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Speaker 1: Good morning. It's Friday, the fifth January here in London.

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Speaker 1: This is the Blueberg Day Brecate podcast. I'm Caroline Hepka.

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Speaker 2: And I'm Stephen Carroll. Coming up today, the Islamic State

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Speaker 2: Group claims responsibility for the two explosions in Iran that

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Speaker 2: killed more than eighty people.

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Speaker 1: Bloomberg has learned that Huawei's newest laptop is powered by

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Speaker 1: a semiconductor made in Taiwan, not China.

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Speaker 2: Plus, how eighty two billion euros of investment in housing

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Speaker 2: across Europe is being held up by red tape despite

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Speaker 2: the shortage of homes in major cities.

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

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Speaker 2: The Islamic State Group has claimed responsibility for yesterday's attack

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Speaker 2: that killed more than eighty people in Iran. The explosions

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Speaker 2: risked in flaming tensions further in the Middle East, with

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Speaker 2: Ran saying it had been attacked because of its stance

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Speaker 2: on Israel. Here's White House National Security Council spokesman John Kirby.

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Speaker 3: We have seen the public credit now that isis KAY

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Speaker 3: has taken for the attack in Iran and were certainly

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Speaker 3: in no position to doubt that.

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Speaker 2: Kirby also told the media about a US airstrike in

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Speaker 2: Baghdad yesterday that killed an AROUND backed militia leader. It

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Speaker 2: highlights the frequency of clashes all across the Middle East,

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Speaker 2: with US Secretary of State Anthony Blincoln traveling to the

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Speaker 2: region beginning in Israel today in a bid to cam tensions.

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Speaker 1: US jobs data is out later today, and someone is

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Speaker 1: betting on the biggest rise in treasury yields since last March.

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Speaker 1: The options market was a buzz on Thursday after the

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Speaker 1: emergence of a large bearish wager on yields, rising to

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Speaker 1: four point one five percent by the end of the

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Speaker 1: business day. Today. Friday's jobs report is expected to show

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Speaker 1: US employers added one hundred and seventy five thousand jobs

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Speaker 1: last month. A strong report would add evidence of economic

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Speaker 1: strength that has already caused traders to pull back on

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Speaker 1: expectations for a FED rate cut as soon as March.

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Speaker 2: Huawei's newest laptop runs on a chip made in Taiwan,

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Speaker 2: quashington of another Chinese technological breakthrough. A Bloomberg investigation found

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Speaker 2: the tech giant was using three year old chips made

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Speaker 2: by the Taiwan semiconductor manufacturing company. This counter it speculation

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Speaker 2: that Huawei's domestic partner, Semiconductor Manufacturing International, may have achieved

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Speaker 2: a major leap forward in fabrication technique, while we caused

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Speaker 2: a stir in the US and China last August when

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Speaker 2: it released a smartphone with a seven millimeter processor made

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Speaker 2: by Shanghai based s MIIC, and.

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Speaker 1: Now the Brits are reaping the benefits of higher interest rates.

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Speaker 1: The news helps explain the country's economic resilience, but improvements

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Speaker 1: could soon fade. Bloomberg's tiwa Ad Bayo has the details.

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Speaker 4: Sixteen billion pounds that's how much UK households have gained

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Speaker 4: since the Bank of England's rate increases began two years ago.

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Speaker 4: According to analysis from the Resolution Foundation, returns on savings

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Speaker 4: have more than outweighed the increased cost of boring compared

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Speaker 4: to previous high making cycles in the nineteen eighties and nineties,

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Speaker 4: this time the public has been handed a quote unprecedented windfall,

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Speaker 4: making up sixty percent of all household income growth during

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Speaker 4: the period, say the think Tank. But those gains could

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Speaker 4: be about to dwindle, as around one point five million

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Speaker 4: homeowners face rising bills this year when their fixed rate

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Speaker 4: mortgage deals expire. And markets expect the BOE to make

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Speaker 4: its first rate cut in May. In London, tiwa Adebayo

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Speaker 4: Bloomberg Radio.

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Speaker 2: Ritchie Sinache signaled that a UK general election will be

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Speaker 2: called in the second half of twenty twenty four. The

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Speaker 2: Prime Minister toild broadcasters yesterday that the timing of the

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Speaker 2: vote is his quote working assumption, but failed to rule

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Speaker 2: out a poll in the spring. The government's decision to

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Speaker 2: hold an earlier than usual budget in March had previously

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Speaker 2: sparked rumors of a May election. Labor leader Keir Starmer

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Speaker 2: worries the Conservatives will play dirty in what will likely

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Speaker 2: be a tough election battle.

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Speaker 5: Because the government has no record to put before the country.

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Speaker 5: It can't say, look at the greater time achievements, you

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Speaker 5: must want more of this, because that will be laughable.

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Speaker 5: I can't say we've had great leaders because they've burnt

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Speaker 5: through five most of them now in disgrace, and so

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Speaker 5: they will go low.

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Speaker 2: Starmer's comments commas the Tories try to close a twenty

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Speaker 2: point poll gap with the Relincoln with the opposition party.

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Speaker 2: Now in a moment, we'll be looking at a story

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Speaker 2: about the property market across Europe and why more than

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Speaker 2: eighty billion euros worth of investments are being held up

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Speaker 2: by red tape. But first we wanted to talk a

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Speaker 2: little bit about some of the further twists in this

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Speaker 2: controversy over the resignation of Harvard. Protesters led by civil

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Speaker 2: rights activist Al Sharpton, picketed Bill Ackman, the activist Investor's

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Speaker 2: Manhattan officers on Thursday, protesting his campaign to oust Claudine

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Speaker 2: Gay as president of the university.

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Speaker 4: Yeah.

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Speaker 1: Absolutely. This follows Claudine Gay herself writing an essay in

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Speaker 1: The New York Times sort of, you know, defending herself

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Speaker 1: on Wednesday, effectively, couple of really interesting pieces on the

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Speaker 1: Bloomberg terminal that I wanted to point our listeners towards.

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Speaker 1: One is by Beth Cohitt, explaining why Harvard is the

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Speaker 1: model for attacking corporate diversity, ecuity, and inclusion strategies. According

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Speaker 1: to the Bloomberg opinion columnists. Beth talks about in her words,

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Speaker 1: how at its call the attack on Gay, in her view,

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Speaker 1: is centered on gender and race, Accusations of plagiarism, criticism

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Speaker 1: of the response of her response to the October seventh

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Speaker 1: attack by her mass on Israel, and the disaster sort

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Speaker 1: of congressional testimony played into the ousting of Claudine Gay

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Speaker 1: according to this piece. But when it comes down to

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Speaker 1: you know, Bill Ackman and his allies are agitating for

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Speaker 1: a reversal of diversity, equity and inclusion, which has become

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Speaker 1: sort of this major priority for American institutions. Look, it's

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Speaker 1: a really fascinating read. You know, I think there are

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Speaker 1: two distinct camps it would now in the United States,

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Speaker 1: and it's also kind of raised the parallels between academia

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Speaker 1: and the US and actually corporate America. And I don't

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Speaker 1: think Europe sort of will escape from this entire controversy either.

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Speaker 1: So it's really really fascinating.

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Speaker 2: No, certainly and well worth read. This morning, I'm in

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Speaker 2: Beth pointing out that female CEOs are much more likely

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Speaker 2: to be the target of activist investor, has been fifty

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Speaker 2: percent higher likelihood in fact, according to research, and that

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Speaker 2: female leaders face greater scrutiny scrutiny than their male counterparts.

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Speaker 2: And she points out that all three of the university

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Speaker 2: presents that testified before Congress last month were women over

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Speaker 2: this issue as well. So this is a really interesting

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Speaker 2: aspect of this debate.

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Speaker 1: Yeah, but it's also race and gender and Al Sharpton

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Speaker 1: sort of leading this picketing outside of Bill Ackman's offices

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Speaker 1: is very very significant. Talk about whether there's going to

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Speaker 1: be a meeting potentially between civil rights activism and Bill Ackman. Anyway,

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Speaker 1: it's all on the Blueberg terminal. Have a read. I think, yeah,

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Speaker 1: very interesting but very important controversy. Let's move our attention though,

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Speaker 1: back to our top story. As the war between Israel

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Speaker 1: and the Islamist Palestinian group har Mass has continued, it

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Speaker 1: has stoked violence in other parts of the Middle East.

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Speaker 1: Islamic State has claimed responsibility for Wednesday's deadly attack in

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Speaker 1: Iran near the grave of Cassam Salimani that left so

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Speaker 1: many dead. The extremist Sunni group is ideologically opposed to

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Speaker 1: Shia dominated Iran. Joining us now to discuss the latest

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Speaker 1: is our Middle East Breaking News editor Patrick Sykes. Good morning, Patrick,

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Speaker 1: thanks for being with us. The war in Gaza then

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Speaker 1: has triggered more violence. What is the significance of the

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Speaker 1: Islamic State attack in Iran in your view?

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Speaker 6: Morning, Yes, there's that opposition that you mentioned, right, the

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Speaker 6: isis being a Sunny extremist group both ideologically and religiously

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Speaker 6: opposed to Shea led and Shear dominated Iran. That the two,

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Speaker 6: of course also fought directly in the region in recent

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Speaker 6: years in theaters like Syria and Iraq, often led by Oars.

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Speaker 6: Suleimanid personally or strategically, he being, of course, or his

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Speaker 6: cemetery being the site of this week's attacks, right, so

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Speaker 6: he was very much a phase of for ISIS Iranian

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Speaker 6: aggression against them in the region. In terms of the significance,

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Speaker 6: this should be ostensibly a sort of risk of factor, right,

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Speaker 6: it should help to isolate this week's attack as a

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Speaker 6: sort of ISIS versus Iran incident and nothing more regional

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Speaker 6: or nothing related to Hamas and Israel. Unfortunately, the Iranian

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Speaker 6: official position is that ISIS itself and this has long

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Speaker 6: been held. The position is that ISIS itself was created

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Speaker 6: by the US by the West in order to weaken

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Speaker 6: and divide Muslims and Muslim states in the region and

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Speaker 6: therefore to protect Israel. And we saw just overnight president

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Speaker 6: Iranian President Raci saying that no support of backing from

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Speaker 6: any power will protect the agents involved in this murder.

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Speaker 6: So the Iranians are still keeping up this sense that

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Speaker 6: Israel had some kind of role in this, of course,

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Speaker 6: the US saying that wasn't the case from the start,

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Speaker 6: and Israel, as it never does, not commenting at all.

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Speaker 2: Patrick, the US Equity of State Anstley Blincoln traveling back

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Speaker 2: to the regions the fourth time he's been there since

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Speaker 2: the October seventh attack in Israel, it's another significant tour.

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Speaker 2: What will he be hoping to achieve?

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Speaker 6: Yeah, it's another huge itinery has God as well. I

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Speaker 6: mean Turkey, Jordan, Katar, Yue, Saudi Egypt, and Israel, plus

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Speaker 6: the West Bank and Greece just to top it off.

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Speaker 6: I think that's a testament to the amount of players

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Speaker 6: with a stake in what happens here, and as a

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Speaker 6: function of that, also how difficult it's going to be

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Speaker 6: to get things done as we've seen it in these

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Speaker 6: the past visits that you mentioned. His priorities are going

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Speaker 6: to be de escalation, and I think, unfortunately for him,

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Speaker 6: the theaters on which you want to see that happening

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Speaker 6: are only increasing. You've got Hezbola on the border with

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Speaker 6: Israel and Lebanon. That Lebanese front was also escalated just

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Speaker 6: the other day with alleged Israeli strike on the hamas

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Speaker 6: senior leader in Beirute, far away from the border. He'll

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Speaker 6: also be looking at the Red Sea, where we know

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Speaker 6: who these have been disrupting commercial shipping. Even despite this

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Speaker 6: US led force in the region, we had more incidents

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Speaker 6: on that front just and in the longer term, he'll

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Speaker 6: be looking at how the governance of Gaza once the

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Speaker 6: conflict ends. So you know, if the immediate problems weren't

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Speaker 6: thorny enough, he's got that one to deal with in

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Speaker 6: the longer term.

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Speaker 1: Patrick Sikes, thank you so much for being with us

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Speaker 1: this morning, Middle East Breaking News editor.

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Speaker 2: We're going to turn into a story about Europe's housing

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Speaker 2: market next and as housing shorts just cause rents at

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Speaker 2: home prices to surge across major European cities, investors have

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Speaker 2: the capacity to jacked and estimated eighty two billion euros

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Speaker 2: into new residential projects over the next two years, but

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Speaker 2: red tape is threatening to get in the way and

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Speaker 2: restrict the flow of this money. Here to discuss what's

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Speaker 2: happening is our residential real estate reporter Damien Shepperd. Damien,

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Speaker 2: good morning to you. First of all, where has this

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Speaker 2: eighty two billion euros a potential investment in residential property

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Speaker 2: come from.

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Speaker 6: Yeah.

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Speaker 7: Look, it's been a tricky year for European real estate

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Speaker 7: off the back of eye interest rates. But in the

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Speaker 7: office and retail sector there have been problems. For a

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Speaker 7: while you work from home, an online shopping era has

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Speaker 7: led to investors wanted to shift their portfolio allocations. Now,

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Speaker 7: as one breaker put it to me, investors turn and

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Speaker 7: beds when they don't like anything else. So that makes

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Speaker 7: residential real estate more attractive than ever. Now there's a

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Speaker 7: lack of supply, not enough existing stock. So the money's there,

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Speaker 7: but as you mentioned, there are some problems in the way.

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Speaker 1: So what are the issues then, sort of playing on

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Speaker 1: the minds of investors who might otherwise be quite keen

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Speaker 1: to put some money to work.

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Speaker 7: So the main one is rent controls. So some governments

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Speaker 7: across Europe have stepped into ConTroll rising rents in recent years.

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Speaker 7: Let's take Scotland for example, where landlords can only hike

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Speaker 7: rents but up to three percent per year. Now that

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Speaker 7: could be great for tenants, but it can put investors

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Speaker 7: off because it limits their returns, often doesn't make the

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Speaker 7: numbers add up, and sometimes doesn't count the surges and inflation.

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Speaker 7: Now there's similar rules in place across Europe in cities

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Speaker 7: such as Dublin, Stockholm and Copenhagen, So there's headaches across

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Speaker 7: the board when it comes to rent controls. Another one

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Speaker 7: of the big issues here is planning bottlenecks, and that's

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Speaker 7: particularly a problem in the UK. The way that the

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Speaker 7: planning system is laid out in the UK means that

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Speaker 7: projects can either be delayed or rejected by local authorities,

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Speaker 7: and that snatches away that incentive for developers to build

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Speaker 7: and build. Energy efficiency rules are also looming across Europe,

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Speaker 7: meaning many buildings need renovating. That can be a problem

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Speaker 7: in countries like German where the existing stock is very old,

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Speaker 7: which can put off investors from putting their money into

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Speaker 7: the country.

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Speaker 2: I mean this is a huge political issue as well.

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Speaker 2: What does this all mean for your political parties and

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Speaker 2: for people who are either trying to buy or rent

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Speaker 2: a home.

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Speaker 7: Yes, so for citizens, this just brings more frustration for

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Speaker 7: people wanting to buy a home or indeed just live

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Speaker 7: in a good quality property. That's because poor quality housing

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Speaker 7: and the lack of stock won't improve fast enough if

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Speaker 7: the investment doesn't come. Now, look, the positive is the

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Speaker 7: money is there to invest and that leaves governments with

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Speaker 7: big policy decisions to make in the year ahead. Take

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Speaker 7: the UK for example, where we've just found out that

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Speaker 7: the election is likely to happen in the second half

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Speaker 7: of this year. We've seen Labor and the Conservative Party

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Speaker 7: locking horns on improving the planning system, and elsewhere in

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Speaker 7: countries with rank caps like Scotland and Ireland, you'd imagine

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Speaker 7: more questions will be asked to the political parties about

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Speaker 7: whether the balance of controlling rents for tenants is in

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Speaker 7: line with the need for that investment for good quality housing.

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Speaker 4: Yeah.

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Speaker 1: I mean, especially if you look at average rental growth

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Speaker 1: as you've done in terms of property prices just in London.

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Speaker 1: It's staggering how much prices have gone up. I mean,

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Speaker 1: is that something that's true across Europe? You know that

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Speaker 1: the increase in rental fees.

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Speaker 7: Yeah, rents arising. I mean, in our story, we've got

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Speaker 7: a chart in there which pays some massive increases over

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Speaker 7: the last five years. And like I said, that does

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Speaker 7: make investment a really attractive proposition for these rich investors

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Speaker 7: across the continent. But it is these policy decisions which

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Speaker 7: they'll be looking at when it comes to making that

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Speaker 7: decision about where am I going to put my money.

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Speaker 7: I mentioned Scotland earlier. I've spoken to a lot of

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Speaker 7: developers and investors who've said, we've actually avoided Scotland because

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Speaker 7: of these rent caps. Why would we build a build

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Speaker 7: to rent site in Scotland if we could just go

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Speaker 7: a few miles there in Manchester. So it could lead

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Speaker 7: to these decisions about some countries getting that investment for

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Speaker 7: some not.

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