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

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Speaker 2: This is the Bloomberg Day Bacate podcast. Good morning, It's Tuesday,

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Speaker 2: the tenth of February. I'm Caroline hepkea in London.

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

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Speaker 1: Prime Minister kir Starmer gets the backing of his cabinet

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Speaker 1: as rivals by their time.

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Speaker 2: Bloomberg learns the EU is preparing a path to give

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Speaker 2: Ukraine gradual membership.

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Speaker 1: Plus why the city once known as Europe's oil capital

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Speaker 1: maybe seeing a terminal decline.

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Speaker 3: Let's start with a roundup of our top stories.

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Speaker 1: The British Prime Minister Kre Starmer appears to have won

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Speaker 1: a reprieve from a potential leadership challenge after all members

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Speaker 1: of his cabinet backed him to stay on. It came

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Speaker 1: after a second top advisor resigned and the leader of

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Speaker 1: the Labor Party in Scotland called on Starmer to go

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Speaker 1: across Labour's political spectrum. MP's and ministers posted messages of

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Speaker 1: support on social media. Even potential leadership challengers like former

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Speaker 1: Deputy Prime Minister Andrew Rayner and Health Secretary West streeting

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Speaker 1: at back Starmer.

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Speaker 3: Let's give Kir. Just give Kir that chance.

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Speaker 4: Let him set out how he's going to lead us forward.

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Speaker 1: West Streeting was speaking to a sky News podcast. His

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Speaker 1: comments came after Labour's leader in Scotland, Anna Sarwar called

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Speaker 1: on Starmer to step down.

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Speaker 5: The situation in Downing Street is not good enough. There

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Speaker 5: have been too many mistakes. They promise they were going

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Speaker 5: to be different, but too much has happened.

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Speaker 1: Sorrow's wing of the party faces a wipeout in Scottish

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Speaker 1: parliamentary elections in May, as does Labour's campaign in Wales.

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Speaker 1: The support gives Starmer more time in the top job,

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Speaker 1: but his record low polling and upcoming local elections are

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Speaker 1: adding to a growing sense of crisis in Downing Street.

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Speaker 2: Bloomberg has learned that the European Union is preparing options

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Speaker 2: to embed Ukraine's future EU membership into any piece still

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Speaker 2: with Russia. Former negotiations on EU membership began in twenty

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Speaker 2: twenty four, but the process has been stalled by objections

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Speaker 2: from Hungary. With more his Our chief europe correspondent Oliver Krook.

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Speaker 6: Sources say the options now under consideration include providing Ukraine

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Speaker 6: with the protections that come with EU accession up front,

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Speaker 6: as well as immediate access to some membership rights. At

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Speaker 6: the same time, the Block would give Ukraine a clear

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Speaker 6: timeframe as well as outline the steps that needs to

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Speaker 6: take in order to advance through the formal accession procedure,

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Speaker 6: which normally takes many years and requires the backing of

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Speaker 6: all member states. A draft piece plan anticipates EU membership

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Speaker 6: in twenty twenty seven, with Key receiving some benefits from

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Speaker 6: membership in the interim. In response to questions from Bloomberg,

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Speaker 6: a spokesman for the European Commission said Ukraine's future accession

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Speaker 6: to the EU is part of the discussion on a

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Speaker 6: peace agreement.

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Speaker 3: Oliver Krook Bloomberg Radio.

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Speaker 1: European Center Bank President Christinagaut is urging politicians to push

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Speaker 1: for deeper financial integration fast. The Center banker told the

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Speaker 1: European Parliament the Block urgently needs to improve its growth

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Speaker 1: and activity.

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Speaker 7: These reforms are not obstruct there are the practical foundations

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Speaker 7: of resilience and sovereignty. In a world where economic power

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Speaker 7: is increasingly exercised through finance, technology and trade.

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Speaker 1: The ECB president is calling for faster progress on financial

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Speaker 1: market integration, cutting regulation, and creating a digital version of

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Speaker 1: the Euro. Despite a major report on the need for

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Speaker 1: reform from the Guard's predecessor, Mario Dragi in twenty twenty four,

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Speaker 1: the EU has so far not made significant progress on

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Speaker 1: implementing his recommendations.

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Speaker 2: France's Central Bank Governor of Francois ville War de Gallo

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Speaker 2: surprise many yesterday but announcing that he will step down

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Speaker 2: in June this year, more than a year before the

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Speaker 2: end of his term. Vill Ward de Gallo insists that

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Speaker 2: his decision to leave early is a personal one to

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Speaker 2: allow him to run a charitable foundation for young people. However,

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Speaker 2: the move gifts present Immanuel Macau the opportunity to appoint

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Speaker 2: the next and rather than leaving that decision to his successor,

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Speaker 2: shall our emoshall is Cio at bunk CS.

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Speaker 8: I think it's going to be very normal and usual

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Speaker 8: process in terms of replacements. It's true that his departure

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Speaker 8: wasn't expected, so we think that the ECB will remain,

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Speaker 8: let's say, as independent as it has been the case

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Speaker 8: the in the past. I think we know that in

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Speaker 8: their case, the moundate is more simple than in the US.

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Speaker 8: It's first and foremost about inflation.

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Speaker 2: Shall Ri Emoshall speaking there as polling suggests that the

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Speaker 2: far right National Rally could be in a strong position

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Speaker 2: to win next year's French presidential election.

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Speaker 1: Shares in US insurance brokers were pummeled and trading yesterday

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Speaker 1: after the launch of an AI tool from insurance shopping

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Speaker 1: platform and sure if I. The tool uses chat ebt

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Speaker 1: to compare car insurance rates. The S and P five

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Speaker 1: hundred Insurance index closed down three point nine percent, it's

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Speaker 1: biggest drop since October, with our third j gallaher Aon

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Speaker 1: and Marshall mclannan down significantly. The UK's insurance industry is

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Speaker 1: increasingly seen as a bedrock of the City of London,

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Speaker 1: while France and Germany also have sizeable insurance sectors, but

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Speaker 1: there are those who doubt it can replace the core

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Speaker 1: business of insurance brokers.

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Speaker 2: In a new analysis of living standards, the think tank

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Speaker 2: The Resolution Foundation says a typical lower income British household

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Speaker 2: would have to wait one hundred and thirty seven years

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Speaker 2: to see its living standards double.

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Speaker 3: Bloomberg's U and Potts has.

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Speaker 9: More hyrants and low pay mean work is no longer

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Speaker 9: a root out of poverty for millions of families in

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Speaker 9: the UK. That's the conclusion of a report called Unsung

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Speaker 9: Britain from the Resolution Foundation. It says incomes for poorer

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Speaker 9: families are set to grow just zero point five percent

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Speaker 9: a year across the twenty twenties. In the forty years

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Speaker 9: up to the mid two thousands, the typical disposal of

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Speaker 9: incomes of working aged families in the poorshlf of Britain doubled,

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Speaker 9: growing by one point eight percent a year in real terms.

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Speaker 9: The report says that for many in work, poverty has

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Speaker 9: become a bigger issue than worklessness in London.

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Speaker 3: I'm you in parts of Bloomberg Radio.

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Speaker 2: And those are our top stories for you this morning

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Speaker 2: and now. In terms of the market, stocks are at

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Speaker 2: or around record highs. The MSCI All Country World Index

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Speaker 2: up two tens, MSCI AS Pacific Index at one point

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Speaker 2: three percent to an all time high, the nick A

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Speaker 2: two two five also an all time high. Europeans stop

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Speaker 2: futures that are actually in the red nows that futures

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Speaker 2: are also lower.

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Speaker 3: This morning.

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Speaker 2: The one has surged of the Bloomberg Dollar Spot Index

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Speaker 2: slightly weaker dollar this morning. President Trump saying that his

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Speaker 2: fed pick Kevin Walsh can get the US economy growing

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Speaker 2: at fifteen percent or more versus two point four percent currently.

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Speaker 2: Also results from currying out this morning, so comparable revenue

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Speaker 2: down ten percent, not quite as much or as bad

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Speaker 2: as had been expected, So that when it comes to

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Speaker 2: earnings and the markets this morning in.

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Speaker 1: A moment, more on the reprieve for k Starmer at

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Speaker 1: least for now. Plus is the UK's North Sea oil

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Speaker 1: and gas industry in terminal decline. But another story that

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Speaker 1: we've been reading this morning, the man who became famous

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Speaker 1: for his work on touch screens has gone back to buttons.

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Speaker 1: It's a former Apple designer, Johnny Ive who's unveiled his

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Speaker 1: design for Ferrari's Luche model, which Mark German writes rejects

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Speaker 1: the prevailing tech industry vision of autonomy and screen dominated interiors. Instead,

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Speaker 1: it's got plenty of switches and physical controls, putting the

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Speaker 1: emphastas on the act of driving itself. Now, there are

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Speaker 1: some Johnny I've hallmarks in there, some aluminium components and

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Speaker 1: leather work as well. But interestingly, Johnny I've actually told

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Speaker 1: Mark that electric cars don't need to have a digital

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Speaker 1: interface doesn't have to be all big screens and touch screens,

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Speaker 1: and actually there's value in having buttons to press relief.

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Speaker 10: It is.

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Speaker 2: It's very on brand, isn't it for Ferrari the whole

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Speaker 2: driving experience. I mean, remember, this is an evy vehicle.

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Speaker 2: Is it going to have the raw There's been a

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Speaker 2: huge debate about that in the you know, for car heads,

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Speaker 2: but I just like this that to me, it all

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Speaker 2: it's about sensory design. Are we returning to the idea

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Speaker 2: you know that William Morris frankly pioneered about having in

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Speaker 2: your houses nothing that is not useful or that you

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Speaker 2: believe to be beautiful.

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Speaker 3: I think it's really nice.

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Speaker 2: And of course, Johnny I've would surely be aware of

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Speaker 2: the arts and crafts movement in the UK. So yeah, touch,

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Speaker 2: touch buttons and knobs and things I think is amazing.

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Speaker 1: Okay, you can read that full story on Bloomberg dot

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Speaker 1: com or put a link to in our podcast show Notes.

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Speaker 1: Let's bring you up to date though on the political

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Speaker 1: turmoil in the UK. The Prime Minister appears to be

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Speaker 1: safe in his job for now after his ministers came

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Speaker 1: out to support him following criticism of his appointment of

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Speaker 1: Peter Mandelson as ambassador to the US. Our UK BOLDUC

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Speaker 1: supporter James Wilcock is with us now for more James,

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Speaker 1: why did the cabinet choose to come out and support

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Speaker 1: of Keir Starmer?

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Speaker 4: I think to understand this, you've got to separate it

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Speaker 4: into what's public and what private. Steven, so publicly we

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Speaker 4: know there was a very very very good operation by

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Speaker 4: Downing Street where in the kind of fallout from the

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Speaker 4: Scottish leader Anastaa calling for Kiirs Starmer to go, which

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Speaker 4: again to underline it is the most senior person in

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Speaker 4: labor yet and a country leader of the party calling

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Speaker 4: on the Prime minister to go. You had within the

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Speaker 4: hour or two that followed every single cabinet minister bar

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Speaker 4: Nune being rung up by Downing Street and saying will

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Speaker 4: you back the Prime Minister? If so, will you put

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Speaker 4: that on social media now? And they all did so publicly.

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Speaker 4: It was a good operation. Then in the PLP meeting later,

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Speaker 4: the meeting with sort of the rank and file MPs,

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Speaker 4: MPs that Bloomberg spoke to on the record were unanimously effusive,

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Speaker 4: saying it was the best speech they'd ever seen Starma

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Speaker 4: give saying he came out fighting now to the private

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Speaker 4: stuff off record, so I cannot name these sources. One

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Speaker 4: MP Tod Bloomberg that none of Starmer's potential challenges is

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Speaker 4: ready to launch bid to replace him. So they had

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Speaker 4: little choice but to declare loyalty and asked with another

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Speaker 4: one saying that they had bottled it. And so you

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Speaker 4: can build a picture here of a party that is

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Speaker 4: deeply unhappy but is not ready to contemplate regicide.

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Speaker 3: Yes.

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Speaker 2: Interesting, does this mean that a challenge is off the table?

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Speaker 2: Off the table?

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Speaker 3: Four? Now where do we go from here?

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Speaker 4: I think there are three things we learnd. Point one,

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Speaker 4: as I've kind of already covered, no one wants to

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Speaker 4: be the person wielding the knife here. There is a

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Speaker 4: silent majority currently in the Labor Parliament for keeping Starmer

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Speaker 4: in place. Point two and this is the thing I

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Speaker 4: think we might have missed. Regional parts of the party Scotland, Wales,

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Speaker 4: in Manchester, Berlin, Yorkshire are furious and this they are

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Speaker 4: facing losses in May. They're going to hit them far

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Speaker 4: worse than anyone in Westminster. They might be the spark

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Speaker 4: that does this. And point three Starmer is weak badly

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Speaker 4: damaged and has had an unusually public display of anger,

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Speaker 4: has lost two of US top aids after we're on

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Speaker 4: air yesterday. The Director of Comm's Tim Allen also quit Caroline,

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Speaker 4: and there are reports in the Guards and Times this

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Speaker 4: morning that the cabinet second and most senior civil servant,

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Speaker 4: Quis World, may also be on his way out.

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Speaker 8: James.

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Speaker 1: All of this is happening at a time when the

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Speaker 1: UK economy is actually starting to show signs of improvement.

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Speaker 4: I mean quite step back for a moment from all

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Speaker 4: the political misery and smell the economic roses. Businesses most

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Speaker 4: optimistic in seventeen months, house prices bouncing back all time highs,

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Speaker 4: the Bank of England cussing base rates, expecting inflation to

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Speaker 4: return to was two percent target in spring. And there

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Speaker 4: is even talk, dare I say it, of a revival

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Speaker 4: in productivity. So to quote Callum Pickering from Peel Hunt,

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Speaker 4: the chief economists, if Starmer can just hang on a

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Speaker 4: few months, the narrative can turn in his favor. Well,

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Speaker 4: I will say to around us office, there's another target.

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Speaker 4: If Starmer survives to thirty seven more days, he we've

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Speaker 4: had a longer tenure than Richie Sunak very interesting.

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Speaker 2: Yeah, okay, James, thank you so much for being with us.

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Speaker 2: Our UK politics reporter James Wilcock, stay with us.

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Speaker 3: More from Bloomberg Daybakeube coming up after this.

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Speaker 1: The North Sea oil and gas was once a significant

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Speaker 1: source of revenue for the UK. Today it's in terminal

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Speaker 1: decline and the political fighters on going in Westminster over

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Speaker 1: whether the industry is worth saving. Our energy reporter Algatanas

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Speaker 1: joins us.

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Speaker 3: Now for more on this, I'll go.

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Speaker 1: The UK has been retreating from oil and gas as

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Speaker 1: part of the energy transition.

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Speaker 3: What state is the industry in now? Well, oil and.

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Speaker 10: Guests production started about fifty years ago in the British Nazi,

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Speaker 10: so you can imagine it's now very mature base, which

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Speaker 10: is ninety percent depleted for commercial resources. According to Wood McKenzie,

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Speaker 10: so oil and guests output has fallen to less than

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Speaker 10: a quarter of its peak in the aging Nazi, while

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Speaker 10: jobs supported by the industry by ail in guests they

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Speaker 10: more than halved. And in addition to declining output, the

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Speaker 10: industry is also suffering from high taxes, in particularly windfall text,

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Speaker 10: which was introduced by the Conservative government after Russia's invasion

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Speaker 10: of Ukraine's and energy crisis soaring, so although prices have

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Speaker 10: since retreated, the windfall tax was extended and increased several

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Speaker 10: times until twenty thirty and that has chilled investment in

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Speaker 10: the industry, with some producers deciding either to merge or

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Speaker 10: to sell their assets in the position of the sea.

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Speaker 2: So then what's the government's plan for the North Sea?

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Speaker 2: What is the industry view of it? Then if you

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Speaker 2: say some are leaving already, So the.

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Speaker 10: Labor Party made it clear that there will be no

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Speaker 10: new exploration licenses as part of the energy transition, but

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Speaker 10: at the same time the government acknowledged that fossil fuels

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Speaker 10: will remain for decades to come, in particular because like

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Speaker 10: about one hundred twenty thousand direct and indirect jobs are

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Speaker 10: supported by ailing gets. So last year the government released

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Speaker 10: a non Sea future plan that will help to protect

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Speaker 10: existing no sea jobs while the energy transition is happening,

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Speaker 10: and at the same time will help workers to move

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Speaker 10: into clean energy industries. So the government believes it's clean

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Speaker 10: energy push would create more than four hundred thousands jobs

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Speaker 10: by the end of this decade. And separately, it's set

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Speaker 10: aside twenty million pounds fund to help not see workers

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Speaker 10: to retrain and to move into renewables.

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Speaker 1: So does this mean that the oil and gas industry

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Speaker 1: is gone on the way out or can it be revived?

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Speaker 10: What we need to understand that the decline of the

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Speaker 10: industry is inevitable mid following production in the aging basin,

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Speaker 10: and everyone understands that, but the question is how fast

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Speaker 10: that decline will be. The industry believes that write policies,

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Speaker 10: including replacing the windfield text and allowing more drilling more exploration,

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Speaker 10: can boost investment, say jobs help to cover about half

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Speaker 10: of the UK's demand by twenty to fifty and create

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Speaker 10: more taxes for the nation's budget. But activists disagree and

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Speaker 10: they say that the SHEIP has sailed with the UK's

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Speaker 10: growing dependence on inputs and the nation should be ramping

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Speaker 10: up renewables.

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Speaker 3: Yeah quite tough then for Aberdeen, Well that's true.

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Speaker 10: The city actually had one of the UK highest concentration

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Speaker 10: of millionaires, but today Aberdeen's job market is among the

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Speaker 10: weakest in the UK. And you can see empty store

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Speaker 10: France on Aberdeen's Union Street. It's the main shopping district

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Speaker 10: in the city. It was interesting one of the people

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Speaker 10: we talked to was Paul do Yo, who moved in

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Speaker 10: Aberdeen more than three decades ago and now he's a

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Speaker 10: professor having Robert Gordon University's Energy Transition Institute in the city,

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Speaker 10: and he said, like Aberdeena has navigated the industry's inevitable

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Speaker 10: fall four years lately, he said, so it moved from

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Speaker 10: a managed decline to a much more accelerated one and

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Speaker 10: the impact is unavoidable.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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