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Speaker 1: This is the Bloomberg Day BT podcast, available every morning

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Speaker 1: on Apple, Spotify or wherever you listen. It's Wednesday, the

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Speaker 1: eighth of May. Here in London. I'm Caroline Hepkin and.

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Speaker 2: I'm Stephen Carroll. Coming up today, the US pauses a

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Speaker 2: shipment of bombs to Israel amid growing concern over a

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Speaker 2: Rafa invasion.

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Speaker 1: China is suspected of carrying out a major hack on

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Speaker 1: UK defense personnel data.

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Speaker 2: And computer says no. The UK border gate system is

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Speaker 2: temporarily thrown into chaos after an outage.

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

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Speaker 2: The United States has paused a shipment of bombs to

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Speaker 2: Israel after its military seized control of the Rafa border

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Speaker 2: crossing in Gaza. A senior US official told Bloomberg. The

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Speaker 2: decision was made in response to Israel nearing a decision

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Speaker 2: to launch a military offensive on the southern Gaza city.

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Speaker 2: It comes after the White House National Security spokesperson John

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Speaker 2: Kirby said the US had reiterated its concerns about civilian

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Speaker 2: casualties to Israeli authorities. What we've been told.

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Speaker 3: By our Israeli counterparts is that this operation last night

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Speaker 3: was limited and designed to cut off from Master's abilities

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Speaker 3: to smuggle weapons and funds in the Gaza. Our views

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Speaker 3: on RAFA have remained the same. We've repeatedly and consistently

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Speaker 3: expressed those views about a major operation in Raffa in

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Speaker 3: densely populated areas that would give higher risk to civilians

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Speaker 3: and civilian casualties as and Biden made that very clear

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Speaker 3: yesterday when he spoke to Prime Minister in Ntnyahu As

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Speaker 3: I said yesterday, and we're going to be monitoring this

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Speaker 3: situation very very closely to see how it unfolds.

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Speaker 4: As John Kirby speaking there.

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Speaker 2: The US has long been Israel's largest military backer, but

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Speaker 2: President Biden's called on the government of Prime Minister benjaminettanniawho

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Speaker 2: to do more to protect civilians at Gaza.

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Speaker 1: Bloomberger has learned that JP Morgan is limiting its dealings

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Speaker 1: with Saganti Capital Management off to the Asian hedge fund

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Speaker 1: Giant was charged with insider trading in Hong Kong. Saganti

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Speaker 1: said that it intends to defend itself vigorously against those charges,

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Speaker 1: which were also leveled at a founder, Simon Sadler, and

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Speaker 1: a four trader. The fund has been a prized client

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Speaker 1: of all street banks that need to unload chunks of

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Speaker 1: shares in block trades and stock offerings colling to people

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Speaker 1: Bloomberg spoke to JP. Morgan informed Sagante this week of

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Speaker 1: the decision not to engage it on new block trades

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Speaker 1: or IPOs, although they added the situation is fluid and

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Speaker 1: could change.

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Speaker 2: It's likely that China is using UK payroll data to

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Speaker 2: map out Britain's defense network. Cyber experts tel Bloomberg a

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Speaker 2: hack of a Ministry of Defense contractor which which compromised

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Speaker 2: the personal data of as many as two hundred and

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Speaker 2: seventy two thousand armed personnel, could be part of a

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Speaker 2: mass intelligence gathering exercise. Prime Minister is she Soon Act

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Speaker 2: declined to blame China directly for the breach, but said

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Speaker 2: he's taking a tough stance towards the country.

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Speaker 5: I set out a very robust policy towards China, which

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Speaker 5: means that we need to take the powers which we

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Speaker 5: have done to protect ourselves against the risk that China

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Speaker 5: and other countries posed to us. They are a country

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Speaker 5: with fundamentally different values to ours for acting in a

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Speaker 5: way that is more authoritarian at home, assertive, abroad.

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Speaker 2: Despite the Prime Minister's words, government officials of attributed of

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Speaker 2: the cyber attack to China. China strongly denies reports that

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Speaker 2: it's behind the hack, but the fresh data breach comes

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Speaker 2: as national security concerns towards the country mount.

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Speaker 1: President Shijiping says that he will never forget the US

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Speaker 1: bombing of China's embassy in Belgrade twenty five years ago.

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Speaker 1: The leader made the comments in an editorial as he

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Speaker 1: arrived in Serbia on the second leg of his European tour.

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Speaker 1: Bloomberg's Asia Politics correspondent Rebecca Chung Wilkins explains what he's

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Speaker 1: signaling with the comments.

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Speaker 6: It is a really pivotal and important moment in the

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Speaker 6: public consciousness in China that isn't always necessarily understood outside

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Speaker 6: of China because it helps seed this mistrust of the

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Speaker 6: US and this mistrust of NATO.

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Speaker 1: Chung Wilkins adds that Serbia is far more economically and

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Speaker 1: politically friendly to both China and Russia than most other

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Speaker 1: European countries. Ties between the two house strengthened even as

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Speaker 1: Beijing's border relationship with Europe phrase over human rights issues

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Speaker 1: and trade concerns.

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Speaker 2: The United States has report revoked export licenses allowing Intellent

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Speaker 2: Qualcom to supply of China's Huawei with semiconductors. Were told

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Speaker 2: the withdrawal effects US sales of chips for use in

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Speaker 2: Huawei phones and laptops. Officials say the move is key

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Speaker 2: to preventing China from developing advance to AI. The US

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Speaker 2: is also considering sanctions against six Chinese firms that could

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Speaker 2: supply chips to Huawei.

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Speaker 1: Byte Dancers started legal proceedings against the US in an

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Speaker 1: effort to repeal the TikTok divest or ban law. It

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Speaker 1: could be a long legal battle and suggests that Byte

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Speaker 1: Dances not planning to sell the app by the January deadline.

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Speaker 1: Ploomberg's Mike Sheppard has.

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Speaker 7: More Since President Joe Biden signed the bill into law

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Speaker 7: last month, TikTok and its owners, Beijing based Byte Dance

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Speaker 7: have been preparing this lead challenge, and they're doing so

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Speaker 7: on First Amendment ground. They're laying the groundwork for a

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Speaker 7: serious constitutional challenge to this law, saying that we'll infringe

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Speaker 7: the free speech rates of one hundred and seventy million

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Speaker 7: TikTok users.

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Speaker 1: As Mike Shepherd says, TikTok has argued the law stifles

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Speaker 1: free speech, but the Biden administration could be forced to

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Speaker 1: reveal classified or sensitive information about why the law is

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Speaker 1: justified by dancers selling TikTok is unfeasible commercially, technically and legally.

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Speaker 2: A glitch in the UK's electronic border gate system has

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Speaker 2: been fixed, but not before the problem caused long lines

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Speaker 2: and chaotic scenes at some of the country's major airports.

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Speaker 2: Bloombergs teaba Atabaio has more.

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Speaker 8: Airports around the country were reduced to manually processing passengers

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Speaker 8: yesterday evening after system outages caused a nationwide issue. Hethrow

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Speaker 8: Edinburgh and Manchester were amongst those affected after electronic border

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Speaker 8: gates went offline. According to a Home Office statement, the

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Speaker 8: problem detected just before eight pm, triggering a response within minutes.

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Speaker 8: The system came back online just before midnight. Authorities say

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Speaker 8: border security was not compromised and there was no sign

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Speaker 8: of malicious cyber activity in London to you, added Bio

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Speaker 8: Bloomberg Radio.

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Speaker 2: In a moment, we'll get more on the latest developments

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Speaker 2: in the Middle East, plus the details of that hack

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Speaker 2: of data of UK military personnel. But the story that

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Speaker 2: caught our eye this morning, Carlin, are you familiar with

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Speaker 2: the item that's been dubbed the millennial burkin?

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Speaker 1: I did not know it was called that.

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Speaker 4: No describe This.

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Speaker 2: Is the Uniclo shoulder bag. You know some of the

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Speaker 2: called the banana bag, the dumpling bag. It looks a

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Speaker 2: bit like to those of us that are a bit older,

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Speaker 2: a bum bag essentially that you wear over your shoulder,

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Speaker 2: over size, but it's something that is was launched in

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Speaker 2: twenty twenty became a viral tektok This was feature star

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Speaker 2: after a video that's posted in twenty twenty two.

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Speaker 4: It's absolutely massive sales.

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Speaker 2: It's only around fifteen pounds in the UK about twenty

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Speaker 2: dollars in the US to buy as retailing doesn't provide

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Speaker 2: sales figures for this particular item, but it's being attributed.

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Speaker 2: They do describe it as their best selling item in

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Speaker 2: some markets and it is being attributed to them. Expecting

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Speaker 2: a nearly ten percent jump and revenue in the current

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Speaker 2: fiscal year, they're having to come up with lots of

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Speaker 2: new iterations to try and keep up the momentum behind

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Speaker 2: this worldly popular item. If you look now, you'll see

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Speaker 2: them everywhere. And this is something that Arcolic Meaglass has

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Speaker 2: been writing about from the terminal. She's even pointing out

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Speaker 2: their regional variations they've introduced. At the new Uniclose store

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Speaker 2: in Edinburgh, they have an iron Brew branded version.

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Speaker 1: Of the orange Yeah in blue. Well, okay, that's nuts.

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Speaker 1: I am going to see these bags everwhere now, but

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Speaker 1: listen fifteen quid Certly it's not going to rival a

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Speaker 1: Burkin in terms of the hit to your wallets. And

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Speaker 1: maybe maybe that's a good nice story on the Bloomberg

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Speaker 1: terminal for you this morning. Now, the US has paused

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Speaker 1: a shipment of some bombs and weapons to Israel after

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Speaker 1: the Israeli military took control of the border crossing into

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Speaker 1: Egypt and sent tanks into Rafa in southern Gaza. This

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Speaker 1: is the Biden administration said that Israel and Hamas should

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Speaker 1: be able to resolve their differences over a proposed cease fire,

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Speaker 1: contradicting Israeli officials who said the two sides are still

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Speaker 1: far apart. Joining US now is Bloemberg's EMEA news direct

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Speaker 1: at Roslyn Matheson was good morning, what do we know

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Speaker 1: about this pause in supplies to Israel?

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Speaker 9: Well, it's about three and a half thousand bombs all up,

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Speaker 9: and these are heavier bombs, so around two thousand pounds.

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Speaker 9: And what we've learned is that they've caused this shipment.

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Speaker 9: This was previously arranged some time ago.

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Speaker 6: But it's a.

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Speaker 9: Signal to the Israelis that the US is concerned about

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Speaker 9: the possible use of those weapons in Gaza, particularly in Rapa,

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Speaker 9: in an offensive and a highly densely populated area with

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Speaker 9: a lot of civilians. So what they're saying is they're

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Speaker 9: holding this shipment. They're not stopping it, they're just halting it.

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Speaker 9: It's unclear exactly when that shipment might come. But separately,

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Speaker 9: they are saying they're going to proceed fully with the

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Speaker 9: recent aid package that was passed through Congress and signed

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Speaker 9: into law by the US President Joe Biden, and that's

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Speaker 9: the large Israeli aid package, and that includes things to

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Speaker 9: help Israel in its own defense, particularly the Iron Dome

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Speaker 9: missile defense shield and so on. So they're not stepping

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Speaker 9: away from supporting Israel militarily, and they've said again they

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Speaker 9: support Israel's right to defend itself. But it is a

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Speaker 9: bit of a further message from the US that they're

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Speaker 9: concerned about what an offensive into Ruffer might look like,

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Speaker 9: a full ground offensive, and the potential use of US

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Speaker 9: heavy bombs in such an offensive.

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Speaker 2: Ross What is the latest we're hearing about Israeli preparations

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Speaker 2: for that kind of offensive.

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Speaker 9: Well, we know that they've occupied the Ruffer border crossing

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Speaker 9: and the UN is saying that no aid is coming

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Speaker 9: in Tagaza as a result. We also have doctors saying

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Speaker 9: that people who were sick in needing medical treatment could

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Speaker 9: not leave through the Ruffer crossing yesterday, so that seems

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Speaker 9: to be fully occupied at this point. They've been conducting

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Speaker 9: targeted strikes into Rufa, so particularly air strikes, and there

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Speaker 9: have been casualties from that reported. They're not doing as

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Speaker 9: yet a full ground offensive inter Rupper, but they do

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Speaker 9: seem to be laying the preparations for it. There are

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Speaker 9: further efforts to entice people to move out of Palm's way.

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Speaker 9: Israel's urging people to do that. There are some signs

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Speaker 9: that people are starting to relocate, but that's a very

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Speaker 9: slow process. You have to move a lot of people

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Speaker 9: out of the way quickly. You have to entice them

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Speaker 9: to move, and we're talking about hundreds of thousands of

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Speaker 9: people potentially, so we see the preparations for a potential

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Speaker 9: full offensive in Raphae. It's unlikely to happen in the

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Speaker 9: coming days because it will take time. And meantime, you

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Speaker 9: still have those efforts from the US and others to

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Speaker 9: try and persuade both Hamas and Israel to get to

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Speaker 9: a cespy agreement that both of them can sign up to.

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Speaker 1: Now, on those negotiations, what do we know. Israel says

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Speaker 1: they're far apart the US that they aren't that they

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Speaker 1: can come to an agreement.

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Speaker 9: Well, the US keep saying it's confident they can get

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Speaker 9: to a point of agreement, And it really seems to

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Speaker 9: come down to the language around you know, what does

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Speaker 9: it signal from the CEASEPA towards the permanent end to

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Speaker 9: the war? What kind of language do you get into

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Speaker 9: the agreement that suggests that it could be the precursor

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Speaker 9: to the end of the war. And Israel's quite reluctant

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Speaker 9: on that front. So it does seem to be about that,

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Speaker 9: but they are still polls apart on it, and there's

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Speaker 9: no sign of any progress in talks from yesterday on

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Speaker 9: that front. Israel is still talking about a ceespar, but

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Speaker 9: no evidence of any progress whatsoever, and so you know,

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Speaker 9: time is really running out on that front, and.

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Speaker 4: We're seeing the level of concern in the region.

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Speaker 9: For example, the Imani foreign minister spoke with the Uranian

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Speaker 9: foreign minister and Amman's been kind of quiet on this

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Speaker 9: front so far. So you're seeing those levels of concern

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Speaker 9: in the region, Egypt, demand elsewhere that the CESPAD talks

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Speaker 9: might collapse entirely.

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Speaker 2: Now China maybe using data from a number of hacks

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Speaker 2: against the UK to build profiles of British military personnel

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Speaker 2: and other people in sensitive roles. The Defense Secretary Grunt

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Speaker 2: Apps told Parliament hackers obtained details of as many as

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Speaker 2: two hundred and seventy two thousand British soldiers, sailors and

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Speaker 2: Air Force pilots, saying that foreign state action could not

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Speaker 2: be ruled out joining US now more details as are

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Speaker 2: UKA Politics supporter James Wilcock James, good morning. What do

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Speaker 2: we know about the hack of this Ministry of Defense

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Speaker 2: payroll provider.

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Speaker 10: Well, we know that hackers access that data, as you said,

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Speaker 10: names bank details, some addresses of serving military reservist potentials,

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Speaker 10: in vestments at a contractor. The one who have been

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Speaker 10: blamed is Shared Services Connected Limited. Now they themselves on

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Speaker 10: their own website describe themselves as the largest provider of

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Speaker 10: critical business support services to the UK government That includes

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Speaker 10: the Home Office, Department for Work and Pensions, the Met Police,

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Speaker 10: the Justice Ministry, to name a few. They are owned

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Speaker 10: by Sopustrainer. Now the question is going forward is we

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Speaker 10: know this data was accessed by these hackers. We don't

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Speaker 10: know if it was stolen or removed or altered in anyway,

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Speaker 10: And so at player this morning is sort of the

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Speaker 10: why forensic operation as well as the blame game and

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Speaker 10: the questions of was their other data potentially privy to

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Speaker 10: this breach?

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Speaker 1: Yeah, and this can often take time. And that individual

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Speaker 1: contractor was named in Parliament, so we know that that

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Speaker 1: was confirmed by the minister and RUSSI, which is the

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Speaker 1: kind of defense organization one of them think tag in

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Speaker 1: the UK saying that this is the weak link, isn't it.

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Speaker 1: Look China denies wrongdoing. That hasn't stopped the accusations.

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Speaker 10: No, and the accusations are come to the sort of

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Speaker 10: a pattern of behavior. I mean it takes months to

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Speaker 10: kind of actually publicly accusaation. Forensic cyber espionage is a

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Speaker 10: very difficult operation. But you look at what MP's at.

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Speaker 10: Tom tuganahat was a noted China hawk points to twenty

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Speaker 10: twenty one when the Electoral Commission was publicly hacked, and

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Speaker 10: that was the public accusation of China. Twenty twenty two

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Speaker 10: where former pilots were being hired by the Chinese military

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Speaker 10: from the RAF that were seen as there and this

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Speaker 10: there was a spearfishing attempt on MP's which was pointing

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Speaker 10: to a Huawei based hacking group. And you look at

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Speaker 10: the profiles of malign state actors, Russian based hackers tend

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Speaker 10: to go far more for sort of ransomware smash and

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Speaker 10: grab style attacks, whereas the profile of Chinese based state

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Speaker 10: cyber espionage tends to be about building up intelligence profiles

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Speaker 10: of defense networks, especially of five iceed countries. And in

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Speaker 10: that this type of hack, which is based around data

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Speaker 10: of noted defense personnels, fits a clear pattern, which is

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Speaker 10: why cyber experts this morning talking to Bloomberg say this

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Speaker 10: is quite clearly in their view at China linked attack.

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Speaker 4: What is the government doing about this, James, Well, they

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Speaker 4: started review of SSLFCL.

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Speaker 10: They have notably pointed out to Labor that this is

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Speaker 10: why they should be investing two point five percent of

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Speaker 10: GDP in defense. But it's worth noting the premis in

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Speaker 10: your question Stephen, that this is something the government should

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Speaker 10: be talking about, in that if you would have read

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Speaker 10: by cyber experts going back twenty thirty years would say, actually,

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Speaker 10: in some way this is just part of modern espionage

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Speaker 10: and it is fascinating the government are even noting it is.

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Speaker 10: Governments all the time try and build up profiles of rivals, nations,

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Speaker 10: defense espionages and so in that this reflects in some

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Speaker 10: ways the increasing frequency of cyber attacks, but also the

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Speaker 10: changing tone towards China and how governments from the US

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Speaker 10: around TikTok and the UK and other five vistations like

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Speaker 10: Australia are increasingly calling out these kinds of attacks as

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Speaker 10: a way of trying to raise the temperature and raise

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Speaker 10: fears around national security.

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