August 29, 2025 • 20 mins
Your morning briefing, the business news you need in just 15 minutes
On today's podcast:
(1) German Chancellor Friedrich Merz says a meeting between Ukrainian President Volodymyr Zelenskiy and Russia’s Vladimir Putin is unlikely to materialize, even though it was touted earlier by President Donald Trump.
(2) European powers referred Iran to the United Nations to face the re-imposition of tough international sanctions after the Islamic Republic failed to comply with demands to negotiate with the US and allow nuclear inspectors to resume their work.
(3) Federal Reserve Governor Christopher Waller again called for lower interest rates, saying he would support a quarter-percentage point reduction in September and anticipates additional cuts over the next three to six months.
(4) A solid economic reading drove stocks to fresh all-time highs, but Wall Street traders refrained from making big moves before inflation data that could bring more clues on the pace of Federal Reserve rate cuts. Short-dated Treasury yields rose. The dollar fell.
(5) Lobbyists are lining up to attend Reform UK’s annual conference next week in a sign corporate Britain is increasingly taking Nigel Farage’s outfit seriously as an electoral force.
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Daybreak you're at podcast Good morning,
It's finding the twenty ninth of August.
Speaker 1 (00:14):
I'm Caroline Hepga in London. Coming up today.
Speaker 2 (00:17):
Germany's Mertz pours cold water on a Putin Zelinsky meeting
as a devastating strike kills more than twenty people and
damages the EU's Ukraine headquarters. The fired's Christopher Wallace says
he would support a quarter point rate reduction as he
opens the door to going further and stocks hit a
new record high, plus reforming its appeal to business. Polling
(00:41):
shared exclusively with Bloomberg shows lobbyists are lining up to
attend the annual conference of Nigel Farage's populist party. Let's
start with a roundup of our top stories. A meeting
between Ukrainian President Vladimizolinsky and Russia's Vladimir Putin is unlikely
to happen, according to the German chance Friedrich Mertz. US
President Donald Trump had talked up the possibility of a
(01:04):
gathering of the two leaders after he held talks with
Putin in Alaska, but during a conference with the French president,
I man who in Macot. Mertz told reporters that a
meeting is highly unlikely, so.
Speaker 1 (01:16):
Try it the Causen farm.
Speaker 3 (01:19):
But tonight we also want to talk again just the
two of us about the big issues of our time,
because we have some tasks that we can only solve together. Unfortunately,
this includes Russia's ongoing war against Ukraine. We must revisit
this issue today, given that it is clear that a
meeting between President Zelenski and President Putin will not take place.
(01:41):
This is in contrast to what was agreed between President
Trump and President Putin last week when we were together
in Washington.
Speaker 2 (01:49):
Metis comment and spoken there via a translator. Follow the
deadliest Russian air strikes on Kiev since July, in which
more than twenty people, including several children, were killed, a
European Union office and a British Council building in the
capitol have also been damaged in the attack, the EU
Commission president as Ondulion says the onslaught shows the scale
(02:10):
of Russia's threat to Europe.
Speaker 4 (02:12):
It shows that the Kremlin will stop at nothing to
terrorize Ukraine, blindly killing civilians, men, women and children, and
even targeting the European Union. This is why we are
keeping maximum pressure on Russia. That means tightening our sanctions
regime as sort of onderliance.
Speaker 2 (02:31):
Comments were echoed by the UK Prime Minister Kis Starmer,
who condemned the quote senseless Russian attack on Kiev. The
US has approved Ukraine's requests to buy thousands of long
range missiles worth up to eight hundred and twenty five
million dollars and funded NATO allies. The approval marks the
first formal use of a new mechanism that President Donald
(02:54):
Trump approved to allow nations to buy American weaponry for Ukraine. France,
Germany and the UK have referred Iran to the United
Nations to face the reimposition of international sanctions over its
nuclear program. According to the European Powers, the Islamic Republic
failed to comply with demands to negotiate with the US
(03:14):
and allow nuclear inspectors to resume their work. Europe's biggest
economies told the UN Security Council that they triggered a
thirty date snapback process that would reinstate sanctions originally lifted
as part of a twenty fifteen deal. Iran has threatened
to leave the International Treaty on nuclear non proliferation. If
UN sanctions resume, such a move would permanently throttle nuclear
(03:38):
inspections and also create deeper ambiguity about Iran's atomic activities.
The European Union has adopted draft regulations to remove all
tariffs on US industrial goods, following a demand from President Trump.
According to the European Commission, the move, which also gives
preferential treatment to some US agricultural products, pave the way
(04:01):
for the US to reduce its tariffs on European cars
and auto parts down to fifteen percent from twenty seven percent.
The proposal is still subject to parliamentary approval, though, but
Bloomberg understands that the EU expects that the US will
be able to lower its levees on the region immediately.
Let's get to the central Bank in the US, so
(04:22):
the Federal Reserve Governor, Christopher Wallace says that he would
support a twenty five basis point rate cut in September,
and he expects further cuts in the coming months. Waller,
whom the Trump administration is considering as a candidate to
replace current chair Jerown Powell, added that he's leaving the
door open to a Jombo half point rate card if
(04:42):
the data points to a significant deterioration in US growth.
Here is what he told an audience at an event
that was hosted by the Economic Club of Miami.
Speaker 5 (04:52):
Well, I judge that THEIRFORMC should have begun this process
in July based on the data in hand, I don't
believe that a cut of larger than twenty five basis
points is needed in September. Now. That view, of course,
could change if the employment report for August do out
a week from tomorrow points to or substantially weakening economy
and inflation remains well contained.
Speaker 2 (05:14):
Christopher Waller. His comments are the first by a top
FED official since President Trump moved this week to fire
fellow Central Bank Governor Lisa Cook. The Fed has kept
US interest rates unchanged so far in twenty twenty five. Yesterday,
FED Governor Lisa Cook sued to block what she called
President Trump's illegal attempt to remove her, saying that he
(05:37):
has no cause and denied her due process. The case
centers on allegations that she listed to homes as her
primary residence in twenty twenty one, therefore gaining better mortgage terms.
Her lawyer suggests this may have been an unintentional clerical
error and was not done with the intention to deceive.
Cook's lawsuit also says that the attempt to remove both
(06:00):
her and her own palell are part of President Trump's
efforts to seize control of the Federal Reserve as part
of his campaign to lower rates. Despite growing concerns over
the Trump administration's efforts to erode FED independence, solid US
economic figures helped drive stocks for a record high yesterday,
(06:20):
with the S and P five hundred above six five
hundred points for the first time ever, just twenty four
hours ahead of the release of the Fed's favored price gauge.
Data shows the US economy expanded faster than had initially
been estimated. Inflation adjusted GDP increased at a three point
three percent pace in the second quarter, underscoring the resilience
(06:43):
of America's primary growth engine, consumer spending and lostly Here
in the UK, a think tank says that the Chancellor
should raise billions of pounds of much needed revenue by
imposing a windfall tax on commercial lenders bigs and pots.
Speaker 6 (07:00):
Has more The plans from the left leaning Institute for
Public Policy Research says the government should look to recover
the profits banks are making from taxpayers on deposits held
at the Bank of England. It says high street lenders
have enjoyed a quote staggering state subsidy on the BOE's
QE program in recent years. Across the current five year
parliamentary term. The report suggests the treasurre we could raise
(07:21):
a total of thirty two point three billion.
Speaker 2 (07:24):
Pounds in London. I'm you in pots Bloomberg Radio and
those are our top stories for you this morning. Let's
have a think about the markets. We are awaiting cover
of big earnings out of China, Ali Baba and byd.
Chinese equities have extended this incredible run in August, but
then also we saw the S and p F one
hundred close of the record high, as I mentioned just
there earlier yesterday. In terms of stop futures, we're down
(07:45):
for the S and P FI one hundred and tenth
of one percent. Yust swifty futures are also nursing losses
this as in the bond markets, it's just an incredible week.
This has been a real pivotal point. The political pressure
on the fared only mounting, but bond markets really are
still very sanguine about this ten year US yields are
trading upper basis point at four twenty one, thirty year
(08:06):
yields trading at four eighty eight also hire only a
basis point today, and then thinking about the dollar, which
had seen losses for three successive sessions, the Blue Big
Dollar Spot index this morning is actually firmer a tenth
of one percent.
Speaker 1 (08:22):
Now, in a moment, we're going to talk more about our.
Speaker 2 (08:25):
Exclusive reporting that shows that the UK business community is
increasingly taking Nigel Farage's Reform Party seriously as an elector force,
a special report here for Bloomberg Radio. But I also
want to dig into today's top story. German Chancellor Friedrich
Mertz says that there is obviously not going to be
(08:45):
a meeting between President Zelinsky and President Putin to resolve
the war in Ukraine, even as Russia launched a major
air attack on Kiev in defiance of the US's please
to end the fighting. Our head of Middle East and
North Africa coverage, Suitt Livingston Wallace joins US Now for
more on this.
Speaker 1 (09:04):
Su At Good Morning, the White.
Speaker 2 (09:06):
House Press Secretary says that Trump is quote not happy
with Putin, but then equally she framed the latest Russian
air strike as a response to Ukraine's Russia oil refinery
at Chacks. What is the state of the conflict now,
and also very importantly of US military support for Ukraine.
Speaker 7 (09:25):
Very good morning. So I mean, I think there is
quite a significant change here going on, certainly in terms
of the front line. So it's really, I suppose a
combination of things. And you can start, let's say, with
the US, which has to some extent resumed supplies to Ukraine.
That's making quite a big difference. Secondarily, you're seeing more
munitions coming in from the Europeans into Ukraine, and that's
sort of giving them the ability to counter the previous
(09:50):
Russian strategy of sort of wave after wave of soldiers
being sent into specific areas to try and break through
the front lines. But I think the third thing, and
perhaps the most certainly, is a change in the Russian strategy.
So you've seen a sort of a shift away from
those waves of soldiers coming in too much more incremental
moves by smaller groups of soldiers, combined with quite a
(10:12):
significant change in the air war strategy. And you know,
as you mentioned, there have been some very significant attacks
with sort of hundreds of drones combined with missile attacks
coming in simultaneously as a way of trying to overwhelm
the Ukrainian defenses. And it is having some effects, certainly
in terms of the amount of damage being caused in Ukraine.
And that is a function I think of a change
in the Russian manufacturing strategy. So previously they would bring
(10:36):
in pretty much, you know, completed drones from some of
their suppliers, notably Iran, and what seems to have changed
is they are still bringing in the components, but they're
putting them together themselves, and that makes it much much
more difficult to disrupt the supply chains. So they have
a lot more equipment to throw at the Ukrainians in
one go. Simultaneously, they are running out of the stockpiles
(10:59):
that they accumulated over many decades of sort of the
older military equipment right back to the Soviet era.
Speaker 2 (11:04):
So then, on the comments that I mentioned from Mafriedrich
Mertz openly critical a President Trump's peace push in Ukraine.
This was at a dinner with the French president in Macon.
What at this stage, with all of these moving parts, then,
is the European strategy on Ukraine.
Speaker 1 (11:22):
If there is one.
Speaker 7 (11:23):
I mean, I think it's been reasonably consistent in the
last searching of the last several months and in the
last several years. I mean, the amount of aid going
from Europe into Ukraine has been substantial, and I think
the water date we're looking at something like sixty billion
euros in aid one way or another, and just sort
of to give you a flavor of the scale of it,
(11:44):
the EU has pledged to provide Ukraine with something like
two million rounds of ammunition in twenty five so it
is large scale. At the same time, you're seeing some
very interesting developments in terms of the Europeans willingness to
fund purchases from elsewhere. So there was a very interesting
thing overnight where we've had preliminary approval from the State
Department to supply Ukraine with something like just I think
(12:07):
it's just over three thousand long range missiles to Ukraine,
a big chunk of which will be paid for by Denmark,
the Netherlands and Norway. So that is also new now
that still has to go to Congress for approval, but
it looks pretty likely. So I would say the scale
of the U intervention is still pretty large and is
having some impact.
Speaker 2 (12:29):
What about President Trump and these very serious consequences that
he has threatened. I suppose the risk for Putin is
that President Trump does actually act against Russia, perhaps quite suddenly.
Speaker 7 (12:41):
I think you're absolutely right, and I think we've got
a flavor of that with the way that it dealt
with India, you know, one of the big purch purchases
of Russian oil with these you know, the tariffs, and
you have seen a very small incremental but nonetheless I
think significant change in terms of the Russian oil flows
out now risk here for the US's you know, the
(13:02):
US president's intent on bringing down interest rates, and in
an environment where you know he puts secondary sanctions, very
harsh secondary sanctions on any buyers of Russian commodities, you're
going to see you would have thought some increase in
the energy price, perhaps quite significant, and other commodities, and
then that has an inflationary impact, and it makes it
(13:23):
much more difficult than to lower interest rates. So there
is a domino effect here that he's going to have
to be mindful of. But I think you're absolutely right
that you've already started to see signs of that, and
there is no doubt that I think there is a
great deal of frustration on the US side that even
after the summit in Alaska, they appeared to be no
further forward than where they were several months ago.
Speaker 1 (13:43):
Stuart, thank you so much for being with me.
Speaker 2 (13:45):
Suet living Ston Wallace is our head of Middle East
and North Africa coverage with the latest when it comes
to Ukraine.
Speaker 1 (13:51):
Thank you so much.
Speaker 2 (13:53):
Stay with us. More from Bloomberg Daybakeuobe coming up after this. Okay,
let's get to a story here in the UK. Lobbyists
are lining up to attend Reform UK's annual conference, which
takes place next week. Twenty percent of public affairs executives
are planning to head to Nigel Faraj's event, according to
data obtained exclusively by Bloomberg. It's a sign that corporate
(14:16):
Britain is increasingly taking the Populist Party seriously as an
electoral force.
Speaker 1 (14:21):
Are UK Politics reported.
Speaker 2 (14:22):
James Wacock hasmore and joins me this morning, James, what
does this poll actually show that we've managed to put together?
Speaker 8 (14:30):
I've got my hands on this pole of people who
are in public affairs. This is both lobbying groups but
also any business that is big enough to have a
public relation's wing, so office is, ones that are in
book government, so finance, health, education, these types of areas.
And two years ago only four percent of the three
hundred executives polled went to reform. Last year, twelve percent
(14:53):
this year. Next week at their conference, twenty percent of
those we polled say they will go. That is a
rapid run and puts them very clearly ahead of any
of the minor parties four percent behind the Conservatives, the
other major party in sort of bridge posites on the
right and labor as the government dominate with forty eight percent,
But it quite clearly establishes Reform as someone a party
(15:18):
that is growing in political and business heft. Now I
spoke to Opinion's head they did this poll of public affairs,
James Crouch. He told me for the first time, businesses
are taking reform seriously.
Speaker 1 (15:32):
You can't ignore them anymore. Whether or not this trend continues.
Speaker 9 (15:37):
And whether or not more resource will eventually be put
into them, I think that depends on how how the
headline polling goes over the next year, and will be
looking particularly intenderly at the next local elections, because that
would be the next electoral sign that actually reform are
in contention for government and you definitely won't be able
(15:57):
to ignore them.
Speaker 8 (15:58):
So James corouch there and he and that the key
question for a lot of the people that he was
talking to for this poll was next week what kind
of conference?
Speaker 1 (16:06):
Is it a professional affair?
Speaker 8 (16:09):
Because he s as soon if the trend continues, the
reform could easily rival the Conservatives as one of the
two key fixtures of conference season.
Speaker 2 (16:16):
Yes, which is so fascinating, isn't it. And I also
thought it was very interesting that the poll speaks to small, medium,
and large businesses. It was broken up into lots of
as you say, different sectors of the economy, different scale
of businesses too, which I think gives us some very
kind of granular insights actually into how business thinks about this.
(16:38):
It comes though, as the Labor government faces all of
these tough questions over their credentials about whether or not
they are the party of business. I mean, this was
the thing that we followed in the election campaign.
Speaker 8 (16:49):
I think just this morning there is a report out
from the sort of left wing think tank, the IPPR
talking about a potential windfall tax on banks coming down
on the track. Now, look, no one at this point
knows what is going to be in chance of Rachel
Reeves's autumn budget, but most economists are saying there is
going to be a public issue with the finances and
the one that she will have to fill by raising
(17:10):
taxes or cutting spending somewhere, and that has a lot
of businesses worried that they will be the targets. Now,
the sources in government have told me just this week
that they have taken note of the business response and
they are looking to try and keep UKPLC on side.
Speaker 1 (17:26):
But after last year, where as you.
Speaker 8 (17:29):
Were saying, Karen, all the talk in the literally election
was the smoke salmon offensive and Rachel rees and Keir
Starmer building relations with business, and then there was this
massive rise in national insurance taxes on business and so
a lot of business leaders you've seen in the press
have felt kind of betrayed. This year, the question is
for labor is, especially in this autumn, where we like
to get the employment rights bill as well, what is
(17:51):
the offering to sort of woo business back. Meanwhile, as
we get into conference season, will we see the rival
pictures from other parties?
Speaker 2 (17:58):
Yes, But my question of conference season is also whether
any political party is facing the very difficult questions that
Britain has right of indebtedness of government spending and addressing
those and that is the same very tough question for reform.
It's the question that we put to Nigel Farage when
he spoke to us at the start of this year,
and so again it can Nigel Phage emerge as a
(18:21):
serious contender for prime minister and what does that path
look like?
Speaker 1 (18:26):
To your point, there is curiosity.
Speaker 8 (18:29):
There is deep curiosity in the people that were spoken
to this Poleish commissioned by the Charter Institute for Public Relations,
because they also are members trying to get involved with
Reform House. Everyone's trying to figure out how serious is
this nascent political party, how much hes does it have,
how lobbyable are they, how much influence they have. Business
are asking is this a group that we could work with?
(18:52):
Is this the group that we can influence? And the
other thing I found fascinating is the money is going
there too. The average spend on informs conferences seventeen thousand
per company that we poled. That's half labor the Conservatives,
but their conference is only half in length, so that's
not two out of our older of the three hundred
executives and public affairs we polled, four of their companies
(19:13):
were putting it more than one hundred thousand into reforms
conference next week. So we are finding out that there
is increasingly a risk in not checking out reform. That's
what the CIPR told me. At this point, you'd be
a fool not to.
Speaker 1 (19:28):
This is Bloomberg Daybreak Europe.
Speaker 10 (19:29):
You're a morning brief on the stories making news from
London to Wall Streets and beyond.
Speaker 2 (19:34):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 10 (19:40):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (19:46):
Our flagship New York station is also available on your
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Speaker 1 (19:54):
I'm Caroline Hepka and I'm Stephen Carroll.
Speaker 10 (19:56):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak Europe.
Speaker 1 (20:03):
Mm hm
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloomberg Daybreak you're at podcast Good morning,
It's finding the twenty ninth of August.
Speaker 1 (00:14):
I'm Caroline Hepga in London. Coming up today.
Speaker 2 (00:17):
Germany's Mertz pours cold water on a Putin Zelinsky meeting
as a devastating strike kills more than twenty people and
damages the EU's Ukraine headquarters. The fired's Christopher Wallace says
he would support a quarter point rate reduction as he
opens the door to going further and stocks hit a
new record high, plus reforming its appeal to business. Polling
(00:41):
shared exclusively with Bloomberg shows lobbyists are lining up to
attend the annual conference of Nigel Farage's populist party. Let's
start with a roundup of our top stories. A meeting
between Ukrainian President Vladimizolinsky and Russia's Vladimir Putin is unlikely
to happen, according to the German chance Friedrich Mertz. US
President Donald Trump had talked up the possibility of a
(01:04):
gathering of the two leaders after he held talks with
Putin in Alaska, but during a conference with the French president,
I man who in Macot. Mertz told reporters that a
meeting is highly unlikely, so.
Speaker 1 (01:16):
Try it the Causen farm.
Speaker 3 (01:19):
But tonight we also want to talk again just the
two of us about the big issues of our time,
because we have some tasks that we can only solve together. Unfortunately,
this includes Russia's ongoing war against Ukraine. We must revisit
this issue today, given that it is clear that a
meeting between President Zelenski and President Putin will not take place.
(01:41):
This is in contrast to what was agreed between President
Trump and President Putin last week when we were together
in Washington.
Speaker 2 (01:49):
Metis comment and spoken there via a translator. Follow the
deadliest Russian air strikes on Kiev since July, in which
more than twenty people, including several children, were killed, a
European Union office and a British Council building in the
capitol have also been damaged in the attack, the EU
Commission president as Ondulion says the onslaught shows the scale
(02:10):
of Russia's threat to Europe.
Speaker 4 (02:12):
It shows that the Kremlin will stop at nothing to
terrorize Ukraine, blindly killing civilians, men, women and children, and
even targeting the European Union. This is why we are
keeping maximum pressure on Russia. That means tightening our sanctions
regime as sort of onderliance.
Speaker 2 (02:31):
Comments were echoed by the UK Prime Minister Kis Starmer,
who condemned the quote senseless Russian attack on Kiev. The
US has approved Ukraine's requests to buy thousands of long
range missiles worth up to eight hundred and twenty five
million dollars and funded NATO allies. The approval marks the
first formal use of a new mechanism that President Donald
(02:54):
Trump approved to allow nations to buy American weaponry for Ukraine. France,
Germany and the UK have referred Iran to the United
Nations to face the reimposition of international sanctions over its
nuclear program. According to the European Powers, the Islamic Republic
failed to comply with demands to negotiate with the US
(03:14):
and allow nuclear inspectors to resume their work. Europe's biggest
economies told the UN Security Council that they triggered a
thirty date snapback process that would reinstate sanctions originally lifted
as part of a twenty fifteen deal. Iran has threatened
to leave the International Treaty on nuclear non proliferation. If
UN sanctions resume, such a move would permanently throttle nuclear
(03:38):
inspections and also create deeper ambiguity about Iran's atomic activities.
The European Union has adopted draft regulations to remove all
tariffs on US industrial goods, following a demand from President Trump.
According to the European Commission, the move, which also gives
preferential treatment to some US agricultural products, pave the way
(04:01):
for the US to reduce its tariffs on European cars
and auto parts down to fifteen percent from twenty seven percent.
The proposal is still subject to parliamentary approval, though, but
Bloomberg understands that the EU expects that the US will
be able to lower its levees on the region immediately.
Let's get to the central Bank in the US, so
(04:22):
the Federal Reserve Governor, Christopher Wallace says that he would
support a twenty five basis point rate cut in September,
and he expects further cuts in the coming months. Waller,
whom the Trump administration is considering as a candidate to
replace current chair Jerown Powell, added that he's leaving the
door open to a Jombo half point rate card if
(04:42):
the data points to a significant deterioration in US growth.
Here is what he told an audience at an event
that was hosted by the Economic Club of Miami.
Speaker 5 (04:52):
Well, I judge that THEIRFORMC should have begun this process
in July based on the data in hand, I don't
believe that a cut of larger than twenty five basis
points is needed in September. Now. That view, of course,
could change if the employment report for August do out
a week from tomorrow points to or substantially weakening economy
and inflation remains well contained.
Speaker 2 (05:14):
Christopher Waller. His comments are the first by a top
FED official since President Trump moved this week to fire
fellow Central Bank Governor Lisa Cook. The Fed has kept
US interest rates unchanged so far in twenty twenty five. Yesterday,
FED Governor Lisa Cook sued to block what she called
President Trump's illegal attempt to remove her, saying that he
(05:37):
has no cause and denied her due process. The case
centers on allegations that she listed to homes as her
primary residence in twenty twenty one, therefore gaining better mortgage terms.
Her lawyer suggests this may have been an unintentional clerical
error and was not done with the intention to deceive.
Cook's lawsuit also says that the attempt to remove both
(06:00):
her and her own palell are part of President Trump's
efforts to seize control of the Federal Reserve as part
of his campaign to lower rates. Despite growing concerns over
the Trump administration's efforts to erode FED independence, solid US
economic figures helped drive stocks for a record high yesterday,
(06:20):
with the S and P five hundred above six five
hundred points for the first time ever, just twenty four
hours ahead of the release of the Fed's favored price gauge.
Data shows the US economy expanded faster than had initially
been estimated. Inflation adjusted GDP increased at a three point
three percent pace in the second quarter, underscoring the resilience
(06:43):
of America's primary growth engine, consumer spending and lostly Here
in the UK, a think tank says that the Chancellor
should raise billions of pounds of much needed revenue by
imposing a windfall tax on commercial lenders bigs and pots.
Speaker 6 (07:00):
Has more The plans from the left leaning Institute for
Public Policy Research says the government should look to recover
the profits banks are making from taxpayers on deposits held
at the Bank of England. It says high street lenders
have enjoyed a quote staggering state subsidy on the BOE's
QE program in recent years. Across the current five year
parliamentary term. The report suggests the treasurre we could raise
(07:21):
a total of thirty two point three billion.
Speaker 2 (07:24):
Pounds in London. I'm you in pots Bloomberg Radio and
those are our top stories for you this morning. Let's
have a think about the markets. We are awaiting cover
of big earnings out of China, Ali Baba and byd.
Chinese equities have extended this incredible run in August, but
then also we saw the S and p F one
hundred close of the record high, as I mentioned just
there earlier yesterday. In terms of stop futures, we're down
(07:45):
for the S and P FI one hundred and tenth
of one percent. Yust swifty futures are also nursing losses
this as in the bond markets, it's just an incredible week.
This has been a real pivotal point. The political pressure
on the fared only mounting, but bond markets really are
still very sanguine about this ten year US yields are
trading upper basis point at four twenty one, thirty year
(08:06):
yields trading at four eighty eight also hire only a
basis point today, and then thinking about the dollar, which
had seen losses for three successive sessions, the Blue Big
Dollar Spot index this morning is actually firmer a tenth
of one percent.
Speaker 1 (08:22):
Now, in a moment, we're going to talk more about our.
Speaker 2 (08:25):
Exclusive reporting that shows that the UK business community is
increasingly taking Nigel Farage's Reform Party seriously as an elector force,
a special report here for Bloomberg Radio. But I also
want to dig into today's top story. German Chancellor Friedrich
Mertz says that there is obviously not going to be
(08:45):
a meeting between President Zelinsky and President Putin to resolve
the war in Ukraine, even as Russia launched a major
air attack on Kiev in defiance of the US's please
to end the fighting. Our head of Middle East and
North Africa coverage, Suitt Livingston Wallace joins US Now for
Speaker 1 (09:04):
Su At Good Morning, the White.
Speaker 2 (09:06):
House Press Secretary says that Trump is quote not happy
with Putin, but then equally she framed the latest Russian
air strike as a response to Ukraine's Russia oil refinery
at Chacks. What is the state of the conflict now,
and also very importantly of US military support for Ukraine.
Speaker 7 (09:25):
Very good morning. So I mean, I think there is
quite a significant change here going on, certainly in terms
of the front line. So it's really, I suppose a
combination of things. And you can start, let's say, with
the US, which has to some extent resumed supplies to Ukraine.
That's making quite a big difference. Secondarily, you're seeing more
munitions coming in from the Europeans into Ukraine, and that's
sort of giving them the ability to counter the previous
(09:50):
Russian strategy of sort of wave after wave of soldiers
being sent into specific areas to try and break through
the front lines. But I think the third thing, and
perhaps the most certainly, is a change in the Russian strategy.
So you've seen a sort of a shift away from
those waves of soldiers coming in too much more incremental
moves by smaller groups of soldiers, combined with quite a
(10:12):
significant change in the air war strategy. And you know,
as you mentioned, there have been some very significant attacks
with sort of hundreds of drones combined with missile attacks
coming in simultaneously as a way of trying to overwhelm
the Ukrainian defenses. And it is having some effects, certainly
in terms of the amount of damage being caused in Ukraine.
And that is a function I think of a change
in the Russian manufacturing strategy. So previously they would bring
(10:36):
in pretty much, you know, completed drones from some of
their suppliers, notably Iran, and what seems to have changed
is they are still bringing in the components, but they're
putting them together themselves, and that makes it much much
more difficult to disrupt the supply chains. So they have
a lot more equipment to throw at the Ukrainians in
one go. Simultaneously, they are running out of the stockpiles
(10:59):
that they accumulated over many decades of sort of the
older military equipment right back to the Soviet era.
Speaker 2 (11:04):
So then, on the comments that I mentioned from Mafriedrich
Mertz openly critical a President Trump's peace push in Ukraine.
This was at a dinner with the French president in Macon.
What at this stage, with all of these moving parts, then,
is the European strategy on Ukraine.
Speaker 1 (11:22):
If there is one.
Speaker 7 (11:23):
I mean, I think it's been reasonably consistent in the
last searching of the last several months and in the
last several years. I mean, the amount of aid going
from Europe into Ukraine has been substantial, and I think
the water date we're looking at something like sixty billion
euros in aid one way or another, and just sort
of to give you a flavor of the scale of it,
(11:44):
the EU has pledged to provide Ukraine with something like
two million rounds of ammunition in twenty five so it
is large scale. At the same time, you're seeing some
very interesting developments in terms of the Europeans willingness to
fund purchases from elsewhere. So there was a very interesting
thing overnight where we've had preliminary approval from the State
Department to supply Ukraine with something like just I think
(12:07):
it's just over three thousand long range missiles to Ukraine,
a big chunk of which will be paid for by Denmark,
the Netherlands and Norway. So that is also new now
that still has to go to Congress for approval, but
it looks pretty likely. So I would say the scale
of the U intervention is still pretty large and is
having some impact.
Speaker 2 (12:29):
What about President Trump and these very serious consequences that
he has threatened. I suppose the risk for Putin is
that President Trump does actually act against Russia, perhaps quite suddenly.
Speaker 7 (12:41):
I think you're absolutely right, and I think we've got
a flavor of that with the way that it dealt
with India, you know, one of the big purch purchases
of Russian oil with these you know, the tariffs, and
you have seen a very small incremental but nonetheless I
think significant change in terms of the Russian oil flows
out now risk here for the US's you know, the
(13:02):
US president's intent on bringing down interest rates, and in
an environment where you know he puts secondary sanctions, very
harsh secondary sanctions on any buyers of Russian commodities, you're
going to see you would have thought some increase in
the energy price, perhaps quite significant, and other commodities, and
then that has an inflationary impact, and it makes it
(13:23):
much more difficult than to lower interest rates. So there
is a domino effect here that he's going to have
to be mindful of. But I think you're absolutely right
that you've already started to see signs of that, and
there is no doubt that I think there is a
great deal of frustration on the US side that even
after the summit in Alaska, they appeared to be no
further forward than where they were several months ago.
Speaker 1 (13:43):
Stuart, thank you so much for being with me.
Speaker 2 (13:45):
Suet living Ston Wallace is our head of Middle East
and North Africa coverage with the latest when it comes
to Ukraine.
Speaker 1 (13:51):
Thank you so much.
Speaker 2 (13:53):
Stay with us. More from Bloomberg Daybakeuobe coming up after this. Okay,
let's get to a story here in the UK. Lobbyists
are lining up to attend Reform UK's annual conference, which
takes place next week. Twenty percent of public affairs executives
are planning to head to Nigel Faraj's event, according to
data obtained exclusively by Bloomberg. It's a sign that corporate
(14:16):
Britain is increasingly taking the Populist Party seriously as an
electoral force.
Speaker 1 (14:21):
Are UK Politics reported.
Speaker 2 (14:22):
James Wacock hasmore and joins me this morning, James, what
does this poll actually show that we've managed to put together?
Speaker 8 (14:30):
I've got my hands on this pole of people who
are in public affairs. This is both lobbying groups but
also any business that is big enough to have a
public relation's wing, so office is, ones that are in
book government, so finance, health, education, these types of areas.
And two years ago only four percent of the three
hundred executives polled went to reform. Last year, twelve percent
(14:53):
this year. Next week at their conference, twenty percent of
those we polled say they will go. That is a
rapid run and puts them very clearly ahead of any
of the minor parties four percent behind the Conservatives, the
other major party in sort of bridge posites on the
right and labor as the government dominate with forty eight percent,
But it quite clearly establishes Reform as someone a party
(15:18):
that is growing in political and business heft. Now I
spoke to Opinion's head they did this poll of public affairs,
James Crouch. He told me for the first time, businesses
are taking reform seriously.
Speaker 1 (15:32):
You can't ignore them anymore. Whether or not this trend continues.
Speaker 9 (15:37):
And whether or not more resource will eventually be put
into them, I think that depends on how how the
headline polling goes over the next year, and will be
looking particularly intenderly at the next local elections, because that
would be the next electoral sign that actually reform are
in contention for government and you definitely won't be able
(15:57):
to ignore them.
Speaker 8 (15:58):
So James corouch there and he and that the key
question for a lot of the people that he was
talking to for this poll was next week what kind
of conference?
Speaker 1 (16:06):
Is it a professional affair?
Speaker 8 (16:09):
Because he s as soon if the trend continues, the
reform could easily rival the Conservatives as one of the
two key fixtures of conference season.
Speaker 2 (16:16):
Yes, which is so fascinating, isn't it. And I also
thought it was very interesting that the poll speaks to small, medium,
and large businesses. It was broken up into lots of
as you say, different sectors of the economy, different scale
of businesses too, which I think gives us some very
kind of granular insights actually into how business thinks about this.
(16:38):
It comes though, as the Labor government faces all of
these tough questions over their credentials about whether or not
they are the party of business. I mean, this was
the thing that we followed in the election campaign.
Speaker 8 (16:49):
I think just this morning there is a report out
from the sort of left wing think tank, the IPPR
talking about a potential windfall tax on banks coming down
on the track. Now, look, no one at this point
knows what is going to be in chance of Rachel
Reeves's autumn budget, but most economists are saying there is
going to be a public issue with the finances and
the one that she will have to fill by raising
(17:10):
taxes or cutting spending somewhere, and that has a lot
of businesses worried that they will be the targets. Now,
the sources in government have told me just this week
that they have taken note of the business response and
they are looking to try and keep UKPLC on side.
Speaker 1 (17:26):
But after last year, where as you.
Speaker 8 (17:29):
Were saying, Karen, all the talk in the literally election
was the smoke salmon offensive and Rachel rees and Keir
Starmer building relations with business, and then there was this
massive rise in national insurance taxes on business and so
a lot of business leaders you've seen in the press
have felt kind of betrayed. This year, the question is
for labor is, especially in this autumn, where we like
to get the employment rights bill as well, what is
(17:51):
the offering to sort of woo business back. Meanwhile, as
we get into conference season, will we see the rival
pictures from other parties?
Speaker 2 (17:58):
Yes, But my question of conference season is also whether
any political party is facing the very difficult questions that
Britain has right of indebtedness of government spending and addressing
those and that is the same very tough question for reform.
It's the question that we put to Nigel Farage when
he spoke to us at the start of this year,
and so again it can Nigel Phage emerge as a
(18:21):
serious contender for prime minister and what does that path
look like?
Speaker 1 (18:26):
To your point, there is curiosity.
Speaker 8 (18:29):
There is deep curiosity in the people that were spoken
to this Poleish commissioned by the Charter Institute for Public Relations,
because they also are members trying to get involved with
Reform House. Everyone's trying to figure out how serious is
this nascent political party, how much hes does it have,
how lobbyable are they, how much influence they have. Business
are asking is this a group that we could work with?
(18:52):
Is this the group that we can influence? And the
other thing I found fascinating is the money is going
there too. The average spend on informs conferences seventeen thousand
per company that we poled. That's half labor the Conservatives,
but their conference is only half in length, so that's
not two out of our older of the three hundred
executives and public affairs we polled, four of their companies
(19:13):
were putting it more than one hundred thousand into reforms
conference next week. So we are finding out that there
is increasingly a risk in not checking out reform. That's
what the CIPR told me. At this point, you'd be
a fool not to.
Speaker 1 (19:28):
This is Bloomberg Daybreak Europe.
Speaker 10 (19:29):
You're a morning brief on the stories making news from
London to Wall Streets and beyond.
Speaker 2 (19:34):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 10 (19:40):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (19:46):
Our flagship New York station is also available on your
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Speaker 1 (19:54):
I'm Caroline Hepka and I'm Stephen Carroll.
Speaker 10 (19:56):
Join us again tomorrow morning for all the news you
need to start your day right here on Bloomberg Daybreak Europe.
Speaker 1 (20:03):
Mm hm
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