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

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Speaker 2: This is the Bloomberg Daybreak Europe podcast, available every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Tuesday, the

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Speaker 2: twenty eighth of May in London. I'm Stephen Carroll. Coming

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Speaker 2: up today. An Egyptian soldier is killed in a clash

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Speaker 2: with Israeli troops at the Gaza border, while international condemnation

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Speaker 2: of the Rafa offensive grows. Within one hundred and twenty

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Speaker 2: business leaders sign a letter supporting the UK Labor Party's

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Speaker 2: economic plans. Plus one day, US investors gear up for

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Speaker 2: a major shift in the speed at which trades are settled.

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Speaker 2: Let's start with the roundup of our top stories. An

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Speaker 2: Egyptian soldier has been killed during a clash with Israeli

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Speaker 2: troops at the Rafa border crossing in Gaza. The death

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Speaker 2: comes after an Israeli airstrike killed and estimated forty five

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Speaker 2: Palestinians at a camp for displaced people in the territory.

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Speaker 2: Israeli Prime Minister Benjamin Nettania, who says it was a

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Speaker 2: tragic mistake.

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Speaker 3: In Raffa, we have already evacuated about a million non

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Speaker 3: involved residents, and despite our best efforts not to harm

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Speaker 3: the non involved. Unfortunately, a technical failure happened. We're investigating

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Speaker 3: the case.

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Speaker 2: Netanyahu's words, spoken there by a translator, have done little

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Speaker 2: to quell the growing international anger over the strike. French

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Speaker 2: President Emmanuel Macron said he was outraged, while the White

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Speaker 2: House said the images of innocent civilians killed in the

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Speaker 2: strike were heartbreaking. More than one hundred and twenty UK

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Speaker 2: business leaders have signed an open letter endorsing the Labor

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Speaker 2: Party's economic policies. They say the party has changed and

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Speaker 2: deserves a chance to run the country. Bloomberog's Chris pet

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Speaker 2: has more.

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Speaker 4: Jeremy Corbyn's Labor leadership notably spooked many business leaders, but

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Speaker 4: since Kirs Starmer took over the party, he and his

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Speaker 4: shadow Chancellor Rachel Reeves have been on a mission to

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Speaker 4: woo execs. Today we got some evidence that the so

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Speaker 4: called smoked salmon and scrambled eggs offensive has paid off.

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Speaker 4: More than one hundred and twenty business leaders have signed

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Speaker 4: an open letter in The Times newspaper saying Labour now

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Speaker 4: wants to work with business. The founder of Wikipedia, the

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Speaker 4: UK president of advertising giant WPP, and the ex CEO

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Speaker 4: of Astin Martin have all offered their signatures, and while

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Speaker 4: no foots one hundred CEOs have given their endorsement, the

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Speaker 4: list is notably longer than the one that David Cameron's

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Speaker 4: team put together ahead of the twenty fifteen election in London.

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Speaker 4: Chris Pitt Bloomberg Radio.

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Speaker 2: The Prime Minister Isshisinak is promising Pansioner is a tax

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Speaker 2: cart worth two point four billion pounds should he win reelection.

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Speaker 2: In a speech later that he'll pledged to increase the

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Speaker 2: tax free allowance for retired people in line with the

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Speaker 2: so called Triple Luck, which guarantees increases in the state pension.

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Speaker 2: The plans triggered an im mediate row about public spending,

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Speaker 2: but the Conservative leader says he has turned the economy around.

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Speaker 5: Inflation down back to normal at two percent, energy bills falling,

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Speaker 5: the economy growing faster than Germany, France America. Wages have

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Speaker 5: been rising faster than prices for ten months now. The

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Speaker 5: plan is working.

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Speaker 2: The Prime Minister is seeking to close the twenty point

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Speaker 2: polling gap with labor with new policies, including bringing back

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Speaker 2: national service for eighteen year olds. The ideas are mostly

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Speaker 2: popular with older voters, suggesting Tory fears around losing support

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Speaker 2: to the right.

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Speaker 1: Wing reform UK Party.

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Speaker 2: UK shop price inflation is slowing as the election approaches.

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Speaker 2: The news adds to signs of an improving economic outlook.

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Speaker 2: Bloomberg's Tea at a Bio has the story.

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Speaker 6: In the first week of May, the pace of pricing

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Speaker 6: increases in UK shops was the slowest in more than

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Speaker 6: two years. The British Retail Consortium says retailers cut the

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Speaker 6: prices of big ticket items in a bit to revive

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Speaker 6: can human demand. Its survey shows food price inflations showing

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Speaker 6: to three point two percent in May, while the prices

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Speaker 6: of non food products fell for the second month in

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Speaker 6: a row. That's meant football fans have been able to

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Speaker 6: secure bargains on TVs and other audio visual equipment ahead

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Speaker 6: of this summer's Euros tournament. The bad weather has dampened

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Speaker 6: retail sales in recent months, and retail intelligence firm Nielsen

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Speaker 6: IQ says the trend of lower prices is likely to

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Speaker 6: continue in London twa Adebayo, Bloomberg.

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Speaker 2: Radio, France and Germany are set to unveil plans to

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Speaker 2: boost Europe's air defenses. The move is in response to

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Speaker 2: growing pressure for Europeans to strengthen their own security in

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Speaker 2: the wake of Russia's invasion of Ukraine. Emmanual Macron and

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Speaker 2: Olaf Schultz will discuss options when they meet later today.

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Speaker 2: Macran is on a state visit to Germany, where he's

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Speaker 2: repeated calls for a bi European strategy and sectors like

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Speaker 2: defense and a massive increase in EU public financing. And

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Speaker 2: starting today, the world's largest capital market will settle trades

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Speaker 2: just one day after they are executed. The move to

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Speaker 2: the so called T plus one system means that in

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Speaker 2: the US, investors no longer have to wait more than

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Speaker 2: twenty four hours to take ownership of the stocks they

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Speaker 2: purchase or to receive payment for the stocks they sell.

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Speaker 2: The Securities and Exchange Commission says the shorter settlement window

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Speaker 2: means lower odds that the buyer or seller might default

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Speaker 2: just before a transaction is completed. However, just nine percent

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Speaker 2: of sell side firms polled by Coalition Greenwich in April

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Speaker 2: and May so they expect the T plus one switch

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Speaker 2: to go smoothly. Now in a moment, we'll get more

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Speaker 2: on the developments in Gaza plus bring you up to

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Speaker 2: date with the latest in the UK election campaign. But

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Speaker 2: another story that caught our eye this morning is Tokyo

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Speaker 2: getting its own version of New York's high Line. Our

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Speaker 2: colleague Neaglass has been writing about this. This is a

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Speaker 2: plan to use some of the KK Line, known as

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Speaker 2: the Tokyo Expressway as an elevated pedesta and walkway. So

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Speaker 2: it's currently a roadway, it's about two kilometers long. The

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Speaker 2: section they're talking about changing, which borders the Ginza district

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Speaker 2: in the center of the capital. Now it'll be much

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Speaker 2: wider than the Kulivet in Paris or the Highland in

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Speaker 2: New York, so we'll include things like shops and other

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Speaker 2: green spaces.

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Speaker 1: The project set to partially.

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Speaker 2: Open in twenty twenty nine, with full completion aimed for

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Speaker 2: the twenty thirties or twenty forties. Could be a big

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Speaker 2: shift though for Japanese cities to move space that's been

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Speaker 2: allocated traditionally for cars towards other uses, and particularly pedestrian

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Speaker 2: uses as well, so it could be an interesting change

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Speaker 2: in Japanese cities as well.

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Speaker 7: Well.

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Speaker 2: Let's get more now on the latest in Gaza. After

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Speaker 2: Israeli Prime Minister Benjamin Ettaniaw, who called the airstrike on

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Speaker 2: a camphor displaced people in Rafa, a tragic mistake. This

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Speaker 2: is Three European countries are set to formally recognize Palestinian

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Speaker 2: statehood later today. Our Middle East breaking news editor Dana

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Speaker 2: Cras joins us now for more.

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Speaker 1: Dana, good morning.

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Speaker 2: Let's start with just the events on the Gaza border

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Speaker 2: crossing with Egypt and Egyptian soldier killed in a clash

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Speaker 2: with Israeli troops. What do we know about what happened

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Speaker 2: and what does it mean for regional tensions?

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Speaker 7: Good morning, So we know there was a shooting incident

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Speaker 7: on the border between Guza and Egypt, where Israeli forces

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Speaker 7: are present, and Egyptian soldier was killed. In Both Egypt

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Speaker 7: and Israel said they are investigating. Well, this is the

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Speaker 7: force of its kind. It seemed both parties are interested

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Speaker 7: in reducing tensions and not turn this incident into more

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Speaker 7: than what it is likely just an accident and not

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Speaker 7: deliberate exchange of fire. Now this is also significant because

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Speaker 7: Egypt was the first Arab country to sign a peace

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Speaker 7: deal with Israel, and keeping that border secure is of

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Speaker 7: course paramount to both countries. But given how close Israeli

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Speaker 7: forces are now to the Egypt border. There this might

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Speaker 7: just happen again.

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Speaker 2: Benjamin Natania, who is called the air strike on a

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Speaker 2: tent city in Rafa, where it's thought that forty five

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Speaker 2: people were killed, a tragic mistake, but it's drawn condemnation

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Speaker 2: too from elsewhere.

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Speaker 7: Indeed, yeah, we saw France uh Francis Macon condemning it,

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Speaker 7: saying that the images out of Rafah were heartbreaking. But

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Speaker 7: also we saw the White House saying it was actively

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Speaker 7: engaging with Israel and partners in the region to better

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Speaker 7: assess what had occurred. Now, images out of Gaza show

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Speaker 7: tents on fire and wreckage from the strike. But the

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Speaker 7: incident's incident is an example of why the international community,

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Speaker 7: including the US, were almost unanimously calling on Israel to

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Speaker 7: refrain from launching an off offensive Rapa or over a

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Speaker 7: million Palestinians are sheltering crammed in tiny spaces. Israel said

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Speaker 7: that it acted based on precise intelligence and intelligence and

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Speaker 7: killed two senior members of Hamas, and that it was

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Speaker 7: investigating what happened. And it is very tragic and evident

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Speaker 7: of that is what Benjamin Nataniel has said that you know,

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Speaker 7: it was a tragic mistake.

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Speaker 2: But of course, this is coming at a time where

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Speaker 2: we had the International Course of Justice ruling only a

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Speaker 2: few days ago designed to halt the operations that Israel's

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Speaker 2: conducting in Rafa. On the European diplomatic front, we have Ireland,

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Speaker 2: Spain and Norway said to formally recognize Palestinian stated today

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Speaker 2: e foreign ministers meeting in Brussels discuss the possibility of

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Speaker 2: sanctions on Israel if it doesn't comply with that ICJ order.

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Speaker 2: How significant a shift are we seeing in the European

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Speaker 2: position visa VI the Israel Hamas war.

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Speaker 7: It's a very strong signal from the you as we're

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Speaker 7: seeing it hardening its stands against Israel's action in the

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Speaker 7: war and trying to also pressure it to not only

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Speaker 7: end the war, but also start the conversation on a

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Speaker 7: two state solution, which Israel said or is completely against it.

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Speaker 7: And this is evident, of course in the recent decisions

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Speaker 7: from last week of some European countries recognizing a Palestinian statehood,

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Speaker 7: and we're seeing, like you said, Ireland, space Spain and

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Speaker 7: Norway are set to formally recognize that as well. So

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Speaker 7: they're going to discuss potential measures if Israel doesn't comply,

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Speaker 7: but Israel has made it clear that it won't comply

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Speaker 7: with the with the ICG ruling of course, to hold

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Speaker 7: operations in Rafah.

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Speaker 2: Okay, Donna Krash, our Middle East Breaking News editor, thank

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Speaker 2: you very much for joining us with the latest on

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Speaker 2: the story and the developments there in the Middle East.

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Speaker 2: Now Here in the UK, the Prime Minister will promise

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Speaker 2: a tax cut for pensioners if his Conservative Party wins

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Speaker 2: the general election on the fourth of July. This is

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Speaker 2: labor is set to focus on business, with Rachel Reeves

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Speaker 2: due to make a major policy speech later on as well.

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Speaker 2: Our UK politics supporter James Wilcock joins us now for

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Speaker 2: more on all of this.

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Speaker 1: James, good morning.

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Speaker 2: What does this say about the battle lines being drawn

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Speaker 2: over the economy with these latest announcements?

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Speaker 1: Good morning, Stephen.

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Speaker 8: It says that both parties are trying to tell a

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Speaker 8: very different message, but where they see the economy going.

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Speaker 8: I mean, for she's soon at the Prime Minister. The

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Speaker 8: Conservative Party have turned the economy around, he'll say, and

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Speaker 8: therefore he can make giveaways and the pensioners where the

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Speaker 8: story of the past decade has been George Osbourne abolished

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Speaker 8: this kind of tax free allowance because it was seem

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Speaker 8: as a way of giving higher pensioners big tax breaks.

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Speaker 8: Now what has happened is since then, obviously inflation and

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Speaker 8: the Triple Lock have led to the basic state pension.

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Speaker 8: It comes in around eleven five hundred and forty pounds

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Speaker 8: a year. Now in a few years the personal tax

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Speaker 8: free allowance for everyone in the UK is currently at

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Speaker 8: twelve thousand and five seventy so you can see pensions

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Speaker 8: will start to get tax on their day income. So

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Speaker 8: Sunak saying, we have you know, after tonally coming around,

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Speaker 8: we can give back on that front, and so he

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Speaker 8: would introduce what he is being called the triple dot

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Speaker 8: plus or the quadruple lock, which should put pensioners on

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Speaker 8: their own special tax exemptions, taking them out of having

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Speaker 8: to pay income tax. Whereas for Rachel Reeves, the Shadow Chancellor,

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Speaker 8: is also speaking today, she says No completely rejected its

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Speaker 8: idea that the economists turned to corner. We're only in

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Speaker 8: this mess because of the Conservative Party and I am

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Speaker 8: being trusted by business leaders to return us to growth

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Speaker 8: and with economic stability. So there are very very key

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Speaker 8: dividing lines now on where both parties would take the

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Speaker 8: economy if they were to win.

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Speaker 2: Yeah, because I mean the existing pension tripper lock. This

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Speaker 2: is the guarantee the pension rises by the highest of

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Speaker 2: either earnings wages or inflation wages are two and a

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Speaker 2: half percent. This is something that is already a huge

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Speaker 2: item on the budget here for the government. How much

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Speaker 2: would the change that the Tories are proposing add to

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Speaker 2: that cost?

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Speaker 8: Well, I mean, I do want to pick up some

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Speaker 8: of the concerned of language it because they're calling this

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Speaker 8: a tax cuts now, because it's a threshold that's being frozen,

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Speaker 8: and then they would unfreeze it. It's technically not imposing

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Speaker 8: a tax rise. Is worth saying, a lot of these

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Speaker 8: spending plenders are really stacking up, Stephen. If you look

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Speaker 8: at the Conservatives, they are pledged to increase defense spending

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Speaker 8: two point five cent of GDP, that's about six billion

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Speaker 8: a year. They the National Service Plan they put out

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Speaker 8: over the weekend, that's another two point five billion, which

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Speaker 8: they say would come from leveling up funds that were

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Speaker 8: come after the EU, but still more spending. This would

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Speaker 8: be another two point four billion pounds. And all of

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Speaker 8: this in addition to the fact that Bloomberg Economics say

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Speaker 8: that because the government haven't updated their spending punch like budget,

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Speaker 8: they predict a forty five billion black hole and government

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Speaker 8: finances over the next five years. So it really is

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Speaker 8: a lot of big spending commitments by the Conservatives at

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Speaker 8: a point where they're already very very fiscally constrained, and

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Speaker 8: ones that Labor are quite eminently choosing not to make.

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Speaker 4: And are rejecting.

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Speaker 8: And I'm throwing a lot of political mud at the

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Speaker 8: Conservatives from making these kind of claims.

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Speaker 2: Well, let's turn to the Labor announcement then, So we've

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Speaker 2: had these one hundred and twenty business leader as signing

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Speaker 2: a letter supporting Labor on the day as you said

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Speaker 2: that Rachel Reeves is making this speech. How significant is

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Speaker 2: that support.

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Speaker 1: For the Labor Party.

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Speaker 8: I mean, you can tell them bringing the citizens from

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Speaker 8: both sides this morning, Stephen. I mean, look, you've got

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Speaker 8: to take these lists with a big pinch of salt. Obviously,

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Speaker 8: BUSI lyders want to support the party that is twenty

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Speaker 8: points ahead in the polls, and also give no reflection

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Speaker 8: of kind of what sectors. If these all these people

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Speaker 8: are from all sorts of sectors of business, how supportive

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Speaker 8: they will be how supported the sectors I as a whole.

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Speaker 8: Having said all of that, you couldn't imagine a list

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Speaker 8: like this being put out in twenty nineteen for Jeremy Corbyn.

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Speaker 8: It mimics a lot of sort of the David Cameron

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Speaker 8: kind of pro business policies. It really is a sign

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Speaker 8: of how the amount of support racial Research chalistanst has

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Speaker 8: won from business leaders across the UK and a sign

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Speaker 8: of where the party has moved on. Notably no foots

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Speaker 8: one hundred CEOs in there. But they normally don't choose

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Speaker 8: any sort of major sides in any election anyway, so

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Speaker 8: Labor will trumpet this as a sign of they have

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Speaker 8: won the trust of the business community and therefore can

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Speaker 8: be trusted to bring stability to the economy and bring

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Speaker 8: investment back to Britain. Is an electionary slogan, Stephen, There's

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Speaker 8: no getting around that. But it is one that a

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Speaker 8: previous Labor Party could not have achieved and is worth

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Speaker 8: noting that.

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Speaker 2: Okay, James, we're coming up to towards towards the end

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Speaker 2: of the first week of the campaign.

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Speaker 1: Believe it or not, how are things going so far?

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Speaker 8: So far, very little has changed in the pulse and

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Speaker 8: we're keeping a close eye on them. Here a Bloomberg

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Speaker 8: to see where things would shift.

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Speaker 1: Now.

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Speaker 8: Richie Sunac, as we've sort of noted, is taking a

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Speaker 8: policy of trying to please much older voters, which seems

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Speaker 8: to suggest he seems to be very worried about the

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Speaker 8: threat from the Reform UK Party and on the right. Meanwhile, Labor,

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Speaker 8: you've also spotted them campaigning in Scotland quite a lot,

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Speaker 8: which always quite inesting in terms of like they're trying

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Speaker 8: to take seats away from the SMP A name for

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Speaker 8: this kind of centrist economics message. We'll see where that

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Speaker 8: develops going forward. I mean Bloomberg that's working our political editor.

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Speaker 8: He is saying that for some conservative campaigns, seems to

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Speaker 8: be trying to get Reform voters home and then maybe

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Speaker 8: doing a pivot in coming weeks. The other side of

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Speaker 8: it we keep watching out for is any kind of

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Speaker 8: big election TV debates and the manifestos, these crucial manifestors, well,

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Speaker 8: the parties really can't hold anything back once those are published.

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Speaker 8: We'll be expecting those in sort of the coming week Stephens.

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Speaker 8: So they are when we really will start to get

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Speaker 8: serious costings as opposed the big picture attention grabbing announcements.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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

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