Good morning.
It's Monday, the ninth of October in London. This is the Bloomberg Daybreak Europe podcast. I'm Stephen Carroll. Israel strikes back at Gaza after Hamas attacks kill more than seven hundred people. Hamas faces international condemnation as tensions in the Middle East flare, plus fears of a proxy war, oil surges as the risk of a wider conflict puts markets on edge. Let's start with the roundup of our top stories.
More than seven hundred Israelis, most of them civilians, have been killed by Hamas in the weekend's attacks on southern Israel. About four hundred Palestinians have also died in fighting and retaliatory attacks. As the Israeli military has regained control over most areas breached by militants. The operation by Hamas, which included taking scores of Israeli hostages, was an unprecedented incursion
that has shaken real stability and markets there on. Ohayan Shakti's relatives were among those taken.
I don't know how this can be resolved in a way that will secure their lives and bring them back to Israel alive in one piece.
I don't know how this can be done.
O'hayan Shakti says she doesn't know how she will be reunited with her family. It's unclear how many hostages have been taken, and Hamas says it was holding dozens of commanders and soldiers. Reacting to the attacks, Israeli Prime Minister Benjamin Nettania, who said the country is now at war with Hamas.
Hamas started a cruel and evil war. We will win this war, but the price is too heavy to bear. This is a very difficult day for all of us.
The timing and scale of the attack appears to have caught Netanyahu's government by surprise. The country's officials have been warning for months that Palestinian militant groups were preparing for violence, but the attack still appears to represent one of the biggest failures by Israeli intelligence in decades. Within hours of Saturday's attacks, these ready defense forces launched Operation Swords of Iron, cutting off power and carrying out airstrikes against targets in Gaza.
The Palestinian Health Ministry says hundreds of people, including children, have been killed there. Reacting to the events, read Mansur, the Palestinian observer at the United nations said this.
We chose the peaceful path to achieve our rights, but Israel continued using bland force against Palestinian lives and Palestinian rights. Israel cannot wage a full scale war on a nation, its people, its land, its holy sites and expect peace in exchange.
Despite read Mansur's comments, Israel says it won't stop until Hamas's military infrastructure is dismantled. That's a task that seems likely to take months and will likely include a ground invasion. President Joe Biden has towed Prime Minister Netanyahu that additional military assistance for Israel is now on the way, with six US naval vessels now headed to the Eastern Mediterranean
to quote bolster regional deterrence. Meanwhile, the British Prime Minister Richi Sunak says the UK stands unequivocally with Israel following the attacks. Now is not a time for equivocation and I'm unequivocal. Har Mass and the people who support her Mass are fully responsible for this appalling act of terror. Ritchie Sunac's comments come as Saturday strike in Israel's subsequent
declaration of war threatened to unnerved markets. Oil has surged by as much as five percent after the attacks, and while the events don't pose an immediate threat to crude supplies, there is a risk the conflict could spiral into a more devastating proxy war involving the US and Iran. Turning now to other news, the Labour leader kir Starmer says the party must keep its composure over the prospect of power.
At the start of possibly the last conference before general elect the Labour leader spoke at the party's women's conference.
A simple message that we take to the country that labor will make a practical difference to the lives of millions of women in this country.
Starmer's Labor Party is expected to use the conference to outline plans for the NHS and for growing the economy. Bloomberg understands that the party is considering plans to borrow to invest in British industry and Metro Bank has secured a nine hundred and twenty five million pound financing package deal which includes a forty percent haircut on some bondholders.
The agreement, Cy's Columbian financier Jimmy Glinski take a controlling interest in the British retail and commercial bank Metro gains some much needed breathing space after a tumultuous week that saw its share price whipsaw. Of course, the story that is dominating our programming today are the events of the weekend in Israel. More than one thy one hundred people are dead in Israel and Gaza after the weekend's Hamas attacks and the retalitory airst strikes on the Palestinian territory.
It's the worst attack on Israel in fifty years, with potentially wide reaching consequences. For the latest were joined Byer Israel BUA chief Ethan Bronner and Tel Aviv and a studio with me in London as our EMA andis reactor Razin Mathison. Good morning to you both, Ethan, and I'd like to start with you. What is the latest that you can tell us this morning about what Israeli forces have been able to do in terms of regaining control of areas where fighting was ongoing over the weekend.
Yes, I can seven. So the situation remains relatively dire in Israel. The Israeli say that Hamas fighters are continuing to sneak in in small numbers to Israel and remain at large in Israel. In the south, mostly but possibly beyond. There are still families being held hostage by Hamas fighters in the south of Israel.
There are at.
Least one hundred Israeli hostages being held in Gaza, so from an Israeli perspective, the situation is not yet under control.
Forty eight hours after the assault.
They are of course striking by air in Gaza and say that they are going after a bunch of launching sites and military infrastructure held by Hamas. But they were clearly caught in terrible surprise, and this is taking a lot longer and a lot more painful than they ever expected.
What have we heard from Prime Minister Benjamin Saint Natania who and the government about what they expect to do from here?
The Prime Minister has actually not held especially high presence lately. I'm sure it's a very difficult time for him. I would say that the military officials and those who have been in and out of government are talking about a month's long campaign which will involve a ground force.
Very likely.
No one is asserting it as a fact, but it's increasingly viewed as likely, and that this is going to take a long time, but that they say they are determined to never allow Hamas to have the capacity to carry out such an attack.
Again, Ethan stay with us.
I'd like to turn to Razin mathscenari Emians reactor, who's in studio with us. There was a meeting also of the UN Security Council last night.
Ros.
What do we know about what happened there?
Well, there wasn't meeting. It was a closed door meeting and obviously an effort by some members, including the US, to get a unified statement condemning Hamas for this attack on Israel. We didn't see that statement eventually in a way that's no surprise, of course, when you look at the makeup of the UN Security Council, you've got Russia and China there. Russia has supported around obviously in the Middle East, which it turned backs Hamas, and China tends
to walk a line on this. You can see in the statements they've issued so far since his attack, not overtly criticizing Hamas by name, not overtly calling out the Palestinians for this, just urging a ceasefire, and no great desire to be part of a statement that's condemning Hamas. Of course, A bit broader questions over the utility of the UN Security Council in recent years, including its response
to Russia's invasion of Ukraine. So you're not really going to see strong leadership necessarily coming from the UN in this moment. The real thing to watch, obviously is the key ally of Israel, which is the US.
So far, the US has sent six vessels, including an aircraft carrier to the Eastern Mediterranean. How should we assess the US response so far to these events.
Well, certainly a high level of concern about what's going on, strong statements of support for Israel, saying they'll support Israel and in a number of ways, including potentially militarily, talk of more aid packages coming in. And the US has had a roll over the years in sort of the development and the production of the Iron Dome missile system, which has proved quite effective. Yet again in the recent events, the question is what does the presence of the US
Navy close by do. It just sends a signal for a start, the US is in the air in the idea that people need to probably keep a lid on contagion effect from what's happened. Again, the concern that this sprawls out into other areas of the Middle East. So that's an important thing. Just again, the US could be needing to potentially West Caast now evacuate its own citizens from the area.
Ethan to you, and a word on the military response we've had from Israel so far. Can you describe to us what has happened in terms of military operations since Saturday?
Sure, And one last thing I would I would, I think with Ross said, is very important and just to point out that the presence of that US system here is really aimed at Isbelah at Lebanon, as she implied.
It is not aimed at Hamas in the South.
It has aimed at the fear that there could be a kind of a multi front war and to send a signal in terms of what Israel has done. It had something like twenty nine spots along the border fence that were breached on Saturday morning. They have repaired them
and say largely secured them. Have mostly they've arrested and killed a whole bunch of Hamas fighters in the South, and they have now been hitting from the air hundreds of targets, especially launcher sites, to reduce the number of rockets and missiles that Hamas can send to Israel, but they are finding it much more difficult than expected. They have called up four divisions, there's a whole bunch of reservists going down. There are already complaints of a slight
lack of equipment. It's fairly chaotic, it.
Must be said. This is not a well ordered situation. From Israel's perspective.
There's been much discussion about the intelligence failures that led to this attack happening as a surprise on Israel. What is being said about that there Now.
This is seen as perhaps the worst intelligence failure, certainly since the nineteen seventy three war.
And again it's a sort of double nature.
One is an operational one, they didn't have enough troops down along the fence, but it was largely a conceptual one.
And here I think this will take a long time to understand. Well.
For the last few years, and especially six or ten months, Hamas has given the distinct impression to Israel that it was not in a fighting mode, that it was looking to negotiate and talk its way to a future. Meanwhile, it seems planning all along a massive invasion. They fooled the Israelis, and the Israelis feel utterly humiliated about it.
Ros.
What do the events of the past few days mean for the efforts to normalize relations between Saudi Arabia and Israel and other Gulf countries.
Well, as Ethan was saying, I mean, Israel is going to be very focused for quite some time, possibly months, simply on its efforts to contain Hamas militarily now. And that's really going to be front of mine. With the level of casualties that we've seen, has to be number one. So does that just take normalization off the table? At the very least, it puts it very much on the back burner. There's going to be no appetite to have
those conversations continuing. They're very, very delicate conversations to be happening at all, let alone in the environment that we're in at the moment, and certainly that may have been some of the intent from Hamas in carrying out this attack, was to derail that process. Certainly, it's got to be very much on the back burner for now.
Whereas the Wall Street journals also reporting this morning that Iran helped Hamas to plan these attacks, what's been the official response to those reports.
Well, obviously it's a pretty natural line to draw, given the historical support that Iran has given to Hamas and obviously also by Hesballah, which Ethan was talking about a minute ago. Are you seeing US caution officially on that. They're saying, there's no there's nothing that they see that tangibly ties Iran to this, But of course you see
a long history of support militarily, strategically, financially Hamas. And whether or not they knew about this attack, they were guiding this attack and helping them planet is another question, but certainly there's a strong level of historic support there. The US is saying officially right now, they don't see anything that directly links around to this particular attack.
Ethan, What does.
All of this mean for the political situation in Israel now? The President calling for national unity, There's been some talk from some of the opposition party leaders as well.
Yes, I think it's important to just recall for our listeners that what happened on Saturday morning was a fairly brutal civilian massacre. Hundreds and hundreds of people were slaughtered. This was not really a military incursion. These were kids
that a concert, These were people in their homes. This has unified this country in an instant, and the protest movement for example, that was protesting against Prime minister in Titania who in the streets for nine months, has now turned into a support system for the troops and the people in the south, raising money for them. As you said, opposition has talked about joining a national unity government. The president, as you said, mentioned, and I think that there's a
likelihood of that happening. This is I don't think that long term prime minister in d'artagna who can survive this failure of intelligence. But for now people are gathering around and really in a rather unified way, which has eluded this country for this past year or two.
Rather I final word to you about wire else we should be watching in the region for the wider implications of the events we've seen in Israel.
Well, obviously, again the concern is that this does spread and perhaps if there's a long running ground war in the area, that does draw in other plays, including around
although so far it's been fairly contained. You saw some rockets fired by Hesbealah, you saw some rockets fired at Hesbelah, but that's really been sort of a gesture if anything else, and there doesn't seem to be an appetite really to see this spread beyond where it is now in the terrible events itself within Israel, but certainly that bears watching, and not just for security in the region, but for beyond,
because of course this is an oil producing region. If all supply gets affected, that's very significant for the global economy as well, especially given the past year and a half of Russia's invasion again of Ukraine. So those are sort of broader threads worth watching, but for now obviously a strong desire to not see this spread.
Our Amia News director Roslind Matheson and from Tel Aviv, Israel Bureau Chief Ethan Broner, thank you both very much. Now we are continuing to monitor events in Israel, but turning to some political news here in the UK. The Labor Party holding its annual conference in Liverpool, freshenal success of the by election victory in Scotland, but the events of the weekend threatening to overshadow the party conference. Cayline Hepgur is live in Liverpool for us this morning. Good
morning to you, Caroline. What has been said first of all on this made her international story at the Labor Party.
Conference, so the Labor leader Kirs Starmer has made a complete break from three years ago if you recalled Jeremy Kudabin presiding over a Labor party accused of deep anti Semitism that saw protests in Parliament Square and prominent Jewish
MPs resigning. Labour has released a statement and also spoken about this with the Shadow Health Secretary Shadow farn Sexualary talking about this, Labour stands firmly in support of Israel's right to defend itself and talking about the indiscriminate attacks from Hamas. I mean, Corbyn has been expelled from the party, but he still would not condemn her mass over the weekend. In particular, he talked only about any and all the
tax in general. So I think it was also very significant that Luciana Berger, one of those MPs who resigned, returned to conference last night saying that Kirs Starmer has shown the leadership and done everything necessary to turn our party around. So this is significant. The Board of Deputies of British Jews and other Jewish leadership groups in the UK have thanked both the Prime Minister but also kiss
Starmer for their support. So I think that on this issue Kis Starmer is trying to clearly put a significant divide between the former leadership of the party and the way that he wants to steer the Labor Party in the UK. Because, as you say, this is potentially the last party conference ahead of the next general election in the UK, Labor is twenty points ahead in the polls. The mood here, I must say in Liverpool already, frankly is excited, nervous, yes, scared to put a foot wrong.
But the party you know, has potentially real shot at power. They've been out of power since twenty ten. Can Kiss Starmer, the former prosecutor turn politician, win the next general election in the UK? You mentioned that he won that by election. His party won the by election in Scotland. So I put a few of these questions to Steve Rotherham Lays Liverpool metro Mayre about what Starmer has to do at conference, what he needs to do to convince voters and businesses and others to vote for him.
I think what you're going to see over in the next few days is a government in waiting, and you know the shambles of the Tory Party conference in Manchester will be in star contrast to policy decisions and really innovative ideas about what we need to do to take our country forward, and that's really what I'm looking forward to over the next few days.
Does Labour need to deliver a lot more policy detail now? I mean that has been also a concern that actually Kirs Starmer has said very little and there's a big question mark about whether there'll be more detailed policy at conference, or whether that will come in the manifesto, whether it won't come at all, that Labor is sort of relying on the Tories to lose rather than proposing policy. Does Labor need to deliver more policy now.
Well, you're not going to see the manifest so launched in Liverpool at party conference because we don't know when a general election is going to be called and if the Tories, if mister Schuenach wants to call that general election, then I'm absolutely certain that you'll see all of the detail of policy come to tuition at this moment in time.
Of course, we don't know when that will be, but we think it will be within the next twelve months or so, and so we're gearing up for that and you know, we have an army of volunteers ready to take that message out onto the doorstep and to fight in every constituency so that we get a majority Labor government and then we'll really see the difference that the Labor Party can make to this country rather than this failed toy alternative.
We've got the highest taxation levels that we've seen since the Second World War. It's hard to tax the UK more in order to create a fairer society if that is the route.
Yeah, and Rachel Reeves has said, you know that we're going to be fiscally prudent and that's the right thing to do. We will find ways, of course of ensuring that it's not just the quantum of funding that is available and hopefully that does grow, but also the distribution is fairly and that's what happened so far in this country.
That's embedded the inequalities that the distribution formula based on the Green Book methodology from the Treasury has meant that the Tories could give you know, their shire counties more money. You know, missus Schunach is famous for actually standing up and making a speech saying that that he's wrestled funding from the areas that needed most and give it to
Tory areas well. We need to reverse that and we need to ensure that those places that have been left behind for generations are now the priority for an income and labor government.
Does in Liverpool think that labor is the party of business?
Well, you can ask them, but certainly the businesses that I speak to overwhelmingly a support of what I've done in the Liverpool City of Egypt. And if what I've done is a microcosm of what can happen on a national scale, then yes, businesses are massively supportive.
I tell you what they're not supportive of.
They're not supportive of the Tory government that cancels HS two, that causes absolute confusion and chaos, that has the country and the shambles that has a former prime minister and list trust that has cost every single.
Household thousands of pounds. They're not supportive of that.
But they are supportive of the things that I've been able to do with limited powers. But just imagine having a labor metro mayor labor councils and then a labor government working in tandem.
That's the real prize that we're talking about.
The Prime Minister is she sud that clearly thinks that he is the selling point perhaps rather than his Conservative party that's seems to be the impetus. Does that target a labor weakness? I that it is the Labor Party that seems to be more popular than kiss Starman, that Starmer lacks personal appeal. Are you worried about that?
Well, Richie Schunach is their benefit.
If he's their their poster boy for Toryism, then I think we're going to do all right, aren't we?
Because we saw what he was like.
He can't make a decision, he can't answer a question, He flips from one thing to another. I just think that what you're going to find over the next few days is not just a leader of the Labor Party who provides that vision, but a united party. And that's the most important thing. The public and the electorate like to see teams. They like to see people working together. It's not about personality politics with that we had with Boris Johnson for instance.
And it's not about mad ideas that we're seeing we Liz forrus.
This is about somebody who will have a team and we will steady the ship and we will provide a vision to build on.
So this country fulfills its full potential.
This is Bloomberg Daybreak 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, Spotify and anywhere 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 device. Just
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