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

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Speaker 2: This is the Big DAYBAK podcast. Good morning, It's Friday,

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Speaker 2: the twelfth of September. I'm Caroline Hepkat in London.

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Speaker 3: And I'm Stephen Caroline Brussels. Coming up today. Questions mount

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Speaker 3: over the British Prime Minister's judgment as he sacks his

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Speaker 3: ambassador to the US, Peter Mandelsson, after Bloomberg's exclusive reporting

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Speaker 3: on his ties to Jeffrey Epstein.

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Speaker 2: The FBI releases footage of a suspect in the killing

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Speaker 2: of US conservative activist Charlie Kirk and a reward of

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Speaker 2: up to one hundred thousand dollars for information.

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Speaker 3: Plus kicking open Europe's IPO window. We look at a

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Speaker 3: flurry of listings that suggest that tariff induced caution of

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Speaker 3: recent mods may have passed.

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

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Speaker 3: The UK's Prime Minister is facing growing questions over what

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Speaker 3: he knew about Peter Mandelson's relationship with Jeffrey Epstein when

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Speaker 3: he appointed him as US ambassador. Here Starmer fired Mandelsson

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Speaker 3: after Bloomberg published a series of emails between Mandelson and

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Speaker 3: the convicted pedophile. Semester's show. The former ambassador offered Epstein's

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Speaker 3: support and advice after the financiers conviction in two thousand

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Speaker 3: and eight for soliciting sex from a minor, saying quote,

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Speaker 3: I think the world of view. Peter Mandelsson's ties to

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Speaker 3: Epstein were known when he was made ambassador, although he

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Speaker 3: denied that they were extensive and said he regretted them.

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Speaker 3: But Starmer's office concluded that Bloomberg's reporting showed their relationship

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Speaker 3: to be closer than was known about. Here's what Foreign

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Speaker 3: Office Minister Stephen Doherty told the House of Commons.

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Speaker 4: The email's show was to speaker that the depth and

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Speaker 4: extent of Lord Mallison's relationship with Jeffrey Epstein is materially

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Speaker 4: different from that known at the time of his appointment.

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Speaker 3: Stephen Doherty speaking there. The timing could hardly be worse

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Speaker 3: for the British government, which is preparing to host US

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Speaker 3: President Trump's state visit next week, as the American leader

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Speaker 3: is facing questions of his own about his relationship with Epstein.

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Speaker 2: The FBI has released footage of these suspects believed to

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Speaker 2: be involved in the shooting of American political activist Charlie

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Speaker 2: Kirk in Utah. The video shows an individual fleeing the scene.

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Speaker 2: Investigators have recovered what they believe to be the murder weapon,

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Speaker 2: but are still searching for the culprit. Utah Governor Spencer

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Speaker 2: Coggs says prosecutors will seek the most severe punishment.

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Speaker 5: More than anything, we are going to catch this person.

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Speaker 5: Last thing I will just say is we've been working

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Speaker 5: with our attorneys getting everything that we need after Davits

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Speaker 5: ready so that we can pursue the death penalty in

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Speaker 5: this case.

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Speaker 2: Utah Governor Spencer Cox speaking there, he also accused other

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Speaker 2: countries of spreading disinformation about the incident and trying to

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Speaker 2: cause unrest in the US. A reward of up to

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Speaker 2: one hundred thousand dollars is now being offered for information

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Speaker 2: about the killing.

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Speaker 3: NATO was preparing defensive military measures to strengthen its eastern

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Speaker 3: flank after Russian drones crossed into Poland this week. Military

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Speaker 3: planning is being led by Supreme Allied Commander in Europe

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Speaker 3: Alexis Grinkovich, who is assessing the situation and what supplies

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Speaker 3: may be needed.

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Speaker 6: And just as you are committed to us, we are

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Speaker 6: committed to you. NATO Land Forces Forward led by Germany,

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Speaker 6: with additional contributions from Belgium, Chechia, Luxembourg, the Netherlands in

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Speaker 6: Norway are here and growing. Germany will permanently station a

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Speaker 6: brigade in Lithuania. This is a major step to strengthen

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Speaker 6: our deterrence and defense on the eastern flank of the Alliance's.

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Speaker 3: The top US commander in Europe, Alexis Grinkovich, speaking during

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Speaker 3: a visit to Lithuania Poland, yesterday, asked allies for additional

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Speaker 3: air defense systems and counter drone technology to better protect

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Speaker 3: against Russian incursions. With offers of assistance starting to come in.

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Speaker 3: President Trump said the incident could have been a mistake,

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Speaker 3: but expressed his frustration with the event that has alarmed

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Speaker 3: WARSAW and other NATO allies.

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Speaker 2: Open AI says that it's closer to converting into a

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Speaker 2: for profit company, which would include giving its nonprofit arm

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Speaker 2: one hundred billion dollars inequity. The maker of chat GPT

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Speaker 2: announced it's nearing the end of months of negotiations with

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Speaker 2: top shareholder Microsoft to overhaul its structure and unlock an

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Speaker 2: eventual public listing. The one hundred billion dollar at stake

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Speaker 2: would also give the company a roughly twenty percent share

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Speaker 2: of open ai if it closes a deal to let

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Speaker 2: employees sell shares at evaluation of five hundred billion dollars.

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Speaker 3: The leaders of open Ai and Nvidia are planning to

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Speaker 3: invest billions of dollars in UK data centers when they

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Speaker 3: visit the country next week. Bloomberg's Freddie Filstone has more.

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Speaker 7: US President Donald Trump is on a state visit to

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Speaker 7: Britain next week, but he's bringing with him open Ais,

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Speaker 7: Sam Altman and Nvidia's Jensen Hwang as part of a

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Speaker 7: group of American executives. They're poised to invest tens of

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Speaker 7: billions of dollars in artificial intelligence, and Prime Minister kir

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Speaker 7: Starmer has promised to turbocharge AI to help grow the

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Speaker 7: UK economy. Bloomberg now understands open Ai and Nvidia are

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Speaker 7: working with London based and Scale as part of a

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Speaker 7: billion dollar deal to build data centers in London. Freddie

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Speaker 7: Fulston Bloomberg Radio.

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Speaker 2: Bloomberg understands the ECB policymakers are convinced that no further

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Speaker 2: interest rate cuts are needed to deliver two percent inflation

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Speaker 2: barring a major shock in the Euro Area. The European

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Speaker 2: Central Bank has kept interest rates unchanged at two percent

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Speaker 2: for a second meeting in a row. Yesterday, new ECB

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Speaker 2: forecasts show inflation staying close to two percent target and

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Speaker 2: growth holding steady, even as Donald Trump's tariffs and political

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Speaker 2: turmil in France way on sentiment. ECB President Christina Guard

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Speaker 2: signaled confidence that inflation is under control.

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Speaker 8: The disinflationary process is over. Inflation is where we want

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Speaker 8: it to be, laterst reading two point one two to

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Speaker 8: two point one medium term outlook on target. In the

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Speaker 8: same breadth affair, I say that we decide meeting by meeting,

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Speaker 8: that we are data dependent, and that we will decide

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Speaker 8: accordingly in order to make sure that we stay in

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Speaker 8: a good.

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Speaker 2: Place, ECB President Christine the Guard, speaking there. Trade is

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Speaker 2: reacted by dialing back bets on more rate cuts. Meanwhile,

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Speaker 2: in the US, underlying inflation rose as expected in August,

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Speaker 2: keeping the US Federal Reserve on track to cut interest

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Speaker 2: rates next week.

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Speaker 3: In a moment, we'll bring you more in the file

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Speaker 3: out from Bloomberg's exclusive reporting on those emails between Jeffrey

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Speaker 3: Epstein and Peter Mandelson and what it means for the

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Speaker 3: British Prime Minister now, plus why Europe's IPO pipeline is

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Speaker 3: starting to look a little more rosy after the latest

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Speaker 3: string of listings. But in the story we've been reading

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Speaker 3: this morning on photo editing tools and could this be

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Speaker 3: what lifts AI to the next level for Internet users,

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Speaker 3: this is what Bloomberg Opinions Katherine Warbeck has been writing about.

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Speaker 3: She got a preview of one of the new Chinese

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Speaker 3: tools in this areas try to use it to restore

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Speaker 3: a photo of her late grandfather. That didn't quite work

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Speaker 3: as planned, but she was able to generate some interesting

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Speaker 3: images by just pulling inspiration fromages available online. So she

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Speaker 3: was able to make one of President Trump holding up

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Speaker 3: a bedazzled l Boo Boo doll, for example, although when

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Speaker 3: she asked the software to do it for cheating ping,

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Speaker 3: it did not respond to that request. But she's talking

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Speaker 3: about I suppose the potential for advertisers and consumers of

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Speaker 3: if you can create photos that are essentially manipulated by AI,

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Speaker 3: this could be the path to monetization for some of

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Speaker 3: these tools, which is, as you know, one of the

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Speaker 3: really big questions about AI, the multi billions of dollars

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Speaker 3: being poured into this technology. But oftentimes it's not actually

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Speaker 3: yielding the results or the return for those companies just yet.

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Speaker 3: Of course, the other side of this is the risks

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Speaker 3: involved too. You start putting manipulated photos out there, how

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Speaker 3: do you control it? How do you flag it to

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Speaker 3: Internet users? But an interesting thought I suppose on that

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Speaker 3: moment of where we are in AI now, and of

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Speaker 3: course the big question is the technology evolves so fast,

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Speaker 3: how do you keep up with regulatoring US, monitoring us

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Speaker 3: trying to understand the sort of impact it can have.

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Speaker 6: Yeah.

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Speaker 2: Absolutely, I think that you are already seeing how AI.

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Speaker 2: I mean just since January when I was downloading a

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Speaker 2: whole suite of different AI applications just to kind of

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Speaker 2: have a go and see whether I could use it

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Speaker 2: or not. It feels like this September, in that space

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Speaker 2: of time, it has already really dawned on people how

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Speaker 2: much it's going to revolutionize different industries. And I think

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Speaker 2: advertisings are absolutely key if you do play around with

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Speaker 2: the tools. Yes, I could. I've put myself in all

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Speaker 2: space outfit. Yeah, exactly, you can. It is strange and interesting,

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Speaker 2: but you're right, it's also about regulation. I mean, I

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Speaker 2: think this goes to the point that we were making

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Speaker 2: earlier about data centers in the UK week, this expectation

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Speaker 2: of billions of dollars being invested into creating data centers

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Speaker 2: in the UK. The part of that is also to

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Speaker 2: do with the slightly tougher regulations that there are in

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Speaker 2: the EU around artivision intelligence. But you know, if it

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Speaker 2: also supercharges growth in the UK, will it be worth it?

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Speaker 2: I think that's a big question, isn't it.

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Speaker 1: Yeah?

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Speaker 3: Indeed, And of course those data centers something that is

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Speaker 3: going to be announced as part of Donald Trump's visit

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Speaker 3: to the UK. The big story now overshadowing that visit

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Speaker 3: is the sacking of Peter Mandelsson, the British ambassador to

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Speaker 3: the US, after his ties to Jeffrey Epstein were revealed

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Speaker 3: in those emails published by Bloomberg. We have our Bloomberg

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Speaker 3: opinion columnist Rosa Prince with us for more on that

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Speaker 3: as well. Rosie, you've been writing about this story. What

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Speaker 3: was it in these emails revealed by our reporting that

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Speaker 3: made it impossible for Peter Mandelson to stay on.

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Speaker 1: Well?

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Speaker 9: When he joined the government as UK Ambassador to the US,

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Speaker 9: Peter Mandlson would have had a thorough vetting to make

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Speaker 9: sure there were no issues in his background. Now, what

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Speaker 9: the government is saying is that he wasn't fully transparent

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Speaker 9: about the extent of his friendship and relationship with Jeffrey Epstein,

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Speaker 9: as the emails that Bloomberg published yesterday showed the friendship

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Speaker 9: was very close and continued after Epstein had been sent

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Speaker 9: to prison for the first time, and even included kind

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Speaker 9: of lobbying for him to seek early release. It suggested

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Speaker 9: that he didn't believe that the crimes he were accused

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Speaker 9: of were valid, that perhaps the accusers were not telling

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Speaker 9: the truth, and it definitely showed that he wanted Epstein

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Speaker 9: to fight to get out of prison early. Kirstym and

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Speaker 9: his team are now saying that they felt that that

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Speaker 9: was not disclosed to them at the time, that this

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Speaker 9: was embarrassing and in the circumstances he had to go.

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Speaker 2: Look, Peter Mandelson was dubbed, you know, the first spin doctor.

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Speaker 2: There was always this possibility, wasn't there. I mean, the

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Speaker 2: reason that he was hired was for his business ties,

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Speaker 2: his network in both politics and business, and so I

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Speaker 2: suppose there are questions now aberhout kis Stalman whether he

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Speaker 2: got the balance right. Does it raise questions about the

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Speaker 2: Prime Minister's judgment in picking Mandelssohn.

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Speaker 9: Yeah, I wrote in my column yesterday that I think

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Speaker 9: it really does. It was always a risk to hire

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Speaker 9: Peter Mandalsson. He's got such a long reputation, he had

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Speaker 9: already had to resign from the cabinet twice. Trouble seems

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Speaker 9: to follow him wherever he goes. Now. He does have

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Speaker 9: undoubted talents, as you say, he's very good at getting

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Speaker 9: on with people, he's very effective, he's very smart. But

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Speaker 9: kirs Starmer was taking a risk when he hired him,

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Speaker 9: and I think it's a risk that has not paid off.

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Speaker 9: There was this sort of sickening air of inevitability about

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Speaker 9: this scandal, and I also think that what it highlights

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Speaker 9: is the fact that Kirstarmer's claim to have been putting

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Speaker 9: the victims first at all time times just isn't true.

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Speaker 9: If he'd really thought this true, I think he would

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Speaker 9: have appreciated that it wasn't worth it. And he's now

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Speaker 9: paying the price, not just as you say, having lost

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Speaker 9: his ambassador on the eve of a very important visit

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Speaker 9: by Donald Trump, but also in his own political standing.

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Speaker 9: It's two weeks running now that he has stood up

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Speaker 9: in the House of Commons during Prime Toter's question time

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Speaker 9: and defended someone very close to him in who were

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Speaker 9: in such indefensible positions really that within hours they had

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Speaker 9: to stand down, And I just think that's not a

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Speaker 9: very good look for the Prime Minister.

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Speaker 6: Right.

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Speaker 3: So this is happening at the time that we're just

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Speaker 3: days away from Donald Trump's visit to the UK. Now

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Speaker 3: the key point person between the UK and the US

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Speaker 3: won't be there. How much of a problem is that

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Speaker 3: going to be.

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Speaker 9: I don't think it's a huge problem in terms of

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Speaker 9: the logistics, the arrangements, everything that's going on with the visit.

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Speaker 9: That's all been done. The hard work has been done

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Speaker 9: thanks to those girls that Peter Manderson has. He had

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Speaker 9: a very able number two in the form of James Roscoe,

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Speaker 9: who is now in charge of the embassy. So I

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Speaker 9: think the visit from that point of view will go

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Speaker 9: ahead just as it was planned to. I think that

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Speaker 9: it will not please Donald Trump to have this big

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Speaker 9: fuss just as he travels to the UK. Obviously, Donald

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Speaker 9: Trump has his own issues with the Epstein affair. He

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Speaker 9: will not want that or to be amplified. He won't

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Speaker 9: want to have to go into a press conference and

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Speaker 9: ask questions about Jeffrey Epstein, which I think the UK

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Speaker 9: press in particular will now feel they are justified in

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Speaker 9: asking because of this scandal around Peter Mandilsson. So the

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Speaker 9: whole thing is not ideal on that front.

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Speaker 2: Yeah, and that's one significant question, isn't it for next week?

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Speaker 2: How the Prime minister is going to navigate that during

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Speaker 2: the visit.

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Speaker 9: That's right, there are a number of moments of jeopardy.

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Speaker 9: They are meeting at Checkers, which is the Prime minister's

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Speaker 9: country tree residents. There is a formal press conference planned,

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Speaker 9: and as you know, there are opportunities, any number of

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Speaker 9: opportunities for Donald Trump to speak off the cuffee. Likes

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Speaker 9: to do that, he likes being around reporters. I kind

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Speaker 9: of think that in normal circumstances he would see this

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Speaker 9: is a fresh challenge, you know, a new pack of

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Speaker 9: journalists to sort of wrangle with. But in the current moment,

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Speaker 9: it's such a difficult time anyway politically in the US,

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Speaker 9: given the assassination of Charlie Kirk, he is probably not

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Speaker 9: going to be in a mood for their typical banter.

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Speaker 9: So I wonder if perhaps those moments, those unscheduled moments

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Speaker 9: will be less than usual. But yeah, he's coming here

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Speaker 9: not in the best frame of mind, and obviously it's

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Speaker 9: an important time for the UK. UK wants to talk

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Speaker 9: about trade. It wants to talk about some of those

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Speaker 9: deals like the investment opportunities by and Video and Open

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Speaker 9: AI that we were reporting on this morning. So I

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Speaker 9: think Kirstarma is currently in number ten. Just crossing his

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Speaker 9: fingers that things go well next week.

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Speaker 3: Okay, Rosa Prince, Bloomberg Opinion columnist, thank you very much.

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Speaker 3: You can read the late us from Rosa by the

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Speaker 3: way at Bloomberg dot Com Forward Slash Opinion. Stay with us.

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Speaker 3: More from Bloomberg Daybreak Europe. Coming up after this.

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Speaker 2: Now is the gloom over initial public offerings in Europe lifting.

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Speaker 2: There's been a florry of listings activity this week with

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Speaker 2: several large issuers wading into the market. Here with more

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Speaker 2: is our European capital markets reporter Pablo Moo Sircarro. Thank

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Speaker 2: you so much for being with us at Pablo remind

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Speaker 2: us of the context here. What kind of a year

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Speaker 2: has it been in terms of IPOs across Europe?

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Speaker 1: Having me, it's been a pretty slow year. Unfortunately, going

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Speaker 1: into twenty twenty five, I think deal makers expected the

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Speaker 1: coming months to be quite busy and to become the

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Speaker 1: start of a renaissance in European capital markets. What happened

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Speaker 1: was that there was about of volatility in the first

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Speaker 1: half of the year on the back of the tariff

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Speaker 1: announcements by the Trump administration, and that prompted a lot

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Speaker 1: of issuers to delay their IPO plans, and some that

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Speaker 1: tried to actually pull the trigger and go public they

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Speaker 1: were forced to pull out at the very last minute.

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Speaker 1: So it's been a really quiet year that now has

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Speaker 1: the potential to end on a high, and we count

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Speaker 1: about a dozen companies that could potentially go public in

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Speaker 1: this window, so twenty twenty five could in a potentially

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Speaker 1: very different note.

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Speaker 3: Talk to us about what's been happening this week and

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Speaker 3: why that's giving some calls for optimism from here.

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Speaker 1: I think it's because of the sheer number of companies

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Speaker 1: that could potentially pull the trigger and the fact that

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Speaker 1: we've seen a couple of the larger ones actually go

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Speaker 1: ahead and you know, communicate plants to go public. We

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Speaker 1: have one IPO in Switzerland by a company calls SMG

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Speaker 1: Swiss Marketplace Group. It's a classified business and they're looking

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Speaker 1: to raise around a billion dollars, so that's a pretty

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Speaker 1: significant offer size. We got Nova Bank in the Nordics,

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Speaker 1: which is a consumer lender owned by private equity. These

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Speaker 1: guys were initially gone to IPO in the first half

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Speaker 1: of the year, but they decided to wait for better markets.

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Speaker 1: It seems like some of that volatility that we saw

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Speaker 1: in the first half of the year derived from tariffs.

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Speaker 1: It seems to have subsided somewhat. Equity prices are sky

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Speaker 1: high at the moment, and you know, bearing something unexpected,

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Speaker 1: like an escalation in the Middle Eastern or Ukrainian conflicts,

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Speaker 1: or some change in the economic direction of the world,

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Speaker 1: then we could we could actually have a pretty busy window.

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Speaker 1: So that's why people are getting excited about it.

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Speaker 2: Okay, So I asked this question with hope and also

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Speaker 2: a bit of trepidation. Where is London in all of this?

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Speaker 2: How does it compare with what's happening in Europe.

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Speaker 1: That's a good question. Look, London, we are aware that

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Speaker 1: there are a couple of IPOs in the works. There's

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Speaker 1: one that actually got announced earlier this week. If I'm

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Speaker 1: not mistaken. It's on the smaller on the smaller side

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Speaker 1: of the spectrum. The beauty tech group they're famous for

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Speaker 1: this led mask, the TikTokers and gen Ziers use for skincare,

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Speaker 1: and there's a couple at least a couple others. There's

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Speaker 1: a specialist bank shop Rock and potentially one subsidiary of

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Speaker 1: the Milan listed foods company New Princess SPA. Now TVD

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Speaker 1: like whether these IBOs will launch. As you very well know,

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Speaker 1: I pos are why caprecious and fickle. The market can

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Speaker 1: shut pretty quickly and at the end of it day

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Speaker 1: it comes down to investor sentiment and how they feel

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Speaker 1: about the UK. And there's some budget coming up, so

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Speaker 1: I think there's hope that we might see a little

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Speaker 1: bit of our revival in London IPOs before the year

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Speaker 1: is out. But there's still some question marks and we'll

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Speaker 1: be watching this very carefully.

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Speaker 3: And Pablo, just to take a step back to sort

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Speaker 3: of the bigger picture, perhaps over a little bit of

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Speaker 3: a longer term, what is the outlook for European capital

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Speaker 3: markets now? Is the US still drawing all the biggest

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Speaker 3: names for listings.

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Speaker 1: I think that we will continue to see some European

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Speaker 1: companies look to the US. There was some news this

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Speaker 1: week by Bloomberg. For example, the UK Stirling Bank is

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Speaker 1: starting to pivot towards the potential US IPO in the future.

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Speaker 1: Some of the more tech enabled names are attempted to

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Speaker 1: go to the US because there's this perception that Europe

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Speaker 1: is old economy in the US is new economy. So

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Speaker 1: in particular FinTechs and technology names are tempted by the US.

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Speaker 1: Having said that, this year, there's been there's been a

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Speaker 1: bit of rotation from investors toward European assets. There is

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Speaker 1: a bit of excitement around Europe with you know, the

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Speaker 1: prospect of increased defence spending, you know, Germany lifting the

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Speaker 1: borrowing breaks and starting to invest into growth. So I

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Speaker 1: think that we have the chance to see quite a

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Speaker 1: few i pos on the side of the Atlantic now

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Speaker 1: while companies continue to examine the US. I think that

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Speaker 1: will remain the case. For now. Europe is trying to

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Speaker 1: make things more attractive to retain the highest number of

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Speaker 1: companies possible. It's to be tbd whether Europe will manage

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Speaker 1: to effectively do that.

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

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 3: You can also listen live each morning on London Dab Radio,

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Speaker 2: I'm Caroline Hepka.

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