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Speaker 1: It's Tuesday, the tenth of October in London. This is

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Speaker 1: the Bloomberg Daybreak Europe podcast. I'm Stephen Carroll. Coming up today,

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Speaker 1: Israel unites. A fractured country comes together after a horrific

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Speaker 1: attack that killed hundreds. Netanyahu says his country's response will

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Speaker 1: reverberate with their enemies for generations as fears of mass

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Speaker 1: civilian casualties grow, and will bring you the latest from

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Speaker 1: the Labor Party conference in the UK, where Kirstahmer is

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Speaker 1: set to warn that the country faces a difficult path

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

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Speaker 1: More than nine hundred Israelis, mostly civilians, are now known

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Speaker 1: to have died in Hamas's surprise attacks. At the weekend,

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Speaker 1: nearly seven hundred Palestinians have been killed during retaliatory strikes.

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Speaker 1: A survivor of the attack by Hamas on the Supernova

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Speaker 1: festival in Israel says his escape was terrifying. Hi Cohen

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Speaker 1: says he dodged bullets as he drove through a field

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Speaker 1: with his girlfriend to get away from the violence. He

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Speaker 1: described so of what he witnessed.

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Speaker 2: We saw the chips in the motorcycles of Hamas pouching

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Speaker 2: young children that they was under effect of trucks and alcohol.

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Speaker 2: They just butchered.

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Speaker 1: Them while Hai Con and his partner made it to safety.

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Speaker 1: Israeli authorities are still trying to identify and remove the

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Speaker 1: bodies of over two hundred and fifty people killed at

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Speaker 1: the event. Many others have been taken hostage. A spokesman

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Speaker 1: for Hamas told Al Jazeera that the Palestinian militant group

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Speaker 1: is preparing to kill them should Israel strike civilian homes

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Speaker 1: in Gaza without warning. Israel's army is now planning the

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Speaker 1: largest mobilization in the country's history, calling up three hundred

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Speaker 1: thousand reserve soldiers to fight. The Prime Minister benjaminettanie who

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Speaker 1: says the response to Hamas has only started, willem.

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Speaker 3: I know that we all want immediate results. It will

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Speaker 3: take time, but I promise you, dear Israeli citizens, at

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Speaker 3: the end of this campaign, all of our enemies will

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Speaker 3: know there was a great mistake to attack Israel. What

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Speaker 3: we will do to our enemies in the coming days

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Speaker 3: will reverberate with them for generations.

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Speaker 1: Netaniahu's comments come as the country's armed forces continue to

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Speaker 1: launch airstrikes against the Gaza Strip. Israel's military often in

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Speaker 1: struct civilians to evacuate before it hits apartment or office

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Speaker 1: towers in Gaza where civilians might be present. Whoever, residents

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Speaker 1: in Gaza now say buildings are being hit without warning.

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Speaker 1: Of these six hundred and eighty seven people reported to

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Speaker 1: have been killed in Gaza. The Health Ministry says one

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Speaker 1: hundred and forty year children. Senior Hamas official Ari Baraka

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Speaker 1: warned against an all out assault on the Palestinian territory Hola.

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Speaker 3: Our allies are ready to join the fight. If Gaza

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Speaker 3: subjected to a war of annihilation, they will not sit

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Speaker 3: with their hands tied. The government of Israel knows they

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Speaker 3: will open the gates of hell if they try to

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Speaker 3: destroy Gaza and to use non traditional weapons to destroy Kaza,

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Speaker 3: like American weapons.

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Speaker 1: Ali Baraka's call for support comes as America's most senior

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Speaker 1: military official, General Charles Q. Brown Junior, warned Iran to

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Speaker 1: not get involved in the Israel Hamas conflict. Speaking to

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Speaker 1: the Financial Times, the chairman of the US Joint Chiefs

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Speaker 1: of Staff said, we do know what do not want

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Speaker 1: this to broaden, and the idea is for Iran to

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Speaker 1: get that message loud and clear. Meanwhile, the US government

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Speaker 1: says the first shipments of security aids to Israel or

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Speaker 1: already on the way. Bloomberg's At Baxter has the story.

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Speaker 4: There had been some question about what the US could do,

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Speaker 4: but National Security Council spokesman John Kirby says it's important

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Speaker 4: that the aid go now and more will be on

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Speaker 4: the way soon. Meanwhile, Kirby on MSNBC says there is

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Speaker 4: no known direct link between Iran and AMAS on the

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Speaker 4: initial attacks.

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Speaker 2: No, we do not.

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Speaker 5: We don't have any specific intelligence or evidence that points

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Speaker 5: to direct participation by Iran. That said, of course, Iran

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Speaker 5: has long supported HAMAS and other terrorist networks, and.

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Speaker 4: The President is set to me can address later today,

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Speaker 4: Ed Baxter, Bloomberg Radio.

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Speaker 1: Top Federal Reserve officials increasingly feel that another rate hike

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Speaker 1: may not be needed after a recent surge in US

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Speaker 1: borrowing costs. Speaking at the National Association for Business Economics

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Speaker 1: conference in Dallas, Federal Reserve Vice chair Philip Jefferson said

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Speaker 1: he's watching the increase in treasury yields closely.

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Speaker 6: What I think about is the real rate that is

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Speaker 6: required to bring aggregate supply back in to balance with

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Speaker 6: aggregate demand. I think current policy is restrictive in putting

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Speaker 6: downward pressure on the inflation rate, and that's really what

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Speaker 6: my concern is.

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Speaker 1: Jefferson went on to say that he will quote remain

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Speaker 1: cognizant of the tightening and financial conditions through higher bond yields.

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Speaker 1: His comments were echoed by Dallas FED President Laurie Logan,

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Speaker 1: who also spoke yesterday, saying that elevated borrowing costs could

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Speaker 1: do some of the work of cooling the economy for us.

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Speaker 1: That's reflected in the markets, which believe there's only a

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Speaker 1: twenty percent chance of a quarter point hike at the

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Speaker 1: upcoming policy meeting. And here in the UK, the Labor

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Speaker 1: Party leader Keir Starmer will today warn that the country

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Speaker 1: faces a difficult path to recovery as he urges voters

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Speaker 1: to put their trust in him and his party. Starmer

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Speaker 1: will tell Labour's annual conference this afternoon that quote what

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Speaker 1: is broken can be repaired, what is ruined can be rebuilt.

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Speaker 1: The speech comes after the Shadow Chancellor of the Exchequer,

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Speaker 1: Rachel Reeves, told Bloomberg's Lizzie Burden that Labor plans to

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Speaker 1: fight the election on the economy.

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Speaker 7: Went borrowing to fun day to day spending. We'll bring

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Speaker 7: dick down as the share of our economy and then

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Speaker 7: only subject to that, we will invest in the things

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Speaker 7: that can boost our productivity. Work it in conjunction with

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Speaker 7: business to unlock further private sector investment.

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Speaker 1: Rachel Reeves also says Labor will use government borrowing to

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Speaker 1: invest in British industry if it wins power. While popular

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Speaker 1: with many, the move risks playing into the typical conservative

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Speaker 1: of tax over the party's fiscal discipline. Well, let's bring

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Speaker 1: you more now on the attacks in Israel, as we

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Speaker 1: are joined by our head of Middle East and North Africa,

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Speaker 1: Stuart Livingstone. Wallace is in Dubai and in London, OURMA

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Speaker 1: News director Rosland mathieson Roz to you. First, we heard

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Speaker 1: from an international point of view, the leaders of the US, Germany, France,

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Speaker 1: Italy and the UK spoke last night about the situation

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Speaker 1: in Israel. What came out of that call.

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Speaker 8: Well, an initial statement of course, strongly supporting Israel and

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Speaker 8: condemning her mass but not a lot more beyond that.

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Speaker 8: For now, Europe is unlikely to want to get caught

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Speaker 8: up in the military aspect of things. Is As very

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Speaker 8: much a US ally and that's where the military ties lie.

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Speaker 8: Of course, Europe is worried about their citizens. They're worried

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Speaker 8: about what's happening inside Israel. They've lit up their parliamentary

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Speaker 8: buildings and places like Germany and the UK, but there

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Speaker 8: is that caution about sort of supplying military aid to

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Speaker 8: Israel or getting involved militarily, and in some places there

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Speaker 8: is a sense of empathy over the years for the

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Speaker 8: challenges facing Palestinian people. That's not to say they endorse

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Speaker 8: the actions taken on the weekend by Hamas at all,

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Speaker 8: but it's not as clear cup for people some officials

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Speaker 8: really in Europe as when Russia invaded Ukraine. So you

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Speaker 8: see protests in these countries in Europe both supporting Israel

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Speaker 8: and supporting those advocating for a separate Palestinian state. So

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Speaker 8: you are seeing that general statement of support overnight from Israel,

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Speaker 8: but it's a little bit more complicated than say the

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Speaker 8: immediate aftermath of Russia's invasion of Ukraine.

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Speaker 1: And that played out as well at an EU level yesterday,

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Speaker 1: where there was announcement from the European Commission that aide

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Speaker 1: two Palestinians had been suspended. Now that was subsequently reversed.

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Speaker 1: EU foreign ministers are meeting today and say they'll be

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Speaker 1: reviewing humanitarian aid. Talk us through what happened in the EU.

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Speaker 8: Well, that's right, we got that announcement it was going

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Speaker 8: to be suspended, and then late last night the idea no,

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Speaker 8: it's actually going to be reviewed but not suspended, and

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Speaker 8: they will discuss that today. It came after the UN

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Speaker 8: Secretary General Antonio Guteris, he spoke with his European Council

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Speaker 8: President counterpart Charles Michelle, and said, hang on, this is

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Speaker 8: humanitarian aid that Europe provides. It's aid aimed at supporting

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Speaker 8: Palestinians who reject Hamas and in this situation we're seeing,

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Speaker 8: for example in the Gaza strip right now, that the

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Speaker 8: living conditions for people there for quite some time have

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Speaker 8: been poor and the aim of this is to reach

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Speaker 8: those people and to support them, regardless of their political affiliation.

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Speaker 8: In some states so they weren't consulted on the initial decision,

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Speaker 8: including Spain and Ireland, and so what you saw was

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Speaker 8: this late night reversed and at least now an idea.

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Speaker 8: It's not going to be suspended.

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Speaker 9: It will be discussed today what more.

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Speaker 1: Have we heard from the United States? RA was about

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Speaker 1: the aid that they're providing to Israel.

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Speaker 8: Well, this is also a bit complicated because of domestic politics.

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Speaker 8: Right now in the US there is no House speaker

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Speaker 8: and they've got to sort that out so the business

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Speaker 8: of the House can resume. Of course, the Biden administration

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Speaker 8: could do some munilateral announcements around aid military a but

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Speaker 8: they've been a bit cautious there. Also, mean, the US

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Speaker 8: provides already more than three billion dollars in military aid

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Speaker 8: to Israel every year. They've said they're going to support

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Speaker 8: Israel in whatever way is needed, that sort of diplomatic support,

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Speaker 8: strategic support, and possibly further military support, but we haven't

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Speaker 8: really heard a lot of specifics about that so far.

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Speaker 8: And of course Israel is a well equipped military, but

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Speaker 8: also that soldiers already seemingly running short on kit according

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Speaker 8: to some reports, and so you're going to see this

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Speaker 8: possibly get caught up a bit also in the wash

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Speaker 8: of US domestic politics.

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Speaker 1: Okay, Ras, and stay with us. We're going to turn

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Speaker 1: to Stuart Livingston Wallace now who joins US from Dubai,

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Speaker 1: a head of Middle East and North Africa. S Jude

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Speaker 1: I wonder if we could start by just updating us

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Speaker 1: on the security situation in southern Israel this morning and

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Speaker 1: the efforts that are being made to secure the release

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Speaker 1: of the hostages being held in Gaza.

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Speaker 9: Yeah, good morning. So it's still things are still a

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Speaker 9: little bit murky. We know that they have regained full

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Speaker 9: control over certainly the majority of areas that we're infiltrated

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Speaker 9: on Saturday and into Sunday, but I think there is

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Speaker 9: still a concern that there are how much medicines knocking

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Speaker 9: around somewhere inside its rail there's no great certainty with that.

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Speaker 9: The regular ideas that of the Israel Defense Forces briefing

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Speaker 9: kicked off about ten minutes ago, so we'll know what

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Speaker 9: the latest situation is, hopefully in detail in about ten

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Speaker 9: minutes from now. To the north. Again, we've had a

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Speaker 9: few incidents, but nothing serious. On the border with Lebanon,

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Speaker 9: We've have some rockets fired over a rather mortified over

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Speaker 9: and some retaliatory responses there. We did have some infiltration,

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Speaker 9: but again it was characterized as relatively low level and

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Speaker 9: seemed to be locked up relatively quickly. So for as

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Speaker 9: things stand right now, at least on the ground, things

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Speaker 9: appear to be getting better in terms of regaining control,

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Speaker 9: but as you know, there is a long way to

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Speaker 9: go in this conflict. In terms of the hostages, we

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Speaker 9: know that castAR has been trying to broak of some

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Speaker 9: sort of deal since Saturday. Really not clear if they're

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Speaker 9: getting anywhere, and I think anyone everyone would be very

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Speaker 9: surprised if that was resolved soon. We think, based on

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Speaker 9: comments from the US government yesterday, that there are Americans involved,

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Speaker 9: but again no one quite knows the number in total.

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Speaker 9: You know, We've been hearing all sorts of numbers. It's

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Speaker 9: probably more than one hundred, but it could be a

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Speaker 9: greater more than that. So in terms of where we

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Speaker 9: go next on that, again we know the FBI is

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Speaker 9: involved in helping out the regular authorities and figuring out

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Speaker 9: how many there are and where they are and what

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Speaker 9: they can do about it. But again, rather like the

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Speaker 9: situation on the ground, things remain quite murky.

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Speaker 1: We have, of course seen this series of airstrikes taking

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Speaker 1: place in Gaza. I wonder what more you can tell

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Speaker 1: us about what we know about what Israel as preparing

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Speaker 1: to do next in its response to these attacks.

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Speaker 9: Well, so far we've not had clarity. I mean As

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Speaker 9: things stand, we continue to get attacks from both the

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Speaker 9: land and the se into Gaza. The death toll in

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Speaker 9: Gaza is into the several hundred now, and broadly speaking,

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Speaker 9: again this from the Israeli side, they're going after what

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Speaker 9: they considered to be military assets. Of that is tunnel,

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Speaker 9: that is, houses where they say hamas meat, that's even

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Speaker 9: includes moss that again the Israelis say Hamas are using

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Speaker 9: for operational purposes. But we know they've targeted residential buildings

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Speaker 9: as well on the grounds as they portrayed as being

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Speaker 9: places where Hammas are operating from. Clearly, everyone is watching

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Speaker 9: and waiting to see whether you're going to have troops

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Speaker 9: on the ground, Israeli troops on the grounds in Gaza.

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Speaker 9: The Israelis themselves have said nothing definitive on that so far.

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Speaker 9: We had Ron Berber on yesterday. Now he's one of

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Speaker 9: Netna's closest allies in the Kabinet, and we asked him

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Speaker 9: that question specifically, and again he was very careful not

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Speaker 9: to give anything beyond what Netna himself has said. But

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Speaker 9: obviously the rhetoric coming from Israeli government has been pretty strong,

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Speaker 9: but we've had no specifics yes on what that might

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Speaker 9: be or when might have.

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Speaker 1: We've been watching very closely the commentary around Iran's role,

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Speaker 1: whether or not it supported or helped Hamas prepare for

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Speaker 1: these attacks. What more have we heard about the role

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Speaker 1: of Iran in.

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Speaker 9: This, Well, everyone's being very cautious. I mean, I think

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Speaker 9: the furthest that anyone's gone is probably Ron Bermerin saying

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Speaker 9: something along the lines of initially we didn't think that

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Speaker 9: they were directly involved. He then said, now there's some

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Speaker 9: evidence that they might have known about, but that they

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Speaker 9: were still working to verify that evidence. But again there's

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Speaker 9: a wide gulf between perhaps being aware of it in

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Speaker 9: advance and being actively involved in planning and the operational

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Speaker 9: side of it.

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Speaker 4: You know.

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Speaker 9: Similarly, the US has been repeated and the arsked did

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Speaker 9: we have any evidence that they were directly involved? And

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Speaker 9: again we had the National Security Council spokesman John Kirby

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Speaker 9: yesterday saying that there wasn't any specific intelligence or evidence

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Speaker 9: that points the direct participation in Iran and the attacks

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Speaker 9: against Israel. So for now, I think the general view

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Speaker 9: is that there is no evidence for it. But again,

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Speaker 9: there is a long history there of Iran providing support

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Speaker 9: to how mass that. The question now is where they

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Speaker 9: directly involved? Did they know about it? Do they not

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Speaker 9: know about it at all? And I think that's what

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Speaker 9: everyone's trying to figure out right now.

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Speaker 1: Ros and Madsen turning back to you, what have we

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Speaker 1: heard from other international powers in this as well? We've

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Speaker 1: been watching the US Senate leader Chuck Schumer meeting China's

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Speaker 1: president she yesterday.

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Speaker 8: Well, so it's been fd quiet from countries like Russia

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Speaker 8: and China. China's expressed sadness of what has happened and

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Speaker 8: called for KHM, but it's not condemned Hamas. And so

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Speaker 8: there was that criticism there, Yester, that you mentioned from

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Speaker 8: Chuck Schuma. But China's response is hardly surprising. It's in

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Speaker 8: line with its general approach not to be drawn into

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Speaker 8: conflicts like this. On Russia's invasion of Ukraine, it said

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Speaker 8: similar things but didn't really condemn Russia throughout calling for

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Speaker 8: ceasefires and the like. And of course China is quick

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Speaker 8: to spott an opportunity to try and drive a wage

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Speaker 8: between other nations, particularly between the US and other nations,

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Speaker 8: and exploit them. And you know in Ukraine there was

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Speaker 8: a case of nations who didn't want that war to

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Speaker 8: carry on. So it's a bit more complex so for

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Speaker 8: countries as they may not feel it's as clear cut

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Speaker 8: as Russia going into Ukraine. But the moment what we're

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Speaker 8: seeing is like Russia China perhaps sitting on the sidelines

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Speaker 8: watching developments but not wanting to get directly.

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Speaker 1: Pulled in own news director Razlin Matheson and are Head

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Speaker 1: of Middle Eastern North Africa Sture at Livingston Wallace. Thank you,

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Speaker 1: boot to you both for joining us with the later

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Speaker 1: on this story. Turning to politics here in the UK,

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Speaker 1: Keir Starmer will tell us Parties Conference of the UK

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Speaker 1: faces a difficult path to recovery as he urges voters

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Speaker 1: to trust Labor to rebuild the UK after thirteen years

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Speaker 1: of Conservative rule. His keynote speech is the main event

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Speaker 1: at the conference at Liverpool today and carln Hepker is

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Speaker 1: live there for us this morning.

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Speaker 10: Carlin, good morning, very good morning to Stephen. Let's start

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Speaker 10: with the day yesterday, shall we hear at Labour conference.

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Speaker 10: It was a hugely ambitious day. Rachel Reeves received a

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Speaker 10: hero's welcome and delivered a very persuasive speech. She has

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Speaker 10: claimed the Tories usual stomping ground of the economy ahead

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Speaker 10: of an election that Labour says they are preparing for

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Speaker 10: as early as next May. Labor gave a clear response

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Speaker 10: to the Hammus attacks in Israel, which could have been

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Speaker 10: derailed by the previous leadership who were here yesterday in Liverpool.

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Speaker 10: Now those you say, Stephen, the party waits Kirs Starmer's speech,

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Speaker 10: in which he's expected to say that what is broken

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Speaker 10: can be repaired, what is ruined can be rebuilt. So

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Speaker 10: the former Bank of England economist Rachel Reeves described the

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Speaker 10: mini budget last year from the Conservatives as devastation and

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Speaker 10: voters trust in the toy's handling of the economy has

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Speaker 10: more than half since March twenty twenty, according to a

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Speaker 10: Yugov poll. So Addressing a packed hall, Reeves talked about

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Speaker 10: boosting investment, increasing house building by easing the planning rules,

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Speaker 10: scrapping non dom tax breaks, rebuilding infrastructure, including the electricity grid,

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Speaker 10: all to spur desperately needed economic growth in the UK.

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Speaker 10: The reception that she got from investors in business was

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Speaker 10: positive and it is really notable that they are here

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Speaker 10: in Liverpool in numbers not seen previously and that they

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Speaker 10: are listening so attentively. So here is the Shadow Chancellor,

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Speaker 10: Rachel Reeves.

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Speaker 7: In the two and a half years that I've been

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Speaker 7: Shadow Chancellor of the Exchequer reached out to business and

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Speaker 7: I think you can see that in the speech that

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Speaker 7: I delivered today where I set out that the lifeblood

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Speaker 7: of any successful economy is private business investment. And the

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Speaker 7: plans that I set out, whether that is a form

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Speaker 7: of the planning system, the stability that we need to

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Speaker 7: underpin and provide the foundation of a successful economy, are

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Speaker 7: all ideas that have been generated in conjunction with business,

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Speaker 7: because we do need to get Britain building, and that

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Speaker 7: means giving business the confidence to invest, but also giving

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Speaker 7: them a reason to invest here in Britain. And that's

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Speaker 7: why I hope I did it conference today.

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Speaker 11: Lots of them are non doms, and if you abolish

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Speaker 11: the non dom regime but it doesn't raise as much

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Speaker 11: money as you expect, are you still going to stick

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Speaker 11: by it on ideological grounds.

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Speaker 7: We've got a loophole in our tax system whereby you

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Speaker 7: can live in Britain and Major Britain your home, but

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Speaker 7: because your father was born somewhere else, you can pay

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Speaker 7: tax in a different jurisdiction. There's outdated and it's not

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Speaker 7: right and Labor will abolish it and we will use

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Speaker 7: that money to put into our national health service and

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Speaker 7: for breakfast clubs are all primary schools. But we've worked

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Speaker 7: closely with businesses and investors to make sure that we

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Speaker 7: do not deter foreign investment. We're determined to get that

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Speaker 7: investment here in Britain, but that tax loophole will end

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Speaker 7: with a Labor government.

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Speaker 11: And you're a former Bank of England economist, you know

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Speaker 11: the law of unintended consequences. If the money isn't raised

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Speaker 11: as you expect, would you revive the measure under a

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Speaker 11: different name.

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Speaker 7: Well, if you look at what Gordon Brown died with

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Speaker 7: George Osborne's reforms for non don's a lot of people

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Speaker 7: said it won't raise the money, people will go and

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Speaker 7: live elsewhere. That didn't happen. And what did happen was

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Speaker 7: the tax review came in and we've got public services

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Speaker 7: in Britain today that are on their knees. We've got

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Speaker 7: seven point seven million people on hospital waiting this. We

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Speaker 7: can't go on like this and that's why we are

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Speaker 7: taking this straightforward measure bringing us into line with countries

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Speaker 7: around the world that don't have these loopholes, and ensuring

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Speaker 7: that if you make Britain your home, you pay your

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Speaker 7: taxes here, and putting that money where it belongs in

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Speaker 7: our national health service.

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Speaker 11: So you promise you'll be cautious about borrowing to invest,

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Speaker 11: But we've got debt at ninety nine percent of GDP already,

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Speaker 11: yields are high. The reality is we just don't know

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Speaker 11: how the market's going to react to borrowing even more.

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Speaker 7: Idea, Well, I set out the fiscal rules that I

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Speaker 7: would stick to with iron discipline, and I got support

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Speaker 7: from conference again in setting out those rules where won't

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Speaker 7: borrow to fun day to day spending. We'll bring debt

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Speaker 7: down as the share of our economy, and then only

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Speaker 7: subject to that, we will invest in the things that

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Speaker 7: can boost our productivity, working in conjunction with business to

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Speaker 7: unlock further private sector investment. So today, for example, I

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Speaker 7: set out how a new National Wealth Fund you will

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Speaker 7: be targeted for every pound that we invest that it

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Speaker 7: unlocks three pounds of private sector investment. That is partnership

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Speaker 7: between government and business in action you're seeing around the world.

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Speaker 7: It is unlocking investment around the world. I want those jobs.

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Speaker 7: I want that investment in Britain and with labor we.

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Speaker 11: Will and shout out, Chancellor, none of your colleagues will

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Speaker 11: tell me how fast after the general election you plan

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Speaker 11: to have the fastest growth in the G seven. Isn't

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Speaker 11: that a meaningless mission without a time frame.

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Speaker 7: In the next parliament. We want to achieve that mission

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Speaker 7: of having the highest sustained growth in the G seven,

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Speaker 7: with good jobs and productivity in all parts of the country,

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Speaker 7: making everyone not just a few better off. And today

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Speaker 7: at conference and tomorrow in Keir Starmer's speech, we will

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Speaker 7: set out we have set out today exactly how we're

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Speaker 7: going to achieve that.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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