1
00:00:02,360 --> 00:00:05,200
Speaker 1: Good morning. It's Wednesday, the twenty third of August in London.

2
00:00:05,240 --> 00:00:08,119
Speaker 1: This is the Bloomberg Daybreak Europe podcast. I'm Stephen Carroll.

3
00:00:08,200 --> 00:00:11,760
Speaker 1: Coming up today. Goldman clamps down on working from home

4
00:00:12,039 --> 00:00:14,600
Speaker 1: as data suggests that more than a third of all

5
00:00:14,680 --> 00:00:19,000
Speaker 1: office desks are unoccupied every day of the week. Former

6
00:00:19,040 --> 00:00:21,680
Speaker 1: precious metal traders at JP Morgan are sent to prison

7
00:00:21,720 --> 00:00:25,799
Speaker 1: for market manipulation, and reports suggest that Huawei is building

8
00:00:25,880 --> 00:00:29,800
Speaker 1: a secret chip manufacturing network in a bid to skirt

9
00:00:30,040 --> 00:00:32,960
Speaker 1: us sanctions. Let's start with a roundup of our top stories.

10
00:00:33,280 --> 00:00:35,839
Speaker 1: As major firms urge workers back to the office, a

11
00:00:35,880 --> 00:00:38,559
Speaker 1: new report says more than one third of desks and

12
00:00:38,640 --> 00:00:42,600
Speaker 1: global offices aren't used all week. Bloomberg Sewin Parts has more.

13
00:00:43,000 --> 00:00:45,120
Speaker 2: Being at your desk all day, every day is an

14
00:00:45,159 --> 00:00:49,000
Speaker 2: increasingly outdated trend, according to workplace sensor provider x Y,

15
00:00:49,200 --> 00:00:52,920
Speaker 2: since meeting spaces and soundproof enclosures are now ninety percent

16
00:00:53,000 --> 00:00:56,520
Speaker 2: full on average, but just fourteen percent of cubicles and

17
00:00:56,640 --> 00:00:59,800
Speaker 2: desks are occupied for five hours or more. Overall, they

18
00:00:59,800 --> 00:01:03,160
Speaker 2: say the offices used about half as much as pre pandemic.

19
00:01:03,520 --> 00:01:06,160
Speaker 2: For banks like Goldman Sachs, who are increasingly enforcing a

20
00:01:06,200 --> 00:01:09,479
Speaker 2: five day week office policy. The xy report begs the question,

21
00:01:09,840 --> 00:01:12,839
Speaker 2: is the modern office fit for purpose? In London? Immunepots

22
00:01:12,840 --> 00:01:14,160
Speaker 2: Spoomberg day Break Europe.

23
00:01:14,760 --> 00:01:17,400
Speaker 1: JP Morgan's former head of precious Metals will spend a

24
00:01:17,480 --> 00:01:21,000
Speaker 1: year in prison for manipulating the gold markets. Michael Novak

25
00:01:21,040 --> 00:01:23,480
Speaker 1: and his top trader, Greg Smith were found guilty of

26
00:01:23,520 --> 00:01:26,679
Speaker 1: issuing huge quantities of fake buy and sell orders, then

27
00:01:26,760 --> 00:01:30,600
Speaker 1: canceling them before they were executed, a practice known as spoofing.

28
00:01:31,120 --> 00:01:33,600
Speaker 1: Their former employer has paid nine hundred and twenty million

29
00:01:33,640 --> 00:01:36,960
Speaker 1: dollars to settle the Justice Department's allegations against it. That's

30
00:01:37,000 --> 00:01:40,040
Speaker 1: the biggest market manipulation fine since two thousand and eight.

31
00:01:41,120 --> 00:01:43,959
Speaker 1: The US banking watchdog, the FDIC is set to propose

32
00:01:44,000 --> 00:01:47,080
Speaker 1: new regulations for mid sized banks as soon as next week.

33
00:01:47,200 --> 00:01:48,800
Speaker 1: More from Bloomberg's Doug Prisner.

34
00:01:48,960 --> 00:01:51,600
Speaker 3: The plan will be unveiled next week and would require

35
00:01:51,640 --> 00:01:53,840
Speaker 3: banks with as little as one hundred billion dollars in

36
00:01:53,920 --> 00:01:57,560
Speaker 3: assets to issue enough long term debt to cover capital

37
00:01:57,600 --> 00:02:01,040
Speaker 3: losses if those lenders ever failed. The FDIC will also

38
00:02:01,160 --> 00:02:04,280
Speaker 3: unveil a plan to make those same banks fortify their

39
00:02:04,360 --> 00:02:07,800
Speaker 3: hypothetical wind down plans. It's the latest response to the

40
00:02:07,840 --> 00:02:10,919
Speaker 3: collapse of three regional banks. Back in March, the issue

41
00:02:10,960 --> 00:02:14,440
Speaker 3: of who should shoulder cost for bank failures became contentious

42
00:02:14,560 --> 00:02:17,679
Speaker 3: when the FDIC had to cover all deposits of Silicon

43
00:02:17,760 --> 00:02:21,639
Speaker 3: Valley Bank and Signature Bank, including those that were unsecured

44
00:02:22,040 --> 00:02:25,840
Speaker 3: in New York. I'm Doug Prisoner Bloomberg Daybreak Europe, a.

45
00:02:25,919 --> 00:02:29,280
Speaker 1: Leading association of global chip companies, says Huawei is building

46
00:02:29,280 --> 00:02:33,160
Speaker 1: a secret chip factory network to skirt US sanctions. The

47
00:02:33,160 --> 00:02:36,600
Speaker 1: Semiconductor Industry Association says the plan is getting thirty billion

48
00:02:36,680 --> 00:02:40,560
Speaker 1: dollars in Chinese state support, allowing the company to acquire

49
00:02:40,600 --> 00:02:43,840
Speaker 1: at least two factories and build three others. Bloomberg's w

50
00:02:43,840 --> 00:02:45,120
Speaker 1: WU helped to break the story.

51
00:02:45,520 --> 00:02:49,760
Speaker 4: The sem Conductor Industry Association to its members in April,

52
00:02:49,880 --> 00:02:53,679
Speaker 4: lad pahwe is building a network of chip making plants

53
00:02:53,760 --> 00:02:57,720
Speaker 4: or across China, so it is acquiring two plants and

54
00:02:57,800 --> 00:03:01,359
Speaker 4: then helping a build three SA Huawei may be able

55
00:03:01,480 --> 00:03:05,080
Speaker 4: to get around US sanctions and foundly a secure or

56
00:03:05,120 --> 00:03:06,600
Speaker 4: some MAH chip capacity.

57
00:03:07,520 --> 00:03:10,960
Speaker 1: Chinese companies are largely allowed to buy older generation US

58
00:03:11,080 --> 00:03:15,200
Speaker 1: chip making equipment. However, blacklisted companies like Huawei are prohibited

59
00:03:15,240 --> 00:03:19,760
Speaker 1: from such purchases without a license, and those exceptions are rare.

60
00:03:20,840 --> 00:03:23,800
Speaker 1: China has publicly backed the expansion of the Bricks Block,

61
00:03:23,919 --> 00:03:26,400
Speaker 1: while also using the annual summit to send an upright

62
00:03:26,560 --> 00:03:30,280
Speaker 1: note on the country's economy present cheating thing. Skipped a

63
00:03:30,320 --> 00:03:32,920
Speaker 1: business forum, but did attend to dinner with the leaders

64
00:03:32,919 --> 00:03:35,640
Speaker 1: of South Africa, Brazil and India, as well as Russia's

65
00:03:35,640 --> 00:03:39,400
Speaker 1: foreign minister. Meanwhile, Russian President Vlasimir Putin's the only leader

66
00:03:39,520 --> 00:03:42,360
Speaker 1: out of the five members not to be attending in person.

67
00:03:42,760 --> 00:03:46,080
Speaker 1: He delivered a speech remotely explaining why Russia pulled out

68
00:03:46,080 --> 00:03:49,200
Speaker 1: of an important grain deal, which is restricting food supplies

69
00:03:49,240 --> 00:03:52,160
Speaker 1: across Africa.

70
00:03:52,360 --> 00:03:56,160
Speaker 5: None of the terms of the so called deal concerning

71
00:03:56,560 --> 00:04:01,440
Speaker 5: the lifting of sanctions imposed on Russian experts to Worldmarkin

72
00:04:01,600 --> 00:04:05,600
Speaker 5: have been fulfilled. Obligations to Russia in this regard have

73
00:04:05,760 --> 00:04:07,120
Speaker 5: been simply ignored.

74
00:04:08,360 --> 00:04:12,000
Speaker 1: That's Russia's President Flasimir Putin speaking through a translator. South

75
00:04:12,040 --> 00:04:15,800
Speaker 1: Africa's President Sarah Ramaposa will be delivering an opening remark to

76
00:04:16,080 --> 00:04:20,320
Speaker 1: the conference today, and the China slowdown is hurting Nike,

77
00:04:20,360 --> 00:04:24,080
Speaker 1: whose shares a full and frey record ninth straight session.

78
00:04:24,480 --> 00:04:27,280
Speaker 1: That is why nearly thirteen billion dollars off the company's

79
00:04:27,279 --> 00:04:29,720
Speaker 1: market value. The story from Bloomberg's Charlie Palace.

80
00:04:30,440 --> 00:04:33,240
Speaker 6: The stock fell for a ninth street session, in its

81
00:04:33,320 --> 00:04:36,919
Speaker 6: longest losing streak since the company's IPO in December of

82
00:04:37,000 --> 00:04:40,320
Speaker 6: nineteen eighty. The latest drop came after retailer and Nike

83
00:04:40,400 --> 00:04:45,160
Speaker 6: customer Dick Sporting Goods reported disappointing fiscal second quarter results

84
00:04:45,400 --> 00:04:48,080
Speaker 6: and cut its profit outlook for the year due in

85
00:04:48,160 --> 00:04:51,400
Speaker 6: part to more theft at its stores in New York.

86
00:04:51,600 --> 00:04:54,240
Speaker 6: Charlie Palette, Bloomberg Daybreak Europe.

87
00:04:54,880 --> 00:04:57,200
Speaker 1: Those are your top stories on the markets. The MSCI

88
00:04:57,279 --> 00:05:00,400
Speaker 1: specific indexes three tenths of one percent, hire uar rostocks

89
00:05:00,440 --> 00:05:02,920
Speaker 1: fifty futures are a tenth higher, and the ten year

90
00:05:03,000 --> 00:05:06,240
Speaker 1: Treasury yield is hovering above four point three percent, down

91
00:05:06,480 --> 00:05:10,200
Speaker 1: two basis points. Well, let's turn out to get more

92
00:05:10,279 --> 00:05:13,200
Speaker 1: on that story around office occupancy around the world, with

93
00:05:13,200 --> 00:05:16,440
Speaker 1: one report showing more than a third of desks are

94
00:05:16,480 --> 00:05:18,760
Speaker 1: empty all week long. That's US companies like Goldby and

95
00:05:18,839 --> 00:05:22,839
Speaker 1: Sachs push for workers to work five days in the office.

96
00:05:22,960 --> 00:05:26,440
Speaker 1: Our reporter James Wilcock joins US now for more on this, James.

97
00:05:26,440 --> 00:05:28,640
Speaker 1: This report from x y sense that we're talking about

98
00:05:28,640 --> 00:05:32,160
Speaker 1: this morning looked at nearly twenty five thousand workstations across

99
00:05:32,400 --> 00:05:34,960
Speaker 1: nine regions including the UK. What did it tell us

100
00:05:35,000 --> 00:05:37,240
Speaker 1: that we didn't already know about this trend.

101
00:05:37,240 --> 00:05:40,880
Speaker 7: Well, Stephen, it tells that employers are scrambling for data

102
00:05:41,000 --> 00:05:42,920
Speaker 7: as they're trying to figure out quite what to do

103
00:05:43,560 --> 00:05:46,839
Speaker 7: with productivity concerns, with concerns about how to get working

104
00:05:46,880 --> 00:05:49,080
Speaker 7: in the right office, and with Goldman saying come in

105
00:05:49,160 --> 00:05:51,520
Speaker 7: five days if that's really the right approach.

106
00:05:51,760 --> 00:05:53,680
Speaker 8: And so what xy sense did is they use their

107
00:05:53,720 --> 00:05:56,360
Speaker 8: technology of putting various workplace sensors are in their sort

108
00:05:56,400 --> 00:05:59,440
Speaker 8: of companies that use them, and they said that actually

109
00:05:59,640 --> 00:06:02,680
Speaker 8: ninety percent of the time people are using these big

110
00:06:02,720 --> 00:06:05,599
Speaker 8: meeting rooms, these communal spaces that form only twenty percent

111
00:06:05,640 --> 00:06:08,839
Speaker 8: of most officers footprints, whereas if they're on desks, they're

112
00:06:08,880 --> 00:06:11,440
Speaker 8: often not there or moving around or going around. So

113
00:06:11,680 --> 00:06:14,880
Speaker 8: it tells us that the way people are using these

114
00:06:14,880 --> 00:06:17,400
Speaker 8: offices are changing. It's not that they're not coming in.

115
00:06:17,480 --> 00:06:20,120
Speaker 8: The data says according to xys sense, that about fifty

116
00:06:20,160 --> 00:06:22,839
Speaker 8: percent of offices are utilized the way they were before

117
00:06:22,880 --> 00:06:25,960
Speaker 8: the pandemic. It's that when they're coming in, they want

118
00:06:26,000 --> 00:06:27,800
Speaker 8: to do very different things to what they used to do.

119
00:06:27,960 --> 00:06:29,960
Speaker 8: They don't want to say an open plan office. They

120
00:06:29,960 --> 00:06:31,960
Speaker 8: want a meeting space. They want to meet their colleagues

121
00:06:31,960 --> 00:06:33,320
Speaker 8: that want to catch up with their manager, they want

122
00:06:33,360 --> 00:06:35,440
Speaker 8: to talk to the intern. They want to sort of

123
00:06:35,520 --> 00:06:38,680
Speaker 8: adjust the way they spend that sort of minimal sort

124
00:06:38,680 --> 00:06:41,200
Speaker 8: of work time that they want to have in the office.

125
00:06:40,920 --> 00:06:43,760
Speaker 1: And less time working by themselves at the traditional banks

126
00:06:43,760 --> 00:06:46,960
Speaker 1: of desks that we're used to seeing in offices. What

127
00:06:47,080 --> 00:06:50,240
Speaker 1: about how companies are handling this issue. It's a policy

128
00:06:50,279 --> 00:06:53,360
Speaker 1: that we've seen evolve quite significantly over the past year

129
00:06:53,440 --> 00:06:53,640
Speaker 1: or so.

130
00:06:53,800 --> 00:06:55,160
Speaker 8: I mean, part of the problem here is we are

131
00:06:55,160 --> 00:06:57,720
Speaker 8: in an era of experimentation. A story I found really

132
00:06:57,800 --> 00:07:01,520
Speaker 8: fascinating a while ago is where the office furniture is moving.

133
00:07:01,640 --> 00:07:04,000
Speaker 8: And so someone who used to design the furniture that

134
00:07:04,040 --> 00:07:05,600
Speaker 8: we work as mode onto their own business has said,

135
00:07:05,640 --> 00:07:07,120
Speaker 8: we are now in ten years, are trying to figure

136
00:07:07,120 --> 00:07:09,600
Speaker 8: out what the next office furniture looks like. In this

137
00:07:09,760 --> 00:07:12,120
Speaker 8: people like Goldman and Tesla are the outliers. They are

138
00:07:12,160 --> 00:07:14,960
Speaker 8: like full time office back to usual, back to the

139
00:07:14,960 --> 00:07:17,360
Speaker 8: before times. And then on the other hand, you have

140
00:07:17,520 --> 00:07:20,120
Speaker 8: most companies settling at kind of a three to four days,

141
00:07:20,120 --> 00:07:23,800
Speaker 8: so that we're talking at Apple, Amazon, Google, Starbucks, even Zoom.

142
00:07:23,920 --> 00:07:25,960
Speaker 8: Now it made a lot of headlines that Zoom were

143
00:07:26,000 --> 00:07:27,800
Speaker 8: ditching the work from home model. They've come out with

144
00:07:27,840 --> 00:07:30,520
Speaker 8: that Actually we're more like, we want three days a week.

145
00:07:30,560 --> 00:07:33,080
Speaker 8: We want to see people having some personal touch time

146
00:07:33,160 --> 00:07:36,280
Speaker 8: and then Zoom can augment that around it. So it's

147
00:07:36,320 --> 00:07:39,840
Speaker 8: fascinating that most of corporate America and the UK seems

148
00:07:39,840 --> 00:07:42,480
Speaker 8: to be sort of settling around that zone. In that sense,

149
00:07:42,520 --> 00:07:44,920
Speaker 8: Goldman is in many ways kind of the one who

150
00:07:44,960 --> 00:07:47,440
Speaker 8: are trying out the back to the past model of

151
00:07:47,600 --> 00:07:50,280
Speaker 8: five days in no questions in it every day.

152
00:07:50,920 --> 00:07:53,280
Speaker 1: It's certainly very interesting and interesting to reflect on that

153
00:07:53,320 --> 00:07:55,200
Speaker 1: when we think about what we see around the city

154
00:07:55,200 --> 00:07:57,280
Speaker 1: of London on a weekly basis and the days that

155
00:07:57,320 --> 00:08:00,120
Speaker 1: are very clearly a lot quieter and those where there

156
00:08:00,120 --> 00:08:01,840
Speaker 1: are longer lines if you're trying to get a sandwich

157
00:08:01,880 --> 00:08:04,400
Speaker 1: at lunchtime, for example. What does all of this mean

158
00:08:04,720 --> 00:08:07,560
Speaker 1: for commercial real estate for office buildings. We've had some

159
00:08:07,640 --> 00:08:09,840
Speaker 1: high profile companies here in London talk about moving their

160
00:08:09,840 --> 00:08:12,440
Speaker 1: officers well I mean, so McKinsey to study a couple

161
00:08:12,520 --> 00:08:15,480
Speaker 1: months ago where they said remote work risks wiping off

162
00:08:15,560 --> 00:08:18,400
Speaker 1: eight hundred billion dollars from the value of office buildings

163
00:08:18,440 --> 00:08:22,960
Speaker 1: in major cities now cbre the retail of State Advisor.

164
00:08:23,000 --> 00:08:25,480
Speaker 8: They say that sort of investors are looking to try

165
00:08:25,520 --> 00:08:27,480
Speaker 8: and convert a lot of office space. They are taking

166
00:08:27,480 --> 00:08:29,360
Speaker 8: the kind of data the Xycenter looking at and saying

167
00:08:29,400 --> 00:08:33,280
Speaker 8: we need to rejig the office space works Now. Investment

168
00:08:33,320 --> 00:08:35,400
Speaker 8: in central London office was about half the long term

169
00:08:35,400 --> 00:08:38,679
Speaker 8: average in the first quarter of this year. So the

170
00:08:38,760 --> 00:08:41,760
Speaker 8: question is for them, like where are companies going to

171
00:08:41,800 --> 00:08:44,079
Speaker 8: decide to commit And this comes back to that sort

172
00:08:44,080 --> 00:08:47,160
Speaker 8: of first problem, Stephen. We know that employees dislike top

173
00:08:47,200 --> 00:08:51,040
Speaker 8: down mandates. We know managers are concerned about productivity, but

174
00:08:51,120 --> 00:08:52,640
Speaker 8: yet they haven't figured out if it's a question of

175
00:08:52,720 --> 00:08:55,520
Speaker 8: more tech and tracking people better, if it's a case

176
00:08:55,520 --> 00:08:57,400
Speaker 8: of just put laying down the law which is going

177
00:08:57,400 --> 00:09:00,119
Speaker 8: to have a real effect on attention. And every employee

178
00:09:00,280 --> 00:09:03,600
Speaker 8: is trying to navigate that spectrum of how hard line

179
00:09:03,640 --> 00:09:06,080
Speaker 8: to go or on the other hand, how soft touched

180
00:09:06,080 --> 00:09:09,360
Speaker 8: to go at the sort of risk of maybe losing productivity.

181
00:09:09,400 --> 00:09:12,280
Speaker 8: Do you know institute a not office wide mandate or

182
00:09:12,320 --> 00:09:14,000
Speaker 8: do you integrate loads of tech as a way of

183
00:09:14,040 --> 00:09:15,200
Speaker 8: tracking where you go in the space.

184
00:09:15,360 --> 00:09:18,160
Speaker 1: So employers and employees are feeling their way through this

185
00:09:18,200 --> 00:09:20,760
Speaker 1: as it sort of an evolving situation. Do we know

186
00:09:20,760 --> 00:09:22,640
Speaker 1: where there any wrong answer is when it comes to this.

187
00:09:22,800 --> 00:09:24,280
Speaker 8: I think in so far it seems the one wrong

188
00:09:24,320 --> 00:09:26,800
Speaker 8: answer is not to be adaptable and not to be

189
00:09:26,840 --> 00:09:29,280
Speaker 8: able to change. And in this London is a concerning

190
00:09:29,280 --> 00:09:32,000
Speaker 8: one because in twenty twenty one they put in a

191
00:09:32,040 --> 00:09:35,160
Speaker 8: new law saying you have people quite strict about converting

192
00:09:35,200 --> 00:09:37,920
Speaker 8: office spaces to home spaces. In London. A lot of

193
00:09:37,920 --> 00:09:41,000
Speaker 8: local councils really don't want to lose office space because

194
00:09:41,040 --> 00:09:43,520
Speaker 8: that's what's bringing people into their sort of central businesses

195
00:09:43,800 --> 00:09:45,880
Speaker 8: and spending. And so there are a lot of fears

196
00:09:45,920 --> 00:09:48,000
Speaker 8: from people who develop real estate in London that it

197
00:09:48,080 --> 00:09:51,439
Speaker 8: might be especially slow in getting planning applications to change

198
00:09:51,559 --> 00:09:53,720
Speaker 8: users office space, both in terms of the new hybrid

199
00:09:53,720 --> 00:09:56,600
Speaker 8: offices of potential the future, but also in office spaces

200
00:09:56,640 --> 00:09:58,440
Speaker 8: that aren't working converting them into homes.

201
00:09:58,640 --> 00:10:00,720
Speaker 1: Okay, James Wilcock, thanks so much for taking us through

202
00:10:00,720 --> 00:10:04,079
Speaker 1: the various strands of that story. Up next the Chinese

203
00:10:04,160 --> 00:10:07,800
Speaker 1: spy using LinkedIn to hunt for UK secrets and Rishi

204
00:10:07,880 --> 00:10:11,319
Speaker 1: Sunak seeks to will Elon Musk after Macron meeting.

205
00:10:13,559 --> 00:10:17,120
Speaker 8: Now the Paper review on blue Bird Daybreak Europe the

206
00:10:17,200 --> 00:10:22,160
Speaker 8: news you need to know from today's papers.

207
00:10:20,960 --> 00:10:23,160
Speaker 1: And Leanne Gerins is with us with the details of

208
00:10:23,160 --> 00:10:26,120
Speaker 1: those stories. Morning to you, Leanne. Let's start in The Times,

209
00:10:26,160 --> 00:10:30,160
Speaker 1: the headline exposed the Chinese spy using LinkedIn to hunt

210
00:10:30,400 --> 00:10:31,319
Speaker 1: UK secrets.

211
00:10:31,520 --> 00:10:34,880
Speaker 9: Oh, Stephen, it's almost something out of a James Bond film.

212
00:10:34,920 --> 00:10:36,959
Speaker 9: We all love a bit of a spy story, but

213
00:10:37,080 --> 00:10:41,880
Speaker 9: this one is actually super in depth and really interesting

214
00:10:41,920 --> 00:10:44,160
Speaker 9: about what's going on when we look at the world

215
00:10:44,200 --> 00:10:48,199
Speaker 9: of spying. Now The Times has learned a single Chinese

216
00:10:48,200 --> 00:10:52,760
Speaker 9: spy is using multiple LinkedIn profiles, and that's to lure

217
00:10:52,960 --> 00:10:57,920
Speaker 9: thousands of British officials to hand over state secrets. The

218
00:10:58,040 --> 00:11:02,960
Speaker 9: man's whose alias is as Chang, would offer large sums

219
00:11:03,000 --> 00:11:07,839
Speaker 9: of money and lucrative business deals in exchange for information.

220
00:11:08,280 --> 00:11:11,680
Speaker 9: I just want to say he has many aliases, but

221
00:11:11,800 --> 00:11:14,760
Speaker 9: this is just the one that's been used in the paper.

222
00:11:14,800 --> 00:11:17,080
Speaker 9: But if you have a look at the article, there's

223
00:11:17,120 --> 00:11:20,000
Speaker 9: a lot more. If you've got any concerns. Now, the

224
00:11:20,040 --> 00:11:25,480
Speaker 9: newspaper says a recruitment consultant was handed eight thousand pounds.

225
00:11:25,520 --> 00:11:28,360
Speaker 9: That's a huge sum of money for every time they're

226
00:11:28,360 --> 00:11:33,199
Speaker 9: handed over details of a candidate from the intelligence services.

227
00:11:33,800 --> 00:11:38,040
Speaker 9: But even more than that, a former military intelligence official

228
00:11:38,200 --> 00:11:41,760
Speaker 9: was given large sums of cash and this was all

229
00:11:41,800 --> 00:11:46,000
Speaker 9: for information about counter terrorism work. So this is something

230
00:11:46,040 --> 00:11:49,920
Speaker 9: that's been going on apparently for a long time. And

231
00:11:50,000 --> 00:11:54,559
Speaker 9: the way they lure people in through LinkedIn is by flattery,

232
00:11:54,800 --> 00:11:59,160
Speaker 9: by praise, also then temptation of cash, people wanting to

233
00:11:59,200 --> 00:12:03,240
Speaker 9: work for private consultancies, so there's lots of reasons for

234
00:12:03,320 --> 00:12:07,319
Speaker 9: why this is attractive and of course money. Now Tom

235
00:12:07,480 --> 00:12:12,199
Speaker 9: touginhat he's the Security Minister, and also Ken McCullen now

236
00:12:12,240 --> 00:12:16,719
Speaker 9: he's the director of MI five, have both warned that

237
00:12:16,880 --> 00:12:21,959
Speaker 9: Chinese spies are using LinkedIn to target British citizens. So

238
00:12:22,000 --> 00:12:24,640
Speaker 9: they know this is going on and they've made this

239
00:12:24,800 --> 00:12:28,440
Speaker 9: absolutely clear. But this in depth article and research by

240
00:12:28,480 --> 00:12:32,160
Speaker 9: The Times really lays bare exactly what's going on, and

241
00:12:32,200 --> 00:12:36,280
Speaker 9: a LinkedIn spokesman has actually sent a quote into the

242
00:12:36,320 --> 00:12:40,600
Speaker 9: paper saying creating a fake account is a clear violation

243
00:12:40,840 --> 00:12:45,800
Speaker 9: of our terms and services. Our threat Protection, Prevention and

244
00:12:45,840 --> 00:12:50,400
Speaker 9: Defense team actively seek out signs of state sponsored activity

245
00:12:50,800 --> 00:12:56,400
Speaker 9: and removes fake accounts using information we uncover and intelligence

246
00:12:56,600 --> 00:13:01,520
Speaker 9: from a variety of sources, including government as agencies. LinkedIn

247
00:13:02,040 --> 00:13:04,840
Speaker 9: is saying they're doing all that they can, but we

248
00:13:05,000 --> 00:13:08,080
Speaker 9: do know that social media is where you can clone

249
00:13:08,520 --> 00:13:11,959
Speaker 9: a lot of profiles and tempt people into these big

250
00:13:12,000 --> 00:13:14,640
Speaker 9: sums of cash to send over state secrets.

251
00:13:14,800 --> 00:13:17,200
Speaker 1: Yeah, very interesting read in The Times this morning. The

252
00:13:17,240 --> 00:13:19,920
Speaker 1: Financial Times next lean a story about the Bank of

253
00:13:19,920 --> 00:13:22,320
Speaker 1: England warning on corporate default risk.

254
00:13:22,920 --> 00:13:25,640
Speaker 9: Yes, indeed, and this is actually quite a stark warning

255
00:13:25,640 --> 00:13:28,160
Speaker 9: from the Central Bank, and it says that companies are

256
00:13:28,240 --> 00:13:32,439
Speaker 9: facing a higher risk of corporate defaults, posing a threat

257
00:13:32,480 --> 00:13:36,440
Speaker 9: to investment and employment. And they're saying this is all

258
00:13:36,520 --> 00:13:39,720
Speaker 9: down to the rising interest rates that we see in

259
00:13:39,800 --> 00:13:43,400
Speaker 9: here in the UK. And according to analysis from the

260
00:13:43,480 --> 00:13:47,240
Speaker 9: Central Bank which was released yesterday, the number of non

261
00:13:47,400 --> 00:13:52,080
Speaker 9: financial companies, so those are the companies that produce goods

262
00:13:52,080 --> 00:13:56,800
Speaker 9: and services for the market, are expecting debt servicing stress

263
00:13:57,200 --> 00:14:00,360
Speaker 9: will rise a fifty percent by the end of the

264
00:14:00,440 --> 00:14:04,079
Speaker 9: year from forty five percent last year. But Stephen, more

265
00:14:04,200 --> 00:14:10,680
Speaker 9: concerning than those statistics. The Ft says that basically, if

266
00:14:10,679 --> 00:14:15,360
Speaker 9: it is for a medium size company, the proportion rows

267
00:14:15,480 --> 00:14:19,680
Speaker 9: seventy percent. So those are the companies with an annual

268
00:14:19,760 --> 00:14:24,360
Speaker 9: turnover of ten million or five hundred million pounds, so

269
00:14:24,600 --> 00:14:28,440
Speaker 9: seventy percent concern there. The interest rate, as we know,

270
00:14:28,640 --> 00:14:31,080
Speaker 9: has risen from a record low of sera point one

271
00:14:31,120 --> 00:14:34,960
Speaker 9: percent in November twenty twenty one to its current five

272
00:14:35,040 --> 00:14:39,760
Speaker 9: point two percent. Ruth Gregory and analysts are Capital Economic,

273
00:14:39,840 --> 00:14:44,600
Speaker 9: speaking to the Financial Time, says corporate insolvencies were expected

274
00:14:44,640 --> 00:14:48,080
Speaker 9: to rise sharply in the months ahead as a result

275
00:14:48,160 --> 00:14:53,800
Speaker 9: of surging borrowing costs, a largely stagnant economy and high inflation.

276
00:14:54,280 --> 00:14:58,120
Speaker 9: But really, this warning from the Bank of England about

277
00:14:58,200 --> 00:15:02,120
Speaker 9: corporate default risk, that's due to rising interest rates.

278
00:15:02,560 --> 00:15:05,760
Speaker 1: Okay, Lean, And finally we'll go to the Telegraph. Rishi

279
00:15:05,840 --> 00:15:09,440
Speaker 1: Sunak to will Elon Musk after Tesla billionaire's meetings with Macron.

280
00:15:09,640 --> 00:15:12,880
Speaker 9: Yeah, apparently he wasn't very happy when he snubbed the

281
00:15:13,000 --> 00:15:16,040
Speaker 9: UK in favor of France. And I do remember seeing

282
00:15:16,080 --> 00:15:20,280
Speaker 9: all those pictures of Elon Musk sitting across from Emmanuel

283
00:15:20,280 --> 00:15:24,440
Speaker 9: Macron as they were having some long discussions that took place.

284
00:15:24,840 --> 00:15:27,760
Speaker 9: Now it's hope that Elon Musk will attend a major

285
00:15:27,880 --> 00:15:30,280
Speaker 9: investment summit here in London.

286
00:15:30,040 --> 00:15:30,680
Speaker 7: Later this year.

287
00:15:30,720 --> 00:15:35,000
Speaker 9: It's expected to take place in November. Rishi Sunak wants

288
00:15:35,040 --> 00:15:38,280
Speaker 9: the billionaire to be one of the style guests at

289
00:15:38,280 --> 00:15:41,840
Speaker 9: that global summit. The government is also planning to invite

290
00:15:41,880 --> 00:15:46,360
Speaker 9: the Amazon founder Jeff Bezos, according to Sky News, which

291
00:15:46,400 --> 00:15:50,200
Speaker 9: first reported on the intentions to invite Elon Musk. What's

292
00:15:50,200 --> 00:15:54,280
Speaker 9: it's all about, Stephen, It's all about investment. We do

293
00:15:54,520 --> 00:15:57,600
Speaker 9: know that a gigafactory in Europe, only one of them.

294
00:15:57,680 --> 00:16:01,040
Speaker 9: Musk has invested in Berlin. Crown's trying to get him

295
00:16:01,080 --> 00:16:03,240
Speaker 9: to build one in France and we appear to trying

296
00:16:03,280 --> 00:16:04,760
Speaker 9: to get him to build one here.

297
00:16:04,600 --> 00:16:05,200
Speaker 4: In the UK.

298
00:16:06,000 --> 00:16:08,680
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

299
00:16:08,680 --> 00:16:11,760
Speaker 1: stories making news from London to Wall Street and beyond.

300
00:16:11,880 --> 00:16:14,680
Speaker 1: Look for us on your podcast feed every morning, on Apple,

301
00:16:14,800 --> 00:16:17,680
Speaker 1: Spotify and anywhere you get your podcasts. You can also

302
00:16:17,680 --> 00:16:21,720
Speaker 1: listen live each morning on London Dab Radio, Bloomberg Business App,

303
00:16:21,840 --> 00:16:24,920
Speaker 1: and Bloomberg dot Com. Our flagship New York station is

304
00:16:24,960 --> 00:16:28,640
Speaker 1: also available on your Amazon Alexa device. Just say Alexa,

305
00:16:28,800 --> 00:16:32,360
Speaker 1: play Bloomberg eleven thirty. I'm Stephen Carol. Join us again

306
00:16:32,400 --> 00:16:34,920
Speaker 1: tomorrow for all the news you need to start your

307
00:16:35,000 --> 00:16:43,680
Speaker 1: day right here on Bloomberg Daybreak Europe