Speaker 1: This is Bloomberg Daybreak here for this Monday, the twenty
Speaker 1: February in London. Coming up today, seeking competition over conflict,
Speaker 1: the US and China struggle to achieve a meeting of
Speaker 1: minds the end of the beginning soonac looks to reset
Speaker 1: EU relations with a Brexit deal on Northern Ireland, a
Speaker 1: fee for your feed. Meta launches a subscription service across
Speaker 1: Facebook and Instagram. Questions over Ireland's economic growth, Elon fails
Speaker 1: to pick up the bill for Twitter and UK retail
Speaker 1: in need of therapy. Those are the stories we're looking
Speaker 1: at in today's papers and nine Leanne Gern's plus asking
Speaker 1: prices head north in North London Camden rises by more
Speaker 1: than seventeen That's all straight ahead on Bloomberg Daybreak Europe.
Speaker 1: The business news you need to start your day in
Speaker 1: just one fifteen minute podcast on Apple, Spotify, the Bloomberg
Speaker 1: Business App and everywhere you get your podcasts. Good morning,
Speaker 1: I'm Stephen Carroll and I'm Caroline Hecker. Here are the
Speaker 1: stories that we're following today. The top diplomats from China
Speaker 1: and the United States have traded barbs in a sign
Speaker 1: of worsening ties in their first in person meeting since
Speaker 1: the Chinese balloon was shot down above the United States,
Speaker 1: Secretary of State Anthony B. Lincoln was blunt. I made
Speaker 1: very clear to him that China sending a surveillance balloon
Speaker 1: over the United States in violation of our sovereignty, in
Speaker 1: violation of international law, was unacceptable and must never happen again.
Speaker 1: Lincoln there on CBS's face the nation. Shortly after, he
Speaker 1: met with China's Foreign Minister Wang Yi, who called the
Speaker 1: balloon incident quote hysterical, just as I would say absurd
Speaker 1: and hysterical. This is a abuse of the use of force. Wang.
Speaker 1: He refused to even cool his conversation with Anthony B.
Speaker 1: Lincoln an official meeting, arguing that the two and he
Speaker 1: spoke because the US made a request. The sorrowing mood
Speaker 1: goes beyond Rhustwick, though, as America is concerned, China is
Speaker 1: weighing whether to give Russia weapons for the war in Ukraine.
Speaker 1: The growing sense of unease between the two superpowers comes
Speaker 1: as Goldman stratagists say Chinese stocks of the potential to
Speaker 1: rise by twenty four percent this year. Bloomberg's Bryan Carters
Speaker 1: has more from Hong Kong Goldman thinks the recent sell
Speaker 1: off of Chinese stocks will reverse and that MSCI China
Speaker 1: can at eight five by the end of the year.
Speaker 1: That's up from around seventy. Now what's interesting about this
Speaker 1: call is that the strategists say that the rise will
Speaker 1: be led by earnings and not just multiple expansion. Some
Speaker 1: investors might quibble with this given the rise in geopolitical
Speaker 1: tensions of late and the property crisis, but the banks
Speaker 1: us a shift from reopening to recovery that will deliver
Speaker 1: windfall profits for business in Hong Kong. Brian Curtis, Bloomberg
Speaker 1: Daybreak hero Now, Bloomberg understands that the Prime Minister Ishisunak
Speaker 1: is preparing to unveil a d deal with the European
Speaker 1: Union on Northern Ireland. If an agreement can be reached,
Speaker 1: it could help to reset relations between the UK and
Speaker 1: EU three years after Brexit. Speaking to Bloomberg's Maria Today
Speaker 1: are at the Munich Security Conference, Sooner cautioned that nothing
Speaker 1: has been finalized. There is still work to do, there
Speaker 1: are still challenges to work through. We have not resolved
Speaker 1: all these issues. No, there is no there isn't a
Speaker 1: deal that has been done that there is an understanding
Speaker 1: of what needs to be done. I've been in Northern
Speaker 1: Ireland talking to parties there about the things that we
Speaker 1: need to fix. We're working through those. We're working through
Speaker 1: them hard and we will work through them intensely with
Speaker 1: the EU. But we are by no means done. There
Speaker 1: is no deal that has done. The Prime Minister issues
Speaker 1: soon next, speaking there to Bloomberg's Maria today O Government
Speaker 1: sources say that any deal is unlikely to be announced
Speaker 1: before Tuesday. Facebook and Instagram's parent company appears to be
Speaker 1: taking a leaf out of Twitter's book by offering verification
Speaker 1: deals to subscribers. The service will include a handful of
Speaker 1: additional parks and feature is including account verification, badgers, meta verified,
Speaker 1: wild Cast eleven dollar month of purchased directly, and is
Speaker 1: said to be primarily targeted at content creators. And Finally,
Speaker 1: North London property prices are surging as young professionals returned
Speaker 1: to jobs in the capital after the pandemic. Bloomberg's You
Speaker 1: in Pots reports now. Property website right Move says asking
Speaker 1: prices in Camden are seventeen percent higher than a year
Speaker 1: ago and are up by six percent in the past
Speaker 1: month alone. Neighboring Barnett and Islington also notched up and
Speaker 1: your gains of about eight percent. The wider picture across
Speaker 1: the capitol is more nuanced and asking prices are just
Speaker 1: a snapshot, but the activity in Camden does suggest there's
Speaker 1: burgeoning strength in the broader market. According to right Move,
Speaker 1: average rates for a fifteen percent deposit five year fixed
Speaker 1: rate mortgage and now about four point eight percent. That's
Speaker 1: down from five point nine percent back in October after
Speaker 1: the Liz Trust many budgets. Most economists do expect property
Speaker 1: parties to be lower by the end of this year
Speaker 1: than where they are now in London. I'm you and
Speaker 1: pots Bloomberg Daybreak Europe. Okay, therese are a few of
Speaker 1: our top stories for you this morning. You heard from
Speaker 1: Rically Soon at the Prime Minister there, who was speaking
Speaker 1: to our own Bloomberg. Maria Todeo, who was at the
Speaker 1: Munich Security conference over the weekend. This is kind of
Speaker 1: a hugely important forum where leaders from around the world gather.
Speaker 1: I think it's quite interesting that there were protests anti
Speaker 1: will protests on the streets in Munich over the weekend,
Speaker 1: and of course it comes as the bathters awarded this
Speaker 1: German language, real anti warn movie with a whole host
Speaker 1: of awards, and that's all quite on the Western front,
Speaker 1: of course, based on on the book around World War One.
Speaker 1: But I just thought that was kind of an interesting tie.
Speaker 1: I mean, it's it's the thing that I think people
Speaker 1: in Europe are thinking about the war in Ukraine. Yeah,
Speaker 1: and seeing the focus on that as well, very interesting
Speaker 1: to hear the commentary outcoming out of that security conference
Speaker 1: as well. In the terms of the Bathters, I was
Speaker 1: watching to see the band She's vent A Sharon did
Speaker 1: as well for four awards. Martin McDonough did make the
Speaker 1: joke when he got up to accept the award for
Speaker 1: Best British Film, Best wat Film because of course the
Speaker 1: film was shot in Ireland with the Narge the Irish
Speaker 1: cast and crew, but did have British funding starts how
Speaker 1: it ended up in that category the BAFTAs as well,
Speaker 1: But lots of winners to be watched out for, you know,
Speaker 1: everything everywhere all at once. Not managing to win as
Speaker 1: many prizes have been expected. That's a big, you know,
Speaker 1: front runner for the Oscars as well, just one prize
Speaker 1: and it's ten BAFTA nomination. There were eleven female directors.
Speaker 1: So that made quite a splash, didn't it, in terms
Speaker 1: of across all of the categories. Eleven female diet. That's
Speaker 1: been a big issue, you know, trying to get more
Speaker 1: women directors to be kind of noticed by these big awards. Yeah,
Speaker 1: one bit of glamor for us to bring you on
Speaker 1: a Monday morning. All right, up next, Ireland's economic growth
Speaker 1: is real, insists its central banker Ellen fails to pick
Speaker 1: up the bill for Twitter and UK retail is a
Speaker 1: need of therapy. Now the paper review on blue Bird
Speaker 1: Daybreak Europe. The views you need to know from today's papers.
Speaker 1: Let's have a look at the papers with Bloom, Basley
Speaker 1: and Garan's Good morning Leon. So the Financial Times headline
Speaker 1: the Irish Central banker defends runaway economic growth as real. Yes, indeed, Caroline,
Speaker 1: good morning to you. So an Irish theme after the
Speaker 1: bathtors and now we're going to the ft Now. Speaking
Speaker 1: to the Financial Times, the Governor of the Irish Central Bank,
Speaker 1: Gabrielle mcclouf, said that much of Ireland's growth, which is
Speaker 1: actually forecast to be twelve point two percent last year,
Speaker 1: that's more than treble the EU average, comes from real
Speaker 1: factories with real people, even if a lot of the
Speaker 1: activity stems from these big tech companies and pharmaceutical groups.
Speaker 1: Now mcclouth in this particular article is pushing back against
Speaker 1: accusations that the high level of economic growth is distorted
Speaker 1: and that's because of big US companies taking advantage of
Speaker 1: Dublin's low corporate taxes. Now, the debate around this An
Speaker 1: Island's economic outperformance really took center stage after the country's
Speaker 1: three point five percent quarter on quarter growth in GDP
Speaker 1: really single handedly prevented the Eurozone economy from stagnating in
Speaker 1: the final three months of last year. Many big US companies,
Speaker 1: including Google, Apple, Meta, Intel and Fiser have their European
Speaker 1: basis in Ireland, which has a relatively low twelve point
Speaker 1: five percent corporation tax. And also recently we heard that
Speaker 1: the drugmaker astra Zenica wants to move some of its
Speaker 1: services over to Dublin too instead of investing here in
Speaker 1: the UK for the tax reasons. Yeah, I mean, it's
Speaker 1: interesting to hear what Gary mccluse the argument is trying
Speaker 1: to make is that it's not this is not just
Speaker 1: due to intellectual property earning. It's actually there are factories
Speaker 1: and manufacturing things, particularly when it comes to biomedical sciences,
Speaker 1: Island as a massive exporter of that. The IRIS Statistics
Speaker 1: Office actually has a different measure of GDP that they
Speaker 1: used called G and I star, which strips out some
Speaker 1: of the effects of globalization, and that's kind of what's
Speaker 1: regarded more in terms of the how they measure the
Speaker 1: performance of the Irish economy from the statistics point of
Speaker 1: view in Ireland. But it's an interesting you know when
Speaker 1: you when you look at the effect that Ireland's economic
Speaker 1: growth had on the oldall are you reading in in
Speaker 1: the Yeah, I mean look, but the twelve and a
Speaker 1: half percent tax um um corporation tax that's been known
Speaker 1: for a long time. The accusation is sort of nothing
Speaker 1: new around around Ireland, but very very interesting though to
Speaker 1: hear those comments from Macliffe. Look the Wall Street Journal
Speaker 1: not that Elon Musque story. The wall Stree Journal says
Speaker 1: that under Elon mask, Twitter faces suits claiming over fourteen
Speaker 1: million dollars in unpaid bills. What's going on with the
Speaker 1: bills of Elon Musque? Yes, indeed, Caroline, So since Elon
Speaker 1: Musk took over Twitter, it's faced a grown list of
Speaker 1: claims that it hasn't paid its bills as a social
Speaker 1: media company is aiming to break even this year landlords,
Speaker 1: consultants and vendors, and recent months have made demands for
Speaker 1: payments in at least nine lawsuits now. According to The
Speaker 1: Wall Street Journal, the complaints against the social media company
Speaker 1: are said to be a fourteen million dollars plus interests,
Speaker 1: so no small fee there. Musk career before Twitter included
Speaker 1: very very close brushes with financial doom, including Tesner nearly nearly,
Speaker 1: very nearly running out of money, and Elon Musk has
Speaker 1: spoken about this on more than one occasion. Now. The
Speaker 1: newspaper reports that Musk says, we're not behind because we
Speaker 1: can't pay them, it's just because we're arguing whether the
Speaker 1: parts are actually right. So he wants to have a
Speaker 1: look at these deals again. I just want to bring
Speaker 1: your attention to one outstanding invoice. It's for seven thousand
Speaker 1: dollars and it was a swag bag gift box for
Speaker 1: Elon Musk now included sand blasted logo on Japanese whiskey bottle,
Speaker 1: an extra large bomber jacket, and more than two hundred
Speaker 1: and fifty dollars worth of socks. I know, whiskey socks
Speaker 1: and warmer jackets bag but in all honesty, it's you know,
Speaker 1: other people are suffering because of these out these outstandings,
Speaker 1: And I was going to say, you can't argue with
Speaker 1: the bill by not paying it. Certainly not for the
Speaker 1: landlords in London who are pretty frustrated by the sounds
Speaker 1: of things. But yeah, that's an inter swing, the one
Speaker 1: in the Wall Street Journal. Let's turn next to the Guardian.
Speaker 1: The headline there last of nearly fifteen UK retail jobs,
Speaker 1: a brutal start of according to a report. Yeah indeed,
Speaker 1: and this is according to the Center for Retail Research,
Speaker 1: and they're saying a majority of job losses are at
Speaker 1: these big large retailers such as both Tesco and Asda.
Speaker 1: Some of the main supermarkets that we shop in now
Speaker 1: national retailers we do know this, including paper Chase, the
Speaker 1: clothing chain, EMM and Co, a Chile giant, have all
Speaker 1: gone by in recent weeks, well Wilco, new Look and supermarkets.
Speaker 1: Tesco and Asda have all announced these job cuts. Now,
Speaker 1: we do know that retail job losses have been mounting
Speaker 1: for several years, and that even came before those lengthy
Speaker 1: closures after repeated COVID lockdowns, and according to The Guardian,
Speaker 1: large retail chains which have ten or more stores across
Speaker 1: the UK High Street are doing the biggest cuts when
Speaker 1: it comes to jobs. And a reevaluation of business rates,
Speaker 1: which are among the largest operating costs for retailers, is
Speaker 1: taking place from the first of April and looks likely
Speaker 1: to reduce the rateable values used to determine bills. So
Speaker 1: we are hearing about these massive job losses across the
Speaker 1: high Street. We've seen lots of department stores closed. Here Caroline,
Speaker 1: that was so used to seeing Debonym's and many of them,
Speaker 1: and now we're just seeing these job losses across the
Speaker 1: retail More pressure on the chances Jeremy Hahn to do
Speaker 1: something about those. Business rates are a complaint of old
Speaker 1: really for businesses and how they are affected. Thanks so much, Lean.
Speaker 1: Going for a look at the newspapers. Well, let's get
Speaker 1: more down the weekend's diplomatic maneuvers at the Munich Security Conference,
Speaker 1: the US Secretary of State Anthony B. Lincoln and China's
Speaker 1: top lip amout wang E mess but failed to calm
Speaker 1: tensions after the shooting down of that suspected Chinese spy balloon.
Speaker 1: For more, let's speak to Bloomberg's Bruce Einhorn in Hong Kong. Bruce,
Speaker 1: did this meeting change anything in this ratcheting up of
Speaker 1: tensions that we've had over the balloon incident? Well? I think, Um,
Speaker 1: you know, you have to look at the glass half
Speaker 1: full version of it, which is at least they're talking
Speaker 1: to one another, right, Um. But Um, aside from that, no,
Speaker 1: there wasn't. There wasn't a whole lot to point to
Speaker 1: to show that tensions are easing. Of course, this is
Speaker 1: um the first time that that there's been a high
Speaker 1: level meeting between the two sides since the balloon incident. Um,
Speaker 1: US Secretary History to Lincoln was supposed to be going
Speaker 1: to China. He called off that visit. Um. They haven't
Speaker 1: said that it was canceled. They said it's postponed. Um,
Speaker 1: but we haven't heard anything about when it will take place.
Speaker 1: And given the exchanges that took place in Munich, Um,
Speaker 1: it's unclear when the two sides will be ready to
Speaker 1: have that kind of a high level meeting. Okay, look
Speaker 1: on the balloon issue, though it's in the past, and
Speaker 1: it's kind of finger pointing. I think the bigger issue
Speaker 1: surely is Ukraine. The kind of blunt statements that b.
Speaker 1: Lincoln made about what China may do with Russia. Yes, so,
Speaker 1: the Secretary of States said that the US has intelligence
Speaker 1: that China is preparing to provide military assistance to Ukraine,
Speaker 1: something that China has denied. China has said that far
Speaker 1: from that, they're actually trying to arrange for some sort
Speaker 1: of a peaceful settlement in Ukraine. Um. So again two
Speaker 1: very distinct, very different views of what's happening between the
Speaker 1: US and China when it comes to the Chinese role
Speaker 1: in Ukraine. And meanwhile, Wangi seeking warmer political relations it
Speaker 1: seems with the European Union. Uh, well, that is part
Speaker 1: of a Chinese effort to try to split off the
Speaker 1: Europeans from the Americans. Um We've seen that before, say,
Speaker 1: with China's attempt to try to get the Netherlands to
Speaker 1: not go along with U S sanctions when it comes
Speaker 1: to semiconductors. That didn't succeed. We'll see if they have
Speaker 1: any better luck this time. This is Bloomberg Daybreak Europe,
Speaker 1: your morning brief on the stories making news from London
Speaker 1: to Wall Street and beyond. Look for us on your
Speaker 1: podcast feed every morning, on Apple, Spotify, and anywhere else
Speaker 1: you get your podcasts. You can also listen live each
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Speaker 1: played Bloomberg thirty. I'm Caroline Heitka and I'm Stephen Carroll.
Speaker 1: Join us again tomorrow morning for all the news you
Speaker 1: need to start your day right here on Bloomberg Daybreak
Speaker 1: Europe eight