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Speaker 1: Good morning. It's Tuesday, the second of January here in London.

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Speaker 1: This is the Boombag Daybaq podcast.

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Speaker 2: I'm Caroline Hipka and I'm Stephen Carroll. Coming up today.

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Speaker 2: Iran dispatch as a warship to the Red Sea as

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Speaker 2: the US sinks Hoothy boats and tensions flair.

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Speaker 1: Mishi Sunak talks up a reduction in small boat migration,

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Speaker 1: but experts warn the decline could be temporary.

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Speaker 2: Plus not shooting for the stars, the UK struggles to

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Speaker 2: get its space superpower ambitions out of low orbit.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: Iran has sent a warship to the Red Sea in

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Speaker 2: a marked escalation of tensions in the region. The show

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Speaker 2: of force comes after the US Navy destroyed three Hoothy

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Speaker 2: boats which were attempting to board a containership on New

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Speaker 2: Year's Day. A spokesperson for Iran's Foreign Ministry says the

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Speaker 2: West has made the area less secure.

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Speaker 3: Activities by the US and Britain in the Red Sea

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Speaker 3: are in line with the role of those two countries

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Speaker 3: and intensifying it's the ability and security in the regional waters,

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Speaker 3: especially the Red Sea. Such moves will not help the

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Speaker 3: region's stability and security at all. Their acts will raise

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Speaker 3: regional and international concern about the security of the region.

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Speaker 2: Spokes when they're speaking through a translator, saying that Iran

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Speaker 2: has a legal right to respond to Israel's recent killing

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Speaker 2: of an Iranian general in Syria. For its part, Israel's

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Speaker 2: military is pulling several thousand troops out of Gaza to

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Speaker 2: focus on targeted strikes. It says it's entering a new

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Speaker 2: phase of the war and reorientating its forces to both

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Speaker 2: boost the economy and focus on a threat from Iran

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Speaker 2: backed Hesbla and Lebanon.

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Speaker 1: Meanwhile, Israel's Supreme Court has overturned a highly contested law

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Speaker 1: aimed at weakening the power of the judiciary. In an

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Speaker 1: eight to seven ruling, the court struck down a law

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Speaker 1: passed in July that would have barred judges from voiding

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Speaker 1: government decisions for being quote unreasonable. The move is a

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Speaker 1: blow to Prime Minister Benjamin Nettnio, whose right wing coalition

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Speaker 1: in Israel. The plan had split the nation and triggered

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Speaker 1: mass protests from opponents who said that it would have

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Speaker 1: eroded the country's democracy by giving the government too much power.

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Speaker 2: Bloomberg has learned of further US efforts to slow Beijing's

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Speaker 2: drive to build its own semiconductor industry. According to sources,

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Speaker 2: the chip equipment maker ASML canceled some shipments to China

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Speaker 2: weeks ahead of a January deadline, following a request from

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Speaker 2: the US. Bloomberg's at Baxter has the story.

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Speaker 4: ASML Holding is counciled shipments of some of its machines

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Speaker 4: to China at the Biden request. This week's before the

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Speaker 4: export bands on the high end ship making came into effect.

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Speaker 4: The Dutch manufacturer had licenses to ship three top of

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Speaker 4: the line deep ultraviolet lithography machines, but before the deadline

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Speaker 4: it decided to cancel the orders. The US and allies

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Speaker 4: have been trying to block access to the technology, ed

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Speaker 4: Baxter Bloomberg Radio.

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Speaker 1: China's president Shi Jinping has pledged to strengthen the country's

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Speaker 1: economic recovery. The leader talked of setbacks in his New

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Speaker 1: Year's Eve address on the road ahead.

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Speaker 5: Wind and rain are normal, some enterprises are facing operational pressure,

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Speaker 5: and some people are counting difficulties in employment and life.

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Speaker 5: And natural disasters such as floods, typhoons, and earthquakes have

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Speaker 5: occurred in some.

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Speaker 6: Places, all which I'm deeply concerned. I see we're not

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Speaker 6: afraid of hardships. We will watch out for each other,

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Speaker 6: face up to the challenges, and overcome the difficulties.

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Speaker 1: The rare mention of difficulties from China's president comes as

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Speaker 1: the latest set of PMI surveys painted a contrasting picture

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Speaker 1: of the country's manufacturing sector. The private Kaishin Index showed

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Speaker 1: factory activity picking up in November, while official data published

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Speaker 1: at the weekend pointed to a contraction in December. She

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Speaker 1: also used his address to re en sites has pledged

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Speaker 1: to reunify China with taiw just weeks before voters on

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Speaker 1: the island go to the polls to pick their next president.

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Speaker 2: At least thirty people have died in Japan after a

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Speaker 2: major earthquake hit the country's northwest coast. The quake triggered

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Speaker 2: a fire was destroyed more than one hundred hoes, houses

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Speaker 2: and buildings in the city of Wajima. Aid workers are

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Speaker 2: continuing to search for victims amidst amidst aftershocks. Dean Nankei Vel,

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Speaker 2: a former international Search and rescue manager it says it's

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Speaker 2: important these teams act quickly.

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Speaker 7: Obviously, it's only a finite time. You cannot spend days

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Speaker 7: and days waiting for that information. If you're going to

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Speaker 7: rescue people, you need to get underground very very quickly,

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Speaker 7: get your teams into the locations, and start affecting those

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Speaker 7: rescues as soon as you possibly can.

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Speaker 2: Thank you. VA's comments come after a tsunami warning for

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Speaker 2: most of the Sea of Japan coast was lifted this morning.

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Speaker 2: Japanese Prime Minister Formio Kashida has set up a task

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Speaker 2: force to help the rescue and repair operations.

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Speaker 1: Ritchie Sounak says the UK is making progress on limiting

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Speaker 1: illegal migration into the country. The Prime Minister's statement came

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Speaker 1: alongside Home Office figures released on Monday showing the number

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Speaker 1: of migrant crossings on the English Channel in small boats

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Speaker 1: dropped by thirty six percent last year. That's the first

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Speaker 1: decline in at least five years. Cracking down on illegal

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Speaker 1: migration has been a central issue for the Conservative government.

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Speaker 1: Speaking last month, Sunak said that he is determined to

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Speaker 1: work on the issue.

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Speaker 8: We're very clear, we want to stop the boats.

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Speaker 3: I want to tackle this problem.

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Speaker 8: They're already down by a third. We've got more to do.

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Speaker 8: The Conservative Party is united in wanting to stopping the boats.

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Speaker 1: Prime Minister Isusunak, speaking last year despite the recent figures,

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Speaker 1: an official from the Immigration Services Union warned that quote

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Speaker 1: higher numbers of migrants are expected in twenty twenty four

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Speaker 1: as last year's crossings were likely affected by high winds

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Speaker 1: over the Channel.

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Speaker 2: In December, Elon Musk's X is now worth less than

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Speaker 2: a third of the forty four billion dollars he paid

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Speaker 2: for the company formerly known as Twitter, according to Axios.

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Speaker 2: Disclosures by the investment company Fidelity show the decline in value.

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Speaker 2: The reports say Fidelity cut the value of it's holding

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Speaker 2: an X by a further eleven percent as of November,

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Speaker 2: extending a series of markdowns of the platform. The news

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Speaker 2: comes after X struggle to attract advertisers last year, following

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Speaker 2: controversial comments from owner Musk. Now, in a moment, we'll

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Speaker 2: tell you well Britain's race to become a space superpower

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Speaker 2: isn't taking off. But first, a quick look at today's

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Speaker 2: Bloomberg Big Take report. Almost everything Wall Street expects in

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Speaker 2: twenty twenty four, so famously, some of the biggest names

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Speaker 2: on Wall Street didn't get their twenty stars three predictions right,

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Speaker 2: Bloomberg has gone through six hundred and fifty calls made

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Speaker 2: by banks, advisors, asset managers about what they're expecting from

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Speaker 2: twenty twenty four. Now most of the consensus among those

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Speaker 2: six hundred and fifty calls or things like a benign

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Speaker 2: economic slowdown, interest rates finally starting to bite that central

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Speaker 2: bank pivot of course we've been waiting for as well,

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Speaker 2: setting the stage four late year rebound in markets a

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Speaker 2: pretty middle of the road scenario.

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Speaker 1: And that's sort of the problem because so many people

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Speaker 1: got the predictions for twenty three wrong. The issue is,

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Speaker 1: you know, does Wall Street get it wrong this time?

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Speaker 1: And if so, what are the outliers? On balance? According

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Speaker 1: to our analysis, they lean a little bit bearish. But look,

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Speaker 1: you can check out this really comprehensive guide, and when

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Speaker 1: we've given you just the top line details, because you

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Speaker 1: get a drop down menu all of the institutions listed,

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Speaker 1: you can read a mini paragraph that summarizes all of

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Speaker 1: their views by different asset classes, by different themes. They

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Speaker 1: talk about interest rates, about volatility, and you can also

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Speaker 1: search using common terms. You know, throughout all of these

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Speaker 1: investment guides for twenty twenty four in the Year Ahead.

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Speaker 2: Yeah, fascinating reads this morning. Bloomberg's big take, and I

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Speaker 2: big take is the function on the terminal. Of course

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Speaker 2: you'll find out on the website as well. Now, Iran

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Speaker 2: has sent a warship, the Albors, to the Red Sea

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Speaker 2: in response to the US navies sinking of three Hoothy

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Speaker 2: boats over the weekend, the latest escalation of tensions in

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Speaker 2: that region. Joining US now to discuss Boomberg's managing editor

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Speaker 2: for Economy and Government News in the Middle East and Africa,

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Speaker 2: Sylvia West. I's with US, Sylvia. Great to have you

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Speaker 2: on the program. What has happened then with these hoathy

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Speaker 2: attacks and the response from US warships.

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Speaker 9: So I think what we are seeing now is these

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Speaker 9: escalating attacks by the Houthy group, which is back by Iran.

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Speaker 9: They're based in Yemen, but they say that they are

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Speaker 9: acting on behalf of the Palestinians in the Israel Hamas war.

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Speaker 9: So you know, it's a moment in which when regional

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Speaker 9: tensions are atchet up with you know, involving Iran. This

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Speaker 9: is something that happens through this proxy group, and the

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Speaker 9: US has said it will to protect shipping. This has

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Speaker 9: happened a few times in the past, and the US

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Speaker 9: is sent military vessels into these into these waterways of

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Speaker 9: the region, and the difficulty is always that the US

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Speaker 9: wants to show its present and protect shipping, but sometimes

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Speaker 9: just by simply being there and being there, you know,

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Speaker 9: in a greater amount, this actually raised the risk of

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Speaker 9: things spiraling into a bigger conflict. So I think, you know,

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Speaker 9: there was this instant in which several who the fighters

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Speaker 9: were killed by the US over the weekend in a

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Speaker 9: in A, and that meant that these tensions have ratcheted

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Speaker 9: up further. So I think the timing of it, the

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Speaker 9: timing of this warship from Iran being sent there. It's

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Speaker 9: quite small, but it's coming at a time of heightened tensions.

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Speaker 9: So the risk is that even a small instant could

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Speaker 9: tip into something larger.

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Speaker 1: Okay, So there are then concerns about this. I mean,

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Speaker 1: how much can the waterway be kept open? This is

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Speaker 1: obviously a hugely important area for shipping, and the US

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Speaker 1: has organized this sort of convoyd to try to work

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Speaker 1: together to keep the waterway open. How much is that

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Speaker 1: is that possible? Then, as you say, given that the

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Speaker 1: tensions are increasing in the Red Sea.

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Speaker 9: Well, I think, you know, it's up to global shipping

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Speaker 9: companies whether they want to take this route. It's not closed,

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Speaker 9: it's there, it's open. So I just think, you know,

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Speaker 9: global shipping companies are weighing up the risk of traveling

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Speaker 9: through that. Obviously it's much faster to go that way,

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Speaker 9: and if you go an alternative route, that's much you know,

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Speaker 9: much further around Africa. It raises shipping costs and most

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Speaker 9: at the moment, it seems that most major at shipping companies,

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Speaker 9: and we've seen you know, data that shows that they

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Speaker 9: are choosing to take the longer route because it's a

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Speaker 9: lower risk one. As soon as sort of tensions, you know, ease,

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Speaker 9: and as soon as there's a clearer picture, then I think,

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Speaker 9: you know, ships will go through the shorter routes. So

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Speaker 9: it's it's really up to these sort of global shippers

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Speaker 9: to sort of assess whether they want to take the

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Speaker 9: higher risk, quicker route which is cheaper, or take the

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Speaker 9: lower risk, longer.

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Speaker 2: Route right now, Sylvia. Of course, the backdrop to this

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Speaker 2: is the ongoing Israel Hamas war and some shift and

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Speaker 2: strategy from Israel. We've heard about it over the weekend.

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Speaker 9: That's right, So Israel says it's pulling out some brigades

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Speaker 9: from Gaza from its ground invasion. Of course, there are

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Speaker 9: still sort of air operations going on, and you know,

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Speaker 9: it does look like it's a new phase in the

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Speaker 9: war after you know, a lot of international pressure on

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Speaker 9: Israel to draw back. It was something that was expected

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Speaker 9: in the coming weeks, although you know, also because of

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Speaker 9: domestic pressures, it's quite difficult for Israel to say things

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Speaker 9: over and it was always very difficult for them to

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Speaker 9: draw a line under it because their aim was to

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Speaker 9: completely eradicate Hamas in Gaza. It's not really clear how

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Speaker 9: that can be done easily unless they can kind of claim,

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Speaker 9: you know, killing members of the top leadership, which you

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Speaker 9: know they haven't done to this point right now, So

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Speaker 9: I think, you know, it was always going to be

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Speaker 9: quite unclear when this would end, and it looks like

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Speaker 9: this is sort of a phase drawback at least of

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Speaker 9: the ground operations, although it is still going on. It's

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Speaker 9: not the end of the wharf for now.

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Speaker 1: Sylvia, thank you so much for being with a sub

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Speaker 1: Bloomberg's Managing editor for Economy and Government news in the

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Speaker 1: Middle East and Africa. Sylvia Westall.

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Speaker 2: Let's turn to a different story now though Britain's pushed

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Speaker 2: to become a space superpower being undermined by political disarray

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Speaker 2: a weak domestic investment, while showing that the country needs

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Speaker 2: international partners more than ever post Brexit and twenty twenty three,

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Speaker 2: Bitton's top satellite operators in Mersat and one Web were

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Speaker 2: absorbed by overseas rivals who are bulking up against Elon

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Speaker 2: Musk's fast growing Starlink. Among the most high profile projects

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Speaker 2: to launch rockets into space have been sidelined by bankruptcy

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Speaker 2: or delays. Well, we've got our tech reporter Tom Seal

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Speaker 2: with us for more on this story. Tom, good morning

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Speaker 2: to you. There have been high hopes for the UK space.

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Speaker 2: What is the potential for this area?

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Speaker 8: Hi, good morning. Yeah, it's a boom time in space

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Speaker 8: investment from a historical perspective, and there's been a huge

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Speaker 8: wave of increasing commercialization of space and the UK, along

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Speaker 8: with other parts of the world, have sought to tap

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Speaker 8: into this. Particularly Boris Johnson. You know two Prime ministers

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Speaker 8: ago now really made a big deal about this and

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Speaker 8: bought a satellite company out of bankruptcy, talked about galactic Britain,

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Speaker 8: and so I've been following this very closely and thought

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Speaker 8: it was a really interesting case study in how Britain

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Speaker 8: can sort of try to manage and employ industrial strategy.

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Speaker 1: Yeah. So then after this year and a lot of

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Speaker 1: focus in twenty three on this issue, what is holding

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Speaker 1: it back for Britain?

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Speaker 8: I think it's something that you might see across lots

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Speaker 8: of industries. Political disarray. We've had, you know, these multiple

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Speaker 8: administrations which don't seem to last very long. Even within

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Speaker 8: those administrations, there are frequent reshuffles. There's been a change

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Speaker 8: in the machinery of government as they call it, with

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Speaker 8: a new Science Department, so policies kind of chop and change.

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Speaker 8: Civil servants aren't necessarily incentivized to carry things through, and

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Speaker 8: so things like a Space Council, which was a bit

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Speaker 8: like a Trump's Space Force that was started by Boris Johnson,

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Speaker 8: was then canceled by Las Trous. It was then brought

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Speaker 8: back by Richie Sunak. So I think that's that's partly.

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Speaker 8: You know, there's a there's a lack of clear direction

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Speaker 8: and long term ism.

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Speaker 2: So what needs to change then to make space a

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Speaker 2: thriving industry for the UK?

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Speaker 8: Well, I think partly there's this this longer term view.

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Speaker 8: I think there are some wider problems which afflict British

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Speaker 8: business beyond space. So in the piece I talk about,

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Speaker 8: you know, the British stock market, this is, this is

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Speaker 8: you know, we're seeing this in semiconductors and chips, with

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Speaker 8: with arm choosing a New York listing over the UK

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Speaker 8: like WWISE, the biggest British satellite companies have been effectively

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Speaker 8: absorbed by an American company and a French company respectively,

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Speaker 8: and you know, there's this kind of lack of ability

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Speaker 8: to hold on to British tech champions, which perhaps you

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Speaker 8: know includes space as well. So these kind of capital

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Speaker 8: market reforms which which the Treasury is working on, you know,

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Speaker 8: you know there's a lot of hope in government that

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Speaker 8: that will help address some of these problems. And then again,

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Speaker 8: you know Brexit has led to skills issue. The UK

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Speaker 8: is excluded from big programs like there's one called Galileo,

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Speaker 8: which you know, there was a British company which made

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Speaker 8: the Galileo satellites. Now it can't. So there's lots of

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Speaker 8: different parts to it, but I think it's kind of

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Speaker 8: an interesting window into bigger challenges for the British economy.

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