Good morning. It's Monday, the sixteenth of October here in London. This is the Blueberg Daybreak europe podcaster. I'm Caroline Hepge. Coming up today a diplomatic drive. America scrambles to contain the fallout from the Israel Hamas war as the risk of escalation grows. The US also prepares to tighten curbs on China's access to advanced chip technology. Plus housing in growth data in the UK point to pessimism about the prospects for the economy. Here, let's start with a roundup
of our top stories. President Joe Biden is considering a trip to Israel as Western nations rampop efforts to prevent the war with ha Mass from engulfing the region. The diplomatic push comes as the US confirmed that the country has held back channel talks with Iran, warning Tehran against escalating the conflict. The efforts to keep the crisis from further escalating comes as Israel continues to prepare for a
likely ground invasion of Gaza. In an interview with CBS's news is sixty Minutes, President Biden stressed his belief that Israel will act in accordance with international law. But stressing he doesn't believe the country should control the territory long term.
I think it'd be a big mistake. Look what happened in Gaza. In my view is Hamas in the extreme elements of mass don't represent all the Palestinian people, and I think that it would be a mistake, prettys real to occupy Garz again.
Meanwhile, Israel's ambassador to the United States, Michael Herzog, spoke to see an End State of the Union about the country's likely invasion of the Gaza Strip.
We have no desire to occupy or reoccupy Gaza. We have no desire to rule over the lives of over two million Palestinians, and certainly want people to go back to the homes. We're talking about innocent civilians and we are doing everything we can to keep them out of harms way, while Hamas is doing everything it can to keep them in harm's way. That's a situation we are at.
Hertzog spoke after the Israeli military released a statement saying that they are now preparing for an attack on the Gaza Strip from quote air, sea and land. Palaesinian authorities say that close to two and half thousand people have been killed during Israel's bombardment of Gaza. The bombings come in response to the initial attack by Hamas, which killed at least one thousand, three hundred people. This as the UN estimates that Garza's main hospital is close to running
out of fuel to power its generators. Doctor Kassan Abusita is a Mezza sin Frantier surgeon working there. He says that the civilian cost of a ground invasion will be hard to bear.
It'll be in absolute catastrophe carnage. Gaza is so densely populated, two and a quarter million people in a very small area of lab This is a turky shoot, and if you go into Gaza, you go in knowing that you're going to have to commit massacres.
Those comments come as the Israeli military said that it believes that more than six hundred thousand people have left Girlza city and the surrounding area for the south of the territory. Meanwhile, the only border crossing between Egypt and Gaza is expected to open this morning, allowing aid to
enter and foreign nationals to evacuate. Now onto some other stories this morning, the United States is planning to tighten measures on China's access to advance semiconductors and chip making equipment with more his Bloombergs head Baxter.
The first round happened in October, described as sweeping. So what this will do is tighten the measures already in place to refine to close loopholes controls on selling graphic chips for AI and advanced chip making equipt the Chinese firms. The US will also add Chinese chip design firms to a trade restriction list on AI and impose additional checks to firms trying to evade restrictions already in place by routing through other nations, Ed Baxter, Bloomberg Radio.
Poland's opposition leader, Donald Tusk, has declared victory in the country's general election, mocking a possible shift in the tide of populist forces in europe An. Exit poll predicts that the ruling nationalist Law and Justice Party has lost its majority in parliament to a coalition led by the former European Council President. Turnout was estimated at seventy three percent,
a record. The upset could steer the country back into the European mainstream after the EU withheld more than thirty five billion Euros to punish Warsaw for curbing the independence of judges and the media. Here in the UK, home seller is a tr trimming their expectations, with October's asking prices rising by the smallest amounts since two thousand and eight. Bloomberg's James Walcock reports.
Right Moves say the housing market is the most price sensitive it's ever been. The toxic cocktail of higher mortgage rates and inflation is hitting seller confidence, with sales down seventeen percent compared to October last year. Landlords are also being hard, paying forty percent more in mortgage interests than a year ago. That's led many to pass on costs to renters or leave the market altogether in London, James Wilcock, Bloomberg Radio.
Now.
In US politics, House Democrats say that they are having informal talks with Republicans about a potential bipartisan solution to find a speaker. Democratic leader Hakim Jeffries has told NBC's Meet the Press that politicians need to move onto the people's real priorities.
We want to continue to put people over politics and to fight for things like lower costs, better paying jobs, safer communities, and to build an economy that works from the middle out and the bottom up. On the other hand, House Republicans have been focused on fighting each other. It's time to in the Republican civil war.
Hakeem Jeffreys added that he would support changes to the House's rules to prevent hardline Republicans who ousted the Speaker, Kevin McCarthy from setting the agenda. Representative Jim Jordan is currently the front runner for the speaker position, but a number of moderate Republicans have said that they will not support him. A word then, on the specific response to what's happening in Israel here in the UK. Over the weekend,
thousands of people demonstrated in support of Palestinians. Be gathering in London attracted large crowds but also more than a thousand Metropolitan Police offices. The police had warned in advance that anyone showing support for Hamas could face arrests. There were also rallies in Manchester and Edinburgh. The UK government,
though remained steadfast in it support of Israel. There have been concerns, of course, about the scale of the Israeli response, but Rishi Sunac saying that at least on Friday and over the weekend. The country has every right to defend itself, although he stressed that civilian safety is paramount in our mind, so that the response from the UK Prime Minister Rishi Sunac I mean a similar response also from the opposition Labor Party. It must be said, but it was noteworthy
that there are those demonstrations in the UK over the weekend. Meanwhile, the spokesman for the Israeli embassy here in the UK insisted that Israel is not targeting civilians, but to talk about the impact and the casualties of the conflict with Hamas in Gaza, meaning that is innocent people will pay tragically with their life. So that's the view then from the UK. Let's also talk, though more broadly, about what's
happening diplomatically. So the US Secretary of State Anthony Blincoln is returning to Israel after diplomatic talks with Saudi Arabia and Egypt and a warning from the US to Iran against escalating the conflict. President Biden may also visit Israel soon. He has told US media that he believes Israel would act by the rules of war. The Israeli army is poised to stage a large scale offensive in girls, something
that we've heard now for a number of days. Joining us in the studio, Bloomberg's news director in Europe, the Middle East and Africa, Rosslyn Mathis, and good Morning Rolls. Thank you so much for being with us. How does Israel firstly wipe out Hamas on the ground, it stated aim? How can that objective be realized?
Well, that is the big question in fact, ken it wipe out Hamas on the ground as well as how and does it really want to? You're talking about a group that does have a leadership structure and a lot of organization, but it's also really quite a morphis in many ways, and so sort of splinter groups that come off at, support groups that come off it, and a
load of tentacles everywhere through the region. So the question is how do you destroy all of that once and for all, And in doing so, can you destroy the support for it as well? Because you can say that you've decimated Harmas, but does something else just grow back in its place. It's like a many headed hydra in a way. So is the realistic goal to destroy Hamas or is it simply to get hermas so denuded to the point that it can never again mount the attack of the kind that we saw just over a week
ago inside Israeli's soil. Of course, with the mass casualties on the civilian side, is the goal ultimately to weaken it to the point that it really is such a shell of itself that an attack like that can never happen again.
Will Palestinians get more access to food, to water, to supplies? Pas in Biden even mentioned a safe zone the border crossing it rafa. What is the situation for Palestinians.
It's still pretty desperate. We're hearing that the Rougher crossing may open for a limited amount of time today. We've had that, of course several times over the past few days, and it's not really eventuated. And even if it does, the US is cautioning like it may not be safe to cross, even if there is an ability to do so for several hours. So the options for Palestinians and
Gars will remain very limited. And also for sort of Americans who are there, others who are trying to get out, how can you leave even if you want to, So that's one question. Also, the conditions inside Gars we know are pretty terrible. We know in the hospitals in the north. There are loads of people, tens of thousands of people crowded into hospitals to seek sort of some sort of safe haven in the event of a war. We know that water did get turned back on to the southern
part of Gaza. That's possibly designed to coax people to move south. If you go there, you will at least have access to water. But right now there's no sort of clear passageway for people to get or also for stuff to get in, which includes food.
I use this phrase advisedly, but there does seem to be a palpable sense of panic from the intensive shottle diplomacy. What are the worries about a wider conflict currently?
Well, that's right.
I was trying to think back to the last time a US Secretary of State had visited so many countries in quick succession. We were talking about nine countries, some of them twice in about four days. Going back to Israel today, now talk the US President Johan Biden may even make a lightning visit to Israel within days, And all of that is conveying this growing sense that we're hurtling towards something big and broad in the region and
this sort of effort to do several things. One is possibly to persuade Israel simply to stave off a ground war inside Gaza. The other is to talk to countries in the region to try and negotiate things like hostage transfer, safe passage of people from Gaza, humanitarian aid and so on. And the third one, of course is to disuade around and others from getting involved. That if a grand war does kick off and you've got Hiszbala of course supported by Iran to the north of Israel, and there's skirmish
is going on there obviously already. So the real sense of concern in the US, also in Europe and in the region is that this is going to at some point draw in those other actors, and then where does this war end?
Yeah, indeed, Roslin, thank you so much for being with us this morning, Bloomberg's news director in Europe, the Middle East and Africa, Roslyn Matheson, as we will watch the Sectary of State Anthony Blincoln, expected to return to Israel today. Now, the United States is planning to tighten measures against China to restrict its access to advanced semiconductors and chip making gear. This is an update to curbs that were announced a year ago that were criticized for failing to get support
from Kili's, notably the Netherlands in Japan. So I want to speak to our Bloomberg Chi and Economy and government. Edited Jill Deesis this morning. Good morning, Jail, thanks for being with us. How effective were the restrictions lost? Yeah, I mean this is a significant point of tension between the US and China.
Yes, Caroline, well, I think, you know, it's a pretty complicated topic for some reasons. I'm sure we'll get into in a few moments, but the short of it is that, as you just said, you know, those restrictions were unveiled before the US got the support of key allies, including the Netherlands and Japan. That essentially allowed equipment companies in those countries to continue selling advanced gear to Chinese customers.
It's part of it. But I think what ultimately they're trying to accomplish with this proposed set of you know, refining and closing some loopholes, is looking to strengthen some controls on selling graphics chips for AI applications. That's a big part of it. They also want to try to figure out how they can, you know, restrict additional advanced
chip makeing equipment to Chinese firms through other ways. And they also just want to impose additional checks and Chinese firms that are trying to evade export restrictions by routing shipments through other nations. So ideally what the US would be looking at is maybe adding design firms in China to a trade restriction list, and so that trying to
trying to show up things there. But yes, I think ultimately, I think it's really just about trying to find ways to stop these Chinese companies from routing things through other countries or ultimately using things for applications in advanced tech that the US is reluctant to a lot of them to do.
So, okay, so trying to tighten not the rules, close off the loopholes. I mean there have been, though, in the meantime, quite notable successes for China in developing its own domestic capabilities.
Right, Yes, I'm glad you brought that up, because I think that that's ultimately what makes this the effectiveness of
those rules last year such an open question. So the big one that made a huge splash was just a few weeks ago when Huawei, the major Chinese telecoms tech maker that the US has been imposing restrictions on since twenty nineteen as part of, you know, sort of the poster child really for those big, big US China tensions during during the trade war, as they were trying to short up these things, they had this pretty massive breakthrough with a phone we tore down actually just a few
weeks ago that showed they produced this chip by a Chinese company that developed these manufacturing capabilities that the US thought were well beyond where they thought that the company had stopped advancing. So their ability to sort of create this phone that had really really competitive tech within the Chinese consumer market, I think has raised a lot of questions about, you know, how advanced China is able to get.
The US is still investigating that phone and trying to figure out exactly where things happened there, But I think that that kind of came as a surprise and ultimately is facilitating some of these new restriction announcements.
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