 (09:44):
So the goal of the accord is really to boost
companies and projects that don't have the access to significant
capital that a member of the foot Sea one hundred
sort of already has and a really important point to
make here, uh. In the in the new agreement, it
says if pension funds buy shares in companies listed on
(10:06):
the London Stock Stock Exchanges aim Market for growth companies
and also from aquis in another exchange for smaller companies basically,
then that will count toward their allocation target into UK
private markets.
Speaker 1 (10:19):
So it's it's it's quite fascinating.
Speaker 7 (10:21):
That they've found they found a way here to include
a sizable part of the of the stock market here.
Speaker 1 (10:27):
One of the criticisms that has been made of the
previous version of this acord is that it was voluntary
and not mandatory. This still isn't going to be a
mandatory commitment from these funds.
Speaker 7 (10:37):
No, that's that's right, And I think the key issue
is the fugutiary duty of the trustees of the of
those pension funds. You know, they have to act in
the best interests of their customers make the best possible investments,
and being forced to invest in a particular sector or region,
you know, really runs against that. And it's quite interesting
also in the statement of Treasury said, you know, programs
(10:59):
progress against that voluntary commitment will be monitored and the
initiative will be reinforced by measures to be announced in
the upcoming final report of the Pensions Investment Review. So
that doesn't sound like outright mandation, but it sounds a
bit like a backstop where the government plans potentially legislation
that will allow it to tell pension funds, you know,
(11:19):
if you don't follow through with your commitments, we can
make you do it.
Speaker 2 (11:23):
That's interesting, isn't it that they're being pressed a little
bit harder. But then the question is whether it will
really work. So the first mansion house compact, they did
a review after a year, and actually it was it
was the ABI that did a review, and they hadn't
found that it had made a huge difference. They said
that there were quite a lot of barriers actually to investment,
(11:45):
and there's also quite a big kind of get out
of free jail card. I suppose assuming a sufficient supply
of suitable investable assets.
Speaker 7 (11:54):
Yes, that's a great that's a very great point. And
this is you know what most asset managers and pension
funds I talk to keep telling me. You know, it
comes down to having that pipeline of investable assets. And
this ultimately depends on other government policies, you know, like
the Industrial strategy, you know, where the government identifies priority
sectors for growth, and also the planning reform that's supposed
(12:16):
to make it easier to build more homes in this country.
So ultimately the ball is again with the government and
the government's call.
Speaker 1 (12:24):
Okay, Leo Kenchapper, Asset Management reporter, thank you very much
for joining us.
Speaker 2 (12:28):
Now, let's move on and talk about US. China. Chi
Jinping's decision to stand firm against Donald Trump resulted in
a massive de escalation in taris. The Chinese president has
been speaking this morning saying that bullying and hegeminism only
lead to isolation and that there are no winners in
tariff wars or trade wars. In a further sign of
(12:48):
the improvement though in relations, China is removing its ban
on Boeing deliveries. Joining us now as our senior editor,
Bill ferries to discuss all of this. So we're a
day on from the tariff deal. We've heard from Xijiping today.
He does seem to clearly come out on top of
the tariff for with the US.
Speaker 8 (13:08):
Yeah, it's hard to see. It's hard to see what
the argument is for what the US has gotten out
of this when you go back to maybe where the
US was before or on April second, that Liberation Day,
when the Trump administration announced these tariffs on a whole
bunch of countries, but which really started this escalation in
the China China trade war, where tariffs went to thirty
(13:31):
four percent and then up to one hundred and forty
five percent and China responded with one hundred and twenty
five percent tariffs. In return, China's got basically, you know,
back to square one. The tariffs are down to thirty percent.
That's ten percent and the baseline that all countries have
now and additional twenty percent for fentanyl. But you know,
(13:53):
we know both countries were feeling some pain. Chinese factory
orders were down, cargo ships orders were declining as well,
and the US was looking at the potential of good shortages.
So both sides had a lot of reason to go
into these talks in Switzerland. But it does seem that
China's gotten most of its demands and that Chi Jinping's
policy of basically standing firm worked out pretty well for him.
Speaker 1 (14:17):
So what does that mean about the strategy from here?
We've just had this news that China's removing this month
long band that it had on airlines taking delivery of
Boeing planes. So that's clearly a sign of China moving
towards the US on this as well. But in terms
of what we think about next, where should we be looking.
Speaker 8 (14:35):
Well, there's supposed to be this ninety day window where
they continue to talk, for instance, about things like the
actions against the fentanyl precursor producers. If the US sees
progress on that front, you have the potential for up
to twenty percent of these extra tariffs coming off of China.
So that's one area I think both sides will try
(14:56):
to make some progress there. Scott Bessent, the Treasury Secretary,
say that he sees the ten percent tariff at this
point as the floor on China. It's the floor on
every country, even that the deal they announced last week
with the UK includes the ten percent tariff. I think
we'll continue to see some of these sectoral tariffs, and
you could see tweaks in that. Donald Trump has changed
(15:17):
his tariff policy a lot in the last few months.
So whether China stays at thirty percent may depend on
how well talks are going or not.
Speaker 1 (15:27):
Going.
Speaker 8 (15:27):
But I think one thing that has come out of
this that both sides would applaud is that there is
this channel for negotiation now that's been created with Scott
Bessett and Jamison Greer and their counterparts from Beijing. That's
I think a channel that's expected to stay open and
continue talking.
Speaker 2 (15:46):
And lastly, of course, markets hugely relieved at de escalation,
and China may well be able to hit its growth target.
Five percent growth target looks perhaps a bit more possible. Yeah.
Speaker 8 (15:58):
Absolutely, we saw ing upgrade their target to about four
point seven percent for Chinese GDP. I was looking at
the SMP before coming in here. It's basically at the
level it was at I think in November around election
day last year. So a lot of the losses have
been wiped out so far. But again it's you have
to wonder kind of what the US has gotten out
(16:19):
of this. I think that endgame remains to be seen.
Speaker 1 (16:24):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (16:30):
Look for us on your podcast feed every morning on Apple,
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Speaker 1 (16:36):
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Speaker 2 (16:42):
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Speaker 1 (16:50):
I'm Caroline Hepka and I'm Stephen Carol. Join us again
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your day right here on Bloomberg day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
This is the BlueBag Day BAKR podcast failable every morning
on Apple, Spotify or wherever you listen. It's Tuesday, the
thirteenth of May in London. I'm Caroline Hepka.
Speaker 1 (00:18):
And I'm Stephen Carroll. Coming up today. UK pension funds
agree to invest at least five percent of their assets
in Britain in a win for the Chancellor.
Speaker 2 (00:26):
Rachel Reeves, the S and B five hundred and NASAK
make huge gains as US China tariff cuts fuel, the
return of a Buy America trade.
Speaker 1 (00:35):
Glass, police investigator, fire at Prime Minister Kier Starmer's house,
and possible links to two other blazers.
Speaker 2 (00:41):
Let's start with a roundup of our top stories.
Speaker 1 (00:44):
Britain's largest pension funds are agreeing to invest at least
five percent of their assets at home in a new
deal with the labor government. The seventeen funds who've signed
up to the Mansion House Accords say the deal will
inject as much as fifty billion pounds of new investment
over the next five years. Bloomberg's James Wilcock has more.
Speaker 3 (01:02):
It sets funds who manage nine to ten UK savers,
direct contribution pension pots a target keep five percent of
your assets in Britain's private markets. It's a significant amount
of money, but it is voluntary and it's not the
first use of the name. A previous mansion House Compact,
signed two years ago, has been criticized for only leading
(01:24):
to a limited amount of investment. This new version comes
as the government weighs legally forcing funds to invest more
domestically as it seeks more money for infrastructure projects in London.
James Wilcock Bloomberg Radio.
Speaker 2 (01:38):
Global stocks have made huge gains on optimism that the
decision to slash US China reciprocal tariffs for ninety days
marks the end of an all our trade war. The
S and P five hundred jump to three point three
percent to take it back above the level when President
Trump first announced those sweeping global levies on the second
of April. Meanwhile, a surge in Big Text put then
(02:00):
as that one hundred back into a bull market, just
about a month after it plunged twenty percent from a
previous record high. Investors also moved out of defensive positions
and reduced expectations for Federal Reserve interest rate cuts. Kathy Jones,
chief fixed income strateist that Charles Schwab says there is
reason for traders to feel more confident.
Speaker 4 (02:22):
The market has been so valerable because it keeps trying
to recalibrate what the outlook is right and now it
seems as if the worst case scenario is probably behind
us because China was the big one to get a
deal with. So if we've dialed back the rhetoric, if
we've dialed back the limit on China, maybe we dial
back limits on everybody else and we get more of
(02:44):
a soft landing.
Speaker 2 (02:45):
Kathy Jones speaking there following the announcement of the US
China trade truce. On the markets right now, the MASCI
Asia Pacific indexes up by four tenths of one percent,
US SOX fifty futures are down two tenths of one percent,
and tenure US treasure yields down one and a half
basis points are trading at four forty six.
Speaker 1 (03:03):
The massive gains across equity markets and the dollar follow
carefully coordinated joint statements issued yesterday from Beijing and Washington.
The US announced it would slash duties on Chinese products
to thirty percent from one hundred and forty five percent
for a ninety day period, while Beijing reduced its levy
on most US goods to ten percent. The rollback in
(03:24):
tariff s appears to validate Cheating Ping's decision to stand
firm against Donald Trump's tariff offensive. Speaking this morning, the
Chinese president warns that acts of coercion and dominance ultimately
lead to isolation. May there are no winners in tariff
wars or trade wars. Bullying or through hegeminism only leads
(03:45):
to self isolation. The Chinese President's remark, spoken thereby a translator,
come as President Trump said he could speak with she
as early asn't it the end of this week, touting
what he called a total reset in US China relations.
Speaker 2 (03:58):
US drug may because meanwhile, have avoided a worst case scenario.
After President Donald Trump signed an executive order asking them
to lower prices for Americans voluntarily. Farm's futuel companies had
feared action on drug prices, but analysts saw the order
as less severe and vague, looking for cuts of between
sixty and ninety percent. President Trump said that the cost
(04:21):
of US drugs should match the lowest prices in developed nations.
Speaker 5 (04:26):
Starting today, the United States will no longer subsidize the
healthcare of foreign countries, countries where they paid a small
fraction of what for the same drug that what we
pay many many times more for, and were no longer
tolerate profiteering and price gouging from Big farmer. But again,
it was really the countries that forced big farmer to
(04:49):
do things that, frankly, I'm not sure they really felt
comfortable doing.
Speaker 2 (04:53):
President Trump suggesting that other countries should pay more for medicines.
Shares of Farm's futul companies have rebounded in Asia this
morning after the S and P five hundred Pharmaceutical and
Biotech Index, which includes names like Gilead Sciences, Murk and
Eli Lilly, close up three point seven percent on Monday.
Speaker 1 (05:12):
Counter terrorism officers are leading an investigation into a fire
at a home owned by the Prime Minister in North London.
Emergency services were called to the property in the early
hours on Monday, but nobody was hurt. The building has
been targeted by protesters in the past. Three people were
convicted of public order offenses last year after carrying out
a pro Palestine demonstration outside. While the home is owned
(05:34):
by Kerstarmar he has not lived there since taking office
last year. Police now say they're looking at whether two
other fires last week could be connected to the blaze.
Speaker 2 (05:44):
And lastly, could artificial intelligence be the secret to more
efficient phone charging. Apple thinks that the technology could answer
a frequent source of customer frustration, the iPhone's battery life.
Bloombig cba Adebayo has the story.
Speaker 6 (06:00):
Howard battery management mode is set to be included in
the latest iPhone software update, due in September. Bloomberg understands
the enhancement will analyze device use and make adjustments to
conserve energy. The move is part of Apple's ongoing bid
to integrate AI into its core features, building on the
first version of Apple Intelligence, which rolled out last year.
(06:21):
Behind the push for battery efficiency is the soon to
be released slimmed down iPhone seventeen, which will have fewer
hours of life due to its size. In London to
at a bio Bloomberg Radio and.
Speaker 1 (06:33):
Those are our top stories and a moment more on
that promise by UK pension funds to invest more here
in Britain, plus the US China tariff cut which turbocharged
global markets. With another story that caught her eye this morning, Carlin.
Recently I did one of those things where you clean
out that drawer of technology that you just kind of
gather as it just.
Speaker 2 (06:51):
A draw I've got buckets and buckets of tech at home.
Speaker 1 (06:54):
But again marveling at how small my old phone was
versus the one that I have now. And this is
a trend, perhaps not smaller, but definitely thinner phones are
coming back. The latest model from Samsung going to be
thirty percent thinner. This is the S twenty five edgephone,
and sort of creates a nostalgia around Do you remember
(07:14):
when phones used to be tiny? Yeah, not to change ourselves,
of course, Kyline the nock your.
Speaker 2 (07:19):
Eight to ten comes to mind. It was absolutely tiny,
the buttons were minute, and look, I think this is
amazing that the phones are going to be thinner and thinner,
and yet of course the perennial problem of never having
a pocket large enough for your phone.
Speaker 1 (07:32):
It gives me a strange sense of like, I feel
like my hands are giant when I've changed the size
on my phone because I keep dropping it ab it's
the wrong size. And I mean, it's worrying how much
you've become accustomed to holding one piece of technology in
your handholes.
Speaker 2 (07:44):
Yeah, and it is the race to also lighter phones
as well. I mean, okay, so the S twenty five
from Samsung is coming out, but then we know that
the iPhone, the latest version, is going to come out
later this year, and surely that will also be a
point of competition. BS phones getting lighter, thinner and with.
Speaker 1 (08:01):
Good battery life, which is the other challenge of course,
as well as we've been reporting. We'll put a link
to that article in our podcast show notes. Well, now,
the Chancellor ray To Reeves is unveiling a new mansion
house accord today with the pension industry that could possibly
unlock as much as fifty billion pounds of investment into
the UK. Seventeen large workplace pension providers have pledged to
voluntarily invest ten percent of assets into private markets and
(08:24):
five percent specifically in the UK, joining US now for more,
our asset management reporter Leo Ken share earlier, Good morning.
What is in this agreement and what is it aiming
to do? Yes, good morning, Stephen. So the large pension
providers you know, names like Aviva Legal and General Phoenix,
they have all signed up to this voluntary commitment to
invest ten percent of their assets into private markets, half
(08:47):
of which or five percent of the total would be
going to the UK, so to you know, on list
of businesses and also infrastructure projects and MNG one of
the signatories. They have actually sent over some helpful examples
of what they already doing, so you know, their lender
to Gales, the rather nice bakery chain, if I may
say that, and Belfast International Airport, and essentially that's what
(09:09):
the government wants to see more of. And I think
it's really important to note that this is definitely a
step up. The initial compact was signed than a little
less than two years ago with the previous Conservative government
and there the goal was to invest five percent into
private markets, and now that's up to ten percent. There's
more signatories as well, and there's also a specific allocation
(09:31):
to the UK.
Speaker 2 (09:33):
So, as you say, it's focused on private assets, so
it doesn't include listed stocks I suppose. My question is
why not? And it's voluntary not mandatory.
Speaker 1 (09:42):
Why Yes, that's a good point.
Speaker 7 (09:44):
So the goal of the accord is really to boost
companies and projects that don't have the access to significant
capital that a member of the foot Sea one hundred
sort of already has and a really important point to
make here, uh. In the in the new agreement, it
says if pension funds buy shares in companies listed on
(10:06):
the London Stock Stock Exchanges aim Market for growth companies
and also from aquis in another exchange for smaller companies basically,
then that will count toward their allocation target into UK
private markets.
Speaker 1 (10:19):
So it's it's it's quite fascinating.
Speaker 7 (10:21):
That they've found they found a way here to include
a sizable part of the of the stock market here.
Speaker 1 (10:27):
One of the criticisms that has been made of the
previous version of this acord is that it was voluntary
and not mandatory. This still isn't going to be a
mandatory commitment from these funds.
Speaker 7 (10:37):
No, that's that's right, And I think the key issue
is the fugutiary duty of the trustees of the of
those pension funds. You know, they have to act in
the best interests of their customers make the best possible investments,
and being forced to invest in a particular sector or region,
you know, really runs against that. And it's quite interesting
also in the statement of Treasury said, you know, programs
(10:59):
progress against that voluntary commitment will be monitored and the
initiative will be reinforced by measures to be announced in
the upcoming final report of the Pensions Investment Review. So
that doesn't sound like outright mandation, but it sounds a
bit like a backstop where the government plans potentially legislation
that will allow it to tell pension funds, you know,
(11:19):
if you don't follow through with your commitments, we can
make you do it.
Speaker 2 (11:23):
That's interesting, isn't it that they're being pressed a little
bit harder. But then the question is whether it will
really work. So the first mansion house compact, they did
a review after a year, and actually it was it
was the ABI that did a review, and they hadn't
found that it had made a huge difference. They said
that there were quite a lot of barriers actually to investment,
(11:45):
and there's also quite a big kind of get out
of free jail card. I suppose assuming a sufficient supply
of suitable investable assets.
Speaker 7 (11:54):
Yes, that's a great that's a very great point. And
this is you know what most asset managers and pension
funds I talk to keep telling me. You know, it
comes down to having that pipeline of investable assets. And
this ultimately depends on other government policies, you know, like
the Industrial strategy, you know, where the government identifies priority
sectors for growth, and also the planning reform that's supposed
(12:16):
to make it easier to build more homes in this country.
So ultimately the ball is again with the government and
the government's call.
Speaker 1 (12:24):
Okay, Leo Kenchapper, Asset Management reporter, thank you very much
for joining us.
Speaker 2 (12:28):
Now, let's move on and talk about US. China. Chi
Jinping's decision to stand firm against Donald Trump resulted in
a massive de escalation in taris. The Chinese president has
been speaking this morning saying that bullying and hegeminism only
lead to isolation and that there are no winners in
tariff wars or trade wars. In a further sign of
(12:48):
the improvement though in relations, China is removing its ban
on Boeing deliveries. Joining us now as our senior editor,
Bill ferries to discuss all of this. So we're a
day on from the tariff deal. We've heard from Xijiping today.
He does seem to clearly come out on top of
the tariff for with the US.
Speaker 8 (13:08):
Yeah, it's hard to see. It's hard to see what
the argument is for what the US has gotten out
of this when you go back to maybe where the
US was before or on April second, that Liberation Day,
when the Trump administration announced these tariffs on a whole
bunch of countries, but which really started this escalation in
the China China trade war, where tariffs went to thirty
(13:31):
four percent and then up to one hundred and forty
five percent and China responded with one hundred and twenty
five percent tariffs. In return, China's got basically, you know,
back to square one. The tariffs are down to thirty percent.
That's ten percent and the baseline that all countries have
now and additional twenty percent for fentanyl. But you know,
(13:53):
we know both countries were feeling some pain. Chinese factory
orders were down, cargo ships orders were declining as well,
and the US was looking at the potential of good shortages.
So both sides had a lot of reason to go
into these talks in Switzerland. But it does seem that
China's gotten most of its demands and that Chi Jinping's
policy of basically standing firm worked out pretty well for him.
Speaker 1 (14:17):
So what does that mean about the strategy from here?
We've just had this news that China's removing this month
long band that it had on airlines taking delivery of
Boeing planes. So that's clearly a sign of China moving
towards the US on this as well. But in terms
of what we think about next, where should we be looking.
Speaker 8 (14:35):
Well, there's supposed to be this ninety day window where
they continue to talk, for instance, about things like the
actions against the fentanyl precursor producers. If the US sees
progress on that front, you have the potential for up
to twenty percent of these extra tariffs coming off of China.
So that's one area I think both sides will try
(14:56):
to make some progress there. Scott Bessent, the Treasury Secretary,
say that he sees the ten percent tariff at this
point as the floor on China. It's the floor on
every country, even that the deal they announced last week
with the UK includes the ten percent tariff. I think
we'll continue to see some of these sectoral tariffs, and
you could see tweaks in that. Donald Trump has changed
(15:17):
his tariff policy a lot in the last few months.
So whether China stays at thirty percent may depend on
how well talks are going or not.
Speaker 1 (15:27):
Going.
Speaker 8 (15:27):
But I think one thing that has come out of
this that both sides would applaud is that there is
this channel for negotiation now that's been created with Scott
Bessett and Jamison Greer and their counterparts from Beijing. That's
I think a channel that's expected to stay open and
continue talking.
Speaker 2 (15:46):
And lastly, of course, markets hugely relieved at de escalation,
and China may well be able to hit its growth target.
Five percent growth target looks perhaps a bit more possible. Yeah.
Speaker 8 (15:58):
Absolutely, we saw ing upgrade their target to about four
point seven percent for Chinese GDP. I was looking at
the SMP before coming in here. It's basically at the
level it was at I think in November around election
day last year. So a lot of the losses have
been wiped out so far. But again it's you have
to wonder kind of what the US has gotten out
(16:19):
of this. I think that endgame remains to be seen.
Speaker 1 (16:24):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (16:30):
Look for us on your podcast feed every morning on Apple,
Spotify and anywhere else you get your podcasts.
Speaker 1 (16:36):
You can also listen live each morning on London DAB Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:42):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
Speaker 1 (16:50):
I'm Caroline Hepka and I'm Stephen Carol. Join us again
tomorrow morning for all the news you need to start
your day right here on Bloomberg day Break Europe
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