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Speaker 1: This is Bloomberg Daybreak. You up for this Monday, the

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Speaker 1: twenty second of May in London.

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Speaker 2: Coming up today, Short circuit China bands Micron semiconductors as

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Speaker 2: their chips battle with the US heats.

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Speaker 1: Up, a ceiling Daytance talks restart ahead of a Biden

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Speaker 1: McCarthy sit down.

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Speaker 2: A harp skip and then maybe a jump. The Fed's

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Speaker 2: Kashkai says he's open to a temporary rate pause.

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Speaker 3: Racing scandal, Epstein's burnt Bridge and where to Get schooled.

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Speaker 3: Those are the stories we're looking at in today's papers.

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Speaker 3: I'm James Wilcock.

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Speaker 1: Plus asking for more property sellers up prices, but is

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Speaker 1: anyone buying?

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Speaker 4: That's all straight ahead on Bloomberg Daybreak Europe. The business

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Speaker 4: news you need to start your day in just one

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Speaker 4: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 4: and everywhere you get your podcasts.

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Speaker 2: Good morning, I'm Stephen Carroll.

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Speaker 1: I'm Caroline Hetker. Here are the stories that we're following today.

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Speaker 2: China has delivered the latest salvo and it's escalating semiconductor

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Speaker 2: disputes with the United States. Beijing says products made by

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Speaker 2: the American chips for a Micron have failed to pass

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Speaker 2: a cyber security review in the country. Many will see

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Speaker 2: the move as a response to the US decision to

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Speaker 2: blacklist Chinese tech firms and curb the flow of sophisticated

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Speaker 2: processors to the country, but US Deputy National Security Advisor

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Speaker 2: for International Economic Affairs Mike Pile says the two countries

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Speaker 2: are not decoupling.

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Speaker 5: Last year was the United States record year with respect

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Speaker 5: to bilateral trade between China and the United States. So

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Speaker 5: that's really the approach that's not decoupling. Record trade is

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Speaker 5: not decoupling, but it is saying there are a set

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Speaker 5: of very significant concerns and we're going to derisk ourselves.

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Speaker 5: Our allies and partners are going to de risk themselves

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Speaker 5: with respect to them.

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Speaker 2: Speaking exclusively to Bloomberg's a Marie Hordern at the end

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Speaker 2: of the G seven summit in Japan, Mike Piles also

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Speaker 2: warned that Republicans are playing a risky game in negotiations

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Speaker 2: to raise the debt ceiling.

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Speaker 4: Now.

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Speaker 1: President Biden and Republican House Speaker McCarthy are set to

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Speaker 1: meet today for talks on averting a catastrophic US default.

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Speaker 1: Negotiations of whip sort between progress and deadlock for days

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Speaker 1: as the two sides simultaneously grapple for political advantage and

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Speaker 1: also for a deal. US Treasury Secretary Janet Yellen says

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Speaker 1: the clock is ticking.

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Speaker 6: It's hard to be absolutely certain about this, but my

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Speaker 6: assessment is that the odds of reaching June fifteenth while

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Speaker 6: being able to pay all of our bills is quite low.

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Speaker 1: Yellen spoke on NBC's Meet the Press. As investors brace

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Speaker 1: for more volatility in markets, a US default would risk

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Speaker 1: triggering a massive sell off, surges in borrowing costs, and

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Speaker 1: it could also send shockwaves across the global economy.

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Speaker 2: FED policymaker Neil Kashkari says he may support a hold

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Speaker 2: on hikes at their next meeting. In an interview with

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Speaker 2: Dad Joe, as the rate setter, said he's quote open

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Speaker 2: to the idea that we can move a bit more

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Speaker 2: slowly from here. However, Kashkari also burnished his hawkish credentials

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Speaker 2: during the interview. The Minneapolis Fed president says he objects

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Speaker 2: to any declaration that the FED has finished raising rates

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Speaker 2: to fight against inflation. The comments add to the possibility

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Speaker 2: the FED may up to skip a June rate hike

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Speaker 2: without committing to a longer pause.

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Speaker 1: Well, when it comes to the European central banks fight

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Speaker 1: to tame inflation, it isn't over and more action is

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Speaker 1: still needed. That is the view of the ECB President

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Speaker 1: Christine Legard, who told Dutch TV that quote, We're not

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Speaker 1: done yet. We are not pausing based on the information

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Speaker 1: I have today. Leguard's click up comments come after several

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Speaker 1: ECB officials warned rate hikes may need to persist beyond

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Speaker 1: this summer.

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Speaker 2: Rishie Sunak returns from the G seven in Japan to

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Speaker 2: face another cabinet scandal. Home Secretary swell A Bravarman is

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Speaker 2: reported to have our civil servants to arrange a private

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Speaker 2: driver awareness course after she was caught speeding. The PM

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Speaker 2: says he'll consult with his independent ethics advisor on the issue. However,

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Speaker 2: Alistair Graham, the former chairman of the Committee on Standards

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Speaker 2: in Public Life, says he needs to take action.

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Speaker 7: If he, on occasion after occasion doesn't take action as

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Speaker 7: Prime Minister on Standards all it will look as if

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Speaker 7: that was one of some sham pr speech rather than

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Speaker 7: a serious intention of how his government would behave.

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Speaker 2: Sir Aster Grahame's warning comes a month after sax's number

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Speaker 2: two Dominic Rab resigned over claims of aggressive and intimidating

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Speaker 2: behavior towards civil servants.

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Speaker 1: The property market appears to be defying predictions of a slump.

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Speaker 1: Online property site right Moves. Average asking price for a

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Speaker 1: house in the UK rose to one rose one point

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Speaker 1: eight percent in May, hitting a record high. Bloomberg. Samuel

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Speaker 1: Ettien reports.

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Speaker 8: A senior economist at the Office for Budget Responsibility recently

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Speaker 8: said the end of cheap money means bumper UK house

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Speaker 8: price growth may be finished, but online property site right

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Speaker 8: Moves latest data begs to differ. The average price property

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Speaker 8: sellers are asking for reached more than three hundred and

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Speaker 8: seventy thousand pounds, a record high, though a note of

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Speaker 8: caution just because asking price is arising doesn't mean anyone

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Speaker 8: is buying at those prices. Hampton's the Property brokers, says

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Speaker 8: investors have deserted the market for new builds, instead looking

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Speaker 8: to invest in cheaper locations outside of the capitol in London.

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Speaker 8: Samuel Ettien, Bloomberg, Daybreak Europe.

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Speaker 2: Now it results from Ryanair, the low cost airline, reporting

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Speaker 2: profit after tax for its full year of one point

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Speaker 2: four to three billion euros, beating estimates that had been

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Speaker 2: for one point three eight billion euro worth of profits,

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Speaker 2: The company saying it expects strong demand in the peak

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Speaker 2: summer season to drive a ten percent increase in passenger

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Speaker 2: numbers and a modest year on year increase in net

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Speaker 2: income and its fiscal year.

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Speaker 1: Okay, those are top stories for you this morning, Stephen.

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Speaker 1: Did you drink any nice wine in Spain? You're away

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Speaker 1: for a few days, Caroline.

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Speaker 2: What a terrible thing to suggest at this hour of

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Speaker 2: the morning. I did my best to support the Spanish

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Speaker 2: wine industry.

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Speaker 1: Well, maybe you could pop up the UK industry because

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Speaker 1: now apparently we learn that the government is going to

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Speaker 1: scrap EU regulations on wine production so that wine makers

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Speaker 1: can pick from a wider range of vines to create

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Speaker 1: new blends here in the UK.

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Speaker 2: And interestingly, it may see the return of piquette to

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Speaker 2: shelves here, something that's banned in the EU. So essentially

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Speaker 2: it's a form of wine making that uses the pomus

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Speaker 2: from wine, so you can cross some of the other

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Speaker 2: elements involved in wine making as well. It's not something

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Speaker 2: that's currently allowed in the EU unless you're drinking it

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Speaker 2: in your own wine production great deal about this, nobody.

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Speaker 2: It is absolutely fascinating because it's something that it's really

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Speaker 2: big and the natural wine world, so it could be

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Speaker 2: something we see returning to shelves here if under this

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Speaker 2: change in rules.

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Speaker 1: Yeah, no, it's really interesting. This is also it's part

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Speaker 1: of the government, you know, the failure to scrap all

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Speaker 1: of these EU regulations, which was the promise that government

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Speaker 1: made by the end of the year. Well, this is

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Speaker 1: one of the rules that they are sort of highlighting

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Speaker 1: as something that is going to be ditched an EU

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Speaker 1: regulation to allow a UK industry to flourish. Having said that,

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Speaker 1: if you read over the weekend the piece about UK

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Speaker 1: everyday products and the inflation that we've seen in terms

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Speaker 1: of food products in the UK much more than we

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Speaker 1: have seen in Europe than actually, you know, the overall

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Speaker 1: picture for grocery bills in Britain is really quite alarming. Yeah.

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Speaker 2: Look, as from the data providers so Cana publishing these numbers.

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Speaker 2: We've all seen the prices going up, but this idea

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Speaker 2: that they're going up at a much faster pace than

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Speaker 2: countries elsewhere in Europe as well. Of course it's all

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Speaker 2: ahead of the inflation number in the UK. Yout and Wednesday.

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Speaker 1: Yeah, absolutely, so that's well the picture in the UK.

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Speaker 1: But let's get some more detail on the debt Seedling

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Speaker 1: talk show. We also dominated over the weekend, didn't they.

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Speaker 1: President Joe Biden, Howse Speaker Kevin Carthy are due to

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Speaker 1: meet now later today. Let's bring in our Bloomberg senior

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Speaker 1: editor Bill Ferries, who joins us for more. Thanks so much,

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Speaker 1: Bill for being with us. So has any progress been

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Speaker 1: made then over the weekend?

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Speaker 9: Well, we, as you, I think said at the top,

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Speaker 9: we were whipsod over the past let's say forty eight

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Speaker 9: to seventy two hours talks that were on where the

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Speaker 9: Republicans walked out of then they've restarted. Speaker McCarthy described

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Speaker 9: them as productive and as after his call with President Biden,

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Speaker 9: who was on his way back from the G seven.

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Speaker 9: But we don't really know staff the staff on both

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Speaker 9: sides had talks on Sunday night. They did not share

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Speaker 9: any details of those meetings with reporters, and we're still

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Speaker 9: waiting to find out the timing of the Monday meeting

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Speaker 9: between President Biden Speaker McCarthy. The calendar here is really unforgiving.

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Speaker 9: We've had the comments from Janet Yellen that mid June

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Speaker 9: is a likely stretch for the Treasure Department. If you

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Speaker 9: go back to the original X state of June first,

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Speaker 9: and you look, you have to you have to look

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Speaker 9: at the Capitol Hill calendar going behind that. So if

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Speaker 9: June first is the date do you hit the debt ceiling,

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Speaker 9: you have to have legislation actively moving through the House

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Speaker 9: and Senate up to four or five days before then.

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Speaker 9: It just takes time. So you open up your calendar.

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Speaker 9: It's that's that's basically this week. They have to have

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Speaker 9: progress this week. So we'll see later today what Kevin

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Speaker 9: McCarthy and President Biden can reach.

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Speaker 2: Do we have any idea or indication what the potential

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Speaker 2: stumbling blocks our areas where there could be progress made

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Speaker 2: towards the deal.

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Speaker 9: Well, we know one area has been the spending caps

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Speaker 9: Republicans wanted. Originally, they were calling for caps on domestic

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Speaker 9: spending that would go out would hold for up to

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Speaker 9: ten years. They have reportedly dialed that back to six years.

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Speaker 9: That's not far enough for Democrats who want to see

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Speaker 9: any caps limited to two years. There's still some push

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Speaker 9: by Republicans to include tougher work requirements for people who

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Speaker 9: are on government aid. That's something that they're going to

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Speaker 9: still keep negotiating with. And they're also just looking at

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Speaker 9: if there are spending cuts where those fall. Do they

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Speaker 9: fall solely on domestic programs or does the Pentagon, the

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Speaker 9: defense industry get hit with some of those two Republicans

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Speaker 9: don't want to see defense touched. They want to see

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Speaker 9: big increases in defense. That's all on the table as well.

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Speaker 1: Okay, Bill, thank you so much for being with us.

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Speaker 1: Then looking at the debt sceneing negotiations in the US

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Speaker 1: President Joe Biden, how Speaker Kevin McCarthy expected to meet

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Speaker 1: later today. Our senior editor Bill ferries up.

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Speaker 2: Next, Ratings Scandal, Epstein's Burnt Bridge and Where to Get Schooled?

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Speaker 4: Now the Paper Review on Blueberg, Daybreak Europe. The news

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Speaker 4: you need to know from today's papers, so it.

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Speaker 1: Makes James Wilcock joins us this morning. Great to have

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Speaker 1: you looking through the newspapers today and actually some real bombshells,

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Speaker 1: it would seem. Let's start with the Times, who are

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Speaker 1: serializing a book by the BBC Economics correspondent andty Verity

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Speaker 1: making some big claims about libel.

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Speaker 3: Yes, I'm I'm sure I want you to tell our listeners, Caroenn,

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Speaker 3: that library is obviously the interbank lending rates that back

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Speaker 3: in two thousand and eight came under a series of

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Speaker 3: manipulations that then unwound into a massive scandal and so

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Speaker 3: in the UK press and the UK financial scene. So

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Speaker 3: during the crisis, the problem for a lot of banks

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Speaker 3: and the government and the Bank of England was the

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Speaker 3: higher librar rates were, the more risky a bank was seen.

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Speaker 3: So what veris he has found and is alleging is

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Speaker 3: he has got some of the tapes of some of

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Speaker 3: the traders called at the time. One that he focuses

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Speaker 3: in on is one called Mark Dealer, who was a

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Speaker 3: senior manager at Barclay's and on this tape it is

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Speaker 3: on record as saying the Bank of England and the

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Speaker 3: UK Government are pressuring us to get these rates lower.

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Speaker 3: Because that would obviously imply that the interventions the government

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Speaker 3: and the state are making are working. So it's a

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Speaker 3: very serious claim because it would imply that the bankers

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Speaker 3: have gone to jail over this. And the person that

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Speaker 3: dear Love was talking to, a guy called Johnson PJ

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Speaker 3: in the call, has since been jailed. Yes, so it

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Speaker 3: is extremely serious and for it's worth the bank of

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Speaker 3: vin that I've told the Times of claims are completely unsubstantiated,

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Speaker 3: but it is part of this book that is being serialized.

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Speaker 3: Talking about how there may have been top down intervention

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Speaker 3: is what Verity's alleging, and it's worth saying this is

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Speaker 3: just the first of many. At the bottom of the

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Speaker 3: artlet it says tomorrow the FBI enters the picture.

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Speaker 2: Okay, so that's in the Times today. Let's go to

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Speaker 2: the Wall Street Journal next, and an explosive report delving

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Speaker 2: into the relationship between Bill Gates and Jeffrey Epstein.

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Speaker 3: So it's JP Moore could invested. Day to day, Stephen

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Speaker 3: and Jamie Diamond is set to have a very very

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Speaker 3: good day with incredible returns that but purchased the first

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Speaker 3: public But there's just one story hanging over them, and

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Speaker 3: it is the Epstein story, and this story in the

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Speaker 3: Wall Street Journal that this very deep dive into sort

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Speaker 3: of the relationship that Bill Gates and eptein has gives

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Speaker 3: a flavor of how the disgraced and deceased mogul operated.

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Speaker 3: So just as a reminder, Epstein was convicted in two

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Speaker 3: thousand and eight of charges and then served jail times

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Speaker 3: and when he came out, he wanted to rehabilitate his name.

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Speaker 3: And so he was in talks to JP Morgan the

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Speaker 3: bank about providing a one hundred multimillion dollar fund that

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Speaker 3: would invest in charitable causes, and he would claim the

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Speaker 3: fee for managing said fund. And one of the people

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Speaker 3: he really wanted to get on board was Bill Gates.

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Speaker 3: And it is fascinating to see how he would write

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Speaker 3: to say Jesz Staley and Mary Edo's with things saying

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Speaker 3: like quote Bill is frustrated, so he would proclaim to

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Speaker 3: be one of Bill Gates's close aids, sthing that Bill

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Speaker 3: Gates completely denies. And on the other side where the

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Speaker 3: Wall Street Journal has found that Bill Gates, Bill Gates

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Speaker 3: was having a potential affair with a bridge player at

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Speaker 3: the time. Epstein found that bridge player paid for them

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Speaker 3: to go to a software course, let them stay in

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Speaker 3: an apartment of his, and then years years later, after

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Speaker 3: the relationship with Epstein and Gates had completely fallen, the

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Speaker 3: part in twenty seventeen emailed Bill Gates to ask him

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Speaker 3: to pay for her to issue fee that Epstein had

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Speaker 3: covered years prior. So that kind of very sly casual

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Speaker 3: and also slightly threatening. The Wall Street chournal alledges method

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Speaker 3: shows how Epstein managed these relationships with people at the very.

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Speaker 4: Top of power.

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Speaker 1: Yeah, I think it's an absolutely fascinating to read. It's

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Speaker 1: extremely detailed. As you say, the kind of workings behind

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Speaker 1: the scene of top players are really interesting. Look the

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Speaker 1: ft also ranking executive education courses. We're going to bring

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Speaker 1: the temperature down and talk about schooling.

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Speaker 3: I was about to say, I mean you say that, Carol,

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Speaker 3: and this could be some of the most controversial ones today. Well,

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Speaker 3: if you're not on the top twelve, people look at

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Speaker 3: these rankings, so where they go and these rankings matter.

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Speaker 3: And the big fascinating story here is of eleven of

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Speaker 3: the twelve top ranked open programs, they're all European, and

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Speaker 3: so it is Europe where people want to be educated

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Speaker 3: for these courses. It is a worth pointing out that

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Speaker 3: that although the basis of these courses of European, one

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Speaker 3: of the things they offer is if you're an executive

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Speaker 3: and want training in things like how to on a

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Speaker 3: modern business AI. Digital transformation's facetting how these courses are changing.

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Speaker 3: It would be a global experience, but that global experience

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Speaker 3: is often being run by European universities.

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Speaker 2: Okay, James Wilcock, thank you very much for that. Look

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Speaker 2: through the papers. That's bring you a couple of our

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Speaker 2: global news stories this morning that we're following for you.

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Speaker 2: And two legal firms are planning to merge to create

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Speaker 2: one of the world's largest law companies with three point

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Speaker 2: four billion dollars in revenue. The combination of alan Ovari

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Speaker 2: and Sherman and Stling will have almost four thousand lawyers

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Speaker 2: across twenty nine countries and offer US law, English law,

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Speaker 2: and local law capabilities. The Greek prime minister Kiriakos mids

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Speaker 2: attackers pummeled the opposition and a national election held over

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Speaker 2: the weekend, moving a step closer to another four year term.

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Speaker 2: The prime minister's center right New Democracy gained almost forty

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Speaker 2: one percent of the vote, compared to about twenty percent

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Speaker 2: for the left to Siriza party of former premier Alexis Cprass.

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Speaker 2: Its attackers will take it will likely up for a

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Speaker 2: second ballot in a month rather than assembling a coalition.

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Speaker 2: And SpaceX has launched a four person crew towards the

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Speaker 2: International Space Station. It's Falcon nine rocket lifted off from

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Speaker 2: Florida and Sunday evening, carrying four private astronauts, including the

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Speaker 2: first woman from Saudi Arabia to travel to space. The

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Speaker 2: mission was operated by Axiom Space and as the second

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Speaker 2: of four human spaceflight launchers that SpaceX is handling for

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Speaker 2: the company. Those are some of our global news stories

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Speaker 2: this morning. This is Bloomberg Daybreak Europe, your morning brief

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Speaker 2: on the stories making news from London to Wall Street

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Speaker 2: and beyond.

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Speaker 1: Look for us on your podcast feed every morning, on Apple, Spotify,

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Speaker 1: and anywhere else you get your podcasts.

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Speaker 2: You can also listen live each morning on London DAB Radio,

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Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

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Speaker 1: I'm Caroline Hipka and.

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Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all

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Speaker 2: the news you need to start your day right here

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Speaker 2: on Bloomberg day Break Europe.

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Speaker 9: H m hmm.