WEBVTT - Trump Zigzags On Iran, Europe’s Migrant Fears, Burnham’s Devolution Bet

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>This is the Bloomberg DAYBAQ podcast. Good morning, It's Monday,

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<v Speaker 2>the third of August. I'm Caroline Hepca in London and.

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<v Speaker 1>I'm Stephen Caroline Brussels. Coming up today, President Trump says

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<v Speaker 1>new talks with Iran will begin today, scrapping planned attacks

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<v Speaker 1>as he moves once again from escalation to negotiation.

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<v Speaker 2>Spain's border crisis rattles Europe, with at least seventy two

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<v Speaker 2>people dead and nearly all those crossing returning to Morocco.

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<v Speaker 1>Plus British Prime Minister Andy Burnham's plan to devolve power

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<v Speaker 1>away from Westminster is popular with many economists, but how

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<v Speaker 1>would it work in practice.

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<v Speaker 2>Let's start with a roundup of our top stories.

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<v Speaker 1>US President Donald Trump has again shifted course on Iran,

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<v Speaker 1>with new talks set to begin today. The latest reversal

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<v Speaker 1>comes after Trump once again ratteted up the threat of

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<v Speaker 1>more strikes continuing and now from mill pattern of escalation

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<v Speaker 1>and de escalation. The President says he stepped back from

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<v Speaker 1>the latest attacks following appeals from Saudi Arabia and other

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<v Speaker 1>US allies in the region. Here's what he told reporters

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<v Speaker 1>on board Air Force One.

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<v Speaker 3>We're talking to them in the form of a negotiation.

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<v Speaker 3>It begins tomorrow afternoon, and we'll see you. But sure,

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<v Speaker 3>I'd love to do that. Save a lot of lives,

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<v Speaker 3>save a lot of a lot of unnecessary power, to

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<v Speaker 3>be honest with you, or take many, many years to

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<v Speaker 3>have a build it back if it could. I don't

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<v Speaker 3>think it would be even buildable back. So we had

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<v Speaker 3>an effect that would be the biggest attack since World

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<v Speaker 3>War Two.

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<v Speaker 1>Rank crude fell by as much as seven percent after

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<v Speaker 1>President Trump suggested a deal to reopen the Strait of

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<v Speaker 1>Hormuz maybe close. Meanwhile, Iran says negotiations with omanor in

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<v Speaker 1>their final stages, including discussions on a new route through

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<v Speaker 1>the waterway, but officials say the talks don't cover whether

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<v Speaker 1>the vital shipping lane will reopen, leaving the biggest question

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<v Speaker 1>for global oil markets unanswered.

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<v Speaker 2>Japan's battle to support the yen is intensifying, with traders

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<v Speaker 2>betting that authorities intervened again. After last week's historic joint

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<v Speaker 2>action with the US. The yen swung from a small

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<v Speaker 2>decline to gains of as much as one point four

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<v Speaker 2>percent against the dollar during morning trading in Tokyo, Japan

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<v Speaker 2>is estimated to have spent a record eight point four

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<v Speaker 2>to five trillion yen. That's the equivalent of about fifty

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<v Speaker 2>three billion US dollars buying yen last week. US Treasury

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<v Speaker 2>Sectary Scott Bessent has signaled that Washington is prepared to

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<v Speaker 2>act again if needed, raising the stakes for investors betting

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<v Speaker 2>against the yen. And while the intervention has reversed much

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<v Speaker 2>of the currency's recent slide, investors remain focused on whether

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<v Speaker 2>policymakers can sustain the rally.

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<v Speaker 1>In the UK, Prime Minister Andy Burnham says Britain must

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<v Speaker 1>regain control of its borders. UK leader visited Dovery yesterday

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<v Speaker 1>to talk to police officers trying to stop people smugglers.

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<v Speaker 4>Clearly progress is being made, but we're not complacent and

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<v Speaker 4>it's why I am here. It's why I come down

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<v Speaker 4>on Sunday to see the team, to listen to what

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<v Speaker 4>they think needs to be done, what further can be done.

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<v Speaker 1>Two thousand migrants have crossed the English Channel in thirteen

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<v Speaker 1>days since Burnham took over from kir Starmer. So far

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<v Speaker 1>this year, estimate suggests the number of people crossing the

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<v Speaker 1>channel is forty three percent lower than last year. Migration

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<v Speaker 1>has been a political flashpoint in the UK and has

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<v Speaker 1>boosted support for Niger Foraja's far out reform UK Party.

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<v Speaker 2>At least seventy two people are known to have died

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<v Speaker 2>trying to reach the Spanish port city of Theuta from Morocco.

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<v Speaker 2>Nearly all of the around sixty thousand people who crossed

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<v Speaker 2>have been returned to Morocco, but the humanitarian crisis has

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<v Speaker 2>reignited a debate around immigration in Europe. Spanish MEP Juan

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<v Speaker 2>Fernandez Lopez Aguiar from the ruling Socialist Party says his

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<v Speaker 2>country needs solidarity.

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<v Speaker 5>We have an external border of the whole European Union

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<v Speaker 5>with the African continent, with the Morocco has an association

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<v Speaker 5>agreement with Europe, so it's time that we enforced the

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<v Speaker 5>association agregion and we'd demand the responsibility for Morocco authority.

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<v Speaker 2>The MAP was speaking after Spain's Prime Minicipaedris Sanchez wrote

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<v Speaker 2>to top EU officials to complain about what he called

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<v Speaker 2>a quote selfish, polarizing and unlawful reaction. Twenty two other

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<v Speaker 2>European leaders signed a letter calling for immediate EU action

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<v Speaker 2>on migration. European Interior ministers will hold an emergency meeting

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<v Speaker 2>on the issue tomorrow.

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<v Speaker 1>Pharmaceuticals giant AstraZeneca is said to have explored a mega

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<v Speaker 1>deal to create one of the world's biggest drug makers.

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<v Speaker 1>Bloombergs Tea out of Bio has More.

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<v Speaker 6>Astrosenica and Bristol Meyers Squip have reportedly held early stage

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<v Speaker 6>discussions about combining. Bloomberg understands that it's unclear whether the

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<v Speaker 6>conversations are ongoing or if they will result in a transaction,

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<v Speaker 6>but any agreement would be significant. The merger could provide

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<v Speaker 6>Astrosenica with a bigger foothold in the US market, complementing

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<v Speaker 6>it's more than two hundred and sixty billion dollar valuation. Meanwhile,

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<v Speaker 6>Bristol Meyer's Squib is preparing for the loss of patent

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<v Speaker 6>protection for some of its biggest products, including a blood

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<v Speaker 6>thinner and cancer drug, which make up about half of

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<v Speaker 6>its sales. In London, Tea at a Bio Bloomberg Radio.

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<v Speaker 2>Two helicopters collided in Greece's Attica region yesterday as they

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<v Speaker 2>fought control a worldfar According to the Hellenic Fire Serve,

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<v Speaker 2>it's a search and rescue operation retrieved two crew members

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<v Speaker 2>with minor injuries, but two others were pulled unconscious on

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<v Speaker 2>the wreckage and brought a hostel where they died later. Meanwhile,

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<v Speaker 2>the effects of extreme heat that have continued to widen

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<v Speaker 2>across you. Of the continent's biggest rivers, including the Vine

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<v Speaker 2>and Danube, are drying up after a series of heat wets,

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<v Speaker 2>disrupting the transport of goods and boosting freight costs. Soaring

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<v Speaker 2>temperatures are also curbing power generation at riverside reactors from

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<v Speaker 2>France to Hungary, push up energy prices and straining Eastern

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<v Speaker 2>European economies. Those are some of our top stories for

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<v Speaker 2>you today. Looking at the markets, well break crewed futures

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<v Speaker 2>are down by five point three percent this morning on

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<v Speaker 2>this back and forth around the US and Iran negotiations.

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<v Speaker 2>Today eighty three dollars twenty nine treasuries rising, yields down

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<v Speaker 2>about four and a half basis point on the ten

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<v Speaker 2>year US treasure yield at four sixty nine. This as

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<v Speaker 2>the Japanese yen is strengthening, so at the moment up

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<v Speaker 2>six ten percent one hundred and fifty six forty interesting.

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<v Speaker 2>Bloomberg reporting that the US Treasury may be using euros

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<v Speaker 2>to fund its en purchases to avoid a weakening its

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<v Speaker 2>own currency. According to strategists, Chip stocks this morning are down.

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<v Speaker 2>So after that record rally on the costb are you

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<v Speaker 2>actually have the cost by this morning retreating some five

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<v Speaker 2>point four percent. So those are the markets.

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<v Speaker 1>In a moment, we'll bring you the latest on the

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<v Speaker 1>Iran war and those potential talks being discussed by Donald Trump.

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<v Speaker 1>Plus can Andy Burnham's plan for more devolution really help

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<v Speaker 1>to grow the UK economy? But first, another story that

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<v Speaker 1>we've been reading this morning are people's use of AI

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<v Speaker 1>changing your opinions of them. Jose Cox has been writing

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<v Speaker 1>about how attitudes toward the technology are now affecting friendships

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<v Speaker 1>and family relations. A twenty twenty five global study from

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<v Speaker 1>Stanford shows that more than half of those surveyed were

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<v Speaker 1>nervous about AI. That was up from thirty nine percent

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<v Speaker 1>in twenty twenty two, and Josie writes at that for

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<v Speaker 1>some AI use has become a proxy for values. In

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<v Speaker 1>the workplace, there's AI suspicion, employees suspect coworkers of secretly

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<v Speaker 1>using AI to generate content, and now in personal relationships,

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<v Speaker 1>people are looking at text messages or even wedding vows

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<v Speaker 1>and wondering whether it was AI involved in writing this.

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<v Speaker 1>And you know, the fears around this come from things

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<v Speaker 1>about people being legitimately very worried about deep fakes, for example,

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<v Speaker 1>undermining creativity, alienating regularly human interaction, or environmental concerns serverance,

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<v Speaker 1>also showing that it's also an important issue in dating

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<v Speaker 1>as well. Do you think more or less of a

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<v Speaker 1>person who doesn't use AI is at a moral high ground.

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<v Speaker 1>I feel like this is going to be a new

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<v Speaker 1>thing that we're all going to be fighting over at

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<v Speaker 1>family dinner tables at events later in the year.

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<v Speaker 2>Yeah, look, I think we should keep our hair on.

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<v Speaker 2>I mean, look, AI can obviously be useful for things,

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<v Speaker 2>you know, for work. I mean, I'm not sure about

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<v Speaker 2>the wedding vows, but I think I have questions, as

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<v Speaker 2>so many people do. Have we learned anything from social media?

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<v Speaker 2>Are there the right safeguards in place? You know, we

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<v Speaker 2>know that AI obviously has used the world's libraries and

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<v Speaker 2>books and knowledge to kind of assimilate and grow, So yes,

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<v Speaker 2>I can understand people's question marks.

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<v Speaker 1>Really interesting piece from Chelsea. You'll put a link to

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<v Speaker 1>us on our podcast show Notes. Well, let's get the

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<v Speaker 1>latest now in the situation in the Middle East, President

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<v Speaker 1>Trump says that new around talks will begin this afternoon

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<v Speaker 1>after he called off a planned attack, partially in response

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<v Speaker 1>to calls from his allies in the Regionston Wallas, who

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<v Speaker 1>heads our coverage of the Middle East and North Africa,

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<v Speaker 1>joins us now for more. Stuart, First of all, what

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<v Speaker 1>do we know about these tugs?

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<v Speaker 7>So, I mean, there seems to be two sets of talks,

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<v Speaker 7>one of which we know very little about. They're the

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<v Speaker 7>ones that start this afternoon. We don't know who the

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<v Speaker 7>participants are or quite what's on the agenda. The other

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<v Speaker 7>one is a little bit better formed, I would say,

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<v Speaker 7>in that it seems to be direct negotiations between Iran

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<v Speaker 7>and Oman, and that has basically two key points. One

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<v Speaker 7>is how to control horror moves and number two, how

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<v Speaker 7>to navigate it. So they're talking about both of those things.

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<v Speaker 7>One will inform the other, because clearly the most pressing

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<v Speaker 7>issue that has to be resolved right now is horror moves.

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<v Speaker 7>And that's not just for the global economy, but I

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<v Speaker 7>think for everything else that follows in terms of the

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<v Speaker 7>nuclear file and the proxies and all the missiles and

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<v Speaker 7>all the other things they want to discuss. So if

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<v Speaker 7>we can get horror moves cracked with some sort of

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<v Speaker 7>agreement between Iran and Oman and that is palatable to

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<v Speaker 7>everyone else that uses the strait, then I think that

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<v Speaker 7>sets us up in good stead to kind of deal

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<v Speaker 7>with everything else.

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<v Speaker 2>President Trump, though made this announcement, said that the talks

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<v Speaker 2>were happening after speaking to Saudi Crown Prince Mohammed bin Salman.

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<v Speaker 2>What does that tell us about the position of countries

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<v Speaker 2>around the Gulf about the conflict and their influence on

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<v Speaker 2>President Trump?

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<v Speaker 7>So, I mean, I think it's a mixed bag in

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<v Speaker 7>terms of what their interests are. I mean, I think

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<v Speaker 7>a lot of the reporting that came out last week

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<v Speaker 7>in terms of the potential targets, seemed to center around

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<v Speaker 7>energy in particular. And we know from Iran's retaliatory actions

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<v Speaker 7>since the end of February that if you go after

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<v Speaker 7>Iran's power plants or bridges or anything else along those lines,

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<v Speaker 7>and it will retaliate in kind, and it will do

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<v Speaker 7>that specifically in the region. So you did see attacks

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<v Speaker 7>on energy infrastructure across the Persian Gulf at least on

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<v Speaker 7>sort of the Arab side of it, and so I

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<v Speaker 7>think that was the great fear this time, was that

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<v Speaker 7>we were sort of going to go back to that

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<v Speaker 7>situation where it was this tip for tat and you would,

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<v Speaker 7>you know, not only have damage to energy infrastructure, but

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<v Speaker 7>potentially wider than that. Much better to follow the diplomatic.

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<v Speaker 1>Track, Stuart, We've seen this cycle of attacks, threat promises

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<v Speaker 1>and negotiations before in this conflict. Is there any reason

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<v Speaker 1>to believe that this time will be different.

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<v Speaker 7>That's a hard one to answer. I mean, I think

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<v Speaker 7>there's certainly willingness on all sides, and by that I

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<v Speaker 7>mean from the US side. You know, it had a

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<v Speaker 7>dwindling number of options really in terms of trying to

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<v Speaker 7>get a diplomatic resolution. It certainly didn't seem to have

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<v Speaker 7>much success in terms of, you know, a military solution

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<v Speaker 7>to this, in that this has been going on now

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<v Speaker 7>for months and months and we seem to be no

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<v Speaker 7>closer to any resolution or any of the key points.

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<v Speaker 7>From the Iranian point of view, again, you know that

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<v Speaker 7>they are paying a very heavy price for during this war,

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<v Speaker 7>and despite the rust of it coming out of Tehran

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<v Speaker 7>and their willingness to accept a great deal of pain.

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<v Speaker 7>It must be said that, you know, this has really

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<v Speaker 7>hurt their economy, which was not in good shape anyway,

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<v Speaker 7>It's hurt the relations with their neighbors. It sets them

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<v Speaker 7>up in a very precarious position, although again I'm sure

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<v Speaker 7>they wouldn't characterize it that way. And then for the

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<v Speaker 7>rest of the world, clearly there is a very heavy

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<v Speaker 7>price that is being paid in terms of the economy

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<v Speaker 7>and just yes, partly through energy prices, but also global trade,

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<v Speaker 7>also through lots of other products like metals and fertilizers

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<v Speaker 7>and chemicals. You know, the impact has been vast, and

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<v Speaker 7>so I think everyone has a lot of stake here

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<v Speaker 7>in trying to get something accomplished that sets us up

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<v Speaker 7>for some sort of stability in terms of particularly global trade.

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<v Speaker 2>Yeah, Stuart, thank you so much for being with us.

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<v Speaker 2>Stuart Livingston Wallace, who heads our coverage of the Middle

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<v Speaker 2>East in North Africa, thank you. Stay with us. More

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<v Speaker 2>from Bloomberg DAYBAQUB coming up after this.

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<v Speaker 1>And the UK Prime Minister Andy Burnham's plan to devolve

0:12:49.559 --> 0:12:53.079
<v Speaker 1>power away from Westminster is popular with many economists. Burnham

0:12:53.080 --> 0:12:56.040
<v Speaker 1>has a vision for growth in every postcode of the country,

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<v Speaker 1>but how does that work in practice? Our senior UK

0:12:58.640 --> 0:13:01.360
<v Speaker 1>Economy reporter for Paldric been looking into this, he joins us.

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<v Speaker 1>Now for more. First of all, what do we know

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<v Speaker 1>about Burnham's plan for devlation.

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<v Speaker 8>Well, he wants to, as he says, he wants to

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<v Speaker 8>have growth in every postcode, by which he means that

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<v Speaker 8>there's too much centralization of power in the UK in Westminster,

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<v Speaker 8>so he's going to His plan is to basically move

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<v Speaker 8>both funding powers more funding powers, so more powers over

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<v Speaker 8>local transport, more powers over education, more powers over regional

0:13:28.200 --> 0:13:32.280
<v Speaker 8>economic development to local areas, to regional areas. These will

0:13:32.320 --> 0:13:35.440
<v Speaker 8>start with the mayor or ties, the metro mayors, and

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<v Speaker 8>alongside those new sort of powers over spending in those regions,

0:13:40.360 --> 0:13:43.440
<v Speaker 8>he's going to be devolving some of the tax as well.

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<v Speaker 8>So at the moment tax is collected in Westminster, we

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<v Speaker 8>are one of the most We are the most centralized

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<v Speaker 8>country in terms of tax collection in the OECD. All

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<v Speaker 8>of it is basically collected in Westminster. So the tax

0:13:57.880 --> 0:13:59.719
<v Speaker 8>is going to Some of that tax is now just

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<v Speaker 8>going to be handed over to the regions and instead

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<v Speaker 8>of getting grants these handouts from Westminster, they will just

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<v Speaker 8>keep the tax that they generate, and the idea is

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<v Speaker 8>this will incentivize growth because the more growth that you generate,

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<v Speaker 8>the more tax receipt you get. And instead of it

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<v Speaker 8>being swept back to Westminster and then distributed around the

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<v Speaker 8>country as and wish as the government wishes, the local

0:14:22.720 --> 0:14:25.400
<v Speaker 8>authority leaders will be able to spend those tax revenues

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<v Speaker 8>on growth enhancing policies and in theory this will help

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<v Speaker 8>speed up things like planning, which take so long for

0:14:33.440 --> 0:14:36.640
<v Speaker 8>local authorities to pass normally, and if you can get

0:14:37.040 --> 0:14:40.160
<v Speaker 8>growth boost, you can just get the planning done a

0:14:40.160 --> 0:14:42.760
<v Speaker 8>lot more quickly and sort'll make things more efficient.

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<v Speaker 2>Okay, so that's the idea. What lessons can be learned

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<v Speaker 2>though from the experiences in Scotland, Wales and Northern Ireland

0:14:49.760 --> 0:14:52.080
<v Speaker 2>where there has already been a lot of devolution.

0:14:52.840 --> 0:14:55.080
<v Speaker 8>Yeah, so this is where it gets a little interesting

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<v Speaker 8>because obviously Scotland and Wales in particular have seen already

0:14:59.000 --> 0:15:02.600
<v Speaker 8>have some divation of tax powers that they have they

0:15:03.000 --> 0:15:05.880
<v Speaker 8>will have. They already have greater tax powers than the

0:15:05.880 --> 0:15:10.000
<v Speaker 8>English regions. But you can actually see Scotland is able

0:15:10.040 --> 0:15:13.560
<v Speaker 8>to raise the income tax rate for example. This the

0:15:13.560 --> 0:15:15.240
<v Speaker 8>powers that are going to go to the English regions

0:15:15.400 --> 0:15:17.400
<v Speaker 8>are not going to be powers of tax where they

0:15:17.440 --> 0:15:20.440
<v Speaker 8>can raise tax rates. All they'll be able to do

0:15:20.560 --> 0:15:23.880
<v Speaker 8>is collect the tax that they generate and keep it.

0:15:25.000 --> 0:15:29.200
<v Speaker 8>So the Scottish and Welsh lessons that aren't awfully encouraging.

0:15:29.960 --> 0:15:33.160
<v Speaker 8>They have got greater greater powers over spending and they've

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<v Speaker 8>got these greater tax powers, but in education and health

0:15:36.000 --> 0:15:39.480
<v Speaker 8>outcomes they have not been as good as educational health

0:15:39.720 --> 0:15:44.000
<v Speaker 8>outcomes in England, where England is still extraordinarily centralized. So

0:15:45.040 --> 0:15:47.280
<v Speaker 8>in that respect it hasn't been. It doesn't look like

0:15:47.320 --> 0:15:48.800
<v Speaker 8>the great you know, a great model.

0:15:51.480 --> 0:15:53.840
<v Speaker 1>Thanks for listening to Bloomberg Daybreak Europe.

0:15:54.000 --> 0:15:56.560
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