UK Turmoil Hits Pound, Trump-Xi Play Nice, Powell’s Term Ends, $100k A Day Wealth Tax |...

Added: 2026-05-15

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[00:00:09]This is the Bloomberg Daybreak Europe podcast. Good morning, it's Friday the 15th of May. I'm Caroline Hepker in London. And I'm Stephen Carroll in Brussels. Coming up today, the pound [music] tumbles as Manchester Mayor Andy Burnham moves to challenge the Prime Minister Keir Starmer to lead the UK.

[00:00:24]China calls for the reopening of the Strait of Hormuz as President Trump says the US doesn't need it. Jerome Powell's term leading the Federal Reserve comes to a close as inflationary risks rise again. And spending $100,000 a day on taxes and willing to pay more, why a Norwegian billionaire is betting his fortune on the world's best fish farm.

[00:00:47]Let's start with a round up of our top stories. A popular UK mayor is entering the race to challenge Keir Starmer as Prime Minister and markets are taking notes. The pound fell by nearly 1% when Andy Burnham announced he would run for a parliamentary seat near his home city of Manchester. It's the first step towards a formal leadership challenge.

[00:01:06]University of Liverpool Professor of Politics Jonathan Tong says Burnham has a strong appeal in the north of England.

[00:01:13]He's ordinary working class guy who can relate to people. I think that's the first thing. Secondly, there's been economic growth in greater Manchester that has exceeded anywhere [laughter] else in England over the last few years.

[00:01:25]Professor John Tong speaking there.

[00:01:26]There's no guarantee Burnham will be allowed to stand or will win the seat which is expected to be a battle between the Labour Party and Nigel Farage's Reform UK. While Burnham is one of Labour's most popular politicians, investors are wary of his past comments about how Britain shouldn't be in hock to the bond markets.

[00:01:44]Earlier this week, we asked former Goldman Sachs chief economist Jim O'Neill, who's worked with Burnham, if Britain's creditors would ever forgive the mayor.

[00:01:52]If you look at the way the spreads traded in the past uh month, as the the renewed speculation about Andy coming back uh has grown. Um that's the market verdict. Um and it's not obvious to me how Andy can climb back down from that and and and have markets believe him in in a in a hurry.

[00:02:13]Germany I was speaking to Bloomberg Radio earlier this week. The Prime Minister, Keir Starmer, has vowed to fight any leadership challenge, but he is deeply unpopular and multiple potential successors have called on the leader to consider his future.

[00:02:26]Well, before even entering the race, Andy Burnham was the favorite on seat Keir Starmer as Britain's Prime Minister, but as Bloomberg's Chris Pitt reports, the senior Labour Party figure has a complex political background. For years, a joke has circulated around the corridors of power in the UK. A Blairite, a Brownite, a Milibandite, and a Corbynite walk into a pub, and the barman says, "Hello, Mr. Burnham."

[00:02:51]The punchline points both to Burnham's time working for all four of those party leaders and to questions over what he really stands for.

[00:03:00]His supporters say the two decades he spent at the heart of the party prove he's a party first rather than faction-first person.

[00:03:09]But to his critics, the history reflects political slipperiness and a lack of a clear political base.

[00:03:16]Yet Burnham has demonstrated genuine electoral appeal with landslide mayoral victories, while Manchester itself is booming, growing at twice the national rate. The question now is whether the man dubbed by his supporters as the King of the North can unseat the current wearer of the UK's political crown. In London, Chris Pitt, Bloomberg Radio.

[00:03:40]Donald Trump and Xi Jinping have held a second day of talks in Beijing with the two leaders exchanging warm words, but delivering few concrete agreements.

[00:03:48]This morning, they spoke for around 10 minutes and walked together through the secret of headquarters of the ruling Communist Party and the residence of China's top leaders. But beneath the displays of friendliness, the relationship between the world's two largest economies remains strained by a range of thorny issues. Ahead of the second day of talks, China called for the reopening of the Strait of Hormuz, which supplies the country with much of its oil. But speaking to Fox News, President Trump said she had offered to help on Iran, something China has not explicitly confirmed.

[00:04:17]President Xi would like to see a deal made. Who would He would like to see a deal made.

[00:04:22]And oh, he did offer. He said, "If I can be of any help at all, I would like to be of help." Because >> He did say that.

[00:04:28]>> Yeah, he did say that. And Look, anybody that buys that much oil is obviously got some kind of a relationship with them.

[00:04:34]But he said, "I would love to be of help if I can be of any help whatsoever."

[00:04:39]He'd like to see the Hormuz Strait open.

[00:04:42]He said, "If I can be of any help whatsoever, I would like to help."

[00:04:46]Trump also told Fox News that China had agreed to buy 200 Boeing planes. That's short of the 500 aircraft the country's airlines were hoping to be buying in the landmark deal. China's Foreign Ministry later issued a statement on Trump's visit, but it was light on details. It said the two leaders had reached consensus on handling each other's concerns and agreed to step up communication and coordination on international issues. Well, when it comes to the fallout of the Iran war, ECB rate setter Yannis Stournaras has said that the central bank in Europe could be forced to raise borrowing costs if oil prices remain at current levels.

[00:05:21]According to the Athens News Agency, the Greek central bank chief said that if crude prices stay where they are, the ECB may have no option but to hike rates. Those comments come as data compiled by Bloomberg Intelligence show that record-breaking US corporate profit margins have limited a capacity to absorb soaring energy costs. The analysis suggests that bullish projections for future earnings growth could prove overly optimistic if faced with a prolonged energy shock in the US.

[00:05:55]Global inflationary pressures are ramping up as Jerome Powell's term as chair of the Federal Reserve comes to a close today. Powell's time leading the Fed will be remembered for his clash with President Trump over the Central Bank's independence and the inflationary surge caused by the pandemic. Steven Myron, a Trump Fed appointee, says the Central Bank needs to unite behind Powell's replacement, Kevin Warsh.

[00:06:19]You want to have people's loyalties undivided. You want to have there be very clearly one chairman. You want to have a place where there's no question about no question about who's in charge and there's no talk of rival factions and things being split. I think you want to have you want to have a sense of of unanimity and and and clarity. And so transitions are important and I think it can be helpful to have to have help in transition, but I still think it's important that it it it is a transition.

[00:06:43]Steven Myron there who'll be resigning from his temporary role at the Central Bank to make way for the new chair.

[00:06:48]Kevin Warsh will inherit the pressure from the White House to cut interest rates.

[00:06:53]Nvidia's stock has gained 20% in just 7 days. The jump comes as investors plow into chip makers profiting from a flood of artificial intelligence investment.

[00:07:04]Bloomberg's Tim Adebayo has more.

[00:07:06]Jensen Huang began his week by boarding Air Force One poised to accompany President Donald Trump on a historic trip to China.

[00:07:14]Just days later the Nvidia CEO is ending it with a company closing in on a valuation no firm has ever reached before.

[00:07:22]A recent rally for the semiconductor giant added more than 900 billion dollars to its market capitalization pushing it towards 6 trillion dollars.

[00:07:31]The advance is the latest reflection of how intensely investors are gravitating towards perceived AI winners.

[00:07:38]But the scale of the surge has left some concern that the market is being propped up by a tech bubble with the potential to burst.

[00:07:46]Nvidia and Micron alone have accounted for more than 30% of the gain in the S&P 500 index this year, according to data compiled by Bloomberg.

[00:07:56]In London, Tiwa Adebayo, Bloomberg Radio.

[00:07:59]Bloomberg understands that the Pentagon has scrapped plans to send around 4,000 troops to Poland as part of a broader review of the US military presence in Europe. The news comes amid a feud between President Donald Trump and other members of NATO, including Germany, but Trump has remained close to Polish leaders. Poland's defense minister said in a post on social media that the issue doesn't concern the country and relates to previously announced changes in the presence of some US forces in Europe.

[00:08:25]Those are top stories. In terms of the markets this Friday, stocks and bonds are declining because of worries about inflation. Oil prices are steady. Brent crude futures at $107.10 are up by 1.3%, but if you look to Asia, MSCI Asia Pacific index is down 2% and you've had a big decline for the Kospi, a huge 5.3% lower. The Nikkei 225 is also down and European stock futures are down 1.2% this hour. Sovereign bond yields have been climbing. Treasuries are up four basis points across the curve. We've had a a big jump in Japanese JBGB yields also. The dollar this morning is stronger, 2/10 of 1%. The pound trades at 1.3358, down by 3/10 of 1%. Those are the markets. In a moment, we'll bring you more on the end of Jerome Powell's tenure as chair of the Fed. And we have a story about a Norwegian billionaire who's decided to stay in the country despite paying increasing wealth taxes.

[00:09:21]And normally, this is a point in the program where we like to share a story that's got us talking, but I can tell you our team WhatsApp group has rarely been more active than it was yesterday and it had nothing to do with some quirky finds that our colleagues have been reporting on at Bloomberg, but the latest twists and turns in the UK political drama, Manchester mayor Andy Burnham could now have a path to challenge the Prime Minister after Health Secretary Wes Streeting resigned from cabinet yesterday. He's urged Keir Starmer to facilitate a leadership contest. Our UK politics supporter James Wolcock is with us for more. First of all, James, please keep sending me those memes. And secondly, let's talk about there being no official contest yet to replace Keir Starmer, but does one now look inevitable? I feel like I have to start with an apology for the WhatsApp spam.

[00:10:06]Look, the reason why I was so active on the team WhatsApp group is because yesterday was the moment where days, if not weeks, of speculation about Keir Starmer's future erupted. And we saw all three of the main contenders pop out 6:00 a.m. Former Deputy Prime Minister Angela Rayner comes out about her tax.

[00:10:23]You can listen to yesterday's podcast for my take on that one. Then at 1:00, the Health Secretary Wes Streeting resigns, which has been buried by the later news, but that is a first cabinet minister publicly calling on the Prime Minister to go. Then the markets were watching at 6:00 p.m. when the Mayor of Greater Manchester, the most popular Labour politician in the country, Andy Burnham, says he's found a seat that he's going to try and stand for it if he's allowed to.

[00:10:48]And that would be a precursor to running for leader, even though Burnham didn't say as much. Anyone can read those tea leaves.

[00:10:56]Keir Starmer has said all week that he will not step aside and that he will fight a leadership election. And in some ways, yesterday was the response from that from the three sort of biggest names in the race, that they are all serious about challenging him, and they want to shape the future of the Labour Party.

[00:11:14]Yeah, absolutely. I think it's really notable that, you know, Wes Streeting's letter of resignation talking about Keir Starmer's leader leadership was really very pointed. Where we need vision, we have a vacuum. Where we need direction, we have drift. That line has been widely picked up in terms of the criticism of Starmer. Andy Burnham though, in terms of a path to Parliament via a by-election, can he win the seat? That is a actually quite a big question. So, this seat is interesting cuz it was occupied by Josh Simons, who stepped down late last night, and he is not of the Burnham sort of left faction. He was seen as centrist, former head of Labour Together the think tank.

[00:11:58]Now, the majority Labour have there from 2024 is about 5,000 give or take.

[00:12:04]Reform in the elections last week got 50% of the vote. They won every ward and every partial ward in that constituency.

[00:12:12]Compared 50% compared to Labour's roughly about 25%. So, they say they are going to throw everything they have at this. Now, allies of Burnham tell us here at Bloomberg that this is no accident because in some ways Andy Burnham's proof of concept here for being Labour leader is he can win back working-class voters. He can show them what a real Labour person's politics are. And so, look at Times columnist famously said the mayor of Greater Manchester has popularity in the north akin to a North Korean leader. So, this is the moment where a by-election rarely has stakes like this, where we see if the mayor really is as popular as he's made out to be, and if he can show that appeal, then in many ways it gives him a real option to challenge for prime minister to say, "I have the story here to challenge Reform," which is what Labour would deeply worry about.

[00:13:08]Okay. James, thank you very much for joining us. Of course, we know the story's being watched closely by investors, and we've had that weakening in the pound continuing today in trading as well. And we'll be watching gilts when markets open later, too. That is our UK politics reporter, James Woolcock.

[00:13:23]Well, today marks the end of Jerome Powell's term leading the Federal Reserve. He will hand over the chairmanship to Kevin Warsh after enduring months of criticism from President Trump for not cutting interest rates. Bloomberg opinion columnist Daniel Moss joins us now for more on this. Daniel, what will be Jerome Powell's legacy at the Fed?

[00:13:46]You know, legacies have a way of being written and rewritten over the years um in response to fresh studies of past events or contemporary issues which beg us to ask how we got here.

[00:14:04]So, Jerome Powell looks like he's going out as a hero.

[00:14:09]Um whether he deserves a place in the pantheon uh with people like uh Paul Volcker or Ben Bernanke, uh we'll see. One thing is for sure, he's had to contend with something neither of those two did.

[00:14:27]Number one, he had to basically drive the response to a global health crisis which became a prospective economic calamity. The latter did not come to pass thanks to the activism of central banks. And number two, he's been dealing with a White House uh contemptuous of the norms that have governed central bank administration relationships.

[00:14:59]So, when you look at those things together, you know, he's held up well.

[00:15:04]Uh it hasn't been flawless.

[00:15:06]Uh he's been very astute in terms particularly in his first term of cultivating relationships on Capitol Hill uh as a way of buffering uh some of the noise coming from the White House.

[00:15:27]Remember as Ben Bernanke famously said in his farewell press conference, "Congress is our boss."

[00:15:35]He is going to be the first outgoing chair though to remain on the central bank's board of governors. That's the first time that's happened in almost 80 years. Is that going to be awkward for Kevin Warsh?

[00:15:45]Depends on the chemistry between them.

[00:15:48]Look, I they're both professionals.

[00:15:52]Powell, I doubt will be there for the full duration of his term as a governor.

[00:15:58]What he has said is he'll stay until the probe into cost overruns at the Fed's new headquarters is complete with finality.

[00:16:10]Now, that doesn't mean that Powell is there for years. It does mean he's there for months.

[00:16:18]And so, in terms of the economic situation, how difficult is it given, you know, what Kevin Warsh is now going to be inheriting?

[00:16:30]Warsh is in the difficult situation of being appointed by a president who made it clear that bending to his desire for interest rate cuts was a prerequisite for appointment.

[00:16:45]Problem is Warsh has come into the job when not only are Fed officials inclined to go slow on the prospect of further rate cuts. If anything, chances of a hike are now starting to enter the conversation.

[00:17:02]Inflation is markedly above the Fed's 2% target. There's little appetite on the FOMC. Remember, the chair has to carry a committee with him. There's little appetite for an interest rate cut anytime soon.

[00:17:20]But I also want to make a broader point.

[00:17:22]You know, Warsh ran as central banking goes, a pretty public campaign uh to win this job and win the president's attention. He talked about {quote} "unquote" regime change at the Fed.

[00:17:38]Be careful here.

[00:17:41]Now, Warsh was a Fed governor from 2006 to 2011.

[00:17:47]He surely knows the institution's strengths and its great capacity for public service to mount rescue economies, not rescue missions, not just for the US economy, but to underpin global prosperity as well.

[00:18:04]He knows that. He knows its flaws.

[00:18:07]You know, how would you say the last couple of efforts at regime change around the world have worked out? Not too great. Uh Warsh needs to tread carefully here.

[00:18:18]And look, uh he may not end up being the change agent uh that he has crafted an image for.

[00:18:31]For all his criticism of how the Fed lost its way during the global financial crisis, you know, guess how many dissenting votes Kevin Warsh cast. Can you tell me?

[00:18:43]I can't.

[00:18:43]>> Zero. Zero.

[00:18:46]Right? So, look, now his campaign for office, he's got the job. He's got to make it work.

[00:18:52]He is the guardian now of a very precious asset, which is the independence of the central bank from the executive branch. Uh mind how you go.

[00:19:04]Absolutely, because the world is watching, isn't it? Not just the US, but it's globally uh that the Federal Reserve is so important. Daniel, thank you so much for being with us. Bloomberg opinion columnist Daniel Moss.

[00:19:18]Stay with us. More from Bloomberg Daybreak Europe coming up after this.

[00:19:24]Now to a story about a Norwegian billionaire whose family business is the world's second largest salmon producer.

[00:19:30]Gustav Witzøe's decision to stay in in Norway and use technology to build a business comes despite wealth taxes costing him around $100,000 a day. Our Oslo Bureau Chief Heidi Taksdal Skeide joins us now for more. Heidi, good morning. Who is Gustav Witzøe and how did he become one of Norway's top taxpayers?

[00:19:50]Oh, good morning. Gustav Magnar Witzøe, he's a 33-year-old salmon heir and he's the majority shareholder of SalMar, the world's second largest [snorts] salmon producer.

[00:19:59]And it was his dad who founded SalMar and transferred large parts of the company to Gustav, his only child, when he was only 14 years old. So, he's been Norway's youngest billionaire for years.

[00:20:11]Uh and while he's been quite reclusive, he's worked as a model in New York and elsewhere.

[00:20:16]Uh he's been known for his love of fast cars and fashion, but also for his love of his home country and his home island.

[00:20:23]Yeah, so what is he doing with the business? You got beautiful photographs of the location uh and also this is a place where he has worked in various capacities since he was a teenager, too.

[00:20:38]Yeah, he started working he started working at the factory when he was 12.

[00:20:42]Uh just pushing these boxes around. He said he can still remember the sound of them screeching on the floor.

[00:20:49]Uh and he worked out at the pens in his 20s.

[00:20:52]Uh but this year he got a formal role as as the CEO of the family company owning most of SalMar. Uh so, now he's getting into the business side of the company.

[00:21:00]He said he's losing sleep over it. He slept better when he was working out at the pens.

[00:21:05]Um but now he's looking to invest more in artificial intelligence, which can now he says track individual fish. And these are millions and millions of salmon out in the pens off the coast.

[00:21:18]And they can track the individual fish to monitor disease cuz he wants to try to make the industry cleaner and and more efficient than it is today.

[00:21:29]And Heidi, this central to the story is what's been dubbed Billionaires' Island.

[00:21:35]Tell us more about that.

[00:21:38]Well, Billionaires' Island it got its name from a Netflix show from 2024.

[00:21:44]We did the show recorded there about all the intrigues and the politics and the business of the salmon the local salmon industry.

[00:21:53]Which the locals I talked to there they're quite proud of. They all love the show.

[00:21:57]But Billionaires' Island is the home of Gustav Magnar Witzøe. It's called Frøya.

[00:22:03]It's a beautiful small island off the coast of mid-Norway. It's famous not for just SalMar but for a lot of farmed salmon companies and supply line business and also for his billionaires. So it's said to have the highest billionaire density in Norway with four billionaires for about 5,000 people. And you can't really tell I mean the houses are small, the roads are winding but there are some major luxury houses like hidden from view there. Yeah, it's I thought that was fascinating. Four billionaires on this small island as you say. In terms of what Gustav Witzøe wants to do with the business, you know, and the fact that he's paying all of these wealth taxes, this is the kind of the heart of the story, the decision as to why he actually decided to stay on the island, isn't it?

[00:22:53]Yeah, and there was a rise in wealth taxes here a few years ago where We we believe 300 billionaires left Norway or not well very wealthy individuals left Norway and I Gustav said that his advisers everybody had told him that he should leave that it was best for the business.

[00:23:13]And he had he had a plane lined up. He had a house in Lugano in Switzerland and then he he told us how he changed his mind just hours before having some beers with his good friends and he said he came back and he told his parents and you can see the relief in their eyes that he decided to stay in Norway because he's he's a very uh, he really really likes I mean the the country his island and he's very very close to his family and he just had a had a young daughter last year so he's raising her now with his with his partner in in Trondheim close to Freya.

[00:23:48]This is Bloomberg Daybreak [music] Europe your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, [music] Spotify and anywhere else you get your podcast. You can also listen live each morning on London DAB [music] radio the Bloomberg business app and bloomberg.com. Our flagship New York station is also available on your Amazon Alexa devices just say Alexa play Bloomberg 11:30. I'm Caroline Hepker.

[00:24:15]And I'm Stephen Carroll join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak Europe.