WEBVTT - $150 Oil Becomes Possible, Solar Eclipse Power Shift, Bankers Leaving London 0:00:02.520 --> 0:00:10.640 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:10.680 --> 0:00:14.080 Daybreak Europe podcast. Good morning, It's Wednesday, the twelfth of August. 0:00:14.160 --> 0:00:17.159 I'm Stephen Carroll in London. Coming up today the one 0:00:17.239 --> 0:00:20.360 hundred and fifty dollars oil risk. Doubts over a Hormoes 0:00:20.440 --> 0:00:23.720 deal push crude hire as Bloomberg Intelligence says a frozen 0:00:23.880 --> 0:00:28.640 conflict piles more pressure on prices. Europe's solar aligned power 0:00:28.680 --> 0:00:33.920 system braces for today's solar eclipse. Plus London's white collar exodus. 0:00:33.920 --> 0:00:37.519 Why ninety thousand bankers, lawyers and other professionals could be 0:00:37.640 --> 0:00:41.280 leaving the UK capital in the coming years. Let's start 0:00:41.280 --> 0:00:44.519 with the roundup of our top stories. Oil prices are 0:00:44.520 --> 0:00:47.920 continuing to grind higher. A skepticism grows over the prospects 0:00:47.920 --> 0:00:49.960 for a deal to restore energy flows through the Strait 0:00:50.000 --> 0:00:53.000 of Hormuz. Brett Cruise now trading above eighty nine dollars 0:00:53.040 --> 0:00:55.760 a barrel after jumping by around twelve percent over the 0:00:55.760 --> 0:01:00.000 past five sessions. Bloomberg Intelligence says a frozen US eround 0:01:00.320 --> 0:01:04.000 conflict is now the most plausible scenario. It warrants that 0:01:04.000 --> 0:01:06.240 that could push oil into a range of one hundred 0:01:06.280 --> 0:01:08.520 to one hundred and fifty dollars a barrel, with the 0:01:08.600 --> 0:01:12.280 upper end becoming increasingly possible as market buffers road No 0:01:12.400 --> 0:01:15.039 i'm ray Dan is a senior fellow at the Washington 0:01:15.080 --> 0:01:16.840 Institute for Near East Policy. 0:01:17.200 --> 0:01:19.360 It is unlikely that we're going to go back to 0:01:19.400 --> 0:01:22.559 the maritime arrangement that existed in the Strait of Home 0:01:22.760 --> 0:01:27.320 was before the Iran War. Iran has gained immense influence 0:01:27.400 --> 0:01:30.319 in the street. It will not let go of this 0:01:30.720 --> 0:01:32.920 leverage it has obtained easily. 0:01:33.400 --> 0:01:35.680 No i'm ray Dan's assessment comes as the latest US 0:01:35.680 --> 0:01:39.200 government forecast for oil supply disruption from the war to 0:01:39.240 --> 0:01:42.440 reach about six hundred thousand barrels a day until the 0:01:42.520 --> 0:01:45.400 end of next year. Adding to the squeeze rushes overseas, 0:01:45.400 --> 0:01:47.840 cruise shipments have fallen to their lowest since May, and 0:01:47.960 --> 0:01:51.880 it continued Ukrainian strikes from its oil infrastructure. Keith had 0:01:51.920 --> 0:01:54.840 five Russian refineries in the first week of August and 0:01:54.920 --> 0:01:57.760 another two in recent days. With the rise in oil 0:01:57.800 --> 0:02:01.040 prices comes as the US and both appear to be 0:02:01.080 --> 0:02:05.080 hardening their positions in negotiations over the Straight OFFEMUS. That's 0:02:05.080 --> 0:02:08.720 despite Pakistan's defense ministers, saying the two countries are close 0:02:09.000 --> 0:02:12.720 to some sort of arrangement. Former US Deputy Secretary of 0:02:12.760 --> 0:02:14.840 State Wendy Sherman is more skeptical. 0:02:15.520 --> 0:02:18.880 I wish I did share Pakistan's optimism, and I will 0:02:18.919 --> 0:02:21.359 hope that there is more reality to this. 0:02:21.280 --> 0:02:22.440 Than I think there is. 0:02:23.200 --> 0:02:24.640 We are definitely out. 0:02:24.560 --> 0:02:29.440 Of stalemate, Wendy Sherman speaking there. Her view comes as 0:02:29.480 --> 0:02:31.960 President Trump told reporters last night that he's in no 0:02:32.080 --> 0:02:34.080 rush to secure a deal and that the US is 0:02:34.120 --> 0:02:37.520 in a very good position along the conflict continues could 0:02:37.560 --> 0:02:39.959 also matter for the FED, with the Iran war adding 0:02:40.000 --> 0:02:44.160 to inflation pressures. Ahead of crucial US inflation data later today, 0:02:44.440 --> 0:02:47.440 Boston Fed President Susan Collins has told The Financial Times 0:02:47.520 --> 0:02:51.040 she could back a September rate ike if the data dictates, 0:02:51.400 --> 0:02:55.919 warning inflation remains too high. A split between the United 0:02:55.919 --> 0:02:59.400 States and Japan over Bank of Japan policy risks undermining 0:02:59.440 --> 0:03:02.600 their joint efforts to support the en. Japan's Prime Minister 0:03:02.680 --> 0:03:06.400 Sanae Atakichi is wary of raising interest rates too high, 0:03:06.480 --> 0:03:10.680 too fast, while US Treasury Secretary's got bestnces monetary tightening 0:03:10.760 --> 0:03:13.760 is crucial to supporting the currency. The EN has already 0:03:13.760 --> 0:03:16.280 given back some of the gains from the first coordinated 0:03:16.440 --> 0:03:20.400 US Japan intervention since nineteen ninety eight. Our Market's Live streates, 0:03:20.400 --> 0:03:24.359 as Mark Cranfield says, the boj's next move will be crucial, So. 0:03:24.240 --> 0:03:27.360 The BOJ speakers will really have a big sway on 0:03:27.440 --> 0:03:30.799 whether or not people get serious about a September rate hike. 0:03:30.840 --> 0:03:34.679 But it probably needs September and October to come back 0:03:34.720 --> 0:03:37.000 to back for people to really get behind the. 0:03:37.000 --> 0:03:41.080 In in Spoomberg's Mark Cranfield expectations are building for another 0:03:41.160 --> 0:03:44.480 BOJ rate hike in September or October. Is the EN 0:03:44.760 --> 0:03:49.760 again near one sixty to the dollar? Core We've shares 0:03:49.800 --> 0:03:53.720 have surged after booming AI demand bolstered the company's sales growth. 0:03:53.760 --> 0:03:56.320 The computing provider raised its outlook to a range of 0:03:56.360 --> 0:03:59.480 twelve point four billion dollars to thirteen point two billion 0:03:59.520 --> 0:04:02.320 dollars for the full year after revenue more than doubled 0:04:02.320 --> 0:04:05.440 in the second quarter. Galoria, head of technology research at 0:04:05.480 --> 0:04:08.640 DA Davidson, says the results are an encouraging step for 0:04:08.680 --> 0:04:09.920 the firm. 0:04:10.360 --> 0:04:11.840 It's incrementally positive. 0:04:12.000 --> 0:04:14.760 There is still a really big question about whether we 0:04:14.800 --> 0:04:18.480 even need neo clouds Whether they're a good business. At 0:04:18.480 --> 0:04:20.320 the base of it is are they getting a good 0:04:20.400 --> 0:04:23.880 enough return on investment to pay for the very expensive 0:04:23.960 --> 0:04:26.640 capital that they have to borrow? And I think that 0:04:26.760 --> 0:04:29.159 what investors are seeing today they took a small step 0:04:29.200 --> 0:04:29.920 in the right direction. 0:04:31.080 --> 0:04:35.000 Ja Davidson's Gloria There Core We've shares rose by more 0:04:35.040 --> 0:04:37.919 than fifteen percent, and after hours trading after the report 0:04:38.320 --> 0:04:41.640 was released, they had been up twenty six percent this 0:04:41.760 --> 0:04:46.120 year through the close. The business, which serves customers like OpenAI, 0:04:46.440 --> 0:04:49.440 Meta and Microsoft, has borrowed tens of billions of dollars 0:04:49.440 --> 0:04:52.920 and is spending heavily on AI chips and data centers 0:04:52.960 --> 0:04:56.360 to meet demand. A German airport has been disrupted by 0:04:56.400 --> 0:04:59.760 a rogue drone, adding to a string of recent incidents. 0:05:00.160 --> 0:05:03.960 Overs Regional Airport was closed for two hours yesterday morning 0:05:03.960 --> 0:05:07.120 after a drone was sighted. Germany's airports have been plagued 0:05:07.120 --> 0:05:10.720 by a series of such events, with one device laden 0:05:10.760 --> 0:05:14.760 with explosives found near a Ukrainian plane last week. Dershpiegel 0:05:14.800 --> 0:05:17.880 has reported that an internal police report isn't ruling out 0:05:18.120 --> 0:05:22.080 foreign involvement. Europe's power grades are preparing for a rare 0:05:22.240 --> 0:05:26.200 solar eclipse later today, which will temporarily cut generation across 0:05:26.279 --> 0:05:29.080 the continent. If skies are clear, solar output good fall 0:05:29.160 --> 0:05:32.920 by about nine point seven gigawatts, with gas, hydroelectric and 0:05:33.000 --> 0:05:36.599 nuclear generation available to cover the shortfall. But for most 0:05:36.600 --> 0:05:38.919 of us, the eclipse will be less about managing power 0:05:38.960 --> 0:05:42.000 supplies and more about the spectacle. Stephen Price, chair of 0:05:42.040 --> 0:05:46.320 the Bristol Astronomical Society, describes what might be in store. 0:05:47.000 --> 0:05:49.760 The light goes dim, silvery kind of a light, not 0:05:49.960 --> 0:05:53.880 like a sunset or sunrise, quite different. Temmet dropped very slightly, 0:05:54.320 --> 0:05:57.039 and also the birds of their singing, they stopped singing. 0:05:57.480 --> 0:06:00.400 So the effect on the crowd is one really all. 0:06:00.960 --> 0:06:03.360 Stephen Price on the eclipse which will fully cover the 0:06:03.400 --> 0:06:07.320 sun in northern Spain and Iceland. In the UK, about 0:06:07.400 --> 0:06:09.720 ninety six percent of the sun will be covered by 0:06:09.800 --> 0:06:13.560 the moon in parts of Cornwall. And those are your 0:06:13.640 --> 0:06:16.520 top stories on the markets this morning. The Mscish Pacific 0:06:16.560 --> 0:06:20.120 Index up by seven tenths of one percent. We have 0:06:20.200 --> 0:06:22.880 got the Cospian sold by three point six percent as well, 0:06:22.920 --> 0:06:26.200 a boosts to s k Heinex and Samsung Electronics shares. 0:06:26.240 --> 0:06:28.920 Eurostok's fifty features are down by a tenth of one 0:06:28.960 --> 0:06:32.280 percent this morning. Forty one hundred fatures are two tenths lower. 0:06:32.320 --> 0:06:35.239 Oil prices eighty nine dollars fifty one for Brent crude 0:06:35.279 --> 0:06:38.040 higher on the day. Natural gas prices arising as well, 0:06:38.040 --> 0:06:39.920 although lower than where they were this time yesterday. The 0:06:39.960 --> 0:06:43.880 Dutch GTF bench markup by one point eight percent, and 0:06:44.000 --> 0:06:46.080 the Japanese NIST training at one hundred and fifty nine 0:06:46.240 --> 0:06:49.320 forty three against the dollar. Well in a moment will 0:06:49.360 --> 0:06:52.920 bring you more on those oil prices grinding higher, plus 0:06:53.000 --> 0:06:56.400 y recruiters see thousands of lawyer and banker jobs moving 0:06:56.560 --> 0:06:59.640 out of London. But another story that caught her eye 0:06:59.640 --> 0:07:02.039 this morning on how best to measure the weakness of 0:07:02.080 --> 0:07:04.560 the en, andnother story that we've been tracking on markets 0:07:04.680 --> 0:07:07.120 as well. Move over the Big Mac index, you now 0:07:07.160 --> 0:07:10.800 need the Katsu Curry Index. Luckily Jeff You from bny 0:07:10.840 --> 0:07:13.320 Mel and a regular here in Boomberg Radio, has created it. 0:07:13.520 --> 0:07:16.600 He argues the index it's a better international price comparison 0:07:16.680 --> 0:07:20.040 for how the retreat of the yen feels in Japan. 0:07:20.120 --> 0:07:22.960 It's trading, as we said, just close to a one 0:07:22.960 --> 0:07:25.520 to sixty against the dollar, not quite there this morning. 0:07:25.600 --> 0:07:28.280 But if you're reflected in purchasing power of curry dishes, 0:07:28.320 --> 0:07:30.960 by Jeff's measure of the dollar should buy just around 0:07:31.160 --> 0:07:34.960 sixty two yen. That suggests the foreign exchange market significantly 0:07:35.080 --> 0:07:37.360 undervaluing the currency. If he used the Big Mac Index, 0:07:37.400 --> 0:07:40.480 it's around eighty yen now. He uses prices and data 0:07:40.480 --> 0:07:43.480 from the world's biggest curry rice chain, coco Ichibanya for 0:07:43.520 --> 0:07:45.960 his measurements. He says that if the price of a 0:07:46.000 --> 0:07:48.720 katsu curry or a bowl of raman becomes prohibitive in Japan, 0:07:48.720 --> 0:07:52.200 it will probably lead to growing calls for a policy change, 0:07:52.520 --> 0:07:55.280 and if the goal is to bring purchasing power in 0:07:55.360 --> 0:07:59.040 line with high income countries, the index shows that the 0:07:59.160 --> 0:08:02.280 en needs to be a lot stronger. Great trying to 0:08:02.280 --> 0:08:04.080 be thinking about kats who curry. I got to visit 0:08:04.080 --> 0:08:06.120 one of my favorite places for it in London yesterday. 0:08:06.160 --> 0:08:07.800 Ten of cats who near Angel In case you wanted 0:08:07.840 --> 0:08:11.440 a recommendation, I've also had the Toyota curry at the 0:08:11.480 --> 0:08:14.880 Toyota factory in Nagoya, which where the rice comes in 0:08:14.880 --> 0:08:17.280 the shape of a car. So those are my my 0:08:17.360 --> 0:08:21.160 Katsu curry facts for you this morning. Let's bring you 0:08:21.160 --> 0:08:23.320 more now on the pressure on oil prices. As the 0:08:23.320 --> 0:08:27.720 global benchmark Brent crude hovers close to ninety dollars a barrel, 0:08:27.800 --> 0:08:30.720 or oil trading reporter Wrongway now joins us now for 0:08:30.920 --> 0:08:35.560 more Wrongway, we've seen Brent gain some twelve percent over 0:08:35.559 --> 0:08:38.400 the past five seconds. What does this tell us about 0:08:38.440 --> 0:08:41.440 how traders are reading the latest Iran war headlines? This 0:08:41.480 --> 0:08:43.839 has been burg intelligence. Now these price is going as 0:08:43.920 --> 0:08:47.440 high as one hundred and fifty dollars is being increasingly plausible. 0:08:47.840 --> 0:08:51.800 Right, So the current brand prices is essentially a very 0:08:51.840 --> 0:08:55.679 clear reflection of how the markets, how trade us are 0:08:55.760 --> 0:08:59.840 actually digesting and viewing the disruption at the Street of 0:09:00.080 --> 0:09:02.760 moves as a result of this conflict. Now, like you 0:09:02.920 --> 0:09:07.160 rightfully mentioned, Brent has climbed to above around ninety dollars 0:09:07.200 --> 0:09:10.680 a barrel, and it's the six consecutive day of gains. 0:09:10.880 --> 0:09:14.840 And that comes even as oil prices have been reacting 0:09:14.880 --> 0:09:18.480 to headlines in the past couple of days, and we 0:09:18.520 --> 0:09:22.200 are constantly flip flopping between signs of optimism as well 0:09:22.240 --> 0:09:27.080 as signs of perhaps increasing signs of risks. That shows 0:09:27.080 --> 0:09:30.520 that perhaps the conflict could be on track for escalation. 0:09:30.880 --> 0:09:34.480 Let's just take this morning, for instance, the market here 0:09:34.480 --> 0:09:38.480 in Asia opened on comments from Pakistan that both sides 0:09:38.520 --> 0:09:41.000 are close to some sort of arrangement to work out 0:09:41.000 --> 0:09:44.880 a deal, and Trump's comments latest comments quickly switched out 0:09:44.960 --> 0:09:48.920 such optimism or such hopes with comments like we totally 0:09:48.960 --> 0:09:53.080 control hormus and other comments, including the fact that he 0:09:53.360 --> 0:09:57.280 is saying that he still doesn't trust Iran. Now, primarily 0:09:57.440 --> 0:10:00.520 this price rareue, we're saying it's still being driven by 0:10:00.559 --> 0:10:03.000 supply risk sentiments. 0:10:03.080 --> 0:10:04.640 It's really not a demand story. 0:10:04.760 --> 0:10:08.199 Everything that's happening at the street, it's all about supply. 0:10:09.000 --> 0:10:12.480 Let's take the latest estimates from the USIE, for instance, 0:10:13.120 --> 0:10:17.840 they're estimating that the homeless disruptions is probably it's affecting 0:10:17.880 --> 0:10:22.120 about roughly six hundred thousand barrels per day, and they 0:10:22.160 --> 0:10:26.120 expect such disruptions or rather such an impact oil flows 0:10:26.120 --> 0:10:29.400 tour possist through and twenty twenty seven, and pretty much 0:10:29.440 --> 0:10:32.480 the testament to the fact that how this conflict could 0:10:32.520 --> 0:10:36.240 result in lasting I would say, lasting impacts or damages 0:10:36.360 --> 0:10:40.120 to the oil market or the oil landscape as a whole. 0:10:40.600 --> 0:10:43.800 Yeah, I mean, it does really complicate the situation and 0:10:43.840 --> 0:10:46.679 as you say, the hardening rhetoric from the US and 0:10:46.800 --> 0:10:49.600 around doesn't give any great optimism that we're going to 0:10:49.640 --> 0:10:51.720 see an increase in traffic de the Strait of Hormones. 0:10:51.760 --> 0:10:57.160 But what is exactly happening in that waterway today? And also, 0:10:57.200 --> 0:10:59.560 of course we're watching the moves in the Red Sea 0:10:59.600 --> 0:11:00.280 as well. 0:11:00.440 --> 0:11:03.000 Well, maybe let's talk about the Strait of Hormones since 0:11:03.080 --> 0:11:06.840 it was the first waterway that was effectively largely affected 0:11:06.920 --> 0:11:10.280 during the onset of this conflict earlier this year. So 0:11:10.320 --> 0:11:13.160 as of now, the Street of Hormones, it remains effectively 0:11:13.320 --> 0:11:17.160 close to normal commercial traffic. But of course, like what 0:11:17.240 --> 0:11:19.760 we have talked about earlier in the program, when there's 0:11:19.800 --> 0:11:21.720 money to be made, there will be actors who are 0:11:21.760 --> 0:11:24.240 willing to take the risk and allow some flows to 0:11:24.320 --> 0:11:27.280 work out and of course earn a quick but through 0:11:28.000 --> 0:11:31.960 of course mediating or arranging for the use to allow 0:11:32.000 --> 0:11:36.240 some of these barrels of oil to continue exiting the Gulf. 0:11:36.600 --> 0:11:39.520 And of course that also includes other OPEC producers like 0:11:39.559 --> 0:11:43.480 what we've mentioned earlier, such as Saudi Arabia UAE. 0:11:43.559 --> 0:11:45.880 With various forms of workarounds. 0:11:46.040 --> 0:11:49.960 So essentially, even though traffic has been I would say, 0:11:50.240 --> 0:11:52.760 by and large, commercial traffic through the Strait of Hormones 0:11:52.880 --> 0:11:55.760 is still officially close because of the risks of attacks 0:11:55.760 --> 0:11:58.880 to tankers as a result of this conflict, that is 0:11:58.920 --> 0:12:02.720 still in flux, but there will be actors, there will 0:12:02.720 --> 0:12:05.760 be tankers that would be willing to take the risk 0:12:06.240 --> 0:12:09.520 for the chance to earn higher profits during the war, 0:12:09.800 --> 0:12:12.000 and that as a result has helped to cap some 0:12:12.120 --> 0:12:14.880 of the gains in oil. So if we recall much 0:12:14.920 --> 0:12:18.880 earlier in the conflict, much perhaps in the first month 0:12:18.920 --> 0:12:22.880 of the war, we have seen prices very often breaking 0:12:22.960 --> 0:12:26.439 past one hundred dollars mark, and as the conflicts, as 0:12:26.440 --> 0:12:30.400 the conflict continues to persist, more and more players have 0:12:30.440 --> 0:12:33.520 started to adapt to this. We can essentially call this 0:12:33.559 --> 0:12:36.160 a new normal, and they started the price in various 0:12:36.160 --> 0:12:39.719 factors such as additional vessels required to do ship the 0:12:39.760 --> 0:12:43.360 ship transfers to allow the safe passage of oil or 0:12:43.360 --> 0:12:45.559 oil barrows to be brought out from the Gulf, as 0:12:45.600 --> 0:12:49.360 well as many various other workarounds such as pipelines and 0:12:49.440 --> 0:12:52.280 all these various avenues are being tapped on as the 0:12:52.320 --> 0:12:55.480 conflict continues to persist, and that has kind of helped 0:12:55.880 --> 0:12:58.240 put a cap on the oil prize gains. Of course, 0:12:58.960 --> 0:13:01.400 the second waterway they gonna be talking about the rat 0:13:01.440 --> 0:13:05.800 Sea route. Uh, the risks that occurred in that waterway, 0:13:06.040 --> 0:13:08.280 it's far more I would say, it's a bit more 0:13:08.320 --> 0:13:10.120 recent compared to the Strait of Hormos. 0:13:10.120 --> 0:13:11.600 It's kind of like a recent development. 0:13:11.880 --> 0:13:16.680 In the past month or so, we have seen perhaps 0:13:17.040 --> 0:13:20.600 a lot of we'll see the treads from Hooties. 0:13:20.440 --> 0:13:25.120 UH that has threatened that this root. And what's important 0:13:25.160 --> 0:13:26.920 about the rad Sea root is that it's UH. 0:13:27.320 --> 0:13:30.560 It's a very important waterway for players such as Saudi 0:13:30.559 --> 0:13:33.880 Arabia to draw out oil through the state pipeline we 0:13:33.880 --> 0:13:37.240 talked about earlier. So the oil that cannot come out 0:13:37.240 --> 0:13:39.520 through the Strait of Hormones, some of them it's been 0:13:39.600 --> 0:13:43.520 routed through a pipeline over to a pod that can 0:13:43.600 --> 0:13:48.160 be removed and transit through the raat Sea and continue 0:13:48.200 --> 0:13:51.120 to be brought to its bias in Asia. And when 0:13:51.120 --> 0:13:55.400 the Hooties threatened, that essentially clipped, uh, I would say, 0:13:55.840 --> 0:13:59.240 partially clipped the wings of Saudi's but very quickly, like 0:13:59.320 --> 0:14:04.120 I mentioned earlier, the market continuously looks to adapt. 0:14:03.960 --> 0:14:05.599 And very quickly we have seen. 0:14:05.880 --> 0:14:09.920 A third workaround through Egypt that was being touted, and 0:14:10.080 --> 0:14:12.040 it seems like it's going to be a vicious cycle. 0:14:12.160 --> 0:14:15.400 If more routes are being threatened, oil producers will be 0:14:15.480 --> 0:14:19.880 incentivized to look for more solutions and continue, allowing some 0:14:19.920 --> 0:14:22.120 flows to take place. Of course, if you take a 0:14:22.120 --> 0:14:25.920 step back, by and large, despite all these workarounds, oil 0:14:25.920 --> 0:14:28.440 flows are largely curtailed as a result of this war. 0:14:29.400 --> 0:14:31.680 And of course, another big factor that's affecting the markets 0:14:31.720 --> 0:14:35.560 too is what's happening in the war in Ukraine and 0:14:35.680 --> 0:14:40.560 Ukraine's attacks on Russian energy infrastructure as well, particularly oil refineries. 0:14:40.880 --> 0:14:43.160 How is that affecting global markets. 0:14:43.760 --> 0:14:47.600 It's pretty much if you view both conflicts together, it's 0:14:47.720 --> 0:14:52.040 essentially a double whammy. But I would say the specifics 0:14:52.040 --> 0:14:55.560 of the markets or the segments of the markets being affected, 0:14:55.600 --> 0:14:58.360 it's kind of different. So when we talked about the 0:14:58.400 --> 0:15:01.360 earlier US irun con flick, it was very much a 0:15:01.440 --> 0:15:05.080 cold oil story, and much of the flows being impacted 0:15:05.240 --> 0:15:08.560 would be oil being produced in the Middle East coming 0:15:08.560 --> 0:15:11.680 out to major buyers such as those in Asia. However, 0:15:11.760 --> 0:15:15.040 when we look at the Russian story, a lot more 0:15:15.080 --> 0:15:19.520 of the beneficiaries of Russian oil products would be found 0:15:19.600 --> 0:15:23.960 actually in Europe and as a result already I would 0:15:24.000 --> 0:15:26.880 say it's on the west of Swiss and of course 0:15:27.120 --> 0:15:30.680 with the recent attacks, which of course have been scaling 0:15:30.760 --> 0:15:34.480 up in the recent weeks as well, that has largely 0:15:34.520 --> 0:15:40.080 impacted the markets for oil products such as gas oil 0:15:40.160 --> 0:15:43.600 and gasoline. This damage is actually pretty severe in the 0:15:43.640 --> 0:15:49.000 recent weeks. Let's take the most recent example for instance, 0:15:49.480 --> 0:15:52.440 it is the damage is so severe that Russia, one 0:15:52.440 --> 0:15:55.360 of the major oil product producers, it has actually begun 0:15:55.800 --> 0:16:00.800 starting to import oil products like gasoline from producers like India, 0:16:00.840 --> 0:16:03.360 and based on our reporting, this has happened for the 0:16:03.400 --> 0:16:07.240 first time ever. It's really a clar cut example of 0:16:07.280 --> 0:16:11.040 how desperate things are for Russian for the Russian producers, 0:16:11.320 --> 0:16:14.800 that a producing nation is actually resulting to importing from 0:16:14.840 --> 0:16:18.600 other producers. And that is pretty much the clearest sign 0:16:18.800 --> 0:16:21.400 of the damaged the extent of damage that Russia has 0:16:21.840 --> 0:16:25.200 of taken as a result of these cumulative strikes. 0:16:25.600 --> 0:16:27.960 Yeah, and as you say, compounding these issues in these 0:16:28.000 --> 0:16:30.600 two conflicts. Wrong Way Now or Oil Trading Reporter, thank 0:16:30.640 --> 0:16:32.760 you very much for bringing us through the details of 0:16:32.800 --> 0:16:35.760 all of those trands that are pushing oil prices higher. 0:16:35.840 --> 0:16:39.080 As we're watching brank crude approach that ninety dollars a 0:16:39.160 --> 0:16:44.080 barrel mark. Stay with us. More from Bloomberg Daybreak Europe 0:16:44.080 --> 0:16:48.120 coming up after this. Now in the UK, the Prime 0:16:48.120 --> 0:16:51.120 Minister's push to drive economic growth in areas outside of 0:16:51.120 --> 0:16:53.680 London could see some ninety thousand jobs move away from 0:16:53.680 --> 0:16:56.520 the capital over the next five years. For more details 0:16:56.560 --> 0:16:59.200 on the analysis and the recruitment firm, Robert Walters our 0:16:59.280 --> 0:17:02.040 UKA Politics. James Wilcock is with me now. 0:17:02.280 --> 0:17:02.560 James. 0:17:02.560 --> 0:17:05.040 First of all, what does the data from Robert Walter's show. 0:17:05.000 --> 0:17:07.479 So Steven Robert Walters are projecting these jobs are going 0:17:07.520 --> 0:17:10.160 to be going to the likes of Manchester, the Midlands 0:17:10.160 --> 0:17:11.600 and New Yorkshire. Now they put us down to a 0:17:11.720 --> 0:17:14.879 number of reasons. It's really expensive to live in London 0:17:15.440 --> 0:17:18.280 and so working from home means shifting outside London makes 0:17:18.280 --> 0:17:20.320 a lot of sense for some people. If you look 0:17:20.320 --> 0:17:22.760 at like Deloitte Goldman in the Bank of England, a 0:17:22.800 --> 0:17:26.840 lot of big organizations have already pre Andy Burnham been 0:17:26.880 --> 0:17:29.880 setting up offices outside of London. And then it has 0:17:29.920 --> 0:17:33.119 to be said they say that Andy Burnham's agenda and 0:17:33.200 --> 0:17:36.800 helping to rebounce power away from London is going to 0:17:36.800 --> 0:17:37.600 play a big factor. 0:17:38.240 --> 0:17:38.359 Now. 0:17:38.400 --> 0:17:42.720 Look, it's important to note that London is colossal. Four 0:17:42.760 --> 0:17:46.399 point nine million people are employed living in Greater London, 0:17:46.480 --> 0:17:48.960 so ninety thousand versus four point nine million, it's still 0:17:49.040 --> 0:17:51.840 less than two percent moving out. But last year was 0:17:52.000 --> 0:17:55.840 the first year the city's population fell since the nineteen 0:17:55.960 --> 0:18:00.560 eighties barring the pandemic, and so there is it seems 0:18:00.680 --> 0:18:04.440 a bit of a trend to moving income, commerce, productivity 0:18:04.560 --> 0:18:07.480 outside of London. One caveat I will say, though, in 0:18:07.560 --> 0:18:10.840 sort of Robert Walters's report is they say that senior 0:18:10.880 --> 0:18:13.960 managers are still sticking around the capitol. It's often the 0:18:14.040 --> 0:18:16.000 junior staff who are being hired elsewhere. 0:18:16.440 --> 0:18:18.400 So where it is likely to benefit then from these 0:18:18.480 --> 0:18:21.640 jobs moving And what does it mean for the Prime 0:18:21.680 --> 0:18:24.639 Minister's ambition for growth in every postcode. 0:18:25.280 --> 0:18:27.240 I think one thing that's going to be quite interesting 0:18:27.240 --> 0:18:30.119 to watch play out is all cities is areas. There 0:18:30.160 --> 0:18:32.360 are big transport links to the areas where you can 0:18:32.400 --> 0:18:35.640 still have kind of large agglomeration effects. And in terms 0:18:35.640 --> 0:18:38.560 of this idea of growth in every postcode, Robert Walters 0:18:38.560 --> 0:18:41.280 do expect that say nine billion pounds or so of 0:18:41.320 --> 0:18:44.879 employers spending are going to be moving these regional areas 0:18:44.920 --> 0:18:48.240 like Manchester and Leeds and Birmingham all over the next 0:18:48.240 --> 0:18:51.560 five years. Now this is interesting because although we haven't 0:18:51.600 --> 0:18:54.560 yet seen the detail of what is in this devolution 0:18:54.640 --> 0:18:57.119 agenda that's supposed to come an autumn in a white paper, 0:18:57.520 --> 0:19:02.440 the big flagship promise is that a mayors are going 0:19:02.480 --> 0:19:05.760 to get shares of local income tax and business rates. 0:19:05.880 --> 0:19:07.800 And this is important because the UK is one of 0:19:07.840 --> 0:19:10.960 the most fisically centralized countries in the OECD. Only five 0:19:11.000 --> 0:19:14.880 percent of taxes and twenty percent of spendingcases are controlled locally, 0:19:15.440 --> 0:19:18.560 and so if mayors have more money to play with, 0:19:18.720 --> 0:19:21.680 they are incentivized to grow more and therefore they get 0:19:21.680 --> 0:19:24.320 a bigger take of the sort of tax. So the 0:19:24.359 --> 0:19:28.440 idea behind a lot of this is you can therefore 0:19:28.480 --> 0:19:32.360 incentivize growth. Some of the problems even with this, how 0:19:32.440 --> 0:19:34.720 quickly is it all going to come about? I mean, 0:19:34.800 --> 0:19:38.639 currently mayors have two percent of all the staff in 0:19:38.680 --> 0:19:42.240 Whitehall and less than one percent of all of Whitehall's budget. 0:19:42.560 --> 0:19:47.200 By law, they are only allocated one political advisor per mayor. 0:19:47.720 --> 0:19:49.639 So the idea that they are going to be given 0:19:49.680 --> 0:19:53.200 loads of resources sture. Some mayors will do very well, 0:19:53.280 --> 0:19:55.200 some mayors will do very badly. And they'll be regions 0:19:55.240 --> 0:19:57.119 that do well and there'll be some regions that do badly. 0:19:57.560 --> 0:20:01.280 How does the state then equalize that for poorer areas. 0:20:01.480 --> 0:20:03.399 These are all sort of the nitty gritty details that 0:20:03.400 --> 0:20:05.919 we are yet to see from this government. But you know, 0:20:06.040 --> 0:20:08.080 the idea and the idea of some jobs moving is 0:20:08.119 --> 0:20:09.479 certainly I promise someone. 0:20:10.320 --> 0:20:12.360 What does all of this then mean for London, which 0:20:12.400 --> 0:20:14.320 is still the economic engine of the UK. 0:20:15.080 --> 0:20:18.639 Right and that is going to change any big way soon. 0:20:18.840 --> 0:20:20.679 I think one thing that's interesting to note when we 0:20:20.720 --> 0:20:24.280 come back to this recruitment data is smaller and mid 0:20:24.359 --> 0:20:26.960 sized businesses, the kind of new startups that the UK 0:20:27.040 --> 0:20:27.800 prize itself. 0:20:28.040 --> 0:20:29.439 They're now being started elsewhere. 0:20:29.520 --> 0:20:32.760 The costs of doing business are much much much higher 0:20:32.800 --> 0:20:36.240 in London, and so London has the big giants playing 0:20:36.240 --> 0:20:38.960 in And if you've listened to Chancellor John Healey recently, 0:20:39.000 --> 0:20:41.920 the cost of doing business is one of his new 0:20:41.920 --> 0:20:43.960 favorite phrases and one we're likely to hear a lot 0:20:44.000 --> 0:20:47.480 more about how that impacts London is although London is 0:20:47.520 --> 0:20:49.560 still going to be seen as this big growth engine 0:20:49.720 --> 0:20:52.600 a lot of the UK policy makers now are very 0:20:52.680 --> 0:20:56.560 much invested in creating other growth engines around the UK. 0:20:57.160 --> 0:20:59.480 In the long run, that will be better for London 0:20:59.520 --> 0:21:01.280 because it will be and there are many different places 0:21:01.280 --> 0:21:03.359 where growth is coming from, where taxes are coming from. 0:21:03.640 --> 0:21:06.919 In the short run, so much wealth is based in 0:21:07.000 --> 0:21:10.800 London that it is going to mean that London is 0:21:10.960 --> 0:21:14.200 the obvious target for any kind of big tax raising 0:21:14.240 --> 0:21:16.960 measures or other ways to raise revenue to get these 0:21:17.000 --> 0:21:19.080 other councils, these other malities going. 0:21:19.560 --> 0:21:21.960 Thanks for listening to Bloomberg Daybreak Europe. 0:21:22.080 --> 0:21:24.640 If you're enjoying the podcast, give us a follow, leave 0:21:24.680 --> 0:21:26.879 a rating or review, and maybe send it to that 0:21:27.040 --> 0:21:29.840 one friend or colleague who's always trying to keep up 0:21:29.880 --> 0:21:30.480 with the news. 0:21:30.880 --> 0:21:33.080 And if one podcast today isn't enough for you, you 0:21:33.080 --> 0:21:35.880 can also listen to us live every weekday from six 0:21:35.960 --> 0:21:39.000