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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bluemberg DAYBAQ podcast, available every morning on Apple,

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Speaker 2: Spotify or wherever you listen. It's Friday, the twenty first

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Speaker 2: of March in London and Caroline Hepka.

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Speaker 3: And I'm Stephen Carroll coming up today. London's Heathrow Airport

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Speaker 3: is shut for at least a full day due to

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Speaker 3: a power outage, causing massive travel disruption.

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Speaker 2: EU leaders failed to agree on a new package of

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Speaker 2: support for Ukraine, despite alarm at being cut out of

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Speaker 2: negotiations between the US and Russia.

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Speaker 3: Plus why a shortage of gunpowder could be a major

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Speaker 3: obstacle in Europe's plans to ramp up defense capabilities.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: London's Heathrow Airport is closed to all flights after a

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Speaker 3: fire at a nearby power substation, disrupting travel plans for

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Speaker 3: hundreds of thousands of people. The London Firebrigade says the

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Speaker 3: blaze broke out in the station in West London, disrupting

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Speaker 3: electricity supply to the airport. Bloomberg's Danny Lee says the

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Speaker 3: fire will cause days of disruption at a minimum they

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Speaker 3: will be.

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Speaker 4: Having to pick up the pieces in the coming days

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Speaker 4: and tenty week or so because of the scale of

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Speaker 4: the disruption, particularly it's going to impact the likes of

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Speaker 4: British Airways in Vegean Atlantic, the two biggest operators out

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Speaker 4: of heath for airport. But just to give you a

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Speaker 4: scale of one, four hundred flights a day operate A

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Speaker 4: flight takes off a land every forty five seconds, and

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Speaker 4: two hundred thousand passengers a day would normally pass through

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Speaker 4: Heath Throw So this gives a scale of the disruption

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Speaker 4: that would last at least into the weekend.

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Speaker 3: This rate our transfer reporter Danny Lee there the local

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Speaker 3: power company says some sixteen thousand homes in West London

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Speaker 3: are also without electricity due to the fire.

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Speaker 2: European Union leaders failed to agree on a five billion

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Speaker 2: euro package to buy ammunition for Ukraine and struggle to

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Speaker 2: agree on a strategy on peace talks and a summit

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Speaker 2: in Brussels. Countries argued over the technical details and ask

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Speaker 2: why they hadn't been a to appoint an envoid to

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Speaker 2: make the EU's case in the US Russia talks. Germany's

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Speaker 2: outgoing Chancellor Arnough Schultz says the Bloc's commitment to Ukraine

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Speaker 2: is not in question.

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Speaker 5: We, of course understandably are once again focused on the

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Speaker 5: situation in Ukraine. Russia's war of aggression continues with a

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Speaker 5: great degree of brutality, and it is therefore very important

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Speaker 5: that during our discussions with President of Lensky today we

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Speaker 5: made it very clear that the European Union, and I

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Speaker 5: want to be very clear, twenty six of the member

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Speaker 5: states have made it clear that they're on the side

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Speaker 5: of Ukraine, that Ukraine can continue to rely on them,

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Speaker 5: that we will not abandon them.

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Speaker 2: Talasen Visson Schultz. We're speaking as EU leaders have become

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Speaker 2: increasingly alarmed about being kept out of US President Donald

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Speaker 2: Trump's dealings with the Kremlin. The European Union and its

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Speaker 2: members have sent fifty billion euros in military support to

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Speaker 2: Ukraine since the full scale invasion began in February twenty

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Speaker 2: twenty two.

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Speaker 3: Donald Trump is invoking emergency powers to boost production of

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Speaker 3: critical minerals and potentially coal in the United States. An

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Speaker 3: executive order signed by the US President outlines plans to

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Speaker 3: provide financing and permits to support domestic mining and processing.

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Speaker 3: The move was one of the latest raft of orders

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Speaker 3: signed by Trump, which also includes plans to dismantle the

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Speaker 3: US Department of Education. In a few moments, I will

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Speaker 3: sign an executive order to begin eliminating the Federal Department

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Speaker 3: of Education once and for all. The US President also

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Speaker 3: denied the New York Times report that Elon Musk was

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Speaker 3: to be briefed on US military plans for any potential

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Speaker 3: war with China, saying it was completely untrue.

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Speaker 2: Turkey's central Bank has raised a key interest rate in

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Speaker 2: a shock meeting to try and stabilize the slump in

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Speaker 2: the lira. The central Bank hiked its overnight lending rate

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Speaker 2: by two percentage points to forty six percent. The country's

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Speaker 2: currency and eco markets have seen sharp sell offs after

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Speaker 2: the arrest of leading opposition politician Istanbul's mayor, Echem Immomolu,

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Speaker 2: and while Capital Partners Fixed income co head Zana Rizzik

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Speaker 2: says that the central bank's move is a positive surprise.

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Speaker 6: Now we're back to familiar territory where the politics step

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Speaker 6: in when they shouldn't and they disrupt everything.

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Speaker 2: But the very.

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Speaker 6: Surprising and the very positive thing that happened this time

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Speaker 6: is the sudden move of the Central Bank.

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Speaker 2: Of the cbrt Rizzik adds, the question now is whether

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Speaker 2: local investors rush to dollars. Turkish authorities say that they

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Speaker 2: detained thirty seven people over social media posts criticizing the

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Speaker 2: arrest of the mayor Vistan Bull.

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Speaker 3: Bank of England governor Andrew Bailer's policymakers to tread carefully

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Speaker 3: in the face of a turbulent global backdrop. Policymakers voted

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Speaker 3: eight to one to keep the base rate four point

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Speaker 3: five percent. Bailey says they're still waiting to see what

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Speaker 3: does happen on tariffs.

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Speaker 7: We are certainly know in a world of even greater uncertainty.

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Speaker 7: I'm always conscious that with central banks we're always accused

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Speaker 7: of saying the world's uncertain, but it really is uncertain.

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Speaker 7: The inflation impact of tariff when you're sort of in

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Speaker 7: a sense on the receiving it to them, is quite ambiguous,

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Speaker 7: as we've said before, and also again there are things

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Speaker 7: that could push in elements of the story that could

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Speaker 7: push it up, in the allowments that could push it down.

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Speaker 3: Bailey is the latest central bank governor to adopt a

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Speaker 3: more wary tone due to US President Donald Trump's tariff threats.

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Speaker 3: Tenure guilts rose, guilty, yields rose, and traders paired bets

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Speaker 3: on future cuts after the decision.

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Speaker 2: Bloomberg understands that UBS is considering relocating its headquarters if

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Speaker 2: Switzerland requires the bank to hold an extra twenty five

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Speaker 2: billion dollars of capital. So also say executives believe increasing

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Speaker 2: the banks capital ratio to fourteen percent in a worst

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Speaker 2: case scenario would make the lender uncompetitive. SISS authorities want

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Speaker 2: the country's largest bank to fully deduct the value of

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Speaker 2: its foreign subsidiaries from the capital of its parent, with

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Speaker 2: an eye on avoiding a repeat of the credit sweet collapse.

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Speaker 2: UBS is stepping up lobbying efforts before a draft of

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Speaker 2: the proposal is used to go before lawmakers in May,

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Speaker 2: although any change likely wouldn't be implemented until twenty twenty eight.

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Speaker 3: The UK's top earners are gearing up to spend more.

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Speaker 3: That's according to the latest survey from market research firm GfK.

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Speaker 8: Bloomberg's Tea what adabaio has.

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Speaker 9: More households with incomes of fifty pounds in above are

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Speaker 9: set to unleash their savings on luxury goods, cars, or tech.

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Speaker 9: According to a recent report. The data suggests lower interest

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Speaker 9: rates and boosting demands for big ticket items at the

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Speaker 9: highest rate since the run up to the festive season

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Speaker 9: last November. The findings could represent an early sign of

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Speaker 9: a brightening mood amongst UK consumers as savings become less

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Speaker 9: lucrative thanks to falling rates. A resilient labor market is

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Speaker 9: also helping the consumer recovery. Wages are still growing faster

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Speaker 9: than inflation, as Prime Minister Kirs Starmer has frequently emphasized

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Speaker 9: in recent weeks, but outside of the top income bracket

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Speaker 9: there's less enthusiasm for extravagant purchases. GfK's major purchasing index

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Speaker 9: across the income spectrum remained flat In London, t We're

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Speaker 9: added Bayo Bloomberg Radio.

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Speaker 2: Those are our top stories on the markets risk off

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Speaker 2: In Asia this morning, we have declines led by the

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Speaker 2: Hangsing index, which is down two point three percent, the

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Speaker 2: Tech index dropping three and a half percent. Mainland Chinese

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Speaker 2: stocks also under pressure. The S and P five hundred

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Speaker 2: on Thursday ended a volatile session in the red. Stock

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Speaker 2: futures are also negative. The White House Press secretary warning

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Speaker 2: that big tariffs are coming on the second of April. Meanwhile,

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Speaker 2: we had FedEx Nike Micron reporting after the bell. FedEx

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Speaker 2: stock fell five point six percent after a profit warning.

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Speaker 2: Nike's share down five point three percent on a glut

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Speaker 2: of inventory. European stocks also underperformed yesterday. Eurostocks fifty futures

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Speaker 2: are now down half of one percent. The dollar this

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Speaker 2: morning is strengthening and treasuries are trading steady this morning.

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Speaker 3: In a moment, we'll bring you more on the disruption

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Speaker 3: at London's Heathrow Airport, plus how a shortage of gunpowder

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Speaker 3: could hamper Europe's defense ramp up. I just wanted to

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Speaker 3: mention the story that caught our eye this morning. Our

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Speaker 3: opinion columnist Matthew Brooker has been writing about something which

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Speaker 3: is a subject of conversation here in London and according

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Speaker 3: to some, has meant London becoming the mobile phone theft

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Speaker 3: capital of Europe. Now, police data shows there are over

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Speaker 3: seventy thousand recorded testament individuals in the past year, up

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Speaker 3: twenty five percent from the preceding twelve months. Now there

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Speaker 3: are questions around one of that data and how exactly

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Speaker 3: one becomes the European capital in this so I'm not

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Speaker 3: sure that title is necessarily well earned or well founded.

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Speaker 8: But look, this is a problem in London. I've seen

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Speaker 8: it happen many times.

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Speaker 3: It nearly happened to me once and only by pure

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Speaker 3: chance that didn't They didn't get my phone. But it

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Speaker 3: is something you know, usually bikes are In my case,

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Speaker 3: somebody on a moped came up right behind you, snatches

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Speaker 3: your phone out of your hand while you're not paying attention,

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Speaker 3: and after they.

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Speaker 2: Go yeah, look I can. It's very frustrating and there

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Speaker 2: has been a huge amount of discussion about this. You know,

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Speaker 2: lots of domestic media here is actually try to trace

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Speaker 2: the phones, you know, wherever they go, because they often

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Speaker 2: actually are taken straight out of the UK somewhere else.

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Speaker 2: On the other hand, I'm a bit bit cynical because

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Speaker 2: of course, if you're walking around with potentially hundreds of

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Speaker 2: pounds worth of kit just in your hand, you know

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Speaker 2: that that is a pretty dangerous thing, isn't it.

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Speaker 3: There's been a recent police and crackdown on this which

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Speaker 3: has shown to yield results. That's one of the causes

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Speaker 3: for optimism that Matthew Broker points to in this as well.

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Speaker 3: He also says make sure you're using your phone security

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Speaker 3: features good advice and as you say, Caroline, paying attention

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Speaker 3: helps to Yeah.

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Speaker 2: Absolutely, Okay, let's bring you to our top story now.

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Speaker 2: So the closure of Heatho Airport for at least a

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Speaker 2: whole day today due to a fire at a nearby

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Speaker 2: power substation, our transport reported. Danny Lee joins us now

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Speaker 2: for more. Danny, good morning. What do we know then

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Speaker 2: about what's caused Heathrow to shut down?

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Speaker 4: Good morning, Caroline Stephens. So we have a presidented shut

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Speaker 4: down due to a substation electrical fire that has taken

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Speaker 4: place just north of hethro Airport, so complete blackout for

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Speaker 4: Heathrow and the neighboring area and it's causing huge amounts

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Speaker 4: of disruption as Heathra Airport hadn't has not even opened

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Speaker 4: yet by the time the incident took place, and the

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Speaker 4: effectively Heathro Airport declaring an emergency. So what we now

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Speaker 4: have is typically on a normal day, around two hundred

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Speaker 4: thousand passions coming in and out of Heathrow Airport and

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Speaker 4: four hundred flights a day, So any flights that were

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Speaker 4: in the inbound Heathrow whatever diverting to nearby airports in

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Speaker 4: out of the UK or in Europe or even turning

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Speaker 4: back from where they were either flying across a Transatlantic

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Speaker 4: or beyond. So complete chaos that for a Friday going

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Speaker 4: into the weekend, that's going to last days in many

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Speaker 4: ways because planes and passengers and aircrew are all out

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Speaker 4: of well, planes and aircrew are all out of position.

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Speaker 4: So it's a huge headache for the airlines in the

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Speaker 4: airport to try and unpick in the days to come.

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Speaker 3: Indeed, and Danny, I mean you've explained there some of

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Speaker 3: the disruption and how this is going to have a

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Speaker 3: lasting effect even if Heathrow is able to reopen tomorrow.

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Speaker 3: I'm just looking at Version Atlantic saying that all Heathrow

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Speaker 3: flights are canceled until midday today based on previous disruption.

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Speaker 3: How long does it normally take for airlines to get

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Speaker 3: things back to normal.

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Speaker 4: Frankly, it can take up to a week even on

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Speaker 4: a good day. Frankly, the challenge for airlines is, you know,

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Speaker 4: having to reset operations and trying to figure out when

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Speaker 4: do they get the aircraft in the right place at

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Speaker 4: the right time, and that takes a few days. And

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Speaker 4: so for passengers who are being warned not to even

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Speaker 4: come to heatwhare airport until it has known that power

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Speaker 4: will resume, So there is going to be a lot

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Speaker 4: of a lot of stress for travelers who won't be

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Speaker 4: able to get out on to holidays or for business trips.

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Speaker 4: And so you know, until the airlines and the airport

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Speaker 4: know that the power will be back and resume hopefully

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Speaker 4: by midnight tomorrow, then flight situation and the operations is

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Speaker 4: a bit of an unknown.

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Speaker 2: Yeah, guitar Is saying that there's been a hit to

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Speaker 2: their operations, India saying it's operations into the capsule also affected.

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Speaker 2: And then a statement from London's Gatwick of course, one

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Speaker 2: of the other major airports around London, saying that they

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Speaker 2: are and have accepted seven diverted flights and that they're

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Speaker 2: aware of the situation that he throw airport and they

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Speaker 2: are supporting by accepting diverted flights as required. How does

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Speaker 2: this compare them to any previous disruption that he has seen,

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Speaker 2: As you say, he throws quite a lynchpin globally.

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Speaker 4: Lynchpin for not just global travel, clearly for the UK,

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Speaker 4: the amount it supports for the UK economy on a

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Speaker 4: daily basis, and look, we've not seen so much disruption

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Speaker 4: clearly airlines from time to time that had Heath Throw

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Speaker 4: and British Airways terminal go down because of the technical

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Speaker 4: issues and baggage failures. Over recent memory, now I can

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Speaker 4: still remember back in twenty I think twenty ten when

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Speaker 4: we had Hethrow shot for a few days because of

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Speaker 4: or you know, flights were disrupted because of a volcanic

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Speaker 4: ash eruption. So you know, there is a headache there

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Speaker 4: and it doesn't happen too often on such a widespread

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Speaker 4: scale for some of like Keithrow Airport to be closed

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Speaker 4: all day.

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Speaker 8: Okay, I transfer Reporter Danny Lee, thank you.

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Speaker 2: Now let's talk about Europe as the continent prepares for

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Speaker 2: a massive boost in defense spending. Munitions makers face many

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Speaker 2: hurdles to ramping up production of artillery shells, missiles and bullets,

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Speaker 2: not least the limits on supplies of gunpowder TNT and

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Speaker 2: other explosives and propellants. It's the subject of one of

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Speaker 2: our deep dive stories this morning. Joining us is our

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Speaker 2: Bloomberger porter Laura Alvis in Frankfurt. Laura, thank you for

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Speaker 2: being with us. What is the supply situation for propellants

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Speaker 2: and explosives look like? Given that the supply chain in

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Speaker 2: Europe has been under intense scrutiny since the start of

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Speaker 2: the war in Ukraine three years ago.

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Speaker 1: Good morning, Yeah, So when it comes to propellants, so

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Speaker 1: gunpowder the part of the ammunition that drives it forward,

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Speaker 1: and also when it comes to explosives, which is responsible

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Speaker 1: for the detonation these parts, they've been responsible for many

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Speaker 1: of the major bottlenecks that we currently see with European

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Speaker 1: ammunitions production. And the EU already identified this back in

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Speaker 1: twenty twenty three and they established a program which is

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Speaker 1: called ASAP, a Defense Industry funding program, and this program

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Speaker 1: has set itself some targets with regard to the amount

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Speaker 1: of propellants, in the amount of explosives that should be produced.

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Speaker 1: But what needs to be remembered is that right now

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Speaker 1: we're talking about a very different level of spending here,

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Speaker 1: right both from the European Union and from nation states

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Speaker 1: that have really rammed up spending. So these targets no

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Speaker 1: longer really align with those goals. And then when we

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Speaker 1: look at this from the company side as well, we

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Speaker 1: can really see that Europe needs to ramp up massively.

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Speaker 1: So Ryn Matthai, for example, the German defense contractor, it's

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Speaker 1: the biggest producer of propellants in Europe, and they have

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Speaker 1: already said that if we take new spending into account,

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Speaker 1: they will probably have to double their production of gunpowder

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Speaker 1: throughout the coming years to be able to get to

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Speaker 1: a point where they can produce up to twenty thousand

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Speaker 1: metric tons of gunpowder annually.

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Speaker 3: Brizilaura, what are the big obstacles to that source of rompope?

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Speaker 1: So the obstacles, on the one hand are the materials

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Speaker 1: and components that go into explosives and propellants. Examples that

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Speaker 1: can be named are, for example, cotton or nitric acid.

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Speaker 1: And for the longest time it simply wasn't the priority

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Speaker 1: for the European Union where these were sourced from. So

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Speaker 1: many of them come from places where it's cheap to

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Speaker 1: produce them, such as for example China, where of course

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Speaker 1: nowadays certain geostrategic issue that figure into this and issues

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Speaker 1: of sovereignty, so this is one of the main issues

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Speaker 1: that needs to be considered.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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