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Speaker 1: This is Bloomberg Daybak here for this Wednesday, the seventh

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Speaker 1: of June in London. Coming up today in.

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Speaker 2: Search of a special relationship, Sinak heads to the White

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Speaker 2: House for talks with Biden.

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Speaker 1: An ecological weapon of mass destruction. Ukraine's economy minister tells

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Speaker 1: Bloomberg Russia is to blame for destroying a key.

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Speaker 2: Down a growing crypto crackdown, the sec accusers, Coinbase of

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Speaker 2: running an illegal exchange, no.

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Speaker 3: Way for Huaweih and homes under the hammer. Those of

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Speaker 3: the stories we're looking at in today's papers. I'm James Wilcock.

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Speaker 1: Plus putting rivalries aside. The PGA agrees to merge with Live,

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Speaker 1: creating a global golf superpower.

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Speaker 4: That's all straight ahead on Bloomberg Daybreak Europe. The business

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Speaker 4: news you need to start your day in just one

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Speaker 4: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 4: and everywhere you get your podcasts.

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Speaker 2: Good morning. I'm Stephen Carroll and.

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Speaker 1: I'm Caroline Hepger. Here are the stories that we're following today.

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Speaker 1: The Prime Minister is she Sunac will today seek closer

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Speaker 1: economic ties with the US during his first visit as

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Speaker 1: leader to the White House. The two day trip comes

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Speaker 1: as the US maintains a freeze on talks on any

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Speaker 1: free trade agreement. Duncan Edwards heads the British American Business

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Speaker 1: Lobby group. He told our UK Politics podcast that he

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Speaker 1: doesn't expect Washington to change its position.

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Speaker 5: The view here from the administration is that they're opposed

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Speaker 5: to globalization in its broadest sense, that it at hollowed

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Speaker 5: out American towns, it removed American jobs, and they the

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Speaker 5: right approach is to invest in in building the American

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Speaker 5: economy for American workers, and so on and so forth.

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Speaker 1: Duncan Edwards were speaking to US as SUNAC is expected

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Speaker 1: to call for the US and UK to raise their

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Speaker 1: economic alliance to a par with their defense one. The

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Speaker 1: UK puts the value of existing trade ties at two

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Speaker 1: hundred and seventy nine billion pounds annually.

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Speaker 2: A state of emergency has been declared in Ukraine after

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Speaker 2: a dam in Russian in a Russian controlled region of

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Speaker 2: the country was damaged in an explosion. Tens of thousands

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Speaker 2: of people may be forced from their homes as a

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Speaker 2: torrent of water swamps communities along the banks of the

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Speaker 2: Denipro River. Ukraine has accused Russia of blowing up the dam,

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Speaker 2: something the Kremlin denies. Ukrainian Economy Minister Ulias Ferdenko has

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Speaker 2: told Bloomberg it's a catastrophe.

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Speaker 6: So what happened, without any doubt, should be called the

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Speaker 6: biggest main made disaster Russia. Would they improve in once

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Speaker 6: again they act like a terroristic state and seems to

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Speaker 6: be like an ecological weapon of mass destruction.

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Speaker 2: Ukraine's economy minister also told us that could cost one

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Speaker 2: and a half billion dollars to rebuild the hydro electric

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Speaker 2: power plant damaged in the blast. Russia has blamed Ukraine

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Speaker 2: for what it called a terrorist attack.

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Speaker 1: The U S Securities and Exchange Commission has widened its

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Speaker 1: sweeping crackdown on crypto suing coin Base for allegedly running

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Speaker 1: an illegal exchange. Regulators say the biggest US crypto exchange

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Speaker 1: evaded rules by letting users trade numerous crypto tokens that

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Speaker 1: are actually on registered securities. The SEC chair Gary Gensler

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Speaker 1: told Bloomberg the whole sector needs more transparency.

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Speaker 7: I think the crypto industry more broadly, if it's going

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Speaker 7: to have any success going forward, has to come into

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Speaker 7: compliance with basic public policy about disclosure about avoiding conflicts

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Speaker 7: about segregating properly segregating customer funds, and guarding against fraud manipulation.

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Speaker 7: Without that, this whole area stands the chances of collapsing

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Speaker 7: like a house of cards.

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Speaker 1: Gary Gensler's interview with Bloomberg comes as Coinbase criticized the

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Speaker 1: SEC's approach and says that it has demonstrated a commitment

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Speaker 1: to compliance.

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Speaker 2: From suing to merging golf's billion dollar titans, the PGA

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Speaker 2: Tour and Sadibacks Live Golf have agreed a shock deal.

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Speaker 2: The two tournaments will combine in a new commercial entity,

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Speaker 2: with the Governor of the Saudi Wealth Fund as its

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Speaker 2: new chairman. PGA Tour Commissioner Jay Monahan defended the shift.

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Speaker 8: This is a significant change for us, you know, in

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Speaker 8: the direction that we were going down. But as I'm

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Speaker 8: trying to explain and I will continue to explain as

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Speaker 8: we go forward, this ultimately is a decision that I

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Speaker 8: think is in the best interests of all of the

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Speaker 8: members of the PGA Tour.

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Speaker 2: That's PGA Tour Commissioner Jay Monahan taking questions after the

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Speaker 2: deal was announced. The new tie up likely to draw

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Speaker 2: scrutiny from regulators. The US has already opened an investigation

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Speaker 2: into anti competitive violations from when the two parties were competing.

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Speaker 1: The head of the Confederation of British Industry says that

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Speaker 1: she'll do her utmost to restore trust with members. After

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Speaker 1: winning a confidence vote ninety three percent back to the

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Speaker 1: business lobby group, which has promised radical reform in the

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Speaker 1: wake of sexual misconduct allegations. Director General Ray Newton's Smith

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Speaker 1: says the organization must make the most of that endorsements.

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Speaker 9: We've got the support of our members and now we

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Speaker 9: want to sit down with policy makers, look at the

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Speaker 9: economic evidence, look at the insights we're getting from businesses

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Speaker 9: and talk to them about the critical challenges are economy faces.

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Speaker 1: Even with the supportive members, Ray Newton Smith faces an

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Speaker 1: uphill struggle to revive the organization. The CBI has told

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Speaker 1: staff that its wage bill will be cut by a

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Speaker 1: third due to fading membership fees, and has taken advice

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Speaker 1: from a law firm on potential insolvency.

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Speaker 2: Chinese exports fell in May for the first time in

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Speaker 2: three months. Bloombrooks Brian Curtis has more from Hong Kong.

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Speaker 10: While not unexpected, this has to be disappointing to policymakers.

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Speaker 10: Exports had been a bright spot for the economy. May's

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Speaker 10: exports down seven point five percent from a year ago,

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Speaker 10: worse than the estimate of a drop of one point

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Speaker 10: eight percent. Chunk it up to weaker external demand and

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Speaker 10: that carries risk more risk for China, imports declining four

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Speaker 10: and a half percent, leaving a trade show plus of

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Speaker 10: sixty five point eight billion dollars. Manufacturing also contracted in May,

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Speaker 10: leaving no doubt China's recovery is faltering. In Hong Kong.

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Speaker 10: Brian Curtis, Bloomberg Daybreak Europe.

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Speaker 1: Okay, those are a few of our tops toys and

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Speaker 1: for you this morning, Oh did New York has overtaken

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Speaker 1: Hong Kong as the most expensive city in the world

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Speaker 1: for expats Now.

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Speaker 2: Our colleagues in New York have pointed out that this

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Speaker 2: is not really a surprise, and I think if you've

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Speaker 2: been to New York recently and if you've seen how

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Speaker 2: quickly the money bleeds through your fingers, that's not any

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Speaker 2: much of a surprise to people either. But it is.

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Speaker 2: It's interesting because this is so these the DCA international

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Speaker 2: rankings that look at the cost of how for example,

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Speaker 2: rent in neighborhoods that are favored by expats but also

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Speaker 2: kind of regular you know, cost of foods, cost of

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Speaker 2: regular utilities and things like that are ranked too. There

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Speaker 2: is interesting to see that there's inflationary impacts on this

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Speaker 2: as well. Think about Dubai, for example. We know that

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Speaker 2: rents have skyrocketed there due to the influx of Russian

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Speaker 2: Patryt's thatt to push the city up to twelfth place

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Speaker 2: in the Cast of Living rankings. In Paris has fallen

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Speaker 2: out of the top twenty list because inflation has been

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Speaker 2: lower there.

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Speaker 1: Yeah, but London is still in there in the top five,

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Speaker 1: which I'm kind of a ghast at, but perhaps not surprised.

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Speaker 2: Also not a renterer of Caroline.

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Speaker 1: Well look, but yeah, you understand that the city is

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Speaker 1: incredibly expensive, but Geneva also is third as well for

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Speaker 1: most expensive place to live. I mean they're also great

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Speaker 1: places to do business.

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Speaker 2: So yeah, yeah, there's a reason I suppose why so

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Speaker 2: many experts are moving to those places.

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Speaker 1: Yeah, they flock to those locations. Also, the story though

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Speaker 1: around England and the problems with wind power. There's a

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Speaker 1: piece on the tunnel that has a great first line

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Speaker 1: about how many thousands of years with the current planning

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Speaker 1: regulations in the UK it is going to take.

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Speaker 2: Shall I read it to you in a traumatic voice?

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Speaker 2: The year is six thousand, seven hundred and twenty three

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Speaker 2: and there are finally enough unsure wind farms in England

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Speaker 2: to support the UK's twenty to fifty net zero target.

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Speaker 1: Yeah, I mean, hats yes, writing what we all think

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Speaker 1: is one of the best news lines this morning. But look,

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Speaker 1: I think, yeah, it's about the planning regulations. I think

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Speaker 1: though to be fair, the offshore wind story for the

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Speaker 1: UK is positive, but there is this real concern that

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Speaker 1: on shore you know, is not getting the same intension.

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Speaker 2: And look even in after when there's a long way

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Speaker 2: to go to meet those targets as well. The question

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Speaker 2: and the point that the IPPR is trying to make

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Speaker 2: with this report is that they need to speed up.

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Speaker 1: Yeah. So that on the UK and a bit more

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Speaker 1: really on the government actions today of course, trade ties

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Speaker 1: but not a trade deal. RISHISNAC is expected to try

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Speaker 1: to get closer ties with President Joe Biden of course

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Speaker 1: during his first visit as leader to the White House.

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Speaker 1: So joining us in studio this morning has Bien Biggs.

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Speaker 1: UK correspondent Lizzie Burden, So what is SUNAC. What is

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Speaker 1: the UK hoping to get out of this two day

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Speaker 1: visit to Washington.

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Speaker 11: Well, as you say, Carolina, Transatlantic trade deal isn't even

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Speaker 11: on the table anymore. But Rishi Sunac's main mission is

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Speaker 11: going to be to put the UK US economic relationship

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Speaker 11: on a more even footing with the UK security relationship.

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Speaker 11: So behind the scenes it's being referred to as a

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Speaker 11: trade deal in all but name, and that includes quote

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Speaker 11: unquote smoothing the edges of the Inflation Reduction Act. This

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Speaker 11: is how the UK Energy Secretary Grant Shaps has put it.

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Speaker 11: It's something that Britain seems to have an understanding from

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Speaker 11: the Biden administration. It can get because Britain just doesn't

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Speaker 11: want to be caught in the middle between the Inflation

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Speaker 11: Reduction Act on the one side and the EUS response

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Speaker 11: to it on the other. But apart from the economic

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Speaker 11: issues on the agenda, they're obviously going to talk about Ukraine.

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Speaker 11: You'll probably get the leaders reaffirming their support for President

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Speaker 11: Zelenski after the meeting, and then China because the two

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Speaker 11: sides will discuss how to shore up critical infrastructure and

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Speaker 11: global supply chains against that Chinese influence and finally AI

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Speaker 11: because of course, in res days, Rishi Sunac has said

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Speaker 11: that he would like to have a global watchdog for

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Speaker 11: artificial intelligence based here in London, Lizzie.

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Speaker 2: Much is made of the personal relationships between the US

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Speaker 2: President and the British Prime Minister. What do we know

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Speaker 2: about the rapport between Rishi Sunac and Joe Biden.

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Speaker 11: Well, as you know, at times Joe Biden struggled to

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Speaker 11: remember Rishi Sunac's name even and a lot of everything

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Speaker 11: that the US President does is highly choreographed. So of

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Speaker 11: course many in the British press have read into the

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Speaker 11: fact that Joe Biden spent more time in Ireland than

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Speaker 11: in the rest of the UK when he came for

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Speaker 11: the twenty fifth anniversary of the Good Friday Agreement, that

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Speaker 11: he didn't attend the King's coronation. Biden went out of

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Speaker 11: his way to emphasize that that wasn't a snub to

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Speaker 11: Rishie Sunac, even though he has been very negative about

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Speaker 11: Brexit while he's been president. So Rishi Sunac is going

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Speaker 11: to be trying to warm those relations, especially given it's

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Speaker 11: his first official Washington tree. You'll want to elevate the relationship.

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Speaker 1: Yeah, absolutely, and many eyes on that. Thank you so much,

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Speaker 1: Lizzie Burden for being with us, our UK correspondent taking

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Speaker 1: us through that Sunac Biden meeting.

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Speaker 2: Up next, No way for Huawei and homes under the hammer.

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Speaker 4: Now the paper Review on blue Bird Daybreak Europe, the

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Speaker 4: news you need to know from today's papers and Bloomberg.

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Speaker 2: Damie Wilcock joins us now for a look at what's

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Speaker 2: in the papers. Morning to you, Jans. Let's start in

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Speaker 2: the Financial Times, which reports that the EU is considering

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Speaker 2: a mandatory ban on Huawei.

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Speaker 3: Yes, so this is the Commissions, or the lawmaking body

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Speaker 3: of the European Union. They recommended that member states try

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Speaker 3: and remove security written and left five g IT books

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Speaker 3: back in twenty twenty. So this kind of chimes what

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Speaker 3: Lizzie was saying, this big geopolitical story about how now

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Speaker 3: the Commissions worried that some countries fingers being pointed at

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Speaker 3: Germany especially, are dragging their heels over this and this

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Speaker 3: company is especially if companies like Huawei, So they are

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Speaker 3: now talking behind closed doors. The FI report about a

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Speaker 3: mandatory ban, this likely wouldn't even come into play unto

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Speaker 3: at least twenty twenty four because it would take a

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Speaker 3: long time to get the legislation through. But it plays

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Speaker 3: into the narrative of the European Commission are puting out

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Speaker 3: of d risk not decoupling from China, and it also

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Speaker 3: speaks to sort of why we're doing this now there

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Speaker 3: are thought of the mounting geopolitical tensions we've mentioned. There's

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Speaker 3: also the National Intelligence Law that from the People's Republic

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Speaker 3: of China, which is that a company based in China

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Speaker 3: is obliged to give the Chinese government any kind of

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Speaker 3: data it asks for and potentially conceeal it from other

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Speaker 3: countries that it has done so, so that our genuine

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Speaker 3: fear is about what kind of the impact it has.

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Speaker 3: You can see that here in the UK and other

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Speaker 3: story in the FT this morning is that the cabin

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Speaker 3: Office of told government departments to remove all surveillance equipment

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Speaker 3: made by Chinese companies, including the Dahua and Hiki Vision

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Speaker 3: from sensitive sites, in an attempt to limit potential intelligence

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Speaker 3: gathering by Beijing's Word's adding that huawest side of you

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Speaker 3: is this violence all e principles of having a fair

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Speaker 3: market and non discrimination, which it says it upholds that

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Speaker 3: says it has a right to a fair market. It's

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Speaker 3: you know, not to be blamed for sort of Chinese

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Speaker 3: government policy.

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Speaker 1: Yeah, okay, and that's the number of the debate. The

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Speaker 1: Times are writing about ethical ESG funds suffering their worst

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Speaker 1: month ever for withdols.

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Speaker 3: Yes, this needs a bit of unpacking calent, because to

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Speaker 3: be honest, there is some skepticism around this. But to

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Speaker 3: give you the headline figure, calas Stone compiled industry wide

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Speaker 3: figures and they say that ESG equi funds suffed their

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Speaker 3: worst ever month, sharding three hundred and four million pounds

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Speaker 3: of capital and that is the fastest paced ever. Second

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Speaker 3: worst was the mini budget in September twenty twenty two,

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Speaker 3: where a net one hundred and twenty six mini was pulled.

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Speaker 3: So it is more than double like the second worst figure.

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Speaker 3: But this is also a wider pullback that is being

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Speaker 3: seeing across equity funds generally. And when you add in

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Speaker 3: the fact that ESG funds are by design underweight on

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Speaker 3: things like oil, which performed very well last year, they

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Speaker 3: also tend to be quite overweight at things like tech, which,

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Speaker 3: although it is getting better now, we did quite worse

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Speaker 3: the start of this year, you start to worry that

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Speaker 3: the question, and it is an open question, is is

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Speaker 3: this a secular trend of investors being concerned about greenwashing,

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Speaker 3: being concerned about issues around sort of green politics, and

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Speaker 3: esg fulms losing their popularity or is this a case

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Speaker 3: of waitings and poor performance, Which is just as it is,

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Speaker 3: and but is a genuine question because a lot of

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Speaker 3: these issues are increasingly being raised. So it's worth keeping

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Speaker 3: an eye on.

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Speaker 2: Yeah, certainly an interesting one to keep an eye on.

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Speaker 2: As you say, James, let's go to the Telegraph next

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Speaker 2: predicting a house price full but for the next five years.

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Speaker 2: And this is timely given that we have new figures

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Speaker 2: on house prices.

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Speaker 3: Yes, the words right out of my mouth, and even

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Speaker 3: timely given Halifax have just posted the what this calling

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Speaker 3: the first annual fallen house prices since twenty twelve. Prices

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Speaker 3: fell one percent versus a year earlier. Now the Telegraph

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Speaker 3: are writing about how this fall is going to be

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Speaker 3: a long and drawn out process, and they cite Oxford

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Speaker 3: Econarnks as well as a series of other economists in

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Speaker 3: this and they say that property viveers with full nine

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Speaker 3: point four percent from their peak last year, hitting their

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Speaker 3: lowest levels between July and September twenty twenty five. Now,

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Speaker 3: I do want to shout out about that this is

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Speaker 3: something that we've been talking about here for a very

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Speaker 3: long time, not just talking about sort of economists in

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Speaker 3: Bloomberg like Novourshah who say that have been predicting attempts

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Speaker 3: at for for quite some time now, but also we

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Speaker 3: had former Bierwie rates setter Michael Saunason the Ucopolitics podcast

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Speaker 3: just last week who was saying fixed rate mortgages are

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Speaker 3: delaying the impact of the interest rates heights, and the

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Speaker 3: telegrapher effecually wrapping this in and the bit that they

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Speaker 3: add is that they also have talked to a lot

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Speaker 3: of mortgage lenders and these mortgage lenders are already pumping

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Speaker 3: their existing mortgage deals higher. As the markets now bet

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Speaker 3: the banking will be raising rates to five point five percent.

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Speaker 3: The average rate for a two year mortgage has jumped

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Speaker 3: from five point three to three percent to five point

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Speaker 3: seventy five in just the past two weeks, according to

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Speaker 3: Money Facts. The Telegraphs say so this bump up is

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Speaker 3: already being seeing mortgage rates, but the big delaying factor

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Speaker 3: is when people have to refine U.

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