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Speaker 1: Good morning. It's Thursday, the thirteenth of July here in London.

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Speaker 1: This is the Public Day Bakut podcast. I'm Caroline Hepkat and.

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Speaker 2: I'm Lizzie Burden. Coming up today, we have special reporting

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Speaker 2: on Jeffrey Epstein's relationship with the former Barclay CEO Jess Staley.

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Speaker 1: US inflation cools to three percent, but it's unlikely to

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Speaker 1: stop FED officials from moving forwards. With another interest rate

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Speaker 1: hike and.

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Speaker 2: The high price of working from home, research suggests remote

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Speaker 2: where it could be wiping eight hundred billion dollars off

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Speaker 2: the value of office buildings. Let's start with a roundup

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Speaker 2: of our top stories. Four years on from Jeffrey Epstein's

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Speaker 2: death in prison by suicide, legal action against the former

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Speaker 2: Barclay CEO Jess Stay is revealing a profound relationship between

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Speaker 2: the pair. Ewan Pops has more.

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Speaker 3: I miss you. The world is a tough place hanging there.

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Speaker 3: That's what Jess Day wrote to Jeffrey Epstein in June

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Speaker 3: two thousand and eight, a fortnight after Epstein was jailed

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Speaker 3: and charges of soliciting prostitution from someone under the age

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Speaker 3: of eighteen. A review of thousands of pages of documented

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Speaker 3: and emails suggests the relationship between Epstein and the former

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Speaker 3: JP Morgan executive went far beyond that of banker and clients.

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Speaker 3: It points to regular and repeated contact, including trips to

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Speaker 3: Epstein's properties and sharing tips on how to negotiate multimillion

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Speaker 3: dollar salaries. The findings also show Staley wanted to keep

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Speaker 3: Epstein's account at JP Morgan when other executives wanted him gone.

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Speaker 3: JP Morgan's top lawyer wrote in twenty eleven that Epstein

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Speaker 3: is not an honorall person in any way he should

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Speaker 3: not be a client. The lawsuit, which alleges JP Morgan

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Speaker 3: knowingly benefited from Epstein's sex trafficking, is scheduled for trial

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Speaker 3: in October in London. I'm un in pots Bloomberg day

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Speaker 3: Break Europe.

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Speaker 2: In response to that story, a spokeswoman for JP Morgan

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Speaker 2: told Bloomberg any association with Epstein was a mistake and

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Speaker 2: in hindsight we regret it, but we did not help

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Speaker 2: him commit his heenous crimes. We would never have continued

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Speaker 2: to do business with him if we believed he was

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Speaker 2: engaged in an ongoing sex trafficking operation. Yes Daily has

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Speaker 2: previously denied wrongdoing a knowledge of Epstein's sexual crimes. His

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Speaker 2: lawyer declined to comment on this report.

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Speaker 1: Now, moving on, US, inflation cooled sharply last month, offering

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Speaker 1: fresh hope that the Federal Reserve is close to ending

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Speaker 1: a series of rapid rate hikes. The Consumer Price index

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Speaker 1: rose three percent in June year on year. That is

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Speaker 1: the smallest advance since March of twenty twenty one, but

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Speaker 1: Blue Big Opinion colonists and former New York Fed President

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Speaker 1: William Dudley says he still expects the Central Bank to

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Speaker 1: opt for a hike at this next meeting.

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Speaker 4: That should be pretty a cheered by this, but I

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Speaker 4: don't think it changes what they're going to do at

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Speaker 4: the July meeting because I think they're looking at the

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Speaker 4: totality of the data of the last three months going

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Speaker 4: to the July meeting, and the reality is the Kamy

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Speaker 4: is still doing quite well.

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Speaker 5: The county really.

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Speaker 4: Hasn't slowed down enough to make the FIT confident that

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Speaker 4: they're going to see that slack Molley overk they that

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Speaker 4: they want.

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Speaker 1: The former New York Fed President's comments come as markets

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Speaker 1: price less than a fifty percent chance of a further

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Speaker 1: rate rise after this month's FED meeting.

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Speaker 2: Here in the UK, prospective home buyers are pulling back

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Speaker 2: from the property market at the sharpest pace in eight months.

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Speaker 2: The Royal Institution of Chartered Surveyors says this is down

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Speaker 2: to recent increases in interest rates and the impact that's

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Speaker 2: had on the cost of mortgages. Bank of England Governor

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Speaker 2: Andrew Bailey says the banking system is resilient to severe

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Speaker 2: stress scenarios and has the capacity to support households.

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Speaker 6: The results of the stress tests that we've published today

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Speaker 6: showed that the major UK banks are resilient to a

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Speaker 6: severe stress scenario. That scenario incorporated deep simultaneous recessions with

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Speaker 6: materially higher unemployment in the UK and global economies, increasing

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Speaker 6: global interest rates, persistently higher advanced economy inflation, and sharp

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Speaker 6: falls in asset prices. The UK banking system has the

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Speaker 6: capacity to support households and businesses through a period of

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Speaker 6: higher interst rates.

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Speaker 2: Meanwhile, the new figures from Rick suggest it, while they

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Speaker 2: show its index tracking house prices fell to minus forty

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Speaker 2: six percent in June from minus thirty percent in the

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Speaker 2: month before.

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Speaker 1: Now, golbe Sachs appears to embracing a new game plan

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Speaker 1: in order to avoid a third straight quarter of disappointing

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Speaker 1: investors on earnings day, executives have been working hard to

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Speaker 1: downplay expectations for results that are due next week. BlueBag

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Speaker 1: su Keenan reports now from New York.

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Speaker 7: Bank executives try to underpromise and over deliver. The situation

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Speaker 7: with Goldman Sachs is markedly different. The bank is famous

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Speaker 7: for not giving any pre earnings guidance to analysts, and

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Speaker 7: yet now it appears to be breaking its own rules.

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Speaker 7: One Illness says it's dropping all kinds of hints that

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Speaker 7: this could be the worst quarter since David Solomon took

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Speaker 7: over as CEO. Analysts have slashed their estimate for quarterly

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Speaker 7: profit by almost half since mid June. That's the biggest

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Speaker 7: revision before an earnings report under Solomon's reign. Sue Kenan Bloomberg,

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Speaker 7: New York.

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Speaker 2: After a two day NATO summit dominated by the on

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Speaker 2: going more in Ukraine and whether it could join the

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Speaker 2: Defense Alliance, President Joe Biden insists the US commitment to

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Speaker 2: Ukraine will not weaken.

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Speaker 7: Now it was stronger, more energized, and yes, more united

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Speaker 7: than ever in its history.

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Speaker 2: We will not waiver.

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Speaker 6: We will not waiver.

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Speaker 1: I mean that our commitment to Ukraine will not weaken.

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Speaker 2: President Joe Biden speaking there, Ukrainian President Vladimir Zelenski criticized

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Speaker 2: analyzes over an absurd reluctance to give his country a

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Speaker 2: clear timeline on NATO membership. Elsewhere, Britain's Defense Secretary Ben

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Speaker 2: Wallace has been criticized for saying he's not Amazon when

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Speaker 2: it comes to weapon requests from Kiev. It comes as

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Speaker 2: Russia's flagship urals Creed oil breached the sixty dollars price

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Speaker 2: cup set by the G seven, arguably an economic win

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Speaker 2: for Moscow.

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Speaker 1: Now, working from home risks wiping eight hundred billion dollars

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Speaker 1: from the value of office buildings in major cities, According

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Speaker 1: to a report for McKinsey that has modeled the impact

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Speaker 1: on office valuations by twenty thirty in nine cities globally,

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Speaker 1: including London, the pandemic has pushed people towards remote working,

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Speaker 1: is driving down the need for office space, with attendance

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Speaker 1: remaining thirty percent below pre COVID levels. The shift is

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Speaker 1: also affecting the value of retail and residential property, as

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Speaker 1: people's new habits influence where they shop and live.

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Speaker 2: And finally, the BBC's Hugh Edwards has been named by

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Speaker 2: his wife as the presenter alleged by The Sun newspaper

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Speaker 2: to have paid a teenager for sexually explicit photographs. The

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Speaker 2: police have concluded that no crime has been committed by

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Speaker 2: the presenter. Edward's wife made a statement on his behalf

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Speaker 2: saying his serious mental health issues have been worsened by

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Speaker 2: the controversy and he's now receiving care in the hospital.

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Speaker 2: PR expert Mark Bukowski says it's important to remember that.

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Speaker 8: It just emphasizes that if you carry that burden of

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Speaker 8: fame and there are other issues going on your private life,

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Speaker 8: it's incredible toxic, but there's no criminality. So what people

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Speaker 8: do in private is totally in their power and it

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Speaker 8: might be interesting for the public, but it's not of

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Speaker 8: public interest.

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Speaker 2: The Sun, owned by Reputmodox News Corps, has defended its

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Speaker 2: handling of the story, and a spokesperson for the paper

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Speaker 2: says it doesn't plan to publish any more details.

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Speaker 1: Those are a few of our top stories than for

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Speaker 1: you this morning. Do you hate meetings, Lizzie?

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Speaker 2: I do, I really really do.

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Speaker 1: I think everybody. I think You're not alone there and Shopify,

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Speaker 1: Oh on your side. I think this is so interesting.

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Speaker 1: The Canadian e commerce company has rolled out this calculator.

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Speaker 1: It's on people's calendar basically at work, and it pings

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Speaker 1: up the cost of having a meeting if you're gathering

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Speaker 1: three or more people at Shopify, and so this is

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Speaker 1: sort of meant to basically cut all of these useless

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Speaker 1: meetings by showing people just how expensive it is actually

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Speaker 1: to take up other people's time.

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Speaker 2: Wonderful, it's the introvert dream. I think it's just an

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Speaker 2: extension of the pandemic because didn't we learn then how

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Speaker 2: useless middle people are in the office.

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Speaker 1: Yeah I suppose, yeah, not to land bast everybody, But no,

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Speaker 1: I think that obviously some gatherings are necessary, but it's

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Speaker 1: about making them, you know, worthwhile. And yes, I'm sure

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Speaker 1: that we all want to get the job done speedily

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Speaker 1: and not have to hang around ad meetings that are necessary.

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Speaker 1: But it's also, one must say, a huge issue for

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Speaker 1: organizations as a whole. Apparently there is a professor who

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Speaker 1: has dedicated twenty years to looking at the cost of

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Speaker 1: meetings in large organizations, and apparently it's totted up that

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Speaker 1: it costs about one hundred million dollars a year for

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Speaker 1: big companies. You have wasted time in meetings, but I feel.

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Speaker 2: Like this is the stick and there needs to be

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Speaker 2: a carrot that enhances meetings. There must be better ways

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Speaker 2: to bring out the best ideas and are short and brief.

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Speaker 1: To the point that's always usked, isn't it?

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Speaker 6: Well?

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Speaker 1: Speak of which, let's move on three percent last month,

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Speaker 1: the US consumer price inflation is now just a third

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Speaker 1: of the level that it reached a year ago. It

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Speaker 1: means that markets now see July more likely than not

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Speaker 1: as the last hike in a while for the fair

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Speaker 1: Johnny Snaplueberg's chief ates correspondent, Garfield Reynolds, who always gets

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Speaker 1: to the point, never wastes anybody's time in a meeting. Garfield,

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Speaker 1: good morning. How much has inflation weakened and what does

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Speaker 1: it mean for the FED path?

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Speaker 5: Well, inflation has weakened substantially, and especially what really mattered

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Speaker 5: from the point of view of investors was that the

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Speaker 5: core measure also came down to four point eight percent,

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Speaker 5: which was the lowest since twenty twenty one, and even

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Speaker 5: the so called supercore measure, which is something that j

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Speaker 5: Power has been very keen on tracking that follows services

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Speaker 5: inflation excluding housing, to get a really good sense of

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Speaker 5: your what's in the economy that could sustainably drive prices higher.

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Speaker 5: That was unchanged on the month. That's the first time

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Speaker 5: that's happened in a long time. And if you look

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Speaker 5: at the three month annualized level of that, that's back

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Speaker 5: down to the sort of levels that were around like

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Speaker 5: one point four percent. That's in line with where things

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Speaker 5: were before COVID, so before all the disruptions of the

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Speaker 5: COVID pandemic. And I had one investor that I often

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Speaker 5: talked to who was saying to me that when she

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Speaker 5: was looking at the data and talking about it with

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Speaker 5: people on her desk, shees like, if I was the FED,

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Speaker 5: I just stopped here. Game over. So that's the way

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Speaker 5: bond investors are looking at it. They understand the FED

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Speaker 5: is going to keep going at least this month and

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Speaker 5: going to consider going further. But even if it does,

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Speaker 5: they're seeing a ready path to not only an end

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Speaker 5: to the FED hikes, but also the beginning of a

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Speaker 5: move towards when were they cut rates because they have

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Speaker 5: done enough and just.

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Speaker 2: Layer into that picture. For us Garfield, the fed's page book.

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Speaker 2: It shows a cooling US economy, Yes it does.

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Speaker 5: It was very interesting. I mean it showed that actually

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Speaker 5: activity in May picked up a bit, but there were

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Speaker 5: lots of signs that it was going to cool down,

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Speaker 5: and in particular, your businesses were expecting it to cool down.

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Speaker 5: And one of the things that you know invests an

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Speaker 5: analyst to say the FED is definitely going to welcome

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Speaker 5: were signs that companies were having difficulty exerting pricing power,

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Speaker 5: so they finding that consumers are reluctant to accept price increases.

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Speaker 5: That's another key sign that inflation can come down sustainably

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Speaker 5: because the FED has succeeded in it looks like it

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Speaker 5: succeeded in sapping aggurate demand to the level that your

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Speaker 5: companies are going to have to rain prices in and

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Speaker 5: that's going to it's like a virtuous loop. Then consumers

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Speaker 5: telling companies they don't want price increases. Companies are listening

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Speaker 5: to that. So that breaks the potential for spiraling expectations

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Speaker 5: for inflation, and that's something that Joy Powell has emphasized.

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Speaker 5: They don't want to see a situation where inflation expectations

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Speaker 5: become unanchored. This is a sign that those expectations are

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Speaker 5: going to remain well and truly nailed to the ground.

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Speaker 1: Yeah, Garfield, thank you so much for your time this morning.

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Speaker 1: Blue Beg's Chief Rates correspondent, Garfield Reynolds.

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Speaker 2: Up next, SUNAC poised to back six percent public sector

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Speaker 2: pay rise and banks off the hook over payment fraud.

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Speaker 3: Now the paper review on Blue Bird Daybreak Europe.

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Speaker 2: The news you need to know from today's papers.

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Speaker 1: Journey us this morning, Blue Begs Leanne Gerin's let's start

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Speaker 1: with the Financial Times Lean the headline SUNAC poised to

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Speaker 1: back six percent pay rise for public sector workers. This

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Speaker 1: is the big question.

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Speaker 9: It is a big question and we're talking about it

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Speaker 9: yesterday with Caroline. So now we're going to bring you

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Speaker 9: up to date. But last night the Prime Minister actually

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Speaker 9: hosted a hog roast for Tory MPs in as Downing

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Speaker 9: Street Garden as he tried to really raise party morale.

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Speaker 9: That's ahead of three parliamentary by elections next week. And also, Caroline,

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Speaker 9: what's going on right now with the pay review Rishie.

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Speaker 9: SUNAC is due to sign off on wage increases which

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Speaker 9: have been proposed by the independent review bodies. And really

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Speaker 9: this comes after a wave of strikes we've seen across

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Speaker 9: the country. He said that he is, according to ministers,

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Speaker 9: going to be backing a rise of about six percent

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Speaker 9: for public set to work as this year. But the

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Speaker 9: Ft says he only agreed to this after ministers were

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Speaker 9: ordered to find savings from their Whitehall budgets. The PMS

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Speaker 9: made it clear any pay rises this year had to

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Speaker 9: be responsible and could not be funded by more government borrowing.

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Speaker 9: He is insisting this is going to fuel inflation soon.

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Speaker 9: That's going to meet the Chancellor, Jeremy Hunt today and

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Speaker 9: that comes amid these expectations in the Financial Times from

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Speaker 9: Fallow ministers that they will agree these pay awards. But

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Speaker 9: we must remember today we're seeing junior doctors begin an

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Speaker 9: unprecedented five days of strike action, and we've seen a

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Speaker 9: whole wave of industrial action over the summer and months

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Speaker 9: before that.

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Speaker 2: Cearly and the hog jokes are just flooding to me.

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Speaker 2: The unions have his feet to the fire, he skewered

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Speaker 2: those ministers. We're going to have to move on for

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Speaker 2: bring you anymore. The Telegraph says banks are off the

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Speaker 2: hook over payment fraud as Barclay's Windows Supreme Court case.

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Speaker 9: Yeah, yes, exactly, So this case, the Supreme Court has

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Speaker 9: ruled banks cannot be held responsible for fraudulent payments that

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Speaker 9: are authorized by customers themselves. Now, this case Involvesona Phillips.

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Speaker 9: She's a music teacher. She's also a longtime customer of

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Speaker 9: the bank. Now, she did sue Barclay's back in twenty twenty,

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Speaker 9: and this came after she was tricked into transferring seven

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Speaker 9: hundred thousand pounds to an account in the UAE in

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Speaker 9: an elaborate scheme. And it's called the push payment fraud.

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Speaker 9: And this is something that costs banks so much money

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Speaker 9: every single year. She alleged Barclay's owed her a duty

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Speaker 9: to ignore her instructions, that the bank had reasonable grounds

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Speaker 9: to suspect she was being defrauded. But yesterday the judge

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Speaker 9: from basically said and agreed that it's going to be

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Speaker 9: enormous relief to banks and to the financial industry. So

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Speaker 9: the Supreme Court Judge George Leggett overturned a twenty twenty

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Speaker 9: one court appeal ruling that allowed the court to proceed

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Speaker 9: and the case to go forward. This is something, Caroline

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Speaker 9: that looks like it's really gonna change things. It could

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Speaker 9: be a landmark ruling when it comes to serning, you know,

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Speaker 9: banks paying people back.

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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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Speaker 1: I'm Caroline Hipka.

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Speaker 2: And I'm Lizzie Burden. Join us again tomorrow morning for

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

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Speaker 2: here on Bloomberg Daybreak Europe