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

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Speaker 2: They say it's the Bloomberg Daybreak Europe podcast. Good morning,

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Speaker 2: It's Thursday, the twelfth of February. I'm Stephen Caroline Brussels.

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Speaker 3: And I'm Caroline Hepkea in London. Coming up today. The

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Speaker 3: UK economy grows by just zero point one percent, in

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Speaker 3: another blow for Prime Minister Kiir Starmer.

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Speaker 2: Neuveene Bryze Schroeders bringing down the curtain on the UK's

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Speaker 2: largest standalone asset manager.

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Speaker 3: Plus another investor cuts ties with global ports giant DP

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Speaker 3: World over the CEO's alleged Epstein ties amid an intensifying backlash.

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

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Speaker 3: The UK economy grew less than expected in the fourth quarter,

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Speaker 3: adding to the pressure on Prime Minister kiss Starmer as

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Speaker 3: he fights to shore up his leadership. GDP rose by

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Speaker 3: a modest zero point one percent in the final three

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Speaker 3: months of twenty twenty five, matching the equally weak growth

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Speaker 3: recorded in the third quarter. Now for twenty twenty five

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Speaker 3: as a whole, the UK economy expanded by one point

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Speaker 3: three percent. UK Treasury Minister Dan Tomlinson says the economy

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Speaker 3: is turning a corner.

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Speaker 4: The growth and investment in the UK economy was twice

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Speaker 4: as high in twenty twenty five than it wasn't twenty

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Speaker 4: twenty four, from one point seven to three point four percent.

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Speaker 4: That investment will drive long term growth, and that's from

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Speaker 4: both public and private sector. Yes, we've increased public sector investment.

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Speaker 4: We need to do that in the UK are We've

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Speaker 4: been living off our paths for too long. Our roads,

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Speaker 4: our railways, our infrastructure. We need to invest in them,

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Speaker 4: but alongside the private sector.

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Speaker 3: Despite Tomlinson's words to Bloomberg, the latest figures deal a

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Speaker 3: further setback to Starma in a week in which he

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Speaker 3: has faced calls to resign over his decision to appoint

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Speaker 3: Peter Mandelson as ambassador to the US despite his known

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Speaker 3: links to Jeffrey Epstein.

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Speaker 2: Will the UK government owned investment firm has suspended its

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Speaker 2: relationship with global ports operator DP World over the CEO's

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Speaker 2: alleged to Jeffrey Epstein. The move follows a decision by

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Speaker 2: Canada's second largest pension fund to pause future investment with

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Speaker 2: the company. With more here's Bloomberg exchange.

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Speaker 5: Walcock among the elite businessmen who carried on friendly, crude

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Speaker 5: and sometimes disturbing correspondence with disgraced financier Jeffrey Epstein. Few

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Speaker 5: kept up their exchanges as long as Sultan Ahmed bin Sulayem.

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Speaker 5: Emails show the men exchange contacts in business and politics,

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Speaker 5: attempted to broak a deal to one another, and made

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Speaker 5: explicit references to sexual encounters. Now, in the wake of

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Speaker 5: those emails being made public, both the UK's Development Finance Bank,

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Speaker 5: British International Investment and Canadian pension fund Kesta Dippo a

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Speaker 5: place mont U Quebec have halted their investments with Sulayem's

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Speaker 5: firm DP World. Bloomberg investigated the emails last summer, and

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Speaker 5: Sulayem has not responded to repeated requests for comment since then.

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Speaker 5: In London, James Walcock Bloomberg Radio.

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Speaker 3: The latest revelations come as the fallout from the release

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Speaker 3: of the Epstein files continues to reach a frost governments, companies,

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Speaker 3: and universities. During a congressional hearing, US Attorney General Pam

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Speaker 3: Bondie said there are pending investigations by the US Justice

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Speaker 3: Department related to the probe of the late financier, but

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Speaker 3: she did not elaborate now. During the hearing, New York

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Speaker 3: Congressman Jerry Nadler tried to ask Bondie how many men

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Speaker 3: connected with Epstein have been indicted?

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Speaker 6: How many perpetrators are you even investigating?

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Speaker 5: First you showed it, I find out how many have you?

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Speaker 1: Excuse me, I'm going to answer the question.

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Speaker 7: Answer my question.

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Speaker 1: No, I'm going to answer the question the way I

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Speaker 1: want to answer the question for you, the question. I'm

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Speaker 1: not going to get in the gutter with these people.

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Speaker 1: I'm going to answer the question.

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Speaker 7: How many of you?

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Speaker 3: The exchange between Jerry Nadler and Pam Bondie came as

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Speaker 3: Columbia University said that it admitted a student to its

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Speaker 3: dental school via what it called irregular process that coincided

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Speaker 3: with fundraising requests by former faculty and alumni to Jeffrey Epstein.

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Speaker 3: That revelation came after Bloomberg reported on a year's long

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Speaker 3: chain of communication between Epstein's camp and senior members of

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Speaker 3: the Columbia dental faculty.

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Speaker 2: Nuveen is buying Schroeders for a total value of nine

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Speaker 2: point nine billion pounds. It means the end of more

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Speaker 2: than two centuries of independence, Foreschroeders, the UK's largest standalone

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Speaker 2: asset manager. The money manager has struggled in recent years,

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Speaker 2: facing criticism for its relatively high cost base and slower

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Speaker 2: organic growth. Richard Oldfield, Schroeder CEO, says the dealer is

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Speaker 2: aligned with the firm's values.

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Speaker 8: The cultures fit the heritage, the three hundred years together,

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Speaker 8: so it's not just our two centuries of history. Novine

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Speaker 8: comes with more than one hundred years of history as well,

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Speaker 8: and that actually helps us have very similar cultures. This

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Speaker 8: is all about the city of London. We put that

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Speaker 8: right at the heart of the deal making commitments to

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Speaker 8: the UK and London.

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Speaker 2: Schroder CEO Richard Oldfield, speaking to Bloomberg this morning. According

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Speaker 2: to a statement, the cash offer represents a premium of

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Speaker 2: twenty nine percent over Wednesday's closing price. This morning, shares

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Speaker 2: and Shoulders are up by twenty nine percent.

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Speaker 3: Shares in the French luxury giant el Mes have risen

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Speaker 3: at the sol of European trading after the company reported

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Speaker 3: stronger sales growth than expected in the fourth quarter of

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Speaker 3: almost ten percent. That's down to robust demand for its

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Speaker 3: burke in handbags. Emmes is whether the demand downturn for

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Speaker 3: luxury products better than its peers. All divisions performed better

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Speaker 3: than expected in the fourth quarter, except for Perfume and Beauty,

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Speaker 3: where sales fell by almost fifteen percent.

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Speaker 2: The British Prime Minister has labeled comments on immigration by

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Speaker 2: Manchester United's co owner Jim Ratcliffe as offensive and wrong.

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Speaker 2: A spokesperson for Number ten also called on the billionaire

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Speaker 2: boss of Ineos Chemicals to apologize for the remarks made

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Speaker 2: during an interview with Sky News. During the conversation, Ratcliffe

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Speaker 2: said the UK couldn't sustain its current population growth both you.

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Speaker 9: Can't have an economy with nine million people on benefits

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Speaker 9: and huge levels of immigrants coming in. I mean that

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Speaker 9: the UK has been colonized. It's costing too much money.

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Speaker 9: It will cause the UK has been colonized by immigrants, really,

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Speaker 9: isn't it. I mean the population of the UK is

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Speaker 9: fifty eight million in twenty twenty now it's seventy million.

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Speaker 2: In that interview with Sky News, Jim Ratcliffe went on

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Speaker 2: to argue that Kirstarmer needs to make difficult decisions to

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Speaker 2: get the UK back on track. Data from the Office

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Speaker 2: for National Statistics estimates the UK's population in mid twenty

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Speaker 2: twenty five was sixty nine point four million versus sixty

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Speaker 2: six point seven million in twenty twenty. Several Manchester United

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Speaker 2: supporters clubs have condemned the comments, as well as the

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Speaker 2: kick it Out campaign against discrimination in sport. And those

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Speaker 2: are your top stories in the program this morning. On

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Speaker 2: the markets, the stock six hundred is six tence high,

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Speaker 2: the catcar on in Powers up by one point one percent,

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Speaker 2: the ACKs and Frankfurt one point two percent. Hire plenty

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Speaker 2: of companies earnings moving those markets this morning. Our Meyre's

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Speaker 2: shares up by one point eight percent, Zeman's shares up

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Speaker 2: by six point two percent, percent is Bends though their

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Speaker 2: shares down by two point seven percent this morning, and

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Speaker 2: in France Michelin up by six point six percent at

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Speaker 2: the moment.

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Speaker 3: Okay, well, in a moment, we'll be talking more about

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Speaker 3: the Epstein files and the uk GDP data that we

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Speaker 3: broke for you earlier this morning. But before that, on

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Speaker 3: questions of imitations and copies. Is it flattery to have

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Speaker 3: something copied? Is it frustrating? Felix Salmon has been writing

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Speaker 3: about this for Bloomberg Pursuits and it got Stephen and

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Speaker 3: Eye chatting and he points in this long tradition of

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Speaker 3: artists copying each other through history. Of course, you know

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Speaker 3: you had to do it by hand. It was so

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Speaker 3: easy if you didn't have machines or ai or whatever.

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Speaker 3: But that perhaps it should be seen as flattery more

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Speaker 3: than something annoying, as maybe el May's might find it.

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Speaker 2: Yeah, and also Felix has points to this idea that

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Speaker 2: perhaps as China's economic dominance rises or economics power rises,

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Speaker 2: that we should be taking a more Asian attitude to

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Speaker 2: the question of copies. You know, look at the labooboos

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Speaker 2: and Lafufou's argument, which are more sought after, which are

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Speaker 2: more treasured by their owners? And even in the case

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Speaker 2: of you know, counterfeit handbags, something that of course has

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Speaker 2: been around for a very long time. Research by Italian

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Speaker 2: professors of business and marketing have shown that luxury knockoffs

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Speaker 2: can actually increase consumers willingness to pay for the originals.

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Speaker 2: Does that mean we should be more tolerant of a

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Speaker 2: copy or not? It's a question worth debating.

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Speaker 4: Yeah.

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Speaker 3: Absolutely, Look, if I step on a Laboobo or a Lafoufoo,

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Speaker 3: they are just as painful whichever one it is.

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Speaker 2: I think the new lego for parents of children anyway,

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Speaker 2: something that we will I'm sure come back to, but

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Speaker 2: the question of counterfeits being examined by Philix Sammon. Will

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Speaker 2: put a link to that article in our podcast show notes.

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Speaker 2: Let's dig into the latest UK economic growth figures. Now

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Speaker 2: they're GDP expanding less than expected in the fourth quarter,

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Speaker 2: arising by just zero point one percent as business investment

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Speaker 2: trenk and services stagnated. Our TFUK economist Dan Hanson joins

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Speaker 2: us now for more. Dan, what stands out for you

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Speaker 2: in these figures on morning?

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Speaker 7: I mean a few things. Obviously, it was a little

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Speaker 7: bit at a headline level, the number was a little

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Speaker 7: bit weaker than expected. We had ourselves expected at growth

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Speaker 7: of point one. Obviously, consensus was point two. I mean,

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Speaker 7: I think the broad takeaway with this is you had

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Speaker 7: a year of two halves in twenty twenty five. You

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Speaker 7: had relatively strong growth in the first half of the year,

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Speaker 7: partly because of what happened with the tariffs and how

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Speaker 7: firms brought forward production, and then in the second half

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Speaker 7: of the year. I think it's very hard to argue

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Speaker 7: that there wasn't a big role to be played around

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Speaker 7: policy uncertainty what might or might not happen in the

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Speaker 7: budget at the end of last year that we got

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Speaker 7: on November the twenty sixth, And you see that in

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Speaker 7: the private sector data, particularly so if you break down

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Speaker 7: GDP into the government sector and the private sector, you

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Speaker 7: see that the private sector was basically flat in the

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Speaker 7: second half of the year. And I think that reflects

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Speaker 7: mostly reflects uncertainty about what was going to happen in

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Speaker 7: the budget. And I think, you know, looking forward, we

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Speaker 7: can talk about what might come next, but I think

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Speaker 7: that that is likely to be a temporary thing. And

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Speaker 7: we think our view at least as the economy should

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Speaker 7: and we see this in some near term indicators should

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Speaker 7: pick up in twenty twenty.

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Speaker 3: Six UK giltiels felt a little bit after that data.

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Speaker 3: They're pretty flat now. Sterling this morning also gaining a

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Speaker 3: little bit of strength against the dollar after the GDP figures.

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Speaker 3: What do you think the data actually means for government?

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Speaker 3: We had from a Treasury minister earlier today, you know,

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Speaker 3: defending the government's record, but this is really kind of

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Speaker 3: bumping along the bottom in terms of growth and the

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Speaker 3: government's got to deliver for voters.

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Speaker 7: Yeah, absolutely, and Obviously it comes at an awful time

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Speaker 7: for Keir Starmer, given what's what's been happening in recent weeks.

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Speaker 7: I mean, I think one really interesting thing about all

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Speaker 7: of this, which I think the dynamic around the debate

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Speaker 7: about whether star Wa will go or not. And you know,

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Speaker 7: still if you look at em betting market, the chances

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Speaker 7: are that he will be gone by the end of

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Speaker 7: this year. But I do think the narrative around the

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Speaker 7: economy could potentially change in coming months if these survey

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Speaker 7: indicators proved to be correct and it gets borne out

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Speaker 7: in the hard data. We're pretty sure inflation is going

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Speaker 7: to come down to two percent, So I think in

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Speaker 7: the near term the narrative might shift a bit a

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Speaker 7: little bit in his favor. Whether that's enough to save him,

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Speaker 7: of course, is another question altogether. I think, more broadly,

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Speaker 7: if you look at what's been happening in the economy

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Speaker 7: over the past eighteen months or so since labor came

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Speaker 7: to power, you know, the vast majority of the problem

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Speaker 7: has stemmed from a speculator relation about tax rises and

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Speaker 7: be tax rises. So you know that the government has,

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Speaker 7: you know, has to look at itself in many ways

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Speaker 7: in terms of what's happened with the economy. On the

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Speaker 7: flip side, I think there are some things that have

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Speaker 7: happened that are positive, but the problem things around planning

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Speaker 7: reform and the like, and increasing government investments as well.

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Speaker 7: But I think the problem with this is that it

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Speaker 7: takes time for those to feed through to the numbers,

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Speaker 7: and in politics you don't have that the luxury of

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Speaker 7: that time. So it's it's a real challenge. But as

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Speaker 7: I say, I think it's possible, at least over the

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Speaker 7: next few months that the narratives does shift in a

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Speaker 7: little bit more of a positive direction, both on growth

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Speaker 7: and inflation.

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Speaker 2: Okay, Dan, thanks very much for joining us, our chief

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Speaker 2: UK economist, Dan Hanson. Stay with us. More from Bloomberg

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Speaker 2: Daybreak Europe coming up after this.

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Speaker 3: Now, let's bring you more on the fallout from the

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Speaker 3: Epstein files. The UK's Development Finance Bank International Investment has

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Speaker 3: suspended dealings with Dubai Logistics Giant DP World over alleged

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Speaker 3: ties between the firm CEO and Jeffrey Epstein. Around the world,

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Speaker 3: politicians and business leaders are having to respond to revelations

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Speaker 3: found in the millions of documents released by the US

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Speaker 3: Justice Department, Joining US now as Harry Wilson, the Blueberg

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Speaker 3: reporter at the center of our investigation that first uncovered

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Speaker 3: the extent of Epstein's ties to the UK's former ambassador

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Speaker 3: to the US, Peter Mandleson. Harry, good morning. You've been

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Speaker 3: reporting on the story also around DP World this week,

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Speaker 3: those revelations around the chairman and CEO's contacts with Epstein,

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Speaker 3: which have consequences beyond Dubai. Tell us about what's been happening.

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Speaker 6: Yes, So so far we've seen two partners of DP

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Speaker 6: World cutting ties. So we've just as you say, had

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Speaker 6: British International Investment has cut its ties and says it

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Speaker 6: won't do any fresh investing with them, and then we've

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Speaker 6: also had before that a Canadian pension fund. There's also

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Speaker 6: been a significant investor alongside Deep World, also saying that

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Speaker 6: they won't make any fresh investments until such time as

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Speaker 6: an investigation or some kind of actions being taken by

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Speaker 6: the company to look into these allegations against their chairman

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Speaker 6: and CEO. So far we've heard nothing itself from DP World,

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Speaker 6: so it's radio silence there. But obviously this is a

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Speaker 6: very difficult position for them. They are a very prominent,

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Speaker 6: very large company. They handle something around about ten percent

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Speaker 6: of global container shipping. They operate some of the UK's

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Speaker 6: largest ports. This is a very very very significant business

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Speaker 6: and it's facing a lot of very troubling questions about

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Speaker 6: the behavior of its top executive.

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Speaker 2: Harry, We're still finding more revelations in these documents, and

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Speaker 2: that the deluge of they came now are really not

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Speaker 2: that long ago comparatively. Should we continue to expect more

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Speaker 2: of these to come as as you and other colleagues

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Speaker 2: are pouring over the details of what was released.

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Speaker 6: Almost certainly, I very much think we're probably only in

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Speaker 6: the early stages, the sort of the low foothills of

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Speaker 6: this of this scandal. There are three three and a

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Speaker 6: half billion documents that have been released. Many of those

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Speaker 6: documents number tends to several hundred pages. So to think

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Speaker 6: that we have in any way got a grip of

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Speaker 6: of what's in this this cash and have fully sort

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Speaker 6: of i suppose, understood it, put it all in context

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Speaker 6: and and found you know, everyone or everything in there,

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Speaker 6: I think that will be very sort of rash for

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Speaker 6: us to say so. So I imagine for the coming weeks, months,

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Speaker 6: you know, potentially even more than a year, there will

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Speaker 6: be fresh revelations from this thing. It's a very very

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Speaker 6: significant cash of documents and you will take a substantial

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Speaker 6: amount of time for us to get a grip of it.

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Speaker 2: This is Bloomberg Break 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 2: You can also listen live each morning on London Dab Radio,

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Speaker 2: the Bloomberg Business app, and Bloomberg dot Com.

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Speaker 3: I'm Caroline Hepka and.

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Speaker 2: I'm Stephen Carol. Join us again tomorrow morning for all

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

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Speaker 2: on Bloomberg day Break Europe.