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Speaker 1: Good morning. It's one day, the fourth of September here

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Speaker 1: in London. This is the Blueberg daybreakurate podcast. I'm Caroline Hipki.

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Speaker 2: And I'm Stephen Carroll. Coming up today, President Zelenski removes

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Speaker 2: his defense chief as Ukraine's counter offensive makes a breakthrough.

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Speaker 1: The UK Chancellor says he is confident inflation will drop

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Speaker 1: to five percent this year.

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Speaker 2: And we learned that Apple's latest iPhone will come with

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Speaker 2: the same charging port as a Thrivals.

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

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Speaker 2: Ukraine's Defense minister is being replaced. Alexei Resnakhoff held the

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Speaker 2: postents before Russia's invasion, but face repeated allegations of corruption

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Speaker 2: related to military procurement. The move comes as multiple sources

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Speaker 2: confirm Ukraine has achieved to break through in its Russian

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Speaker 2: counter offensive. Here's at the White House. National Security spokesman

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Speaker 2: John Kirby told reporters on Friday.

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Speaker 3: We had noted whole gonna last seventy two hours or so,

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Speaker 3: some notable progress by Ukrainian enforces in that southern wine

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Speaker 3: coming out of the Zapparizi area, and they have achieved

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Speaker 3: some success against that second line of Russian defenses.

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Speaker 2: Kirby's comments, Commas reports emerged that Russia's getting significant financial

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Speaker 2: support from Beijing. According to The Financial Times, China's biggest

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Speaker 2: banks are now extending loans worth billions of dollars to Moscow.

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Speaker 1: China's Shijingping is set to skip this month G twenty

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Speaker 1: summit for the first time. It's not exactly clear why.

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Speaker 1: One thing, though that is evident. Missing the event means

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Speaker 1: that President she will avoid thorny questions on his support

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Speaker 1: for russia aggression towards Taiwan and China's economic trajectory. Speaking

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Speaker 1: after her trip to the country, the US Commerce Secory

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Speaker 1: Gina Beimondo said that America is looking for more than

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Speaker 1: words from their geopolitical rival. Trust is probably not the

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Speaker 1: word I would use. We need to see action, and

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Speaker 1: until we see action, there can be no Trustina Raimondo

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Speaker 1: also told CBS's Face the Nation that while quote, not

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Speaker 1: every investment from China into America harms on national security,

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Speaker 1: but many do.

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Speaker 2: Here In the UK, the Chancellor Jeremy Hunts as tax

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Speaker 2: cuts are on the agenda if economic growth improves. Speaking

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Speaker 2: ahead of Parliament returning today, Hunt defended the Conservative government's

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Speaker 2: handling of the economy.

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Speaker 4: Until you get inflation down, you can't end the misery

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Speaker 4: for families who see the cost of their weekly shop

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Speaker 4: going up, the cost of their filling up their tank

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Speaker 4: of petrol, they see that going up as well, and

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Speaker 4: that was an absolute priority for US.

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Speaker 2: Chancellor Jeremy Hunt, insisting the government is on track to

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Speaker 2: hit its target of reaching five percent inflation by the

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Speaker 2: end of the year. He also promised to spend what

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Speaker 2: it takes as a crisis over crumbling school buildings threatens

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Speaker 2: to overshadow good economic news.

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Speaker 1: Mercedes are promoting an electric vehicle which outperforms a Tesla,

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Speaker 1: as the car maker challenges Elon Musk's dominance. The German

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Speaker 1: automaker's new Cla sedan can drive one hundred and fifty

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Speaker 1: kilometers further on a single battery charge. Coeo owner Collenius

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Speaker 1: says that it's aimed at the high end of the market.

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Speaker 5: Our goal is value over volume, so we're not pushing volume.

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Speaker 5: We're very very careful about how we go to market

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Speaker 5: or go to market strategy, and as you can see

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Speaker 5: from the Resalt for the first six months of this year,

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Speaker 5: that has been working quite well for us. We're focused

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Speaker 5: on value for the customer. I don't think the customer

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Speaker 5: expect from a Mercedes a little bit of a roll

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Speaker 5: across the ride, but something that you can depend on.

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Speaker 5: So we will continue with the value over volume strategy.

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Speaker 1: Colleniusay's new car comes as Mercedes is under pressure to

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Speaker 1: bolster its lineup after disappointing sales in China.

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Speaker 2: Apple is expected to change the iPhone charging ports for

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Speaker 2: the first time in eleven years, moving from lightning to

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Speaker 2: USB c ports. Consumers can now look forward to using

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Speaker 2: a single charging cable for multiple Apple devices, faster charged

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Speaker 2: for the iPhone, and more phones being compatible with chargers

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Speaker 2: for non Apple devices. The company will confirm the date

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Speaker 2: of the shift at its iPhone fifteen event on the

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Speaker 2: twelfth of September. Well, looking at some of the stories

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Speaker 2: that caught our eye, I think I'm still sort of

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Speaker 2: my head's still slightly spinning after an ONS release on

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Speaker 2: Friday which sort of undid a lot of the thought

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Speaker 2: around what the UK economy has done since the end

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Speaker 2: of COVID. It's a revision based on new data from

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Speaker 2: the ONS which shows the UK has returned to its

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Speaker 2: pre COVID levels and had done so in fact at

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Speaker 2: the end of twenty twenty one.

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Speaker 1: Yeah, this is more than a year and a half

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Speaker 1: earlier than we had thought, so all of that bemoaning

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Speaker 1: and hand ringing about the state of the UK economy

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Speaker 1: suddenly wiped out. It took a lot of people by surprise.

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Speaker 1: The Independent newspaper talking about it being a huge lucky

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Speaker 1: break for soon at the Prime Minister. Our economic performance

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Speaker 1: was similar to that of most other countries and the

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Speaker 1: third best in the G seven. Having said that, one

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Speaker 1: caveat we don't know that for sure because this is

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Speaker 1: a revision of the data from the Statistics Office here

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Speaker 1: in the UK, But of course other countries have a

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Speaker 1: similar process, so we don't exactly know what the picture

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Speaker 1: will look like elsewhere, but you know, for now it

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Speaker 1: looks quite positive.

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Speaker 3: Yeah.

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Speaker 2: It certainly gives the government, as the Independent's pointing out,

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Speaker 2: a bit of a boost when it comes to the

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Speaker 2: calculations around the performance of the UK's economy. And it

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Speaker 2: is interesting that the o ands is able to provide

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Speaker 2: this more detailed data, richer data, as they describe it,

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Speaker 2: from things like the costs incurred by businesses and also

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Speaker 2: that allows them to adjust for price levels at a

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Speaker 2: much more detailed level. But this, as you say, comes

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Speaker 2: with the note of caution that there could be revisions

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Speaker 2: that come from other countries.

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Speaker 1: Well, absolutely, twenty twenty the UK economy still did shrink

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Speaker 1: five point eight percent. Obviously the pandemic twenty twenty one

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Speaker 1: revive up from seven point six percent to eight point

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Speaker 1: seven cents, So that was the bounce back after covid Okay, Well.

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Speaker 2: Let's turn to Ukraine next, where President Zelenski is replacing

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Speaker 2: his Defense minister Allegate after allegations that the department overpaid

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Speaker 2: for military supplies. This as we are also watching a

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Speaker 2: key meeting today between Vladimir Putin and Turkey's Right to

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Speaker 2: Tia Berduwan, who are going to be discussing the Black

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Speaker 2: Sea grain export deal that Russia abandoned in July. Are

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Speaker 2: europe correspondent Maria today I was with us for the latest.

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Speaker 2: Good morning to you, Maria. What is the significance first

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Speaker 2: of all of President Zelenski replacing Alexi Rasnikoff.

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Speaker 6: Well, it's a huge announcement that was made yesterday by

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Speaker 6: the Ukrainian president. As you see, this is the biggest

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Speaker 6: or would be the biggest reshuffle in his cabinet, but

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Speaker 6: also really going to the core of the defense ministry

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Speaker 6: by removing the defense Minister who had been on the

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Speaker 6: job for the entirety of the war. And of course

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Speaker 6: we know him pretty well because this is an individual

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Speaker 6: that you would see repeatedly at NATO meetings. You would

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Speaker 6: see him also at cabinet meetings with other European defense ministers,

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Speaker 6: US officials two always calling for this idea of more

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Speaker 6: weapons for Ukraine. So the announcement yesterday by Selensky again

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Speaker 6: saying a lot of this had to do with allegations,

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Speaker 6: the idea that maybe the Defense ministry overpaid for things

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Speaker 6: like food and uniforms for the army. Of course, the

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Speaker 6: more you overpay, the more you have money that is

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Speaker 6: swirling around that may end up in well, non official pockets.

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Speaker 6: So that is the announcement by Selensca and the significance

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Speaker 6: of it beyond the implications on the battlefield and the

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Speaker 6: counter offensive, which I'm not sure there will be many,

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Speaker 6: because we should note that the Defense Minister obviously oversees

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Speaker 6: the operations, he oversees the funding, and he makes sure

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Speaker 6: that the army has supplies, but he doesn't really handle

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Speaker 6: the actual combat. That has left to generals. But overall,

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Speaker 6: what it shows once again is that persons. Lensky has

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Speaker 6: been very mindful of this idea of corruption and tackling corruption.

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Speaker 6: Remember a month ago he was also announced that he

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Speaker 6: dismiss recruitment officers who were also accused of mishandling funding.

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Speaker 6: A lot of this goes into the idea that Ukraine

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Speaker 6: has to show that it's a serious country a because

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Speaker 6: it is dependent on external funding. We know that billions

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Speaker 6: of dollars euros have gone into this country, so they

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Speaker 6: have to show that there is not just value for money,

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Speaker 6: but obviously that they take seriously this money. And then

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Speaker 6: too politically, remember, this is a country that wants to

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Speaker 6: join the European Union. This is a country that says

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Speaker 6: will make tackling corruption and Ukraine has for many years

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Speaker 6: a bad reputation in terms of that issue. So it's

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Speaker 6: also political here. He wants to send a political signal

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Speaker 6: that not only they're not brushing this under the car,

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Speaker 6: but but he's actually tackling head on.

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Speaker 2: Yeah.

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Speaker 1: Absolutely, the strength of governance in Ukraine was an issue

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Speaker 1: pre war. How big a problem do we think that

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Speaker 1: corruption is in Ukraine's war effort? Right now though, Look that.

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Speaker 6: I would not get into because I feel like, again

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Speaker 6: there's a number of things before we can say that

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Speaker 6: the Defense Minister himself, and obviously there's significance to that,

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Speaker 6: because this is a man that oversees the ministry and

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Speaker 6: the governmental operation when it comes to the war effort,

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Speaker 6: which is tremendous as we know for the past two years,

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Speaker 6: this war almost going on.

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Speaker 2: Now.

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Speaker 6: Look, the reality is at this point he has denied

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Speaker 6: the allegations. It is unclear whether Ukraine also by doing this,

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Speaker 6: presidence Lansky believes that he has benefited from this personally.

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Speaker 6: We also know that the Ukrainian parliament will have to

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Speaker 6: vote this move and vote in favor to remove him,

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Speaker 6: and then of course the investigation continues. So I think

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Speaker 6: the entire size of this remains to be seen. But

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Speaker 6: again I would go back to this idea of showing

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Speaker 6: value for money. When it comes to Ukraine, we know

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Speaker 6: that again billions have been pumped into this country, not

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Speaker 6: just in weapons but also in direct funding, and of

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Speaker 6: course this is a counter offend. The shift that we

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Speaker 6: know is proven difficult, and it's proven hard. So also

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Speaker 6: for Ukrainians, there's a whole interest in this being quote

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Speaker 6: unquote cleaned and focusing on the battle.

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Speaker 2: It's turned to that meeting between Presidents put and Urduwan

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Speaker 2: set to take place later to do with grain exports.

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Speaker 2: What's at stake in this meeting, Well, it.

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Speaker 6: Has to do with the grain exports and overall it

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Speaker 6: has to do with more than thirty million tons of

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Speaker 6: food that were exported through this grain deal. Remember that's

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Speaker 6: what the United Nations has credited this deal for. This

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Speaker 6: is a deal that was mediated by the United Nations,

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Speaker 6: as I say, but also Turkey, connecting Ukraine and Russia.

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Speaker 6: What we know now you said this at the top

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Speaker 6: of the show, is that Russia pulled out of it

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Speaker 6: unilaterally last month. What it changes here is that a

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Speaker 6: lot of the ships that would be crucial in terms

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Speaker 6: of getting at these food components and grain are now

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Speaker 6: being treated by Russia and Ukraine too, because remember that

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Speaker 6: was a tid for ted response from the Ukrainian government.

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Speaker 6: They're now being treated as potentially military cargo and therefore

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Speaker 6: potentially a military target. What Urduwan hopes to get in

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Speaker 6: this deal is Russia back at it to make sure

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Speaker 6: that we go back to a format that we had

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Speaker 6: before where both Russia and Ukraine would facilitate ships like

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Speaker 6: this that export food to operate safely in the Black Sea.

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Speaker 6: We know that ERDA one once as a United Nations,

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Speaker 6: wants as a European Union, wants us to Ukraine wanted

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Speaker 6: it to. The question is whether he can get Ladimir

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Speaker 6: put Into agree to it.

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Speaker 1: Yeah. Absolutely, and we futures remain pretty volatile on that prospect. Really, Maria,

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Speaker 1: thank you so much for being with us. That is

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Speaker 1: our europe correspondent Mura today.

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Speaker 2: A tontal different story. Now we've been reporting regularly over

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Speaker 2: the past few months, but how a shortage of rental

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Speaker 2: properties in London has driven it double digit increases in

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Speaker 2: rental costs. But it's a problem that's being seen in

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Speaker 2: many major cities across Europe. This is something that Bloomberg

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Speaker 2: Sarah Jacob has been looking into and she joins us

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Speaker 2: now for more. Good morning to you, Sarah. Why is

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Speaker 2: it that renters are finding it more hard now to

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Speaker 2: find apartments they did before and how widespread is this problem?

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Speaker 5: Hi?

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Speaker 7: Yeah, They're a host of factors that are you know,

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Speaker 7: affecting cities from Zurich to Dublin, Lizbond and Amsterdam it's

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Speaker 7: basically a mismatch between demand and supply. On one hand,

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Speaker 7: you have rising modket rates which have forced many people

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Speaker 7: to postpone buying a home or an apartment. There's higher

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Speaker 7: migration in many cities and that's increased the demand and

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Speaker 7: the rental market. On the supply side, there's a small

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Speaker 7: size of European cities, you know, and higher concentration of

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Speaker 7: historic and low rise buildings in Europe. That's sort of

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Speaker 7: coupled with an environment of high inflation rates and in

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Speaker 7: turn high construction costs, which is impacting supplies. So these

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Speaker 7: factors combined are resulting in rents arising across several large

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Speaker 7: cities in Europe.

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Speaker 1: What are the factors then causing this sort of housing

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Speaker 1: shortage in a number of different cities.

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Speaker 7: So, I mean, in many ways governments have identified the

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Speaker 7: problem that you know, there is this this severe shortage,

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Speaker 7: and they introducing plans to tackle it. But the other

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Speaker 7: main factor is basically just inflation and green policies, you know,

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Speaker 7: which is raising construction costs. They aren't enough, they aren't

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Speaker 7: able to build enough or build fast enough to keep

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Speaker 7: up with this rising demand.

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Speaker 2: What about the role of migration, all of this as well.

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Speaker 2: Population growth in some of these cities is part of

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Speaker 2: what this story has been playing out.

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Speaker 1: Yes, yes, that's right.

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Speaker 7: So in a lot of large cities of governmental tax

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Speaker 7: breaks and they're leading to a lot of global companies

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Speaker 7: setting up offices in big cities, which is it sort

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Speaker 7: of turn attracting a lot of high skilled workers from

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Speaker 7: other countries. So in Lisbon your locals who are protesting

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Speaker 7: against being priced out of the city center, as as

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Speaker 7: an influx of you know, wealthy foreigners. In many cities

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Speaker 7: in Eastern Europe, there's been an influx of Ukrainians fleeing

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Speaker 7: the war. In Amsterdam, for instance, the municipality has said

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Speaker 7: that in twenty twenty two the population growth and migration

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Speaker 7: can even be referred to is extreme. So it's definitely

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Speaker 7: a big factor play note.

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Speaker 1: Here, and what impact does it have then on the

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Speaker 1: broader economy? I mean, if people are having to pay

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Speaker 1: so much of their income on rental costs.

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Speaker 7: Yeah, you're seeing you know a lot of those people

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Speaker 7: who can't afford to buy homes are sort of being

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Speaker 7: forced to, you know, give up a larger portion of

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Speaker 7: their income on housing. You're seeing in places like Dublin

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Speaker 7: and Lisbon, young professionals are moving back in with their

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Speaker 7: parents in many instances. In other areas, people are being

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Speaker 7: forced to find apartments in the suburbs or satellite out

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Speaker 7: that they're commuting into biggest cities.

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Speaker 2: What are people doing then to get apartments in these

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Speaker 2: high demand places.

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Speaker 7: Yeah, real estate agents are seeing you know, several like

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Speaker 7: one hundred two hundred responses on each partner listics, So

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Speaker 7: people are starting to get a bit creative to stand out.

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Speaker 7: In Amstem, for instance, we spoke to a mother who

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Speaker 7: is actively searching for an apartment for her son as

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Speaker 7: he prepared to go to university this month. Then she

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Speaker 7: was searching for about four four months, logging in ten

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Speaker 7: times a day on online to look at websites that

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Speaker 7: she wasn't successful, and she finally started getting more viewings

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Speaker 7: when she created an ad or a resume of sorts

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Speaker 7: for her son and put up his pictures and interest

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Speaker 7: and shared it on social media. In Zurich, your seeing

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Speaker 7: apartment hunters, you know, taking wine, chocolates and their bag

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Speaker 7: statements to viewing. So people are really starting to get creative.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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