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Bloomberg Daybacurate podcast, available every morning on Apple, Spotify or wherever you listen. It's Thursday, the twelfth of June in London. I'm Caroline Hepkip.
And I'm Stephen Carroll. Coming up today.
Exclusive Bloomberg reporting reveals a jump in the number of business leaders leaving the UK in the past year.
Rachel Reeves pumps billions into areas outside London in a bid to counter the electoral threat Reform UK poses to Labour's traditional heartlands.
Plus looking beyond the ninety day pause, President Trump plans to send letters to countries on the next fortnight, setting his unilateral Tara frights.
Let's start with a roundup of our top stories.
There are fresh signs the UK could be on course for the biggest exodus of wealth in the country's recent history. At Bloomberg, analysis of five million company filings shows a spike in business leaders leaving more than four thousand and four. Andrew disclosed an overseas move in the last year, up around twenty percent on previous years.
Boomberg James Wilcock has more.
The UK government is besting tax changes for non doms will bring in thirty three billion pounds in extra revenue, but that assumption is based on the vast majority staying. Bloomberg's latest data suggests exits are on the rise. Charlie Sosna heads that Michigan Private's wealth and tax teams. He told us last month, the wealthy are leaving.
Pretty safe to say.
It's an increasing percentage every day that goes by, and every year that goes by, and I absolutely wouldn't be surprised if it's twenty five percent plus heading into the forty percent mark. Sozna is one of more than a dozen lawyers and other advisors to the ultra rich who told Bloomberg between fifteen percent to two thirds of their non dom clients are out or making plans to depart
the UK. The individuals who've already exited command or share part of Fortune's totaling at least one hundred and ten billion dollars. That's according to the Bloomberg Billionaires Index. The full extent of the moves won't be known for at least a year when official tax sat is published in London.
James Wilcock, Bloomberg.
Radio the UK government is investing billions of pounds meanwhile outside of London in a bid to drive growth and also to win back popularity. The Chancellor announced one hundred and thirteen billion pounds worth of infrastructure investment yesterday, much of it outside of the Capitol. Rachel Reeves says that voters now need to feel the benefit of Labour's choices on tax and spending policy.
This government's task and the purpose of this spending review is to change that, to ensure that renewal is felt in people's everyday lives, in their jobs and on their high streets.
Chancellor Rachel Reeves also repeatedly attacked to the far smaller Reformed UK Party during her announcement. The unusual prominence is a sign of how concerned the government is about the new challenger.
US President Donald Trump says he's planning to send letters to trading partners within the next two weeks to set unilateral tariff freights. That move comes ahead of a July ninth deadline to reimpose higher duties on dozens of economies once the current ninety day pause expires. So far, the White House has only reached a yet to be implemented trade framework with the UK and a tariff truce with China. Speaking to reporters yesterday, President Trump had this to say.
We're rocket in terms of deals. Now at a certain point, we're just going to send letters out. And I think you understand that saying this is the deal. You can take it or you can leave it. You don't have to use it. You don't have to shop in the United States, as I say.
Trump was speaking as new data showed that US tariff revenue hit a fresh record last month of twenty three billion dollars. Figure marks a two hundred and seventy percent increase in the same month a year earlier. May's figer helped to reduce the US fiscal deficit for the month by seventeen percent to three hundred and sixteen billion dollars. However, Treasury Secretaries and says he still expects the deficit for the year to be between six point five and six point seven percent of GDP.
Well.
The latest news on tariffs comes as the US Commerce Secretary Howard Lutnik warned that the EU is likely to be among the last trade deals that the US complete. Speaking to CNBC, Lutnick said, I'm optimistic that we can get there with Europe, but Europe will be probably the very very end. Those comments come after European Union sources that told Bloomberg that they believe trade negotiations with the
US will extend beyond President Trump's July ninth deadline. Lutnik added that he expects to see deals with other countries to quote start coming next week and the week after and the week after.
The United States has ordered some staff to leave its embassy in Baghdad and authorized families of military service members to leave the region. Officials say the decision is due to heighten security risks after a round threatens to strike American bases if it is attacked over its nuclear program. The UK Navy also issued a rare warning yesterday stating that increased tensions in the Middle East could affect shipping,
including through the Strait of Hormuz. Hormus is the world's most important oil choke point, and Aran has frequently threatened to close US during times of geopolitical strife. However, it's never followed through on those threats.
Now, the Pentagon is reviewing a pact to develop nuclear powered submarines with Australia and the UK.
Dubbed ORCUS.
The twenty twenty one Biden era agreement was part of a pivot by Washington and London to strengthen their presence in the Indo Pacific region given China's military growth. According to a statement, the Pentagon is now considering whether that pact is quote aligned with the President's America First Agenda. Australian Deputy Prime Minister and Defence Minister Richard Males says his country is open to discussion with the US.
We understand America seeking more from its friends and allies around the world.
The answer is that as a conversation.
We are very happy to engage in and we will and we obviously have engaged in a historic increase in our own defense spending to this point in time, but we will continue to have that conversation with the United States.
Australian Defense Minister Richard Males speaking that any major revisions or even scrapping of the Orcus Pact would be a major blow to Australia's defense sector, which has already begun preparations for the new submarines.
Northern Ireland has seen a third night of clashes between rioters and police and violence that's been described by officials has racially motivated. The unrest began after alleged sexual assault in Ballymena, County Antrum, but a sinse spread to other areas. In the town of lar In, a leisure center which was providing emergency accommodation to families displaced by the violence,
was set on fire by master attackers. Mayor of Mid and East Antrum, Jack Minford, says there's growing fear in the community.
I spoke to local people in there who are very scared. People are labeling their host that are in Filipino and British or whatever. That should not happen in this day and age that people have to label their house. But there were a lot of probleties damaged randomly.
Jack Minford speaking there.
During the first two nights of unrest, thirty two police officers were injured and six people arrested. Police have not yet given any details about Wednesday night.
Now, those are top stories for you this morning. Let's get to the market. So stop futures are heading lower for the US. We're down by three times of one percent for both the S and P and NOWSTA I many futures your stocks fishy futures are also down by seven tenths of one percent. That is being propelled by the headlines that we were discussing about President Trump handing out effectively letters possibly around tariff rates in the next
couple of weeks. It also does mean that the dollar's weakening. We are down by three times of one percent on the Boomberg Dollar Spot Index. We had a number of winners including the Japanese and the Euro as well against that a softening dollar. Gold as people look for safe havens around the uncertainties, that has also done well, so by half of one percent for the gold Spot Prize, and also the tensions in the Middle East that have had an impact, it would seem on the oil markets.
So we see breakthrough features down by four tens of one percent after we saw those prices jumping earlier on Thursday or earlier this morning.
Any moment, we'll bring you more on our story on the ultra wealthy leaving London, plus the latest on what Donald Trump has said about tariffs. But another story that
caught a eye this morning. If you're thinking about your summer travel plans, France had a particular spike in tourism last year of course linked to the Olympics one hundred million visitors last year, which was a record, And Lindsay Tremuta has been writing about some of the places that if you're planning a trip to Paris course razy journey on the Eerstar from London, maybe some places you might
want to visit as well. I like this because it's it's quite easy, which I think is the yes, and takes advantage of high speed trains around France, I think, which is kind of a good option as well. So there's a chateau that's, you know, thirty five minutes from by from.
Paris, this Paris Plus so you get to do the kind of museums and all the wonderful things in Paris, and then you take a little mini break somewhere else, although there is one further afield. And if you can't be bothered with the trains, where did you just hop on a flight down to the coach Desire which definitely speaks to me. Lero was one of the recommendations. But there are lots of lovely places. I mean, that's it's got this very dramatic salt water.
The swimming piol carved into the rockside on the on the sea. So yeah, pretty spectacular views from there as well. Great piece and lindsay very inspirational for this Thursday Morning. Five French countryside escapes that para perfectly with Paris. Will put a link to the story in our show notes.
Now, more than four four hundred business leaders have left the UK in the past year. This according to the latest Bloomberg analysis as Britain accounts the cost of scrapping the non dom tax status. Joining us now to discuss is our ultranet Worth reporter Benjamin estupples Ben good morning. So Bloomberg has analyzed five million company filing is to get to this point? What does it actually show?
Yeah, good morning and credit to my colleague, are very talented colleague.
Max Harlowe.
That data analysis, what it really shows is that it signals that the disruption that's going on amid the UK business community. What it boils down to is the number of departures. Number of individuals business leaders disclosing that they are now living overseas was up from April twenty twenty five, about seventy five percent from a year ago and the
highest in four years. And why is that important? That month the UK scrapped it's centuries old nond regime and that effectively allowed wealthy foreigners living in the UK to get tax breaks for as long as fifteen years under the system that existed up until only a few weeks ago.
So what we can see is for the.
First time a real attempt from us to ascertain the damage that's going on and the ripple effects they're going to continue for the foreseeable future at the very least.
Yeah, of course, that that figure year on year, as you say, a massive increase for that particular month, which of course is related to the tax changes, but averaged over a year, it's an increase of around twenty percent on departures from those company director filings. The government has put forward the idea of that attacks the Rich policy would bring in more fresh tax revenue that at last from those people who are leaving.
What are we seeing on that CSAR A good.
Question, Stephen. This really boils down to one crucial data point. There're about seventy four thousand nondoms based on the latest government data, and if the biggest category within that group, if about if half of them go, then what the UK has tried to do on the non reforms will end up costing the government money. Now where where are
we there now? Some advisors are seeing as we heard earlier just a few minutes ago from our colleague, some advisers are seeing maybe forty as many as forty percent of their clients possibly going. Some are seeing even more than more than half of their clients who've specialized in this space, and we interviewed them for our big take today. We're not there yet or we can see the official data. It will come out in at least a year's time.
But what we're seeing on the ground, the witnesses in the private wealth community, an influential part of Britain services heavy workforce, they're seeing the damage right now.
Yeah, and this is also goes to the nove It doesn't it that the official data comes out with a big time lag, So it's about you know, what do we know now how reliable the data is. There has also been a tweak as well from the government and a new four year tax system available to the most recent non dom arrival, so there's also a question mark about whether that change helps matters.
Again, that's a good point.
I think what we had before was fifteen years and now We've got four other countries that arrivals to the UK as wealth hubs, like Italy, Greece, Cyprus, they have fifteen year regimes as well. They basically copy and pasted the UK's former non dom regime, took the best parts out of it, and a UK has gone right, we're actually going to cut more than by half. So what's happening now is the UK has already been seen in
this starkically different perspective. Whilst you might have come here, for example as a foreign individual, set up a business or run part of your business mpath from London, send your kids to school here fifteen years, you've got enough time. Now it's maybe being seen perversely, almost as like a divin end extraction zone. Come here, have a great time in London for four years, go to the West End,
go toal museums. But four years, you know, you can't really get your kids through school in that time, but maybe you can sell a business.
And by the.
Way, it takes about a year to set up in the UK and maybe about a year to leave, so really it boils down to maybe about two years. So the UK has radically changed the way it's perceived by the globally mobile.
Okay, Ben, thanks so much for bringing us details of your reporter this morning. Our alter net worth report of their bands doubles.
Now let's get it to the latest on the US tariff. President Trump says that he will send letters in the next week or two on unilateral tariff raids to the US's trading partners. This ahead of the deadline of the ninth of July. It's only US now to discuss. Has been a big senior at US Economics and Government editor
Derek Wallbank, Derek, good morning. President Trump seems to be moving away then from the idea of negotiating over trade with all of the US's different partners, as he had indicated before the.
End of this ninety day period. Is fast approaching.
Right that Trump had had put out all of the tariffs on Liberation Day, the ten percent global minimum baseline for almost every US trading partner, and then several more reciprocal tariffs calculated based on trade gap, and then the negotiations start. Right now, we've got the United Kingdom on the board, and after that we're still waiting for the next one to drop. There's several countries that are in advanced talks, India, Japan, there are others, but we're still
waiting for these next deals to come. And the idea, I think has been from Trump administration officials that at some point, when you get close to the end of that window in early July, you might see a whole lot of them kind of go together. Maybe they might come in some of a similar form. And we're getting to the end of this process now now. I think that it has been a daunting thing to take on.
I think every analyst that I've talked to has said that it is a sort of mission impossible to try and come up with, you know, ninety plus individual trade deals or however many it would wind up eventually being all in a ninety day period. At the same point, the Trump administration has to figure out what this end game is and what they're going to wind up with, what they're going to settle with, and how that's all
going to work. I think that there has been a thought that that they're not signaling that there's going to be a massive extension. That is always possible, but this is all toward how do we get to this endgame? How do we try and wrap things up? And the idea that there might be some sort of template that everyone kind of draws from or hughes close to. I think that's kind of where this is signaling.
Yeah, and look at, as you say, a lot of signals being read at this point, as it is a story that is evolving. Some of the signals we have gotten in the past twenty four hours have been around the progress made with China, Donald Trump saying that there was a deal done with China awaiting sign off.
Do we know what's in it?
If you listen to the exact words, it's sort of like a framework to implement a consensus reached in the Geneva talks, now decided in the London talks. It still has to go through and get signed off by Trump and she Trump is seeming very positive on this. We haven't heard the same exact thing from the Chinese side. That will take the time that it will take, but
that's trying to get the Geneva agreements on track. We're also hearing, you know, from from Howard Lutnik and Jamison Greer, who were two of the key negotiators from the United States, that this is kind of intended to pave a way towards a resolution over rare earths and over magnets and things of that nature, and that that that in turn could unlock some things that the Chinese want as well.
I think one of the big things that came out of Geneva, one of the one of the big sticking points with the implementation of easing the rare earth shipments and getting those sort of back on track. The US very much did not feel that China was living up to its agreements and rapidly escalated in response. Everything sort of went back went off track. Trump and you have a call, they go and talk for two days in London. Now that's kind of back on track. That's where we
are in sort of this framework. Do we have text of that framework now, but that's what's been described to us. And the other thing that I should mention when I say that is that when the Chinese side came out and read out their version of what happened, and then when the American side came out, it wasn't that they were different. I mean, that's something we've talked about. We have to judge whether or not they're the same or different.
But the US side has been way more expansive on what they say was in this the Chinese have very much stuck to the idea of tone tone.
Yes, okay, that is an interesting point, isn't it. In terms of the concrete numbers, though, the tariff revenue that the US is generating is quite significant, a record twenty three billion dollars in May. That's also helped to shrink the deficit just for that one month. Again, it's quite uncertain about whether those revenue streams are reliable, whether they'll remain.
Well, yeah, no, and that and that's that's one of the things that I think that Trump administration has been clear about that tariffs are an anchor of their revenue strategy as they're going forward. Trump has been really clear about this that tariffs were meant to help pay for his one big, beautiful bill of the tax cuts and other policy moves and uh and and they have been
expecting big revenue to come in. Even as that is quite a large amount of revenue, it is, i should say, nowhere in the ballpark of being able to offset the costings the projected costings of the tariff bill or not the tariff bill of the tax bill. So that is that still remains a gap there. So so when you're when you're sitting there looking at this, that that winds up being a dis connects. So even as there is quite a lot of revenue brought in, it's not necessarily
quite enough to do that offset. And it bears mention that these tariff collections are still not the fullness of what of what the Trump administration has talked about, has threatened, has put forward, because we have seen sort of again and again through the first you know, six month window of this administration, a lot of threats of where they're going to be, and then a pullback, and eventually they land somewhere much softer than where they were aiming to
do so. So I think one of the things to look for as we go through here is that if all of this tariff level kind of settles out somewhere well short of where the administration had threatened, they're also not going to get the revenue that would be implied by those sort of maximalist tariff policies. This is Bloomberg Daybreak Europe, your morning brief on this worries making news from London to Wall Street and beyond.
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