April 25, 2025 • 16 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) Donald Trump’s tariffs and a barrage of rising domestic bills sent UK household confidence to its lowest level since the Labour government came to power.
(2) President Donald Trump said his administration was talking with China on trade, after Beijing denied the existence of negotiations on a deal and demanded the US revoke all unilateral tariffs.
(3) Treasuries jumped after comments by a Federal Reserve official bolstered odds that the central bank will cut interest rates as early as June.
(5) Google parent Alphabet reported first-quarter revenue and profit that exceeded analysts’ expectations, buoyed by continued strength in its search advertising business.
(6) The US will demand that Russia accept Ukraine’s right to develop its own, adequately equipped, army and defense industry as part of a peace agreement, according to people familiar with the matter, pushing back on Russia’s insistence that the country largely demilitarize as a condition to end the war.
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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 Bloobeg Day baq At podcast, available every
morning on Apple, Spotify or wherever you listen. It's Friday,
the twenty fifth of April in London. I'm Caroline Hepca and.
Speaker 1 (00:19):
I'm Stephen Carroll. Coming up today. British consumer gloom deepens
as the Chancellor, Rachel Reeves admits the UK has no
space to borrow more amid tariff uncertainty.
Speaker 2 (00:29):
Bloomberg learns that China may exempt some US goods from tariffs.
As the tit for tat trade will realities begin to bite.
Speaker 1 (00:37):
Plus buying London, UK's capital gets a taste of New
York's cutthroat real estate culture as Sotheby's gets aggressive on pay.
Speaker 2 (00:46):
Let's start with a round up of our top stories.
Speaker 1 (00:48):
Donald Trump's tariffs, coupled with the surge and domestic bills,
have dragged UK household confidence to its lowest level since
labor came to power. GfK's Consumer Confidence index fell by
four points minus twenty three in April, the weakest reading
in nearly a year and a half and worse than
economists that expected the prospect that global economic uncertainty could
(01:09):
hit UK growth was reinforced by the Bank of England
Governor Andrew Bailey at this week's IMF and World Bank
Spring meetings. Here's what he told CNBC on Thursday.
Speaker 3 (01:19):
I see it when I talk to people in the
UK economy a lot they are worried about, you know,
just the sheer level of uncertainty now in the world economy,
the sheer level of uncertainty in policy, and we see
it coming through. So we see it coming through in investments.
It's quite natural for firms to postpone investment decisions. We
see it also coming through with consumers, you know, they
(01:41):
are more uncertain.
Speaker 1 (01:43):
Andrew Bailey, speaking to CNBC, is the Deputy BUE Governor
Claire Lambordelli warned the Bank must now assume a future
of persistent global shocks for the world economy, requiring greater
use of scenarios and rate decisions.
Speaker 2 (01:58):
UK Charles Lla Rachel Reeves meets with the US Treasury
Secretary Scott's Bessent today to discuss trade and economics. The
UK wants to see the twenty five percent US tariff
on exports of cars, steel, and potentially pharmaceuticals cut the
bulk of goods from the UK facing a ten percent
tariff into the US. Reeves told economists at the IMF
(02:20):
that Britain's high levels of debt means that it can't
spend more to drive growth.
Speaker 4 (02:26):
Countries that have got the space of fiscally should use it.
The UK is not one of those countries. Our debt
as a share of GDP is around one hundred percent.
We've got a set of fiscal rules that say that
we need to balance day to day spending with tax
receipts and bring debtors as a share of the economy down,
subject to that investing in things to grow our economies.
Speaker 2 (02:47):
Rachel Reeves, speaking there, she also added that the US
President Donald Trump is going about fixing the global economy
and global trade the wrong way. The Chance also pointed
to Britain's relationships with the Pin Union and the Middle
East as other priorities. On top of a US trade.
Speaker 1 (03:04):
Deal, China is considering suspending it's one hundred and twenty
five percent tariff on certain US imports as the economic
toll of the ongoing trade war begins to bite. Sources
tell us that authorities are weighing the removal of additional
levies on medical equipment and some industrial chemicals. The development
comes as President Trump insists his administration is in trade
(03:26):
talks with China, despite Beijing publicly denying any active negotiations
and reiterating its demand that the US revoke all unilateral tariffs.
Speaking to reporters at the White House, Trump had this
to say.
Speaker 5 (03:39):
Well, they had a meeting this morning, so I can't
tell you.
Speaker 6 (03:42):
It doesn't matter who they is.
Speaker 5 (03:44):
We may reveal it later, but they had meetings this morning,
and we've been meeting with China.
Speaker 1 (03:51):
The statement followed. That statement followed remarks from China's Commerce Ministry,
which had dismissed speculation that any progress had been made
in bilateral communications. Meanwhile, China's Central Bank announced it would
boost liquidity through one of its policy tools and a
bit to shields the world's second largest economy from the
strain of punitive US tariffs.
Speaker 2 (04:11):
US stocks and treasuries jumped yesterday after comments by a
Federal Reserve official boosted odds that the Central Bank will
cut rates in the coming months. Speaking to Bloomberg, the
Fed Governor Christopher Waller, said that firms may begin laying
off more US workers if aggressive tariff levels are reinstated
(04:31):
by the Trump administration. He said that he would support
rate cuts if there's a significant rise in unemployment.
Speaker 6 (04:38):
See, I'm willing to look through whatever and terror price
effects there are, and I've said that, so for me,
then I'm not going to overreact to any increase in
inflation that I think is attributable to the tariffs. But
if I see a significant drop in the labor market,
then the employment side of the mandate I think is
important and we step in and we would have to start.
I said this last week in my speech. You know,
(04:58):
I would expect more rate council sooner once I started
seeing some serious deterioration labor market.
Speaker 2 (05:05):
Christopher Waller speaking there, the Cleveland FED President Beth Hammock,
who was even stronger in her view. Speaking to CNBC,
she said that the Fed could move in June, quote
if we have clear and convincing data by then and
know which way is the right way to move at
that point in time.
Speaker 1 (05:24):
Google's parent company, Alphabet has reported first quarter revenue and
profit that exceeded analyst expectations. The numbers are void by
continued strength and its search advertising business. First quarter sales
excluding partner payouts were seventy six point five billion dollars.
That's more than a billion more than what had been
expected by analysts. Man Deep, saying global had of technology
(05:45):
research at Bloomberg Intelligence, says new developments at the firm
haven't hindered growth.
Speaker 5 (05:50):
Google Services revenue was a slight bead, but what was
really impressive was the margin bead on the Google Services.
A lot of it is because everyone told because they're
adding AI overviews, that's going to hurt the margins or search. Oh,
it didn't happen.
Speaker 1 (06:09):
Man Deep, saying from Bloomberg Intelligence, there Alphabet's net income
came in at two dollars eighty one per share, eighty
cents higher than consensus estimates.
Speaker 2 (06:17):
The United States will demand that Russia accept Ukraine's right
to develop its army as part of a peace agreement.
To Bloomberg, understands that the White House will push back
on the Kremlins call for Kiev's demilitarization as a condition
for peace. Russian Fie Minister Sergei Lavro said that Trump
had provided strong support to date.
Speaker 7 (06:38):
President Trump is probably the only leader on Earth who
recognized they need to address the root causes of this
situation when he said said that it was a huge
mistake to pull Ukraine in Tornado, and this was a
mistake by by the administration and he wants to reptify this.
Speaker 2 (06:56):
That was the Russian Feign Minister Sergei Lavro speaking exclusive
to CBS's face. The nation Russia has continued to bomb
Ukrainian cities even as talks have continued, and as it
has insisted that it's prepared for peace. Moscow launched the
biggest air strike of the year this week, targeting Kiev
and killing at least twelve people.
Speaker 1 (07:18):
Those are your top stories on the markets. The SMB
five hundred on Wall Street selling for its second best
week of the year after rising by two percent yesterday.
We've got futures heading another half a percent higher this morning.
Some optimism in Asian equity markets too, after that report
that China is considering lifting some of the tariffs on
US imports. The Mscish Pacific Index seven tents higher, the
(07:39):
hansng and Hong Kong's up by one point four percent
as well, the dollars strengthening three tenths of one percent
of mid risk on sentiment. So we're seeing the Japanese
en seven tenths week this morning at one hundred and
forty three sixty six. European stock features are pointing to
a boost at the open today as well, up half
of one percent for eurostocks fifty and the euros four
tenths week, or at one third teen forty against the dollar.
Speaker 2 (08:02):
Now, in a moment, we will bring you more on
what to expect from Rachel Reeves's meeting with Scott Bessett
later today, and also how bigger pay packets are parently
sparking a talent war among London's estate agents. We'll get
to that in just a moment before we.
Speaker 1 (08:17):
Get into the detailed though of what the Chancellor said.
I was struck by a question that she was asked
during an event at the IMF Spring meetings in Washington,
Perhaps a much trickier question than any of the economic ones.
So Rachel Reeves was asked what her favorite film was
and how it was emblematic of her economic policy. Take
a listen to her answer.
Speaker 4 (08:35):
I've got two young children, so I only ever really
go and see children's films these days. So Paddington, Wicked,
Harry Potter movies is the sort of genre I'm not
sure it's my choice, but that is.
Speaker 5 (08:48):
What I do.
Speaker 1 (08:49):
So that was the Chancellor's answer. I thought that was
pretty reasonable as asking.
Speaker 2 (08:55):
A really busy person who's got a massive job whether
they've got any spare time to watch films. She did
quite well.
Speaker 1 (09:00):
I mean, look, I hate being putting this part of
that because like people judge you based on when you
have to pick acid perlative of what is your favorite.
Although I think had Rachel Reeves thought about it, she
probably wouldn't want to be drawing parallels to the likes
of Wicked, you know, which which does she identify with more?
Speaker 4 (09:15):
Well?
Speaker 2 (09:15):
The Paddington things, of course brings up that issue of,
you know, whether she's giving the Americans a hard stare
when it comes.
Speaker 1 (09:21):
To the Mari late samag just for all.
Speaker 2 (09:23):
Yeah, exactly.
Speaker 1 (09:24):
Potentially that was one of the parts of that discussion
that stood out to us this morning. But let's get
into I suppose the meat of what Rachel Reeves was discussing.
She's meeting her American counterpart, Scott bess And in Washington
later hoping for progress on trade talks that might lead
to a deal that could perhaps limit the impact of
some of those tariffs. She's already said that Donald Trump's
going about addressing trade and balances the wrong way and
(09:47):
warned the UK doesn't have space to borrow more. Our
UK politics supporter James Wilcock is with us for more.
James Racher Reeves has talked a lot in Washington this
week about trade. Do we have a clear idea of
what her position is going to be going into this
meeting with.
Speaker 3 (10:00):
Yes, we do.
Speaker 8 (10:02):
And it's quite remarkable actually, because I'm used to a
sort of diet of Oh, I couldn't possibly comment on
ongoing negotiations, but her position is free trader is good,
tariffs are bad. The UK is happy to lower its
tariffs on cars coming from the US, but it would
like global twenty five percent tariffs on cars and drugs
removed on it. In turn, it's not going to budge
(10:23):
on food and tech safety standards. And she's not in
a rush to do a deal now. She has said
that in multiple media outlets, in multiple places and across
the sort of breadth of US political sort of life.
The one caveat I would add is in the UK.
Polling suggests that Donald Trump is incredibly unpopular amongst sprits,
(10:45):
and a recent poll by Yugov suggested that only fourteen
percent of Brits would react to TARIS by seeking closer
trade deals to the US. So part of Rachel Reeves's
job is not just to be the chance who manages
the finances, but also one of the most second most
senior partition in labor government. Some of this is also
posturing about the UK not being seen to be sort
of cow towing to the US too, which is why
(11:06):
this meeting with Bestn't, her counterpart in the US to
Treasury Security, is so important because it's the first time
they'll have met person to person to actually talk behind
closed doors about what actually might be being compromised on.
Speaker 2 (11:19):
Yes, because the other question, you know, for the UK,
the other issue for the UK is actually Rachel Reeves
admitting the very difficult fiscal picture of fiscal challenges that
the UK has. She was also quite clear about that.
Speaker 8 (11:32):
I mean, I was struck by your chat about films
because I think there's no magic coming down the track.
There's no magic money tree and there's no magic from
Wicked either. There is a real awareness of how difficult
the situation is and the name that kept coming out
of rich L Reeves was Germany. Germany. Germany Germany because
Germany has a debt to GDP ratio of forty percent
(11:53):
versus the UK is one hundred percent and that gives
it far more fiscal space, and she's very aware of that.
There was something new though in what she was saying
in her role as sort of the Iron Chancellor. It's
quite rare to hear Rachel Reeves say that more spending
is good. And yet in the IMF meeting she said
that governments should be spending more, the implication being if
(12:15):
she had fiscal space, and she directly said this, she
theoretically could be spending more. However, she sees herself as
tied into the UK's very in debt situation. But I
think that gives you a bit of a hint about
what her actual ideology and instincts are, but also how
she sees herself as tied into the UK's restraints.
Speaker 1 (12:33):
Okay, James Wilcock are UKA politic supporter.
Speaker 2 (12:35):
Thank you now to the London property market and a
shakeup among the city's estate agency. Southerby's is using new
pay tactics to attract top talent from rivals. Our residential
real estate reporter Damian Shepherd joins us now for more. Damian,
good morning. What is Southerbe's doing differently to London's traditional
(12:55):
property agents, I mean people like Knight, Frank and Saviles.
Speaker 3 (13:01):
Yeah.
Speaker 9 (13:01):
One of the things that really surprised me when I
started immersing myself in this world is that London's traditional
property agents, when one of their sales agents works on
an eighty million pound ninety million pound deal, they don't
actually give them commission on that sale. So the traditional
model has been to earn a salary and a bonus
at the end of the year that reflects your performance
(13:22):
and the team's performance. So income. Southerby's a couple of
years ago with their New York eat what you Kill
style brokerage model, and they are making a serious mark.
They have no geographical restrictions on where their brokers can
do business, so they're kind of rubbing shoulders in London's
exclusive districts, almost battling against each other to try and
secure these deals. And we've seen a massive amount of
(13:45):
poaching going on. A fifth of the breakers they've employed,
the fifty three breakers they've employed since so inception a
couple of years ago have come from Night Frank. So
we're seeing a real shift in how things are done
at the top end of the London market.
Speaker 1 (14:00):
How much has market conditions got to do with this though?
This poaching of talent by Sotherby's oh big time.
Speaker 9 (14:07):
I mean, I've come on here several times, Stephen and
spoken about how the market has been weak over the
past few years. Transactions are down, there's massive discounts needed
to secure deals at the top end of the market.
That's all down to tax changes, interest rates being higher.
And if we put ourselves in the shoes of an
agent at these traditional breakers at night Frank and saviles,
(14:28):
who've typically relied on the overall performance of the team
at time when transactions are down, a lot of them
have been tempted to move over to Southby's, where they're
offering the massive minimum pay guarantees of up to one
pounds for their first year at the company, and it's
just giving them an incentive to move across and know that,
(14:50):
you know, if they're working to the point where they're
getting a few deals, they're going to have a direct
flow of commission to their bank accounts from that. So yeah,
that's what we're seeing a massive shift in how things
are running.
Speaker 2 (15:02):
Who from tempted to whistle at a million pound possible paypacket.
Speaker 7 (15:06):
Wow.
Speaker 2 (15:07):
In terms of the old school agents, then what are
they doing to try to protect themselves I suppose? And
what does it also mean for people who are buying
and selling homes in London?
Speaker 6 (15:16):
Yes?
Speaker 9 (15:17):
So, I mean the newest angle in our story is
that Knight frank has actually started offering the option of
commission to their sales agents and that's breaking centuries long
sort of pay methods from these traditional agents. Now that
you know, my sources telling me that is in direct
response to what Southerbees are doing. But ultimately these traditional
(15:39):
brokers will just be hoping for the market to bounce back.
You know, there's lots of positive talk about what Southerbees
have done, but the true test will be when these
transactions start booming again, when the values start rising again.
Will these brokers that have made the move to Southeby's
start knocking on their old manager's doors and want to
go back to these more established breakers who have a
(16:02):
bit more of a reputation in the industry.
Speaker 1 (16:04):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (16:10):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (16:16):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:22):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hipka and.
Speaker 1 (16:31):
I'm Stephen Carroll. Join us again tomorrow morning for all
the news you need to start your day right here
on Bloomberg day Break Europe
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
This is the Bloobeg Day baq At podcast, available every
morning on Apple, Spotify or wherever you listen. It's Friday,
the twenty fifth of April in London. I'm Caroline Hepca and.
Speaker 1 (00:19):
I'm Stephen Carroll. Coming up today. British consumer gloom deepens
as the Chancellor, Rachel Reeves admits the UK has no
space to borrow more amid tariff uncertainty.
Speaker 2 (00:29):
Bloomberg learns that China may exempt some US goods from tariffs.
As the tit for tat trade will realities begin to bite.
Speaker 1 (00:37):
Plus buying London, UK's capital gets a taste of New
York's cutthroat real estate culture as Sotheby's gets aggressive on pay.
Speaker 2 (00:46):
Let's start with a round up of our top stories.
Speaker 1 (00:48):
Donald Trump's tariffs, coupled with the surge and domestic bills,
have dragged UK household confidence to its lowest level since
labor came to power. GfK's Consumer Confidence index fell by
four points minus twenty three in April, the weakest reading
in nearly a year and a half and worse than
economists that expected the prospect that global economic uncertainty could
(01:09):
hit UK growth was reinforced by the Bank of England
Governor Andrew Bailey at this week's IMF and World Bank
Spring meetings. Here's what he told CNBC on Thursday.
Speaker 3 (01:19):
I see it when I talk to people in the
UK economy a lot they are worried about, you know,
just the sheer level of uncertainty now in the world economy,
the sheer level of uncertainty in policy, and we see
it coming through. So we see it coming through in investments.
It's quite natural for firms to postpone investment decisions. We
see it also coming through with consumers, you know, they
(01:41):
are more uncertain.
Speaker 1 (01:43):
Andrew Bailey, speaking to CNBC, is the Deputy BUE Governor
Claire Lambordelli warned the Bank must now assume a future
of persistent global shocks for the world economy, requiring greater
use of scenarios and rate decisions.
Speaker 2 (01:58):
UK Charles Lla Rachel Reeves meets with the US Treasury
Secretary Scott's Bessent today to discuss trade and economics. The
UK wants to see the twenty five percent US tariff
on exports of cars, steel, and potentially pharmaceuticals cut the
bulk of goods from the UK facing a ten percent
tariff into the US. Reeves told economists at the IMF
(02:20):
that Britain's high levels of debt means that it can't
spend more to drive growth.
Speaker 4 (02:26):
Countries that have got the space of fiscally should use it.
The UK is not one of those countries. Our debt
as a share of GDP is around one hundred percent.
We've got a set of fiscal rules that say that
we need to balance day to day spending with tax
receipts and bring debtors as a share of the economy down,
subject to that investing in things to grow our economies.
Speaker 2 (02:47):
Rachel Reeves, speaking there, she also added that the US
President Donald Trump is going about fixing the global economy
and global trade the wrong way. The Chance also pointed
to Britain's relationships with the Pin Union and the Middle
East as other priorities. On top of a US trade.
Speaker 1 (03:04):
Deal, China is considering suspending it's one hundred and twenty
five percent tariff on certain US imports as the economic
toll of the ongoing trade war begins to bite. Sources
tell us that authorities are weighing the removal of additional
levies on medical equipment and some industrial chemicals. The development
comes as President Trump insists his administration is in trade
(03:26):
talks with China, despite Beijing publicly denying any active negotiations
and reiterating its demand that the US revoke all unilateral tariffs.
Speaking to reporters at the White House, Trump had this
to say.
Speaker 5 (03:39):
Well, they had a meeting this morning, so I can't
tell you.
Speaker 6 (03:42):
It doesn't matter who they is.
Speaker 5 (03:44):
We may reveal it later, but they had meetings this morning,
and we've been meeting with China.
Speaker 1 (03:51):
The statement followed. That statement followed remarks from China's Commerce Ministry,
which had dismissed speculation that any progress had been made
in bilateral communications. Meanwhile, China's Central Bank announced it would
boost liquidity through one of its policy tools and a
bit to shields the world's second largest economy from the
strain of punitive US tariffs.
Speaker 2 (04:11):
US stocks and treasuries jumped yesterday after comments by a
Federal Reserve official boosted odds that the Central Bank will
cut rates in the coming months. Speaking to Bloomberg, the
Fed Governor Christopher Waller, said that firms may begin laying
off more US workers if aggressive tariff levels are reinstated
(04:31):
by the Trump administration. He said that he would support
rate cuts if there's a significant rise in unemployment.
Speaker 6 (04:38):
See, I'm willing to look through whatever and terror price
effects there are, and I've said that, so for me,
then I'm not going to overreact to any increase in
inflation that I think is attributable to the tariffs. But
if I see a significant drop in the labor market,
then the employment side of the mandate I think is
important and we step in and we would have to start.
I said this last week in my speech. You know,
(04:58):
I would expect more rate council sooner once I started
seeing some serious deterioration labor market.
Speaker 2 (05:05):
Christopher Waller speaking there, the Cleveland FED President Beth Hammock,
who was even stronger in her view. Speaking to CNBC,
she said that the Fed could move in June, quote
if we have clear and convincing data by then and
know which way is the right way to move at
that point in time.
Speaker 1 (05:24):
Google's parent company, Alphabet has reported first quarter revenue and
profit that exceeded analyst expectations. The numbers are void by
continued strength and its search advertising business. First quarter sales
excluding partner payouts were seventy six point five billion dollars.
That's more than a billion more than what had been
expected by analysts. Man Deep, saying global had of technology
(05:45):
research at Bloomberg Intelligence, says new developments at the firm
haven't hindered growth.
Speaker 5 (05:50):
Google Services revenue was a slight bead, but what was
really impressive was the margin bead on the Google Services.
A lot of it is because everyone told because they're
adding AI overviews, that's going to hurt the margins or search. Oh,
it didn't happen.
Speaker 1 (06:09):
Man Deep, saying from Bloomberg Intelligence, there Alphabet's net income
came in at two dollars eighty one per share, eighty
cents higher than consensus estimates.
Speaker 2 (06:17):
The United States will demand that Russia accept Ukraine's right
to develop its army as part of a peace agreement.
To Bloomberg, understands that the White House will push back
on the Kremlins call for Kiev's demilitarization as a condition
for peace. Russian Fie Minister Sergei Lavro said that Trump
had provided strong support to date.
Speaker 7 (06:38):
President Trump is probably the only leader on Earth who
recognized they need to address the root causes of this
situation when he said said that it was a huge
mistake to pull Ukraine in Tornado, and this was a
mistake by by the administration and he wants to reptify this.
Speaker 2 (06:56):
That was the Russian Feign Minister Sergei Lavro speaking exclusive
to CBS's face. The nation Russia has continued to bomb
Ukrainian cities even as talks have continued, and as it
has insisted that it's prepared for peace. Moscow launched the
biggest air strike of the year this week, targeting Kiev
and killing at least twelve people.
Speaker 1 (07:18):
Those are your top stories on the markets. The SMB
five hundred on Wall Street selling for its second best
week of the year after rising by two percent yesterday.
We've got futures heading another half a percent higher this morning.
Some optimism in Asian equity markets too, after that report
that China is considering lifting some of the tariffs on
US imports. The Mscish Pacific Index seven tents higher, the
(07:39):
hansng and Hong Kong's up by one point four percent
as well, the dollars strengthening three tenths of one percent
of mid risk on sentiment. So we're seeing the Japanese
en seven tenths week this morning at one hundred and
forty three sixty six. European stock features are pointing to
a boost at the open today as well, up half
of one percent for eurostocks fifty and the euros four
tenths week, or at one third teen forty against the dollar.
Speaker 2 (08:02):
Now, in a moment, we will bring you more on
what to expect from Rachel Reeves's meeting with Scott Bessett
later today, and also how bigger pay packets are parently
sparking a talent war among London's estate agents. We'll get
to that in just a moment before we.
Speaker 1 (08:17):
Get into the detailed though of what the Chancellor said.
I was struck by a question that she was asked
during an event at the IMF Spring meetings in Washington,
Perhaps a much trickier question than any of the economic ones.
So Rachel Reeves was asked what her favorite film was
and how it was emblematic of her economic policy. Take
a listen to her answer.
Speaker 4 (08:35):
I've got two young children, so I only ever really
go and see children's films these days. So Paddington, Wicked,
Harry Potter movies is the sort of genre I'm not
sure it's my choice, but that is.
Speaker 5 (08:48):
What I do.
Speaker 1 (08:49):
So that was the Chancellor's answer. I thought that was
pretty reasonable as asking.
Speaker 2 (08:55):
A really busy person who's got a massive job whether
they've got any spare time to watch films. She did
quite well.
Speaker 1 (09:00):
I mean, look, I hate being putting this part of
that because like people judge you based on when you
have to pick acid perlative of what is your favorite.
Although I think had Rachel Reeves thought about it, she
probably wouldn't want to be drawing parallels to the likes
of Wicked, you know, which which does she identify with more?
Speaker 4 (09:15):
Well?
Speaker 2 (09:15):
The Paddington things, of course brings up that issue of,
you know, whether she's giving the Americans a hard stare
when it comes.
Speaker 1 (09:21):
To the Mari late samag just for all.
Speaker 2 (09:23):
Yeah, exactly.
Speaker 1 (09:24):
Potentially that was one of the parts of that discussion
that stood out to us this morning. But let's get
into I suppose the meat of what Rachel Reeves was discussing.
She's meeting her American counterpart, Scott bess And in Washington
later hoping for progress on trade talks that might lead
to a deal that could perhaps limit the impact of
some of those tariffs. She's already said that Donald Trump's
going about addressing trade and balances the wrong way and
(09:47):
warned the UK doesn't have space to borrow more. Our
UK politics supporter James Wilcock is with us for more.
James Racher Reeves has talked a lot in Washington this
week about trade. Do we have a clear idea of
what her position is going to be going into this
meeting with.
Speaker 3 (10:00):
Yes, we do.
Speaker 8 (10:02):
And it's quite remarkable actually, because I'm used to a
sort of diet of Oh, I couldn't possibly comment on
ongoing negotiations, but her position is free trader is good,
tariffs are bad. The UK is happy to lower its
tariffs on cars coming from the US, but it would
like global twenty five percent tariffs on cars and drugs
removed on it. In turn, it's not going to budge
(10:23):
on food and tech safety standards. And she's not in
a rush to do a deal now. She has said
that in multiple media outlets, in multiple places and across
the sort of breadth of US political sort of life.
The one caveat I would add is in the UK.
Polling suggests that Donald Trump is incredibly unpopular amongst sprits,
(10:45):
and a recent poll by Yugov suggested that only fourteen
percent of Brits would react to TARIS by seeking closer
trade deals to the US. So part of Rachel Reeves's
job is not just to be the chance who manages
the finances, but also one of the most second most
senior partition in labor government. Some of this is also
posturing about the UK not being seen to be sort
of cow towing to the US too, which is why
(11:06):
this meeting with Bestn't, her counterpart in the US to
Treasury Security, is so important because it's the first time
they'll have met person to person to actually talk behind
closed doors about what actually might be being compromised on.
Speaker 2 (11:19):
Yes, because the other question, you know, for the UK,
the other issue for the UK is actually Rachel Reeves
admitting the very difficult fiscal picture of fiscal challenges that
the UK has. She was also quite clear about that.
Speaker 8 (11:32):
I mean, I was struck by your chat about films
because I think there's no magic coming down the track.
There's no magic money tree and there's no magic from
Wicked either. There is a real awareness of how difficult
the situation is and the name that kept coming out
of rich L Reeves was Germany. Germany. Germany Germany because
Germany has a debt to GDP ratio of forty percent
(11:53):
versus the UK is one hundred percent and that gives
it far more fiscal space, and she's very aware of that.
There was something new though in what she was saying
in her role as sort of the Iron Chancellor. It's
quite rare to hear Rachel Reeves say that more spending
is good. And yet in the IMF meeting she said
that governments should be spending more, the implication being if
(12:15):
she had fiscal space, and she directly said this, she
theoretically could be spending more. However, she sees herself as
tied into the UK's very in debt situation. But I
think that gives you a bit of a hint about
what her actual ideology and instincts are, but also how
she sees herself as tied into the UK's restraints.
Speaker 1 (12:33):
Okay, James Wilcock are UKA politic supporter.
Speaker 2 (12:35):
Thank you now to the London property market and a
shakeup among the city's estate agency. Southerby's is using new
pay tactics to attract top talent from rivals. Our residential
real estate reporter Damian Shepherd joins us now for more. Damian,
good morning. What is Southerbe's doing differently to London's traditional
(12:55):
property agents, I mean people like Knight, Frank and Saviles.
Speaker 3 (13:01):
Yeah.
Speaker 9 (13:01):
One of the things that really surprised me when I
started immersing myself in this world is that London's traditional
property agents, when one of their sales agents works on
an eighty million pound ninety million pound deal, they don't
actually give them commission on that sale. So the traditional
model has been to earn a salary and a bonus
at the end of the year that reflects your performance
(13:22):
and the team's performance. So income. Southerby's a couple of
years ago with their New York eat what you Kill
style brokerage model, and they are making a serious mark.
They have no geographical restrictions on where their brokers can
do business, so they're kind of rubbing shoulders in London's
exclusive districts, almost battling against each other to try and
secure these deals. And we've seen a massive amount of
(13:45):
poaching going on. A fifth of the breakers they've employed,
the fifty three breakers they've employed since so inception a
couple of years ago have come from Night Frank. So
we're seeing a real shift in how things are done
at the top end of the London market.
Speaker 1 (14:00):
How much has market conditions got to do with this though?
This poaching of talent by Sotherby's oh big time.
Speaker 9 (14:07):
I mean, I've come on here several times, Stephen and
spoken about how the market has been weak over the
past few years. Transactions are down, there's massive discounts needed
to secure deals at the top end of the market.
That's all down to tax changes, interest rates being higher.
And if we put ourselves in the shoes of an
agent at these traditional breakers at night Frank and saviles,
(14:28):
who've typically relied on the overall performance of the team
at time when transactions are down, a lot of them
have been tempted to move over to Southby's, where they're
offering the massive minimum pay guarantees of up to one
pounds for their first year at the company, and it's
just giving them an incentive to move across and know that,
(14:50):
you know, if they're working to the point where they're
getting a few deals, they're going to have a direct
flow of commission to their bank accounts from that. So yeah,
that's what we're seeing a massive shift in how things
are running.
Speaker 2 (15:02):
Who from tempted to whistle at a million pound possible paypacket.
Speaker 7 (15:06):
Wow.
Speaker 2 (15:07):
In terms of the old school agents, then what are
they doing to try to protect themselves I suppose? And
what does it also mean for people who are buying
and selling homes in London?
Speaker 6 (15:16):
Yes?
Speaker 9 (15:17):
So, I mean the newest angle in our story is
that Knight frank has actually started offering the option of
commission to their sales agents and that's breaking centuries long
sort of pay methods from these traditional agents. Now that
you know, my sources telling me that is in direct
response to what Southerbees are doing. But ultimately these traditional
(15:39):
brokers will just be hoping for the market to bounce back.
You know, there's lots of positive talk about what Southerbees
have done, but the true test will be when these
transactions start booming again, when the values start rising again.
Will these brokers that have made the move to Southeby's
start knocking on their old manager's doors and want to
go back to these more established breakers who have a
(16:02):
bit more of a reputation in the industry.
Speaker 1 (16:04):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (16:10):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (16:16):
You can also listen live each morning on London Dab Radio,
the Bloomberg Business app, and Bloomberg dot Com.
Speaker 2 (16:22):
Our flagship New York station, is also available on your
Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty.
I'm Caroline Hipka and.
Speaker 1 (16:31):
I'm Stephen Carroll. 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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