# Nvidia CEO Onstage Trump Call, Space Weapons Deployed, UK Mulls Saudi Support

An episode of [Bloomberg Daybreak: Europe Edition](https://invisiblenetwork.ai/podcast/1663863397), 15 Sep 2026, 23 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/c1b39a51-1327-40f8-ae83-af80014e0b5c/86e4944a-4447-4b3b-bc89-b4c600630e41/audio.mp3?utm_source=Podcast&in_playlist=8a433f03-1a96-430e-a3d0-af80014e0b7d

Your morning briefing. All the news you need to start your day. On today's podcast: (1) Nvidia Chief Executive Officer Jensen Huang took a live phone call from Donald Trump during a panel discussion Monday, allowing the US president to dismiss artificial intelligence dangers as a “hoax.” (2) The US 10-year Treasury yield surpassed 5% for the first time since 2023 on Monday, as mounting inflation angst collided with swelling government and corporate borrowing needs. (3) President Donald Trump’s daughter-in-law said a Russian oligarch paid for “two incredible nights of celebration” in the Bahamas after her wedding to Donald Trump Jr. but was not involved in the actual nuptials, amid fresh ethics questions involving the first family. (4) President Donald Trump and Ukraine offered differing accounts of a supposed agreement with Russia to stop attacks on energy infrastructure, as strikes on oil refineries help drive diesel prices to record levels. (5) The US Supreme Court refused to clear the Postal Service to enforce new restrictions on mail-in ballots for the congressional midterm elections, rebuffing the Trump administration’s request to intervene after several states launched early voting. (6) Prime Minister Andy Burnham is considering whether to help Saudi Arabia counter attacks from the Houthis in Yemen amid UK concerns about a worsening economic hit from the escalating conflict. Podcast Conversation: Business School ROI Calculator: Will an MBA Pay Off for You? See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios.
[0:04] Speaker 2: Podcasts.
[0:05] Speaker 3: Radio.
[0:06] Speaker 4: News.
[0:09] Speaker 1: This is the Bloomberg Daybreak Europe podcast. Good morning. It's Tuesday,
[0:12] Speaker 1: the 15th of September. I'm Caroline Hepka in London. Coming
[0:15] Speaker 1: up today, Trump calls NVIDIA's CEO Jensen Wong while on
[0:19] Speaker 1: stage to dismiss AI fears as a hoax. The US
[0:23] Speaker 1: military acknowledges for the first time that it has weapons
[0:27] Speaker 1: in space. Plus, Burnham's dilemma is The UK weighs supporting
[0:31] Speaker 1: Saudi Arabia to counter the Houthis as Britain braces for
[0:35] Speaker 1: a worsening economic hit from energy prices. Let's start with
[0:39] Speaker 1: a roundup of our top stories. Donald Trump has dismissed
[0:44] Speaker 1: artificial intelligence dangers as a hoax, as calls grow to
[0:48] Speaker 1: slow the development of cutting-edge AI models. The president says
[0:52] Speaker 1: that AI and robots will not take over the world,
[0:55] Speaker 1: arguing that the US should not stop the industry. Trump
[0:59] Speaker 1: even made an impromptu call to NVIDIA CEO Jensen Wang
[1:03] Speaker 1: while he was on stage during a panel discussion in
[1:07] Speaker 1: LA on Monday.
[1:09] Speaker 4: They're just playing right into the hands of a lot
[1:11] Speaker 4: of people that don't want to see it happen. And
[1:14] Speaker 4: that could be political people. It could also be China.
[1:18] Speaker 4: And we're not going to let that happen. It's a hoax.
[1:21] Speaker 1: NVIDIA CEO Jensen Wang said that he agreed with the
[1:24] Speaker 1: US president, saying that Trump had seen through the complexities
[1:28] Speaker 1: of the issue and arguing that concerns about AI have
[1:31] Speaker 1: created a false choice between rapid innovation and safety. US
[1:35] Speaker 1: tech stocks fell on Monday on concerns about a slowdown
[1:39] Speaker 1: in spending with NVIDIA shares down by 3.4%. The 10-year U.S.
[1:44] Speaker 1: Treasury yield has risen above 5%, hitting its highest level
[1:48] Speaker 1: since 2007, as higher energy prices fuel inflation concerns. The
[1:54] Speaker 1: yield rose as much as four basis points of 5.02%,
[1:58] Speaker 1: surpassing a peak from 2023, as oil is extending its
[2:02] Speaker 1: rally this morning. with Brent around $ 107 a barrel. Now,
[2:07] Speaker 1: the move raises the stakes ahead of the Federal Reserve's
[2:09] Speaker 1: interest rate decision tomorrow, with traders seeing a more than 90%
[2:13] Speaker 1: chance of a hike. Former Congressional Budget Office Director Douglas
[2:17] Speaker 1: Holtz-Eakin says that not hiking now would be bad for
[2:22] Speaker 1: the central bank.
[2:23] Speaker 5: I think it undercuts this Fed's credibility. I mean, the
[2:29] Speaker 5: Fed needs to rebuild its credibility overall for having let
[2:31] Speaker 5: inflation get out of the bottle and not getting back
[2:35] Speaker 5: to 2%. There's a new chairman there who has to
[2:37] Speaker 5: establish his credentials. I think a failure to take this
[2:41] Speaker 5: opportunity really, really is harmful to them.
[2:44] Speaker 1: Douglas Holtz-Eakin speaking there as markets also price in close
[2:49] Speaker 1: to four quarter point ECB hikes and five hikes from
[2:53] Speaker 1: the Bank of England over the next 12 months. President
[2:57] Speaker 1: Trump is claiming a Russia-Ukraine energy truce, whilst Ukraine's President
[3:03] Speaker 1: Zelensky says that no deal has been reached. According to
[3:06] Speaker 1: the U.S. President, the two countries have agreed to stop
[3:09] Speaker 1: attacks on each other's energy infrastructure. The news comes after
[3:13] Speaker 1: Trump blamed the strikes, rather than the war in Iran,
[3:15] Speaker 1: for elevated diesel prices and posted on social media that
[3:20] Speaker 1: Moscow and Kiev would stop them. Stephen Cook, Middle East
[3:24] Speaker 1: Senior Fellow at the Council on Foreign Relations, says it's
[3:27] Speaker 1: the conflict in the Middle East that is squeezing supplies.
[3:31] Speaker 6: This does have something to do with the Strait of Hormuz.
[3:35] Speaker 6: But the president's attitude would suggest that his overall goal
[3:39] Speaker 6: is ultimately to force the parties in the region, despite
[3:44] Speaker 6: the fact that the United States initiated the conflict in
[3:46] Speaker 6: the region, to force the countries in the region to
[3:48] Speaker 6: work out some sort of agreement that allows for passage
[3:53] Speaker 6: through the Strait of Hormuz.
[3:55] Speaker 1: Stephen Cook from the Council on Foreign Relations there. Now,
[3:58] Speaker 1: following President Trump's social media post, President Zelensky said that
[4:02] Speaker 1: no deal had been finalised, though he acknowledged a strong
[4:06] Speaker 1: US proposal for a mutual halt to strikes on critical infrastructure.
[4:12] Speaker 1: Moscow has not agreed to a deal. According to a
[4:14] Speaker 1: Ukrainian official, the Kremlin did not immediately respond to a
[4:18] Speaker 1: request for comment. Now, fresh ethics questions are being raised
[4:26] Speaker 1: about the Trump family after a Russian oligarch paid for
[4:30] Speaker 1: lavish celebrations following Donald Trump Jr. 's wedding. Bloomberg's Ewan
[4:35] Speaker 1: Potts reports now.
[4:36] Speaker 7: Donald Trump Jr. 's wife says that Russian oligarch Umar
[4:40] Speaker 7: Kremlin paid for two nights of celebrations in the Bahamas
[4:43] Speaker 7: after the couple tied the knot back in May. Bettina
[4:46] Speaker 7: Trump says Kremlin, who has ties to Vladimir Putin, was
[4:50] Speaker 7: not involved in the wedding itself, calling the party an
[4:53] Speaker 7: extraordinarily generous gift from a friend. Pro Repubblica reports the
[4:58] Speaker 7: festivities cost hundreds of thousands of dollars, raising fresh questions
[5:02] Speaker 7: over potential conflicts of interest involving the president's family. In London,
[5:07] Speaker 7: I'm Ewan Potts, Bloomberg Radio.
[5:09] Speaker 1: The US Supreme Court has blocked new Postal Service restrictions
[5:13] Speaker 1: on mail-in ballots for November's midterms. The justices rejected the
[5:18] Speaker 1: Trump administration's request to enforce the rules while its legal
[5:22] Speaker 1: challenge continues. Several states have already begun mailing ballots after
[5:27] Speaker 1: warning late changes could disrupt election preparations. The US military
[5:34] Speaker 1: says that it has deployed weapons into orbit. Air Force
[5:38] Speaker 1: Secretary Troy Mink told a defence conference the weapons will
[5:42] Speaker 1: serve as a deterrent. Now, it is the first time
[5:46] Speaker 1: that the US has acknowledged having offensive capabilities in orbit.
[5:51] Speaker 1: But Ian Cinnamon, who is the CEO of the satellite
[5:53] Speaker 1: company Apex, says that we shouldn't be surprised.
[5:58] Speaker 2: So the honest truth is most things in space touch government,
[6:03] Speaker 2: whether that's something like NASA or more often stuff like
[6:06] Speaker 2: Department of War or the intelligence community. By and large,
[6:10] Speaker 2: most of the new satellites that are going up there
[6:13] Speaker 2: are really for defense purposes. Think missile tracking, missile warning,
[6:16] Speaker 2: intercepting missiles from space.
[6:19] Speaker 1: Ian Cinnamon there, speaking to Bloomberg's latest edition of Wall
[6:23] Speaker 1: Street Week. Now, the Trump administration is pushing to build
[6:26] Speaker 1: what it calls a Golden Dome missile defence shield, as
[6:30] Speaker 1: China and Russia also invest in their military capabilities in space.
[6:35] Speaker 1: And the news about US military weapons in space comes
[6:38] Speaker 1: as disagreements with NASA push Europe to plan for greater
[6:43] Speaker 1: self-reliance in space. Bloomberg's Tiwa Adebayo has more.
[6:48] Speaker 8: Paris is presenting itself as the centre of the space industry.
[6:52] Speaker 8: Europe's premier space business conference opened yesterday in the city
[6:56] Speaker 8: with a clear message, the continent's campaign for independence in
[7:01] Speaker 8: the sector. But missing from Macron's summit were prominent US companies,
[7:05] Speaker 8: including Elon Musk's SpaceX, and Jeff Bezos' Blue Origin, as
[7:10] Speaker 8: the French government made links between their absence and what
[7:14] Speaker 8: it called rumors of pressure from President Trump's administration to
[7:18] Speaker 8: sit out the event. As NASA risks isolation on a
[7:22] Speaker 8: global stage, Europe's leaders are calling for space autonomy as
[7:26] Speaker 8: local aerospace and defence players pool resources. And according to
[7:31] Speaker 8: the European Space Agency's Director General, Europe's space exploration is
[7:36] Speaker 8: too exposed to the US. In London, Tiwa Adebayo, Bloomberg Radio.
[7:41] Speaker 1: And those are our top stories for you this morning.
[7:44] Speaker 1: Looking at the markets, Treasuries edge lower. 10-year Treasury yields
[7:48] Speaker 1: are trading at 5.02. So, actually yields now at the
[7:52] Speaker 1: highest since 2007. This is we see energy prices continuing
[7:57] Speaker 1: to rally. Brent crude futures at $ 107.
[7:58] Speaker 7: 44 by 1.7%.
[7:58] Speaker 1: We've gained more than 18% for Brent prices just this
[8:00] Speaker 1: month alone. Also, shares of chip makers that have benefited
[8:10] Speaker 1: from the AI surge were sold off on Monday, both
[8:13] Speaker 1: in Europe and in the U.S., the likes of NVIDIA,
[8:16] Speaker 1: of Micron, of ASML. The cost this morning is down
[8:20] Speaker 1: by 1.1%. The dollar is weaker. We've also had data
[8:24] Speaker 1: out of China. Retail sales rising only 0.4% from a
[8:28] Speaker 1: year ago and a big drop in fixed asset investment,
[8:31] Speaker 1: more than 7% in the first eight months of this year. So,
[8:35] Speaker 1: that's a story that we're continuing to follow. the economy
[8:38] Speaker 1: in China. So, those are the markets. In a moment,
[8:41] Speaker 1: we're going to bring you more on the extraordinary call
[8:44] Speaker 1: by President Trump to the CEO of NVIDIA whilst on stage.
[8:48] Speaker 1: What does all the back and forth about AI development mean? Plus,
[8:52] Speaker 1: we'll talk about why Andy Burnham is weighing helping Saudi
[8:57] Speaker 1: Arabia to counter the Houthis. This would be a major question.
[9:01] Speaker 1: foreign policy move by the UK prime minister is certainly
[9:04] Speaker 1: a big test. Before that, though, I want to talk
[9:07] Speaker 1: about a story that got my attention this morning. So,
[9:10] Speaker 1: Bloomberg's business school rankings measuring the 66 MBA programmes in
[9:16] Speaker 1: the United States Stanford comes on top again for an
[9:20] Speaker 1: eighth year in a row, followed by Wharton and Harvard,
[9:23] Speaker 1: in case you were curious. Beneath that, though, generative AI
[9:29] Speaker 1: has gone from an idea to an imperative, and it
[9:32] Speaker 1: really does raise some pretty fundamental questions for university faculties today.
[9:36] Speaker 1: And so that is the kind of context in which
[9:39] Speaker 1: Bloomberg has done these business rankings, because actually there's not
[9:42] Speaker 1: been much change over the years in terms of which
[9:45] Speaker 1: schools are delivering the MBAs. I mean, not completely. There
[9:49] Speaker 1: are 66. There are a few changes. But at the top,
[9:52] Speaker 1: it's largely stayed quite static. And so we've been writing
[9:58] Speaker 1: a lot about actually what does AI mean for education?
[10:01] Speaker 1: What does it mean for the value of an MBA?
[10:03] Speaker 1: And if you want to work that out, Bloomberg's got
[10:05] Speaker 1: a tool for you. Just go to Bloomberg.co.uk and you
[10:08] Speaker 1: can understand and analyze the return on investment rate. of
[10:14] Speaker 1: an MBA we've got a calculator right there so you
[10:17] Speaker 1: can have a look at it average cost of tuition
[10:19] Speaker 1: in the US for an MBA $ 136, 000 but you get
[10:24] Speaker 1: a 12% return on investment over 10 years so you
[10:28] Speaker 1: can plug in your own figures have a play around
[10:30] Speaker 1: decide whether an MBA is worth it for you or
[10:32] Speaker 1: not whether it's going to increase your wages I think
[10:35] Speaker 1: it's a really interesting story and it's on the Bloomberg
[10:38] Speaker 1: website and I'll put a link to it in our
[10:40] Speaker 1: podcast show notes too Now, another researcher, this time from
[10:46] Speaker 1: Google DeepMind, has resigned, saying that AI may kill us all,
[10:50] Speaker 1: while David Sachs from the President's Council of Advisors on
[10:54] Speaker 1: Science and Technology has said that anthropic and open AI
[10:57] Speaker 1: have a basic obligation to make products safe. Joining us
[11:02] Speaker 1: now from Bloomberg Intelligence is our senior analyst, Robert Lee,
[11:05] Speaker 1: to discuss. Robert, good to speak to you. The pushback
[11:09] Speaker 1: on anthropic CEO Dario Amadai that companies should work together
[11:14] Speaker 1: to pace AI development has seen some quite sharp pushback
[11:19] Speaker 1: from the US president, namely, what's been going on?
[11:23] Speaker 9: It's not often I find myself in agreement with President Trump,
[11:27] Speaker 9: but on this particular issue, I do. I think this
[11:30] Speaker 9: whole thing is a complete nonsense, to be honest. What
[11:33] Speaker 9: gives me such confidence? Because going right back to my
[11:37] Speaker 9: engineering degree at Imperial College, I built these models. Now,
[11:41] Speaker 9: this is some years ago, but at least that gave
[11:44] Speaker 9: me a firm grounding in the fundamentals of what makes
[11:47] Speaker 9: this technology tick. And as you and your listeners appreciate,
[11:50] Speaker 9: any technology has a potential for misuse, doesn't it? And
[11:56] Speaker 9: AI does have risks in terms of cybersecurity risks, in
[12:00] Speaker 9: terms of people using it for misinformation or creating deep fakes.
[12:05] Speaker 9: These are real risks, and definitely the industry does need
[12:08] Speaker 9: to be regulated. And sitting here in Hong Kong, I
[12:12] Speaker 9: would actually give credit to the Chinese authorities for trying
[12:14] Speaker 9: to lead that debate. But of all the things that
[12:17] Speaker 9: keep me awake at night, Is Rise of the Machines,
[12:21] Speaker 9: AI Apocalypse, you know, is that one of them? Absolutely not.
[12:25] Speaker 9: I think it is a complete and utter nonsense. There
[12:29] Speaker 9: is no grounding based on academic research or otherwise that
[12:34] Speaker 9: this is about to happen. There is no evidence based
[12:37] Speaker 9: on academic research that these machines are sentient in any way,
[12:41] Speaker 9: that they can act, you know, outside their instruction set, etc.
[12:47] Speaker 9: So whilst AI does bring risks, I think the risk of, again,
[12:53] Speaker 9: AI causing the annihilation of humanity is so infinitesimally small.
[13:00] Speaker 9: I don't think it's something that anybody needs to be
[13:02] Speaker 9: concerned or to worried about. And I think part of
[13:06] Speaker 9: the narrative that's come out of China and one that
[13:08] Speaker 9: I do agree with, again, we need to understand what
[13:10] Speaker 9: are the vested interests of the people making these claims.
[13:13] Speaker 9: If you look at the aforementioned sort of CEOs and
[13:17] Speaker 9: Elon Musk, et cetera, then obviously they're at a point
[13:20] Speaker 9: where these companies, and I mean specifically Anthropic and OpenAI,
[13:24] Speaker 9: don't have credit ratings. So their ability to raise debt
[13:28] Speaker 9: in the public markets is what they can't. And therefore,
[13:32] Speaker 9: they're reliant on this funding from NVIDIA and others. And,
[13:35] Speaker 9: you know, we've got the whole separate circular funding debate.
[13:39] Speaker 9: But obviously, both companies are potentially looking to list and
[13:43] Speaker 9: again to raise money at a point when they are
[13:45] Speaker 9: substantially loss making. So I think people need to consider
[13:49] Speaker 9: the real motives behind what's being said. They're trying to
[13:54] Speaker 9: increase the or create a sense of allure and mystique
[13:58] Speaker 9: around AI in order to enhance the valuations. I think
[14:01] Speaker 9: that is most likely the main reason for a lot
[14:04] Speaker 9: of these comments.
[14:06] Speaker 1: OK, Robert, I like your smelling salts. That's what it
[14:09] Speaker 1: feels like this morning in terms of your answers. Wake up.
[14:12] Speaker 1: I like that. But in terms of the split, even
[14:18] Speaker 1: within the U.S., President Trump and the call to NVIDIA
[14:22] Speaker 1: seems somewhat at odds, actually, with other Republican lawmakers, with
[14:25] Speaker 1: what one of his own, you know, there are some
[14:29] Speaker 1: concerns within the Republican Party. But and that was also
[14:33] Speaker 1: quite an extraordinary call, wasn't it, from President Trump?
[14:37] Speaker 9: Well, I guess I'm not a political expert, but absolutely.
[14:41] Speaker 9: But I think, again, most people agree AI needs to
[14:44] Speaker 9: be regulated. They're probably, and I think they've been caused
[14:47] Speaker 9: by Mark Carney today or yesterday, again, that we should
[14:51] Speaker 9: have some global body regulating the development of AI. That
[14:55] Speaker 9: is absolutely the right thing to do. We need cooperation
[14:59] Speaker 9: from a regulatory perspective between the two leading powers in AI,
[15:03] Speaker 9: namely the US and China. So, I think that's in
[15:07] Speaker 9: everybody's common interest. But again, is that those regulations and
[15:12] Speaker 9: rules being put in place because of genuine fears about,
[15:16] Speaker 9: you know, potential apocalyptic scenarios, you know, existential dangers to mankind?
[15:22] Speaker 9: Then absolutely not.
[15:23] Speaker 4: Okay.
[15:24] Speaker 1: It also led to a sell-off in semiconductor stocks, which
[15:27] Speaker 1: is quite important to note.
[15:30] Speaker 9: And that's true. But again, let's take the 50,000 foot
[15:33] Speaker 9: view here. Tech stocks already struggling. And I think, as
[15:36] Speaker 9: you said in your intro earlier on, we've got 10
[15:39] Speaker 9: year yields. Well, not an all time high. They're at
[15:43] Speaker 9: a high point versus I think the last time they
[15:46] Speaker 9: traded at this level, 5% or so was in 2007. So,
[15:51] Speaker 9: high yields, inflationary pressures are not good for risk appetite
[15:55] Speaker 9: and are certainly not good for tech stocks. So, you
[15:57] Speaker 9: have to see that in the context of tech stocks
[16:00] Speaker 9: in Asia in particular that were already struggling. And, you know,
[16:05] Speaker 9: people are sort of voting with their feet. Do I
[16:07] Speaker 9: see or do I hear any signs of panic amongst
[16:10] Speaker 9: investors in Asia?
[16:13] Speaker 2: No.
[16:14] Speaker 9: Am I myself worried that companies will actually follow through
[16:18] Speaker 9: and cut back orders? And again, speaking to other peers and,
[16:22] Speaker 9: you know, very seasoned investors here in the markets in Asia,
[16:25] Speaker 9: is that a genuine concern or worry from people? Then again,
[16:27] Speaker 9: I would say no.
[16:29] Speaker 1: Okay. Robert, thank you so much for being with us.
[16:31] Speaker 1: Bloomberg Intelligence's Senior Analyst, Robert Lee, as we continue to
[16:35] Speaker 1: think about artificial intelligence. Stay with us. More from Bloomberg
[16:40] Speaker 1: Daybreak Group coming up after this. Now, let's turn to
[16:49] Speaker 1: the U.K., where Prime Minister Andy Burnham is considering helping
[16:53] Speaker 1: Saudi Arabia to respond to attacks from Houthis in Yemen.
[16:58] Speaker 1: Bloomberg is reporting that the country in the Middle East
[17:01] Speaker 1: is asking the U.K. as one of its allies for
[17:04] Speaker 1: military help. This comes as the conflict in the Middle
[17:06] Speaker 1: East reshapes how Western governments are thinking about their finances.
[17:10] Speaker 1: And in the radio studio is Bloomberg's U.K. politics reporter,
[17:14] Speaker 1: James Walcock. James Walcock. What does the government in Saudi Arabia,
[17:18] Speaker 1: one from the UK, what is it hoping for?
[17:21] Speaker 10: I mean, the kingdom in the Middle East is facing
[17:23] Speaker 10: what many have thought of as a sort of worst-case
[17:24] Speaker 10: scenario now, Caroline, which has massive ramifications for global shipping.
[17:27] Speaker 10: Because you're seeing in the Gulf the conflict with Iran ongoing,
[17:30] Speaker 10: and the state of Hormuz still seeing trade for a trickle.
[17:33] Speaker 10: But in the past week, with the Houthi rebels, who
[17:36] Speaker 10: are Iran-backed militias, crossing into the Bab al-Mandeb Strait, which
[17:40] Speaker 10: is a key shipping point. If you remember the Suez Canal,
[17:43] Speaker 10: this is the line that goes from Egypt down through
[17:46] Speaker 10: past Yemen and connects the Mediterranean Sea to the rest
[17:49] Speaker 10: of the world. That is now also under pressure. And so,
[17:54] Speaker 10: what we are reporting at Bloomberg is that the Saudi
[17:58] Speaker 10: Arabians have reached out to Andy Burnham and the U.K.,
[18:01] Speaker 10: to push for help defending their oil sites and to
[18:04] Speaker 10: push for military support in pushing back the Houthi rebels. Now,
[18:09] Speaker 10: it's worth saying that, as yet, the UK have not
[18:11] Speaker 10: formally responded to these claims. And it's also worth saying
[18:14] Speaker 10: that the UK is not alone. Axios is reporting the
[18:17] Speaker 10: US has been asked similar claims. So, it is quite
[18:20] Speaker 10: possible to read this as maybe Saudi Arabia pressing all
[18:22] Speaker 10: its allies for help here. But it can be read
[18:25] Speaker 10: as a sign of sort of the desperation and need
[18:28] Speaker 10: in the kingdom for help reopening the second straight, which
[18:30] Speaker 10: is a crunch point for trade globally.
[18:33] Speaker 1: Yeah, absolutely. Because, you know, it's been the workaround really
[18:36] Speaker 1: for them. Where does the UK stand now? I mean,
[18:40] Speaker 1: you've said they haven't initially responded, but what are the considerations?
[18:44] Speaker 10: This is Andy Burnham's first real test on the geopolitical stage,
[18:49] Speaker 10: because there are three major concerns here. There is the
[18:52] Speaker 10: UK is determined not to get drawn into the war
[18:55] Speaker 10: in the Middle East. Politically, it is toxic at home.
[18:57] Speaker 10: There are memories of the Iraq war in the early 2000s.
[19:01] Speaker 10: But Saudi Arabia are a UK ally in their own
[19:05] Speaker 10: right before we even get into ramifications around the US.
[19:08] Speaker 10: And Saudi Arabia is a major investor in the UK.
[19:12] Speaker 10: It's worth saying as well that although the Iran war
[19:15] Speaker 10: that the US started, the UK was not consulted, in 2024,
[19:19] Speaker 10: under the conservative former Prime Minister Rishi Sunak, Britain's military
[19:22] Speaker 10: forces struck Houthi targets in Yemen. Keir Starmer has also
[19:26] Speaker 10: deployed military forces to Saudi Arabia in the past few
[19:28] Speaker 10: months before Andy Burnham took over. So, whereas Iran was
[19:32] Speaker 10: a step too far, this might genuinely be an area
[19:34] Speaker 10: where the UK sees precedent. And we have to mention
[19:38] Speaker 10: economic consequences. Oil is now trading at roughly $ 110 a barrel.
[19:42] Speaker 10: If you go back to February, that was $ 60. And
[19:45] Speaker 10: the UK, as many other Western European governments, are in
[19:49] Speaker 10: dire straits. fiscal and energy straits here. Straits, not pun intended.
[19:55] Speaker 10: And they are thinking about what they might need to do.
[19:58] Speaker 10: And if this might be an intervention, that would be
[20:00] Speaker 10: worthwhile for them.
[20:01] Speaker 1: Yeah, absolutely. Brent, around $ 107 right now. What does it
[20:06] Speaker 1: mean for the budget? I mean, defence spending is in
[20:10] Speaker 1: focus and there are pressures on that for the UK.
[20:12] Speaker 1: But that's defence spending for keeping Britain safe rather than
[20:17] Speaker 1: maybe money to be spent on allies.
[20:18] Speaker 10: Well, I mean, this is the difficulty into the interconnected
[20:20] Speaker 10: world we live in because Andy Burnham has prided himself
[20:23] Speaker 10: on being a domestic-focused prime minister. But increasingly, just months
[20:28] Speaker 10: into his premiership, he is starting to be distracted by
[20:31] Speaker 10: global events. And this is the first big one. Look,
[20:35] Speaker 10: if the price of oil could in any way be
[20:37] Speaker 10: knocked down or changed, that would make the budget remarkably easier.
[20:41] Speaker 10: The opposite also holds true. We are already seeing journalists
[20:46] Speaker 10: in the UK who are mainstream press journalists building trackers
[20:48] Speaker 10: to see how the fiscal headroom is eroding ahead of
[20:51] Speaker 10: the budget, Caroline.
[20:52] Speaker 1: I know.
[20:53] Speaker 10: And it's expected Bloomberg's own estimates say there is roughly, say,
[20:56] Speaker 10: £ 12 billion left of a £ 25 billion estimate. That has
[21:00] Speaker 10: businesses worried about taxes. Already, you are seeing people lobbying
[21:05] Speaker 10: the government. I mean, here is what Barclays CEO, C.S. Venkatakrishnan,
[21:08] Speaker 10: told Bloomberg yesterday when asked about a potential UK bank
[21:12] Speaker 10: tax hike.
[21:13] Speaker 3: And I think the amount of revenue that the government
[21:15] Speaker 3: gets out of all of this across the banking system
[21:18] Speaker 3: is not that great. What it does is sends a
[21:21] Speaker 3: signal to any industry that's successful that there can be
[21:25] Speaker 3: a Damocles' sword hanging over your success. The more successful
[21:28] Speaker 3: we are, even at a constant tax rate, which is,
[21:31] Speaker 3: by the way, the highest for banks among the major jurisdictions,
[21:34] Speaker 3: even at a constant tax rate, we pay more if
[21:37] Speaker 3: we make more profit, right? Increasing that percentage take is,
[21:42] Speaker 3: I think, not a good signal for growth. But, you know,
[21:45] Speaker 3: let's see what happens.
[21:47] Speaker 10: So, you heard there, the Barclays CEO. Now, look, the Chancellor,
[21:51] Speaker 10: the Prime Minister used words like risk-taking and entrepreneurship, but
[21:54] Speaker 10: they also see the cost of living and fixing that
[21:56] Speaker 10: as a core part of the electoral pitch. In this
[21:59] Speaker 10: world of high borrowing costs, rising energy prices, it's going
[22:03] Speaker 10: to be a very difficult budget and they are going
[22:05] Speaker 10: to have to turn somewhere.
[22:07] Speaker 1: Thanks for listening to Bloomberg Daybreak Europe. If you're enjoying
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