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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Blueberg

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Speaker 1: DABAC podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Tuesday, the third of September in London.

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Speaker 1: I'm Caroline Hepkeet.

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Speaker 2: And I'm Stephen Carroll. Coming up today. The UK halts

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Speaker 2: the sale of some arms to Israel over the risk

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Speaker 2: of breaking international law.

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Speaker 1: Cathay Pacific cancels flights after finding a faulty engine part

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Speaker 1: on an air Boss. A three point fifty.

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Speaker 2: Plus Reshaping the World of Work and You study finds

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Speaker 2: that London workers are in the office for just half

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Speaker 2: of the week.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: The UK will suspend some licenses for arms exports to

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Speaker 2: Israel after concluding the use of British components in Gaza risks,

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Speaker 2: violating international humanitarian law. The decision is a break from

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Speaker 2: allies and covers components used in F sixteen fighter aircraft, helicopters,

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Speaker 2: drones and naval systems, as well as i items that

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Speaker 2: facilitate ground targeting. Britain's Foreign Secretary, David Lamy says it's

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Speaker 2: not a decision that has been taken lightly.

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Speaker 3: Israel's actions in Gaza continue to lead to immense loss

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Speaker 3: of civilian life. Israel could reasonably do more to ensure

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Speaker 3: life saving food and medical supplies reach civilians in Gaza.

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Speaker 2: David Lammy says the suspension does not amount to an

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Speaker 2: arms embargo and won't have a material impact on Israel's security.

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Speaker 2: The move was criticized by senior Israeli politicians and comes

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Speaker 2: as Prime Minister benjaminette Yiaho faces growing pressure from those

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Speaker 2: in his own country to secure a deal to release

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Speaker 2: hostages currently being held by Hamas in Gaza.

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Speaker 1: European officials say that they expect Iran to deliver ballistic

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Speaker 1: missiles to Russia imminently, while Tehran has supplied hundreds of

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Speaker 1: drones to Moscow during its two and a half year

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Speaker 1: war in Ukraine. Sources tell Bloomberg that this would be

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Speaker 1: a worrying development in the conflict. Ballistic missiles typically fly

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Speaker 1: much faster than cruise missiles or drones, and can carry

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Speaker 1: larger payloads. The US and other NATO allies have repeatedly

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Speaker 1: warned around against such a move, and are pressing ahead

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Speaker 1: with diplomatic efforts to prevent it from happening.

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Speaker 2: Cathay Pacific has canceled almost all of its scheduled flights

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Speaker 2: from Hong Kong to Singapore today due to inspections. A

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Speaker 2: raft of other services are also being scrapped after the

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Speaker 2: discovery of a faulty engine component on some of the

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Speaker 2: airlines Airbus A three fifty jets. The first failing part

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Speaker 2: was on earthed on Monday on a plane heading to Zurich.

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Speaker 2: Bloomberg's transport reporter Danny Lee says concern is now building

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Speaker 2: across the sector.

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Speaker 4: The concern now is if Cathay's having these issues, does

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Speaker 4: this extend to other Airbus A three fifty operators, and

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Speaker 4: there are many of this which are in Asia and

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Speaker 4: across the.

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Speaker 2: World Bloomberg Danny Lee, speaking there, Cathay says that has

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Speaker 2: canceled forty eight flights, including return legs. There is Hong

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Speaker 2: Kong to Singapore service as a flagship for the airline,

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Speaker 2: which is among the world's biggest operators of the long

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Speaker 2: haul A three point fifty.

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Speaker 1: Volkswagen is considering factory closures in Germany for the first

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Speaker 1: time in its eighty seven year history. Data from just

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Speaker 1: Auto shows analysts determined that the automaker and Piers Delantis

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Speaker 1: and Reno were operating more than thirty factories that they

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Speaker 1: considered unprofitable. European car sales are still nearly a fifth

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Speaker 1: lower than pre pandemic levels, but Volkswagen's CFO Arno Antletz

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Speaker 1: has told Bloomberg that the firm is performing well despite

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Speaker 1: headwinds after its quarterly results were released last month.

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Speaker 5: If you take out some restructuring effects and some one

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Speaker 5: of the achieved a seven point six percent margin, which

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Speaker 5: is likely above our expectations for the quarter in a

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Speaker 5: difficult environment. And this was only possible based on our

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Speaker 5: great brands, on great products and obviously a strong, strong

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Speaker 5: team effort.

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Speaker 1: Volkswagen's are no antlets speaking there. The auto giant showed

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Speaker 1: that it was shifting into downsizing in July when its

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Speaker 1: Audi brand announced plans to cut ninety percent of the

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Speaker 1: three thousand workers at a plant in Brussels. Now CEO

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Speaker 1: Oliver bloom is working to reverse a loss of market

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Speaker 1: share in China, Volkswagen's biggest market.

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Speaker 2: Hewlett Packard says it will pursue its four billion dollars

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Speaker 2: damages claim in London against the estate of the recently

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Speaker 2: deceased British tag tycoon Mike Lynch. As Chris Pez reports,

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Speaker 2: the decision to move forward puts the company on a

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Speaker 2: reputational tightrope.

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Speaker 6: Mike Lynch and his eighteen year old daughter were killed

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Speaker 6: after a storm struck their yacht last month. His wife,

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Speaker 6: who was also on board, managed to escape. Now just

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Speaker 6: over a week after the tragedy, Hewlett Packard says it

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Speaker 6: plans to continue to seek damages from the civil court

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Speaker 6: case in the UK that found that Lynch had fraudulently

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Speaker 6: boosted the value of his company Autonomy before the US

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Speaker 6: company purchased it. In the event of death, a UK

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Speaker 6: civil claim automatically passes to the estate of the defendant,

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Speaker 6: but the prospect of pursuing the money from Lynch's family

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Speaker 6: is likely to be deeply unpopular with many in London.

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Speaker 6: Chris Pitt Bloomberg Radio.

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Speaker 1: Right Move is working with UBS and Morgan Stanley to

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Speaker 1: respond to an unsolicited takeover interest from Aria Group. Sources

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Speaker 1: say the UK's biggest property portal is speaking to the

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Speaker 1: banks about its next steps. The discussions come after Australia's Aria,

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Speaker 1: part of Rupert Murdoch's Empire, said that it's considering a

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Speaker 1: possible cash and stock offer for the firm. Shares in

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Speaker 1: Right Move stored twenty seven percent on Monday in London, London,

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Speaker 1: the biggest daily gain on record. Now, in a moment,

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Speaker 1: we will discuss mounting Israeli anger over Hamas hostages, and

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Speaker 1: in London, a warning about the city's productivity given how

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Speaker 1: reluctant workers are to spend days in the office. New

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Speaker 1: research out today, But first, this story also caught my eye.

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Speaker 1: Have you noticed your favorite items on the supermarket being downsized?

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Speaker 5: Yes?

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Speaker 2: I mean I think it's almost impossible to to be honest,

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Speaker 2: because it does seem like everything's gotten smaller. But I

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Speaker 2: think there's a slight upside of this. We're talking about

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Speaker 2: a survey from Barkley's showing that eight and ten shoppers

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Speaker 2: say they've been affected by shrainflation. This suits me though

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Speaker 2: when it comes to things like sweets, because I would

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Speaker 2: rather that the bag of sweets is smaller, so I

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Speaker 2: will eat fewer of them. Although I obviously resent paying more,

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Speaker 2: it's better.

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Speaker 1: For your wasteline. Well, the issue about shrinkflation is yes,

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Speaker 1: it is happening, but it's the fact that it's happening

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Speaker 1: more than once, and it does particularly affect issues snacks

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Speaker 1: like chocolate and biscuits, but supplies apparently are reducing the

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Speaker 1: amount the quantity in the bags multiple times and shoppers

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Speaker 1: have noticed. So this also is something that the Berkley

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Speaker 1: survey picked up. Anyway, nice bit of consumer news this morning.

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Speaker 2: Let's get bringing more now on our top story in

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Speaker 2: the Foreign Secretary David Lammy has announced the UK government

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Speaker 2: to suspending some arms export licenses for exports to Israel.

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Speaker 2: It comes as thousands of Israelis demonstrated on Munday in

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Speaker 2: a bid to force Prime Minister Banjaminetnia Who's government to

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Speaker 2: agree to a ceasefire with the mass and secure the

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Speaker 2: release of hostages in Gaza. Joining us now for more

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Speaker 2: is our Bloomberg Horizons Middle Eastern Africa anchored Gamanda Versiity Jamana,

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Speaker 2: Good morning. What impact. First of all, does this announcement

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Speaker 2: from the UK have The Foreign Secretary says it's not

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Speaker 2: an arms embargo.

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Speaker 7: Yeah, that's exactly it. So there are two things to

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Speaker 7: note here. The first thing is that this is not

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Speaker 7: an arms embargo. What the UK have announced is they're

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Speaker 7: looking to hold some arms licenses to Israel and the

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Speaker 7: justification for that is because of concern about a potential

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Speaker 7: breach of humanitarian law. But again they have added that

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Speaker 7: the UK government as of now could not arbitrate on

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Speaker 7: whether Israel has already breached international humanitarian law. But all

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Speaker 7: of this would be in anticipation of potentially some of

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Speaker 7: these arms breaching that law. The second point to note

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Speaker 7: is that the UK only provides around one percent of

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Speaker 7: Israel's weapons in totality. You're not talking about a huge

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Speaker 7: amount of weapons. Are dependents from Israel on UK's weapons

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Speaker 7: supply versus the US, where you're talking about seventy percent.

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Speaker 7: So again not significant in terms of actual impact. But

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Speaker 7: the political messaging is important here because essentially we are

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Speaker 7: seeing some voices from the international community say that they

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Speaker 7: want to start applying a bit of pressure on the

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Speaker 7: Natanyahu government with the actions that are being taken in Gaza,

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Speaker 7: with the view of course to eventually get to this

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Speaker 7: ceasefire deal which has been widely talked about the last

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Speaker 7: couple of weeks, and we can talk about that, but

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Speaker 7: ultimately this seems to be a political messaging from the

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Speaker 7: UK government as opposed to one that's going to have

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Speaker 7: a tax impact.

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Speaker 1: Yeah, so shift in the messaging from the UK. I

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Speaker 1: mean you mentioned pressure. There is pressure, given protests by

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Speaker 1: israelis US pressure. Are we reaching potentially a turning point

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Speaker 1: in what has been an eleven month conflict.

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Speaker 7: I would say internally, we've never seen as much political

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Speaker 7: pressure on Natanya, who as we saw over the last

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Speaker 7: couple of days, remember Sunday, after those six hostages were

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Speaker 7: found killed in the Gaza tunnel, people took to the

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Speaker 7: streets extremely angry, expressing a lot of frustration against the

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Speaker 7: Prime Minister and his cabinets, saying that they need to

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Speaker 7: really focus now on securing the release of the estimated

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Speaker 7: to be more than one hundred hostages still sitting with

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Speaker 7: Hamas before it's too late. And then yesterday we saw

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Speaker 7: another big strike put together by the labor unions. By

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Speaker 7: the end of the evening a court had ruled that

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Speaker 7: the strikes had to end because they didn't find any

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Speaker 7: economic argument for it. But ultimately what we're seeing is

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Speaker 7: the Prime Minister is standing very defiant that Tanya, who

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Speaker 7: gave a speech saying yesterday saying that he doesn't want

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Speaker 7: to make any more concessions, and one of the sticking

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Speaker 7: points is maintaining that military presence across the Philadelphia Corridor,

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Speaker 7: that is the border that separates from Egypt, Gaza from Egypt,

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Speaker 7: I should say, and it is a deal breaker for

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Speaker 7: both Hamas and Egypt and those discussions, Egypt being one

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Speaker 7: of the key mediators. So it's difficult to see at

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Speaker 7: this point where the compromise is going to come from

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Speaker 7: and if Israel and Natinejou's government are going to accept

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Speaker 7: to pull back, say fifty or one hundred meters away

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Speaker 7: from that border to come to a form of an

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Speaker 7: agreement that's acceptable for all parties involved, in addition to

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Speaker 7: securing the release of the hostages in exchange for some

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Speaker 7: of those Palestinian prisoners as well.

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Speaker 2: So that's the lass on the negotiations towards some form

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Speaker 2: of ceasefire or settlement. Do you wanna what about the

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Speaker 2: risks of a wider war? We've been talking a lot

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Speaker 2: about the risks of Iran attacking Israel after the killing

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Speaker 2: of the Harmas leader in Tehran a few weeks ago.

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Speaker 7: Yeah, yeah, I think what's interesting is a week ago

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Speaker 7: we were sitting here around the same time talking about

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Speaker 7: the attacks that took place between Israel and Tesbulah, and

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Speaker 7: that was no because Hesbelah acted unilaterated. Then they didn't

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Speaker 7: come out with a coordinated attack or response to Israel

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Speaker 7: in conjunction with Iran. Iran since then have still reiterated

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Speaker 7: that their own response is coming to you, but they

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Speaker 7: haven't done anything. They're binding their time, they're waiting to

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Speaker 7: see and analysts that we speak to in the region

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Speaker 7: say that they're also waiting to see what happens with

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Speaker 7: these seas Far discussions. This is why the Seesfar and

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Speaker 7: Gaza is so important, because once they do agree to it,

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Speaker 7: it gives room, it gives some time and space for

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Speaker 7: diplomatic conversations to start taking over. And I also yesterday

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Speaker 7: I just want to repeat this point too. The US

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Speaker 7: have reiterated their desire to get the seas Far deal

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Speaker 7: across the line as well, and the Washington Post for

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Speaker 7: reporting that the US are potentially going to come up

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Speaker 7: with a take it or leave it proposal for all

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Speaker 7: parties involved. And so if you want to think about

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Speaker 7: short term conflict in the region, in order to bring

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Speaker 7: down the temperature, you have to go to the cease

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Speaker 7: fire agreement first.

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Speaker 1: Jamana, thank you so much for being with us this morning.

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Speaker 1: That has Bienberg Horizons Anker Jamanabasserci on the latest then

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Speaker 1: from the Middle East.

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Speaker 2: Now, London lags behind other major global cities when it

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Speaker 2: comes to working in the office, with full time workers

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Speaker 2: only spending half of the week on site. The research

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Speaker 2: from the Center of the City's think tank raises concerns

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Speaker 2: about both productivity and London's appeal as an international investment destination.

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Speaker 2: Are reported to Adebio is here with more details. Good

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Speaker 2: morning to you. How does London compare to other cities

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Speaker 2: in this report?

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Speaker 8: Well, Stephen, you and I were in the studio every

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Speaker 8: day we come into work, but it doesn't seem that's

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Speaker 8: the case in the rest of the City of London.

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Speaker 8: It is lagging behind other major cities, including the likes

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Speaker 8: of Paris, New York, Sydney. But it actually is important

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Speaker 8: to remember here that nowhere has one hundred percent attendance rate.

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Speaker 8: This is according to a report by the Center for

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Speaker 8: Cities think tank. The highest was Paris, where workers are

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Speaker 8: in the office three point five five days a week.

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Speaker 8: In comparison, in central London, employees are only in the

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Speaker 8: office two point seven days a week, and only Toronto

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Speaker 8: is actually at that same level. But across the board

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Speaker 8: since the COVID pandemic in twenty twenty, nowhere has really

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Speaker 8: seen that return to pre lockdown levels of office time.

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Speaker 8: There is concern though from the authors of this report

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Speaker 8: about what they're calling a sluggish return to the office

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Speaker 8: in London, and they think it could have some implications

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Speaker 8: in terms of the city's ability to keep up with

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Speaker 8: global competitors on benchmarks like productivity. And they do see

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Speaker 8: London actually compared to other cities, being on a trajectory

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Speaker 8: which we'll see it fall further behind as time goes on.

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Speaker 1: So then why is London lacking behind them? I mean

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Speaker 1: in terms of bringing people back to the office.

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Speaker 8: Well, this might be where the comparison to other cities

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Speaker 8: is having an impact as well. Actually, expense seems to

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Speaker 8: be a big factor for work is actually over forty

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Speaker 8: percent of those surveyed are saying that reduced travel costs

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Speaker 8: are a big perk of working from home, and that's

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Speaker 8: compared to thirty four percent of people across all cities.

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Speaker 8: So the expense of traveling to work is something that's

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Speaker 8: worrying London is more than workers elsewhere. And actually, if

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Speaker 8: you look at the data that's consistent there was a

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Speaker 8: survey last year that actually ranked the UK as the

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Speaker 8: country with the most expensive public transport in the world,

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Speaker 8: so it's not surprising that it's a big concern for

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Speaker 8: those working here, and if you look elsewhere. In France,

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Speaker 8: for example, employers are actually obliged to cover part of

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Speaker 8: the cost of season tickets for transport to and from

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Speaker 8: work for their employees. And actually looking at the survey,

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Speaker 8: Paris is top of the survey in terms of employees

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Speaker 8: working the most days from the office. But outside of costs,

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Speaker 8: it seems that time saving is another big draw for

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Speaker 8: working from home. In London, over half said that was

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Speaker 8: a big bonus for them coming into the offic What

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Speaker 8: was another interesting nugget in the report that I thought

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Speaker 8: actually was that over thirty percent of Londoners asked actually

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Speaker 8: said they were more productive when they worked from home.

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Speaker 8: And that's despite obviously the big fear around the drop

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Speaker 8: in productivity which comes when workers choose to work remotely.

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Speaker 8: So perhaps it may not be as big a problem

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Speaker 8: as the fear suggest Yeah.

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Speaker 2: Indeed, it's worth remembering that for a lot of people

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Speaker 2: the flexibility is actually what makes them more productive necessarily

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Speaker 2: than being in the office. One hundred percent of the time.

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Speaker 2: What are the broader economic implications that we can draw

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Speaker 2: from this research.

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Speaker 8: Well, the report says that less face to face interaction

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Speaker 8: could put London at a productivity disadvantage. That's what the

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Speaker 8: Center for Cities are saying. And of course Keir Starman

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Speaker 8: and new Prime Minister, has put growth really at the

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Speaker 8: heart of his economic mission, so there are some fears

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Speaker 8: around what the implications could be. We know that there

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Speaker 8: is an impact on local economies when people choose to

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Speaker 8: work remotely. They don't come into the office, they don't

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Speaker 8: buy lunch, they don't do any last minute shopping, so

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Speaker 8: businesses could fear seeing fewer levels of footfall, for example.

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Speaker 8: But the economic implications are really to be stated. We'll

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Speaker 8: see what happens as we continue to move into our

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Speaker 8: post COVID working reality.

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Speaker 2: stories making news from London to Wall Street and beyond.

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Speaker 4: Mm hmm