Boeing's Loose Bolts, Red Sea Warning & Barclays Headcount Drops

Good morning. It's Tuesday, the ninth of January here in London. This is the Bloomberg Daybreak you at podcast. I'm Caroline Hepkit.

And I'm Stephen Carroll coming up today. In another blow to Boeing, United finds loose bolts on multiple seven three seven.

Max jets, as Anthony Blinkn warns of consequences for continued attacks in the Red Sea. We have a special report on the sailors risking their lives to make the crossing.

Plus picking up the tab. Taxpayers face a ten billion pounds bill for student loans, including those that have already been repaid.

Let's start with a round up of our top stories.

United Airlines says it has found loose bolts and multiple Boeing seven three seven Max jets during inspections of the planes. The discovery follows a mid air blowout on an Alaska Airlines flight, which prompted the Federal Aviation Administration to ground more than one hundred and seventy jets. Bloomberg Intelligence's senior aerospace analyst, George Ferguson has more.

When you look of the way the plug, the sort of that the shots later on and you see where the plug was, and how clean the plug seemed to have left the airplane. It does seem to indicate that either fasteners failed or someone didn't apply the fasteners correctly, and I think the United News kind of confirms that maybe somebody on the manufacturing line didn't understand the right procedure for applying this plug.

Thats George Ferguson from Bloomberg Intelligence. The setback comes after a series of manufacturing and quality lapses at Boeing. It Shares suffers their biggest decline in more than a year on the news, dropping by eight percent.

In New York, America's top diplomat says that Huthy militants will face consequences if they continue to attack ships in the Red Sea. Anthony Blincoln's warning comes as the US and its allies contemplate strikes on the Iran backed group in Yemen. He told reporters that the principle of freedom of navigation is at stake.

We've got forty countries come together to make clear the one who these are doing has to stop, and we have other countries that have made clear that if it continues, there.

Have to be consequences.

So our strong view, our strong preference is that the Houthis get the message, but they're receiving from countries around the world that this needs to stop, and that's what.

We're focused on.

Blinken meets with Israel's leader Benjamin Netanyahu late today. He is hoping to contain the conflict in Gaza and potentially broker a post war government for the Strip.

Francis Prime Minister Elizabeth Bonon has resigned, prompting a government reshuffle expected to be unveiled today. Bonne said that President Emmanuel Macran told her he wanted to replace her. The French leaders seeking to refresh his government agenda head of European elections in June. French media reporting that Education Minister Gabrielle A Dale is the favorite to replace Bonn as the next prime minister.

Samsung's profits have fallen by thirty five percent, amits weak consumer demand in the tech industry. Company six straight quarter of declining operating profit, which missed estimates by about twenty four percent. Tom Kang, who is Research direct at Counterpoint Technology Market Research, says that the results indicate that the sector's revival might take longer than previously expected.

The numbers are a bit disappointing, but they are rebounding, so I think this shows that the rebound is going to be if it's slower than we all thought. So the semiconductor market has been starting to recover since the third quarter last year. Prices were rising, but it looks like the pricing the prices are not rising that fast and the demand from certain sectors are not that strong.

Kang's comments come after Samsung executives predicted in October twenty twenty three that the one hundred and sixty billion dollar memory market would bounce back gradually this year, driven by a boom in AI development. Investors will want to hear about Samsung's long term investment plans when it releases full results on the thirty first of January.

Barkley has let go approximately five thousand staff last year. The move is the most visible sign yet of cost cutting at the lender. Bloomberg's Teawa aut of Bio has the details.

Barkley has cut about six percent of its global headcount last year during what was described as its quote ongoing efficiency program. According to a company statement, the majority of roles affected were in support functions, reflecting increased automation capacity. The Bank's stock lagged behind piers in twenty twenty three and faces slowing tailwinds from higher interest rates in the UK this year. Despite the cuts, Barkley says it will

The UK Treasury is facing a yearly ten billion pound hit due to its student loan scheme. It's a cost that the Institute for Fiscal Studies says is not on the books. Botomberg's James Wilcock explains.

The think tank says the government will lose an average of fifteen thousand pounds per student this year. That's because the price of financing new government borrowing is more than three times higher what it was two years ago, and will outpay students inflation tracking interest, the IFS say the spread is not one the Office of National Statistics tracks, and is set across the government ten billion pounds annually, right at a moment when Chancellor Jeremy Hunt is hoping

And UK Christmas shopping sales fail to deliver a festive boost for retailers. According to the latest data, the British Retel Consort Team and KPMG say that total sales grew by just one point seven percent in December, compared to almost seven percent growth a year earlier. The difficult trading environment for retailers is expected to continue this year as

Yeah, do you buy branded sports where gear? I should ask should have asked this to Leanne Gerns of great who's in the Middle East of longtime listeners keen sports familiar?

Right?

Yes? Indeed, I don't know whether you you do. Maybe you were influenced if you did by of course that.

I'm very susceptible to influencing.

Get Tiger Woods. Twenty seven years, Tiger Woods and Nike have had this iconic partnership, partnership worth six hundred and sixty million dollars. Now, the golf legend that was announced a split, all very friendly, wishing each other well for the future and so. But the relationship going back to nineteen ninety six, really taking golf to new heights.

Yeah, hard to imagine how who Tiger Woods was in nineteen ninety six, I mean comparatively to the global name that he is now.

Yeah, absolutely, fifteen major titles and obviously still playing. But yes, I think this the idea of whether this kind of partnership would continue has been in doubt actually for some months now, the splits that have come, so there's still lots of question marks there about what Tiger Woods might do. He does have his own clothing line apparently, not that I've ever seen it, but you know, the Nike sworsh I think he many revolutionized, you know, sports icons, and.

I mean he was signed up tonight before Lebron James t. I didn't realize I would have sameed that that relationship was back much longer anyway. Yeah, fascinating news in the words of sports sponsorship as well.

Now, let's talk about the latest from the Middle East. Now, the U S Secretary of State Anthony Blincoln is in Israel and meeting with the Prime minist of Benjamin Netanya, who this is Israel's longest serving leader, is also facing increasing questions about his leadership after the October seventh attack and the ensuing war in Gaza. Let's bring in Israel Bureau Chief Ethan Bonnet now for more on this topic. Good morning, Ethan. First of all, what is Anthony Blincoln

I'm not sure how much the toner shifted, but certainly Lincoln's goal here has been to urge the Israelis to move from a more robust form of warfare to a more targeted one, and the Israelis have said that's what they're doing at the urging of the United States. So partly it's to kind of button that down and make sure the Israelis say they're pulling five brigades out in the coming days and weeks.

So that's part of what they want.

And the goal here is to reduce civilian casualties and reduce the risk of starvation and disease spreading and God and to start thinking in some concrete terms about the so called day after how Gaza is going to be run once Israel ends its military efforts to take out Hamas.

So that's all of that.

Don't forget that Lincoln arrived in Israel from Saudi Arabia and the Emirates, and he comes with a very specific message, which is that the Golf leaders are eager and willing to help rebuild Gaza, but only in the context of the agreement for a Palestinian state. The Israelis are unlikely to be willing to say those words at the moment, so we'll have to see where it goes.

What about Benjamin Etniau and all of this as well, How has the war with Hamas changed his leadership?

Well, first of all, it has deeply threatened it.

I mean, he had sold himself and he'd his entire image been as mister Security, a guy who has presided over the longest sort of moment of peace and prosperity in Israel from around two thousand and six to October seventh, a few skirmishes, but fundamentally a great increase in GDP percapit, a huge increase in the economy and international investment in Israel, and in a sense that the place was safe and secure. That's all over, and his poll numbers are way down.

In addition, of course, you know, he's been.

Fighting charges of corruption, fraud, bribery.

So he's got that going.

But there have been basically and then there was this attempt along with his far right partners and government to remake the judiciary, weaken the judiciary, which upset people and produced weekly demonstrations in the country until October seventh.

So there was a lot going on to begin with. And his numbers are down.

He is not the most popular leader in Israel right now, Benny Gonsay is. But the system is that he doesn't have to call an election and he may well not.

So in terms of the pressure then that he might be under. From Anthony Blinkin, how much is Netnyahu's fate tied with what happens in Gaza? I mean, might he be forced out before the end of the war. I mean these Raelis are talking about many, many months of war and conflict.

They are.

The problem is what does it mean to force them out? There is no real legal system to force them out. He has a sixty four member a Kinesset majority out of one hundred and twenty, and as long as he holds his coalition together, there is no way to drive him from power unless he were to be convicted, and that's not going.

To happen quickly enough for that to happen.

So the idea would be that there's this emergency cabinet war cabinet, which includes members of the opposition.

If this war shifts into a more.

Low level operation and they decide there's no longer a need for an emergency cabinet, then we're back to the old government and you know, they'll probably be weekly demonstrations again calling for him to resign, and people are very angry and eager for the remaining hundred plus hostages to be returned. But you know, there is no specific way of making him leave, and what we know about him suggests he's unlikely to go on his own.

Okay, well, a story for us to honoror then Israel Buia Chief Ethan Browner, thank you very much for joining us.

With that.

We've been reporting in recent weeks though on the attacks on cargo ships traveling through the Red Sea. The strikes by militant group in Yemen have endangered civilian seafares, raise costs along a crucial global trade artery, and of course it's related to the war in Gaza, to attentions in the Middle East. Bloomberg's Aaron Clark has been speaking though to some of those aboard these ships, and he joins us now for more Alan, good morning, Thank you for

Yeah, the Huthi militants and you men, they're attacking ships connected to Israel, or they've said they're attacking ships connected to Israel in order to break the siege on Gaza and stop Israeli aggression. You know, they're they're demanding people in Gaza get access to things like food and medicine. Some of the initial attacks were on vessels that appeared to have a link to you know, Israel or Israeli ownership. Those connections have begun to look a lot more tenuous

And you spoke to sephars whose ships have been attacked by by drones? Can you describe what they experienced?

Yeah, I mean, you know, it's it's pretty traumatic. One seafair I spoke with he described how, you know, he was on the bridge helping navigate the ship through the Red Sea. It was around midday, most of the most of the crew was was having launch in the dining hall and basically, you know, there there was a loud bang and it was very clear that that there had been some sort of an attack. It didn't actually directly

This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Streets and beyond.

Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcasts.

You can also listen live each morning on London Dab Radio. The Bloomberg Business app and Bloomberg dot Com.

Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty. I'm Caroline Hetka.

And I'm Stephen Carroll. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg day Break Europe