Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is the Bloomberg DAYBAQ podcast. Good morning, It's Monday,
Speaker 2: the third of August. I'm Caroline Hepca in London and.
Speaker 1: I'm Stephen Caroline Brussels. Coming up today, President Trump says
Speaker 1: new talks with Iran will begin today, scrapping planned attacks
Speaker 1: as he moves once again from escalation to negotiation.
Speaker 2: Spain's border crisis rattles Europe, with at least seventy two
Speaker 2: people dead and nearly all those crossing returning to Morocco.
Speaker 1: Plus British Prime Minister Andy Burnham's plan to devolve power
Speaker 1: away from Westminster is popular with many economists, but how
Speaker 1: would it work in practice.
Speaker 2: Let's start with a roundup of our top stories.
Speaker 1: US President Donald Trump has again shifted course on Iran,
Speaker 1: with new talks set to begin today. The latest reversal
Speaker 1: comes after Trump once again ratteted up the threat of
Speaker 1: more strikes continuing and now from mill pattern of escalation
Speaker 1: and de escalation. The President says he stepped back from
Speaker 1: the latest attacks following appeals from Saudi Arabia and other
Speaker 1: US allies in the region. Here's what he told reporters
Speaker 1: on board Air Force One.
Speaker 3: We're talking to them in the form of a negotiation.
Speaker 3: It begins tomorrow afternoon, and we'll see you. But sure,
Speaker 3: I'd love to do that. Save a lot of lives,
Speaker 3: save a lot of a lot of unnecessary power, to
Speaker 3: be honest with you, or take many, many years to
Speaker 3: have a build it back if it could. I don't
Speaker 3: think it would be even buildable back. So we had
Speaker 3: an effect that would be the biggest attack since World
Speaker 3: War Two.
Speaker 1: Rank crude fell by as much as seven percent after
Speaker 1: President Trump suggested a deal to reopen the Strait of
Speaker 1: Hormuz maybe close. Meanwhile, Iran says negotiations with omanor in
Speaker 1: their final stages, including discussions on a new route through
Speaker 1: the waterway, but officials say the talks don't cover whether
Speaker 1: the vital shipping lane will reopen, leaving the biggest question
Speaker 1: for global oil markets unanswered.
Speaker 2: Japan's battle to support the yen is intensifying, with traders
Speaker 2: betting that authorities intervened again. After last week's historic joint
Speaker 2: action with the US. The yen swung from a small
Speaker 2: decline to gains of as much as one point four
Speaker 2: percent against the dollar during morning trading in Tokyo, Japan
Speaker 2: is estimated to have spent a record eight point four
Speaker 2: to five trillion yen. That's the equivalent of about fifty
Speaker 2: three billion US dollars buying yen last week. US Treasury
Speaker 2: Sectary Scott Bessent has signaled that Washington is prepared to
Speaker 2: act again if needed, raising the stakes for investors betting
Speaker 2: against the yen. And while the intervention has reversed much
Speaker 2: of the currency's recent slide, investors remain focused on whether
Speaker 2: policymakers can sustain the rally.
Speaker 1: In the UK, Prime Minister Andy Burnham says Britain must
Speaker 1: regain control of its borders. UK leader visited Dovery yesterday
Speaker 1: to talk to police officers trying to stop people smugglers.
Speaker 4: Clearly progress is being made, but we're not complacent and
Speaker 4: it's why I am here. It's why I come down
Speaker 4: on Sunday to see the team, to listen to what
Speaker 4: they think needs to be done, what further can be done.
Speaker 1: Two thousand migrants have crossed the English Channel in thirteen
Speaker 1: days since Burnham took over from kir Starmer. So far
Speaker 1: this year, estimate suggests the number of people crossing the
Speaker 1: channel is forty three percent lower than last year. Migration
Speaker 1: has been a political flashpoint in the UK and has
Speaker 1: boosted support for Niger Foraja's far out reform UK Party.
Speaker 2: At least seventy two people are known to have died
Speaker 2: trying to reach the Spanish port city of Theuta from Morocco.
Speaker 2: Nearly all of the around sixty thousand people who crossed
Speaker 2: have been returned to Morocco, but the humanitarian crisis has
Speaker 2: reignited a debate around immigration in Europe. Spanish MEP Juan
Speaker 2: Fernandez Lopez Aguiar from the ruling Socialist Party says his
Speaker 2: country needs solidarity.
Speaker 5: We have an external border of the whole European Union
Speaker 5: with the African continent, with the Morocco has an association
Speaker 5: agreement with Europe, so it's time that we enforced the
Speaker 5: association agregion and we'd demand the responsibility for Morocco authority.
Speaker 2: The MAP was speaking after Spain's Prime Minicipaedris Sanchez wrote
Speaker 2: to top EU officials to complain about what he called
Speaker 2: a quote selfish, polarizing and unlawful reaction. Twenty two other
Speaker 2: European leaders signed a letter calling for immediate EU action
Speaker 2: on migration. European Interior ministers will hold an emergency meeting
Speaker 2: on the issue tomorrow.
Speaker 1: Pharmaceuticals giant AstraZeneca is said to have explored a mega
Speaker 1: deal to create one of the world's biggest drug makers.
Speaker 1: Bloombergs Tea out of Bio has More.
Speaker 6: Astrosenica and Bristol Meyers Squip have reportedly held early stage
Speaker 6: discussions about combining. Bloomberg understands that it's unclear whether the
Speaker 6: conversations are ongoing or if they will result in a transaction,
Speaker 6: but any agreement would be significant. The merger could provide
Speaker 6: Astrosenica with a bigger foothold in the US market, complementing
Speaker 6: it's more than two hundred and sixty billion dollar valuation. Meanwhile,
Speaker 6: Bristol Meyer's Squib is preparing for the loss of patent
Speaker 6: protection for some of its biggest products, including a blood
Speaker 6: thinner and cancer drug, which make up about half of
Speaker 6: its sales. In London, Tea at a Bio Bloomberg Radio.
Speaker 2: Two helicopters collided in Greece's Attica region yesterday as they
Speaker 2: fought control a worldfar According to the Hellenic Fire Serve,
Speaker 2: it's a search and rescue operation retrieved two crew members
Speaker 2: with minor injuries, but two others were pulled unconscious on
Speaker 2: the wreckage and brought a hostel where they died later. Meanwhile,
Speaker 2: the effects of extreme heat that have continued to widen
Speaker 2: across you. Of the continent's biggest rivers, including the Vine
Speaker 2: and Danube, are drying up after a series of heat wets,
Speaker 2: disrupting the transport of goods and boosting freight costs. Soaring
Speaker 2: temperatures are also curbing power generation at riverside reactors from
Speaker 2: France to Hungary, push up energy prices and straining Eastern
Speaker 2: European economies. Those are some of our top stories for
Speaker 2: you today. Looking at the markets, well break crewed futures
Speaker 2: are down by five point three percent this morning on
Speaker 2: this back and forth around the US and Iran negotiations.
Speaker 2: Today eighty three dollars twenty nine treasuries rising, yields down
Speaker 2: about four and a half basis point on the ten
Speaker 2: year US treasure yield at four sixty nine. This as
Speaker 2: the Japanese yen is strengthening, so at the moment up
Speaker 2: six ten percent one hundred and fifty six forty interesting.
Speaker 2: Bloomberg reporting that the US Treasury may be using euros
Speaker 2: to fund its en purchases to avoid a weakening its
Speaker 2: own currency. According to strategists, Chip stocks this morning are down.
Speaker 2: So after that record rally on the costb are you
Speaker 2: actually have the cost by this morning retreating some five
Speaker 2: point four percent. So those are the markets.
Speaker 1: In a moment, we'll bring you the latest on the
Speaker 1: Iran war and those potential talks being discussed by Donald Trump.
Speaker 1: Plus can Andy Burnham's plan for more devolution really help
Speaker 1: to grow the UK economy? But first, another story that
Speaker 1: we've been reading this morning are people's use of AI
Speaker 1: changing your opinions of them. Jose Cox has been writing
Speaker 1: about how attitudes toward the technology are now affecting friendships
Speaker 1: and family relations. A twenty twenty five global study from
Speaker 1: Stanford shows that more than half of those surveyed were
Speaker 1: nervous about AI. That was up from thirty nine percent
Speaker 1: in twenty twenty two, and Josie writes at that for
Speaker 1: some AI use has become a proxy for values. In
Speaker 1: the workplace, there's AI suspicion, employees suspect coworkers of secretly
Speaker 1: using AI to generate content, and now in personal relationships,
Speaker 1: people are looking at text messages or even wedding vows
Speaker 1: and wondering whether it was AI involved in writing this.
Speaker 1: And you know, the fears around this come from things
Speaker 1: about people being legitimately very worried about deep fakes, for example,
Speaker 1: undermining creativity, alienating regularly human interaction, or environmental concerns serverance,
Speaker 1: also showing that it's also an important issue in dating
Speaker 1: as well. Do you think more or less of a
Speaker 1: person who doesn't use AI is at a moral high ground.
Speaker 1: I feel like this is going to be a new
Speaker 1: thing that we're all going to be fighting over at
Speaker 1: family dinner tables at events later in the year.
Speaker 2: Yeah, look, I think we should keep our hair on.
Speaker 2: I mean, look, AI can obviously be useful for things,
Speaker 2: you know, for work. I mean, I'm not sure about
Speaker 2: the wedding vows, but I think I have questions, as
Speaker 2: so many people do. Have we learned anything from social media?
Speaker 2: Are there the right safeguards in place? You know, we
Speaker 2: know that AI obviously has used the world's libraries and
Speaker 2: books and knowledge to kind of assimilate and grow, So yes,
Speaker 2: I can understand people's question marks.
Speaker 1: Really interesting piece from Chelsea. You'll put a link to
Speaker 1: us on our podcast show Notes. Well, let's get the
Speaker 1: latest now in the situation in the Middle East, President
Speaker 1: Trump says that new around talks will begin this afternoon
Speaker 1: after he called off a planned attack, partially in response
Speaker 1: to calls from his allies in the Regionston Wallas, who
Speaker 1: heads our coverage of the Middle East and North Africa,
Speaker 1: joins us now for more. Stuart, First of all, what
Speaker 1: do we know about these tugs?
Speaker 7: So, I mean, there seems to be two sets of talks,
Speaker 7: one of which we know very little about. They're the
Speaker 7: ones that start this afternoon. We don't know who the
Speaker 7: participants are or quite what's on the agenda. The other
Speaker 7: one is a little bit better formed, I would say,
Speaker 7: in that it seems to be direct negotiations between Iran
Speaker 7: and Oman, and that has basically two key points. One
Speaker 7: is how to control horror moves and number two, how
Speaker 7: to navigate it. So they're talking about both of those things.
Speaker 7: One will inform the other, because clearly the most pressing
Speaker 7: issue that has to be resolved right now is horror moves.
Speaker 7: And that's not just for the global economy, but I
Speaker 7: think for everything else that follows in terms of the
Speaker 7: nuclear file and the proxies and all the missiles and
Speaker 7: all the other things they want to discuss. So if
Speaker 7: we can get horror moves cracked with some sort of
Speaker 7: agreement between Iran and Oman and that is palatable to
Speaker 7: everyone else that uses the strait, then I think that
Speaker 7: sets us up in good stead to kind of deal
Speaker 7: with everything else.
Speaker 2: President Trump, though made this announcement, said that the talks
Speaker 2: were happening after speaking to Saudi Crown Prince Mohammed bin Salman.
Speaker 2: What does that tell us about the position of countries
Speaker 2: around the Gulf about the conflict and their influence on
Speaker 2: President Trump?
Speaker 7: So, I mean, I think it's a mixed bag in
Speaker 7: terms of what their interests are. I mean, I think
Speaker 7: a lot of the reporting that came out last week
Speaker 7: in terms of the potential targets, seemed to center around
Speaker 7: energy in particular. And we know from Iran's retaliatory actions
Speaker 7: since the end of February that if you go after
Speaker 7: Iran's power plants or bridges or anything else along those lines,
Speaker 7: and it will retaliate in kind, and it will do
Speaker 7: that specifically in the region. So you did see attacks
Speaker 7: on energy infrastructure across the Persian Gulf at least on
Speaker 7: sort of the Arab side of it, and so I
Speaker 7: think that was the great fear this time, was that
Speaker 7: we were sort of going to go back to that
Speaker 7: situation where it was this tip for tat and you would,
Speaker 7: you know, not only have damage to energy infrastructure, but
Speaker 7: potentially wider than that. Much better to follow the diplomatic.
Speaker 1: Track, Stuart, We've seen this cycle of attacks, threat promises
Speaker 1: and negotiations before in this conflict. Is there any reason
Speaker 1: to believe that this time will be different.
Speaker 7: That's a hard one to answer. I mean, I think
Speaker 7: there's certainly willingness on all sides, and by that I
Speaker 7: mean from the US side. You know, it had a
Speaker 7: dwindling number of options really in terms of trying to
Speaker 7: get a diplomatic resolution. It certainly didn't seem to have
Speaker 7: much success in terms of, you know, a military solution
Speaker 7: to this, in that this has been going on now
Speaker 7: for months and months and we seem to be no
Speaker 7: closer to any resolution or any of the key points.
Speaker 7: From the Iranian point of view, again, you know that
Speaker 7: they are paying a very heavy price for during this war,
Speaker 7: and despite the rust of it coming out of Tehran
Speaker 7: and their willingness to accept a great deal of pain.
Speaker 7: It must be said that, you know, this has really
Speaker 7: hurt their economy, which was not in good shape anyway,
Speaker 7: It's hurt the relations with their neighbors. It sets them
Speaker 7: up in a very precarious position, although again I'm sure
Speaker 7: they wouldn't characterize it that way. And then for the
Speaker 7: rest of the world, clearly there is a very heavy
Speaker 7: price that is being paid in terms of the economy
Speaker 7: and just yes, partly through energy prices, but also global trade,
Speaker 7: also through lots of other products like metals and fertilizers
Speaker 7: and chemicals. You know, the impact has been vast, and
Speaker 7: so I think everyone has a lot of stake here
Speaker 7: in trying to get something accomplished that sets us up
Speaker 7: for some sort of stability in terms of particularly global trade.
Speaker 2: Yeah, Stuart, thank you so much for being with us.
Speaker 2: Stuart Livingston Wallace, who heads our coverage of the Middle
Speaker 2: East in North Africa, thank you. Stay with us. More
Speaker 2: from Bloomberg DAYBAQUB coming up after this.
Speaker 1: And the UK Prime Minister Andy Burnham's plan to devolve
Speaker 1: power away from Westminster is popular with many economists. Burnham
Speaker 1: has a vision for growth in every postcode of the country,
Speaker 1: but how does that work in practice? Our senior UK
Speaker 1: Economy reporter for Paldric been looking into this, he joins us.
Speaker 1: Now for more. First of all, what do we know
Speaker 1: about Burnham's plan for devlation.
Speaker 8: Well, he wants to, as he says, he wants to
Speaker 8: have growth in every postcode, by which he means that
Speaker 8: there's too much centralization of power in the UK in Westminster,
Speaker 8: so he's going to His plan is to basically move
Speaker 8: both funding powers more funding powers, so more powers over
Speaker 8: local transport, more powers over education, more powers over regional
Speaker 8: economic development to local areas, to regional areas. These will
Speaker 8: start with the mayor or ties, the metro mayors, and
Speaker 8: alongside those new sort of powers over spending in those regions,
Speaker 8: he's going to be devolving some of the tax as well.
Speaker 8: So at the moment tax is collected in Westminster, we
Speaker 8: are one of the most We are the most centralized
Speaker 8: country in terms of tax collection in the OECD. All
Speaker 8: of it is basically collected in Westminster. So the tax
Speaker 8: is going to Some of that tax is now just
Speaker 8: going to be handed over to the regions and instead
Speaker 8: of getting grants these handouts from Westminster, they will just
Speaker 8: keep the tax that they generate, and the idea is
Speaker 8: this will incentivize growth because the more growth that you generate,
Speaker 8: the more tax receipt you get. And instead of it
Speaker 8: being swept back to Westminster and then distributed around the
Speaker 8: country as and wish as the government wishes, the local
Speaker 8: authority leaders will be able to spend those tax revenues
Speaker 8: on growth enhancing policies and in theory this will help
Speaker 8: speed up things like planning, which take so long for
Speaker 8: local authorities to pass normally, and if you can get
Speaker 8: growth boost, you can just get the planning done a
Speaker 8: lot more quickly and sort'll make things more efficient.
Speaker 2: Okay, so that's the idea. What lessons can be learned
Speaker 2: though from the experiences in Scotland, Wales and Northern Ireland
Speaker 2: where there has already been a lot of devolution.
Speaker 8: Yeah, so this is where it gets a little interesting
Speaker 8: because obviously Scotland and Wales in particular have seen already
Speaker 8: have some divation of tax powers that they have they
Speaker 8: will have. They already have greater tax powers than the
Speaker 8: English regions. But you can actually see Scotland is able
Speaker 8: to raise the income tax rate for example. This the
Speaker 8: powers that are going to go to the English regions
Speaker 8: are not going to be powers of tax where they
Speaker 8: can raise tax rates. All they'll be able to do
Speaker 8: is collect the tax that they generate and keep it.
Speaker 8: So the Scottish and Welsh lessons that aren't awfully encouraging.
Speaker 8: They have got greater greater powers over spending and they've
Speaker 8: got these greater tax powers, but in education and health
Speaker 8: outcomes they have not been as good as educational health
Speaker 8: outcomes in England, where England is still extraordinarily centralized. So
Speaker 8: in that respect it hasn't been. It doesn't look like
Speaker 8: the great you know, a great model.
Speaker 1: Thanks for listening to Bloomberg Daybreak Europe.
Speaker 2: If you're enjoying the podcast, give us a follow, leave
Speaker 2: a rating or review, and maybe send it to that
Speaker 2: one friend or Collin who's always trying to keep up
Speaker 2: with the news.
Speaker 1: And of one podcast today, isn't it enough for you?
Speaker 1: You can also listen to us live every weekday from
Speaker 1: six am in London on DAB Radio, on tune in
Speaker 1: and on the Bloomberg Business app
Speaker 2: Or if you've got a smart speaker nearby, just say
Speaker 2: play Bloomberg Radio