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

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Speaker 2: This is the Bloomberg Day bak you at podcast. Good morning,

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Speaker 2: It's Thursday, the fourth of September. I'm Caroline Hepkeet in London.

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Speaker 1: And I'm Stephen Caroline Brussels. Coming up today, the UK's

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Speaker 1: Deputy Prime Minister Angela Rayner admits she underpaid tax on

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Speaker 1: a home purchase as calls for her to quit grow.

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Speaker 2: Ukraine Zelinsky is to hold more talks with European leaders

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Speaker 2: and President Trump to discuss security guarantees amid fears of

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Speaker 2: a fresh Russian assault.

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Speaker 1: Plus why billionaire's plans to build opulent apartments in London's

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Speaker 1: Mayfair are hitting one problem after another.

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

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Speaker 1: The UK's Deputy Prime Minister, Angela Rayner has admitted she

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Speaker 1: paid two little tax on a property she bought earlier

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Speaker 1: this year, raising questions about the future of one of

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Speaker 1: Labour's most popular politicians. Rayner, who's also the Minister in

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Speaker 1: charge of Housing, says the flat she bought should have

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Speaker 1: been taxed as a second home rather than her primary residence.

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Speaker 1: Rainier now faces both an ethics probe and a tax

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Speaker 1: bill of forty thousand pounds. She says she was given

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Speaker 1: bad legal advice.

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Speaker 3: I only own one property that is mortgaged like most people,

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Speaker 3: but because of the nature of the trust that was

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Speaker 3: set up by the court that I would be liable

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Speaker 3: to pay the additional stamp duty. As soon as I

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Speaker 3: knew that that was the case, I have alerted and

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Speaker 3: referred myself to the Independent Advisor on the Ministerial cold.

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Speaker 1: The scandal comes as the government tries to recover from

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Speaker 1: a bruising first year, and is also considering further taxes,

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Speaker 1: including on property, in the autumn.

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Speaker 2: Well as a kirs starmer seeks to show up support

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Speaker 2: for his deputy. His chancellor is grappling with a very

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Speaker 2: different financial challenge. New Big Economics estimates that Rachel Rees

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Speaker 2: will need to raise around thirty five billion pounds in

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Speaker 2: her November budget, driven by higher boring costs, policy U turns,

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Speaker 2: and a looming productivity downgrade. Potentially, economists who have spoken

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Speaker 2: to Bloomberg fear that much of this shortfall will be

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Speaker 2: covered through tax hikes, a move that could weigh heavily

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Speaker 2: on the UK's already lackluster growth prospect. And it's looking

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Speaker 2: like the Chancellor won't be able to rely on falling

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Speaker 2: interest rates to boost the UK economy. Here's what the

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Speaker 2: Bank of England Governor Andrew Bailey told lawmakers yesterday.

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Speaker 4: Although you know we've taken a further step, and although

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Speaker 4: I think that the path will continue to be downwards

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Speaker 4: gradually over time, because policy is still restrictive, there is

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Speaker 4: now considerably more doubt about exactly when and how quickly

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Speaker 4: we can make those further steps.

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Speaker 2: Andrew Bailey, speaking there as his deputy Claire Lombardelli, also

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Speaker 2: said that rates may need to settle only slightly below

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Speaker 2: their current level of four percent because of prolonged price pressures.

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Speaker 1: Ukraine's President Vladimir Zelenski will meet several European leaders in

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Speaker 1: Paris today. The meetings expected to include talks on security

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Speaker 1: guarantees for the war torn country. It comes amid rising

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Speaker 1: concerned Russia will mount a new offensive on Ukraine as

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Speaker 1: peace talks appear to stall elsewhere. Vladimir Putin said he

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Speaker 1: would be willing to meet with Zelensky, but only under

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Speaker 1: the right circumstances.

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Speaker 5: That it's a path to know where to meet with

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Speaker 5: the current head of administration. To put it carefully, it's possible.

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Speaker 5: I never rejected it. If this meeting is well prepared

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Speaker 5: and will lead to some positive, possible results. Donald asked

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Speaker 5: me if it is possible to hold such a meeting.

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Speaker 5: I said, yes, it is possible. If Zelenski is ready,

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Speaker 5: he should come to Moscow and the meeting will take place.

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Speaker 1: The Russian president there, speaking in Beijing via a translator. Meanwhile,

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Speaker 1: President Donald Trump says the United States could increase its

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Speaker 1: troops presence in Poland and indicated more financial penalties could

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Speaker 1: target Moscow.

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Speaker 2: Comic activity saw little or no change across most of

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Speaker 2: the country in recent weeks. That's according to the fed's

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Speaker 2: Beige Book survey of regional business contacts. Meanwhile, data shows

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Speaker 2: that US job openings fell in July to the lewest

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Speaker 2: than ten months, with available positions decreasing by one hundred

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Speaker 2: and eighty thousand month on month. Now the news comes

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Speaker 2: as Federal Reserve Governor Christopher Waller to our CNBC that

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Speaker 2: the Central Bank should begin lowering rates this month and

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Speaker 2: make multiple cuts in the coming months.

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Speaker 1: For me, I think we need to start cutting range

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Speaker 1: at the next meeting, and then.

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Speaker 5: We don't have to go in a lock sequence of steps.

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Speaker 1: We can kind of see where things are going because

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Speaker 1: people are still worried about tariff inflation.

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Speaker 5: I'm not what everybody else is.

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Speaker 2: So that was Christopher Waller, who is a contender to

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Speaker 2: succeed your own Powell as FED chair. He was speaking

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Speaker 2: there as the focus now shifts to Friday's US employment report.

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Speaker 1: Bomb're gounderstands China's regulators are considering new steps to cool

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Speaker 1: a one point two trillion dollar stock rally. It comes

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Speaker 1: amid worries about how fast markets have searched since August.

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Speaker 1: The measures include weighing, easing short selling curves, and options

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Speaker 1: to rain in on speculative trading, though it's unclear if

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Speaker 1: any of them will be approved or adopted. Chinese officials

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Speaker 1: are seeking to cultivate steadier gains that will help revive

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Speaker 1: the economy and consumer sentiment.

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Speaker 2: Now, Apple is giving up to launch its own AI

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Speaker 2: powered web search engine next year, directly challenging chat, GPT

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Speaker 2: and perplexity. Bloomberg understands that the company's working on a

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Speaker 2: new system that will be integrated into the Siri Voice assistant.

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Speaker 2: Our chief Apple correspondent Mark German says that the move

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Speaker 2: is designed to make SyRI, a place where users can

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Speaker 2: look up information from across the Internet.

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Speaker 6: They haven't anauncedis yet. There's going to be an AI

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Speaker 6: based web search product within siriy competing with Chat gpt

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Speaker 6: in perplexity. If you're like me, I don't go to

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Speaker 6: Google Search anymore, open CHATGPT to search it. Now for

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Speaker 6: the first time, Siri, we'll be able to get you

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Speaker 6: detailed results from the web using its own technology.

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Speaker 2: Bloomberg's Mark German speaking their Apples shares climbed to a

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Speaker 2: session high on Wednesday after Bloomberg reported on the search plan,

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Speaker 2: adding to earlier gains.

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Speaker 1: On the markets. We are looking at the Mscish Specific

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Speaker 1: Index up by two tenths of one percent, but a

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Speaker 1: sell off on equities in China, the Hanksang and Hong

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Speaker 1: Kong down by one point two percent, the MSCI China

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Speaker 1: Index one point six percent lower, so CSI three hundred

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Speaker 1: down by two point two percent. Tenure Treasury yield holding

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Speaker 1: steady at four point two two percent this morning. The

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Speaker 1: Bloomberg Dollar Spot Index a tenth of one percent stronger,

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Speaker 1: and European staff futures are pointing slightly higher as well well.

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Speaker 2: In a moment we'll bring you more on the pressure

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Speaker 2: facing the UK's deputy Prime minister. Plus we'll look ahead

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Speaker 2: to the meeting of European leaders with Ukraine's President Zelinsky.

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Speaker 2: A few in person, a lot actually on video conference.

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Speaker 2: But there's another story that caught my eye this morning, Stephen.

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Speaker 2: If you have well perhaps Gallow's humor. What do you

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Speaker 2: get with three strong men and a whole mike, organ

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Speaker 2: transplants and immortality. Yes, it's not a joke. It is

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Speaker 2: actually a.

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Speaker 1: Vandra proutine needs work, Caroline, it's a bit too obscure.

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Speaker 2: Right, Yeah, Well, look, this is a rare glimpse into

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Speaker 2: a conversation and the thinking of China's Shijingping, because this

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Speaker 2: was a hot mic moment that was caught between Shijingping,

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Speaker 2: Vladimir Putin and Kim Jong un and their translators. It

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Speaker 2: was about a minute of audio that was caught and

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Speaker 2: you know we've been passing all of this, but yes,

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Speaker 2: they were talking about longevity effectively.

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Speaker 1: Yeah, I mean, look, it's a fat, as you say,

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Speaker 1: very interesting insight into the idea that you know, they're

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Speaker 1: pointing out that people are living longer, which is true,

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Speaker 1: but the chance of living to one hundred and fifty

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Speaker 1: is what president she was talking about, you know, through

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Speaker 1: transplant technology. I mean it sounded like they were all

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Speaker 1: very excited about the idea, and I don't know quite

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Speaker 1: how I feel about it.

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Speaker 2: Yeah, a little bit strange. I mean, do you remember

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Speaker 2: that and Putin are both seventy two. They have no

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Speaker 2: succession plan in place. She's been in power thirteen years,

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Speaker 2: Putin for twenty five. Kim Jong un is younger, of course,

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Speaker 2: but he took Boyd, his own daughter to Beijing and

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Speaker 2: so that sort of added to speculation about about succession

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Speaker 2: planning for Kim Jong un. But yes, they were talking

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Speaker 2: about how seventy is, you know, not old that she

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Speaker 2: was saying that seventy you're still at seventy, you're still

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Speaker 2: a child. But yes, this idea that you could live

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Speaker 2: for much longer. Yeah, it's one of the stories that've

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Speaker 2: been thinking about on the Bloomberg terminal.

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Speaker 1: We'll put a link to it in our podcast show

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Speaker 1: notes as well. Let's bring you back to our top

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Speaker 1: story though in the UK, with the Deputy Prime Minister

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Speaker 1: Angela Rayner has admitted to underpaying property taxes and the

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Speaker 1: purchase of a flat earlier this year, leaving the Housing

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Speaker 1: Secretary fighting for her political future. Are UK Politics supporter

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Speaker 1: James Wilcock is with.

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Speaker 2: Us for more.

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Speaker 1: Let's talk about the background to all of this. Can

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Speaker 1: you fill us in on what it is. Angela Rayner

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Speaker 1: has been I suppose disclosed now, but the pressure that's

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Speaker 1: been put on her right.

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Speaker 7: This is the simple version. Angela Rayna bought a house

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Speaker 7: in May. She also has an adult child who has

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Speaker 7: a lifelong disability and court sets up a trust in

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Speaker 7: that child's name, and that is where a property that

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Speaker 7: Rayner has lived in and has treated many argue as

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Speaker 7: her primary residences in her constituency home. When she bought

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Speaker 7: this property in May. Although the Deputy Prime Minister doesn't

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Speaker 7: own this other house that's in the trust, tax lawyers said, wow,

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Speaker 7: this is what's all in debates Stephen. Tax lawyers argue

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Speaker 7: now that because she has this first home and a trust,

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Speaker 7: this second home has to be taxed as a second

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Speaker 7: property being purchased at the time. Rayner, who's the Deputy

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Speaker 7: Prime Minister and also the Housing Secretary, says she was

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Speaker 7: given legal advice that she could treat the new property

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Speaker 7: as a primary residence, which involves forty thousand pounds less

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Speaker 7: in tax. Media, especially the Male and the Telegraph, have

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Speaker 7: been campaigning for weeks on this and rain has insisted

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Speaker 7: she followed the law until yesterday, where she came out

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Speaker 7: and said because of all the media speculation, she sought

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Speaker 7: the advice of a leading tax council who told her

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Speaker 7: actually she was in the wrong, which leaves her now

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Speaker 7: referring herself to an ethics probe facing a forty thousand

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Speaker 7: pounds bill and potentially also a penaltyve Machrema seat, not

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Speaker 7: to mention charges of hypocrisy from the Conservative Party, from

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Speaker 7: Reform and many of her other political opponents.

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Speaker 2: Yeah. Yes, and as you say, it is quite a

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Speaker 2: complex story and one that Rayner has reflected on that

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Speaker 2: reflects the complexities of her own family. In terms of

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Speaker 2: the Prime Minister at Promeinnis's questions yesterday, I mean the

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Speaker 2: revelation came just a few minutes before PMQs yesterday and

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Speaker 2: the Prime Minister was backing her. What does this now

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Speaker 2: mean for the Deputy Prime Minister for Angela Ranger Reyna.

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Speaker 7: Well, like you said, Kirs Starmer says that Rayner has

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Speaker 7: gone over and above and setting out the details and

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Speaker 7: says he's proud to sit alongside us. That's a strong

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Speaker 7: show of support, but this could become very, very toxic

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Speaker 7: politically for the Deputy Prime Minister. The crux of the

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Speaker 7: issue now revolves around if angel Raina can produce the

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Speaker 7: legal advice she was given in the first setting to

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Speaker 7: show that she was wrongfully advised that she should have

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Speaker 7: been paying lower of tax. If she can do that,

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Speaker 7: may tax withings like Dan Needle can then say she

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Speaker 7: can make a case to say this wasn't really her fault. However,

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Speaker 7: there are at least a few ways this can go arrive.

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Speaker 7: She was the labor a tack dog sent after many

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Speaker 7: Conservative ministers to my mind, notably in a Deem Saharawi

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Speaker 7: when he fell afoul of tax affairs. The end up

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Speaker 7: having to pay five million pounds to HMRC, and you

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Speaker 7: said it was on his position was untenable at the time,

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Speaker 7: so the charge there. There are issues around the fact

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Speaker 7: that planning app law is her area and so the

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Speaker 7: idea that she isn't paying the right amount of tax

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Speaker 7: on this stuff sets up all sorts of charges as

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Speaker 7: they try and reform planing lords and labor of who's

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Speaker 7: actually in charge in are they ethical? And also this

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Speaker 7: comes as Labour faces a crisis of confidence. Their polls

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Speaker 7: have collapsed since last year. This time last year there

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Speaker 7: were questions over Sue Gray and questions over Sleez in

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Speaker 7: Downing streets and free outfits for Rachel Reeves and Keir

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Speaker 7: Starmer's wife. All that is now back in the kind

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Speaker 7: of political radar as the Prime Minister is trying to

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Speaker 7: reset his party head a party conference.

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Speaker 1: Yeah, indeed, party conferences on the budget coming as well.

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Speaker 1: So plenty more to watch in a difficult time for

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Speaker 1: the government are UK politic supporter James Wilcock, thank you

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Speaker 1: for joining us.

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Speaker 2: Stay with us. More from Bloomberg Daybaqube coming up after this.

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Speaker 2: Now European leaders are meeting with the Ukrainian presidents. A

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Speaker 2: lot of Miszilinsky Paris today for so called Coalition of

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Speaker 2: the Willing talks. The President Trance expected to speak to him. Also,

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Speaker 2: he said yesterday he is open to more US troops

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Speaker 2: in Poland joining US now has bien Beg's Tony Halpin,

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Speaker 2: who leads our team covering Russia's economy and government. So

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Speaker 2: I want to get into the story about Ukraine. Tony

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Speaker 2: good morning. But firstly, I wonder whether what you thought

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Speaker 2: of of Putin's comments about immortality, about using transplants to

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Speaker 2: live to be younger and younger. Stephen and I were

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Speaker 2: just chatting about it earlier. You know, that image of Putin,

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Speaker 2: Wiji and Kim Jong un, and the fact that the

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Speaker 2: unscripted moment caught on Mike was all about these leaders

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Speaker 2: trying to live for long or maybe the world benefiting

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Speaker 2: from longevity.

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Speaker 8: Yes, something that's a startling thought, isn't it. But it's

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Speaker 8: not one I think we can easily dismiss. So if

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Speaker 8: you're an autograd, as Putin and Zee undelthldly are, and

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Speaker 8: you've come to the conclusion, for example, that the entire

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Speaker 8: world being of your nation is intricately tied up with

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Speaker 8: your continued rule of this country, then for you it

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Speaker 8: becomes a matter of national, vital, national importance that you

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Speaker 8: continue to rule as long as possible. And Putting in

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Speaker 8: the past has expressed interest, for example, in the potentials

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Speaker 8: of the genetic medicine and what that may offer in

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Speaker 8: terms of longevity. And we shouldn't forget there's a long

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Speaker 8: history of this in Russia. I mean, Vladimir Lenin's body

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Speaker 8: until right now lies in Red Square, regarded as an

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Speaker 8: immortal figure for many Russians. You know, a preserved body

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Speaker 8: of somebody who died more than a century ago. So

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Speaker 8: the idea of living on to one hundred and fifty

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Speaker 8: is obviously much more appealing than lying in state and

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Speaker 8: Red Square. If you can continue to rule from the

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Speaker 8: Kremlin for that length of time, why not.

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Speaker 1: Yeah, indeed, very interesting to hear that insight into that conversation.

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Speaker 1: But turning to the events happening in Paris today, Europeans

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Speaker 1: are concerned about a new Russian offensive in Ukraine. What

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Speaker 1: are we expecting from this meeting in terms of security guarantees?

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Speaker 8: Yes, I mean essentially that the Europeans are trying to

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Speaker 8: lay out their plan of what would happen after the

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Speaker 8: war to try and secure Ukraine's or safeguard Ukraine's security

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Speaker 8: against future Russian attack. So they want to lay out

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Speaker 8: what they think could happen once the war comes to

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Speaker 8: an end, and in part they want to ensure that

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Speaker 8: Donald Trump is convinced enough to make some US commitments

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Speaker 8: of support, for example through intelligence provision or providing air cover.

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Speaker 8: They're still rather concerned that he won't provide sufficient support

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Speaker 8: that would make such a plan feasible. But of course,

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Speaker 8: the big problem here is that it all depends on

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Speaker 8: the war coming to an end, and so far we

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Speaker 8: don't see that happening. So it's an exercise really in

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Speaker 8: future planning, but no one's really got an idea when

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Speaker 8: they're going to actually implement these plans.

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Speaker 2: In terms of President Trump speaking to Zelensky, any signs

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Speaker 2: of more forceful US pressure on Russia? Sorry, Trump was

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Speaker 2: asked about this yesterday.

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Speaker 8: Yeah, frankly, not really. I mean, if we remember all

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Speaker 8: the previous times that President Trump has set various deadlines

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Speaker 8: for Russia to comply with demands for a ceasefire, all

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Speaker 8: of those deadlines went and didn't receive any kind of

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Speaker 8: response from President Trump. And if you recall also at

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Speaker 8: the summit meeting with President Putin and Alaska last month,

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Speaker 8: he basically abandoned the demand for President Putin to cease

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Speaker 8: fire and so that they were going to focus instead

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Speaker 8: on some kind of deal to bring the war to

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Speaker 8: an end. And there's no sign so far that that

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Speaker 8: war is coming to an end.

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Speaker 1: Okay, Tony Halpin leading our team covering Russia's economy.

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Speaker 2: Now to a story here in the UK, John Cardwell,

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Speaker 2: the Phones for You billionaire, has tried to turn his

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Speaker 2: hand to super high end property development with a site

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Speaker 2: that's become known as one Mayfair, Bloomberg's residential real estate.

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Speaker 2: Reported Damien Shepherd has been doing a deep dive bit

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Speaker 2: of reporting into this. I mean, John Caldwell is known

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Speaker 2: for his own fabulous property and you know, flair in

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Speaker 2: terms of his suits, and he's just a very kind

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Speaker 2: of colorful businessman. Why did this project to him seem

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Speaker 2: like such a sure far bet? Because he spent a

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Speaker 2: huge amount of money on buying this site.

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Speaker 9: He certainly did, so I think it's useful for us

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Speaker 9: to rewind about fifteen years here just to get the

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Speaker 9: context of what was happening in the market at the time.

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Speaker 9: So John Cordwell had recently sold his Phones for You business,

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Speaker 9: become a billionaire, was rolling in cash, and the London

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Speaker 9: luxury housing market was absolutely booming. There was red hot

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Speaker 9: demand from internationals who were looking to capitalize on a

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Speaker 9: week pound. Interest rates were low, transactions were just flying.

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Speaker 9: So John Cardwell slashed out almost one hundred and fifty

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Speaker 9: pounds on a car park in Mayfair the most expensive

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Speaker 9: car park ever to be purchased in the UK. But

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Speaker 9: now fifteen years later, we're in a situation where the

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Speaker 9: market has been on a roller coaster ride since twenty eleven.

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Speaker 9: What Cordle didn't know was that the market was about

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Speaker 9: to peak and then go on a downward trajectory, and

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Speaker 9: most concerningly for him, as he nears the official launch

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Speaker 9: date for sales, things could be about to get even worse.

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Speaker 1: So why has the market gone sour?

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Speaker 5: Sense?

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Speaker 2: Then?

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Speaker 9: Yeah, you know, there's no polight way to put it.

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Speaker 9: This is the worst slowdown in London's luxury housing market

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Speaker 9: since the financial crisis. Shortly after Cordwell bought that car

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Speaker 9: park and started his master plan for this one Mayfair scheme,

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Speaker 9: George Osborne brought in wealth taxes which immediately hit the

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Speaker 9: top end of the market. And even if we come

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Speaker 9: more recently, the mini budget caused rates to spike. Even

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Speaker 9: recent inflation readings have made you know, the rates coming

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Speaker 9: down more concerning for these kind of developers who are borrowing.

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Speaker 9: And you know, if we look even more recently than that,

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Speaker 9: we've had hikes to stamp duty on second homes. The

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Speaker 9: end of the non dom regime, and we're now seeing

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Speaker 9: the government flying ideas around about new taxes on the

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Speaker 9: sale of homes over five hundred pounds and talking about

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Speaker 9: potential change to capital gains tax to all of this

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Speaker 9: creates uncertainty that is killing demand for luxury London homes.

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Speaker 2: Well. I mean also the price tags are the other

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Speaker 2: thing that maybe you know, there are not many people

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Speaker 2: perhaps in the world who could pay the sort of

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Speaker 2: money that might be asked for these properties. And you

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Speaker 2: talk about it being a car park, are you a

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Speaker 2: parking lot?

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Speaker 3: Was it?

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Speaker 2: You've got lovely photographs in your report. Was it actually

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Speaker 2: a car park like a multi story thing in Mayfair?

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Speaker 2: It was, right, So, yeah, that's I'm picturing it now.

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Speaker 2: But it's gone obviously. The building, the new building is there.

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Speaker 9: Yeah, exactly, I mean it's you know, it's under construction,

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Speaker 9: but you know, the construction date, the finalization date has

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Speaker 9: been moved obviously as Cordwell has been struggling with certain

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Speaker 9: parts of his finances and there's been all sorts of

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Speaker 9: build cost inflation. But you mentioned about the pricing. I mean,

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Speaker 9: these are some of the most expensive apartments in the

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Speaker 9: world when they go on. So we're talking about apartments

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Speaker 9: up to two hundred million pounds and what brokers are

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Speaker 9: telling me is that the pricing for Cordwell's apartments is

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Speaker 9: far too high and aside from the market reasons, that

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Speaker 9: is another reason why demand just isn't there for these flats.

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Speaker 9: It's not just cord Well. There's a huge gap between

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Speaker 9: buyer and seller expectations and the London market At the moment.

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Speaker 9: People are not willing to accept that their properties probably

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Speaker 9: aren't worth as much as they were ten years ago.

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Speaker 9: So that's all causing a real dip in demand and

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Speaker 9: cord Well is definitely at the forefront of that.

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Speaker 1: So what has John Caldwell said then about the chances

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Speaker 1: of selling the apartments.

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Speaker 9: Yes, Stephen Well, I just mentioned that the next year

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Speaker 9: is the official launch date for sales, but these kind

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Speaker 9: of apartments do typically get marketed far before that. He

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Speaker 9: says there's been several strong offers already ahead of the

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Speaker 9: sales launch and that a lack of construction in Mayfair

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Speaker 9: means demand will exist for his apartments. There was also

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Speaker 9: a planning rule that came in in Westminster that limits

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Speaker 9: the size of apartments in Mayfair and the rest of

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Speaker 9: the borough. But Cordwell got his planning in just before that,

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Speaker 9: so he's saying this is one of the last in

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Speaker 9: a dying breed of ultra sized apartments in London.

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Speaker 2: So just lastly, I've got to get a flavor for

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Speaker 2: what these apartments are like, because like the luxurious listings

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Speaker 2: of all the kind of the benefits of having one

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Speaker 2: of these properties is quite long, isn't it.

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Speaker 5: What's it?

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Speaker 2: What's it like? I suppose you went and had a

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Speaker 2: look at it, did you, even though you can't see

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Speaker 2: the apartments of.

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Speaker 9: Course, yeah, I mean I've seen the CGI images of

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Speaker 9: how yeah, exactly, and you know we're talking in the building,

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Speaker 9: we've got spa swimming pool, entertaining halls, the first rotunda

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Speaker 9: in may Fir since the seventeen hundreds. They say, these

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Speaker 9: are very gootzy apartments. A lot of you know what

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Speaker 9: the design has come from Cordwell himself. So look, he

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Speaker 9: is confident. Let's see what happens.

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