Liverpool Parade ‘Horror’, EU-US Accelerate Talks, NatWest’s New Era
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This is the Bloomberg Daybreak Europe podcast, available every morning on Apple, Spotify or wherever you listen. It's Tuesday the 27th of May here in London. I'm Caroline Hepke. Coming up today, a horrific incident. The words of Prime Minister Keir Starmer after a car drives into crowds at Liverpool's Premier League trophy parade. The US and EU agree to fast-track trade negotiations as President Trump pauses 50% tariffs on the bloc.

And 17 years after the bailout, NatWest is preparing for life after government ownership with an eye on acquisitions and wealth management. Let's start with a roundup of our top stories. 27 people, including four children, have been injured after a car drove into crowds of people during Liverpool's Premier League victory parade. A 53-year-old British man has been arrested.

Merseyside Police Assistant Chief Constable Jenny Sims says that they are not looking for anyone else. I know that people will understandably be concerned by what has happened tonight. What I can tell you is that we believe this to be an isolated incident. The incident is not being treated as terrorism.

Merseyside police speaking there as the local fire service reported that four people, including a child, were lifted from beneath the car. In a statement, Prime Minister Keir Starmer said Liverpool stands together and the whole country stands with Liverpool. Liverpool Football Club says its thoughts and prayers are with those involved.

So that our top story this morning. Now, let's think about the European Union, which says that it has agreed to accelerate negotiations with the US to avoid a transatlantic trade war. The move to fast track trade talks comes after a phone call between the EU Commission President Ursula von der Leyen and the US President Donald Trump. Following the call, President Trump also extended the deadline to impose 50% tariffs on the EU to the 9th of July to allow trade

more time for negotiations. While the EU has said that its priority is to find a negotiated solution with the US, it has also been preparing to retaliate with its own levies if needed.

European Central Bank President Christine Lagarde says that the White House's erratic policies are an opportunity for the euro. In a speech, Lagarde suggested that America could be undermining the dollar's role as the world's reserve currency. She says that this could be the moment the euro goes global. Moments of change can also be moments of opportunity. The ongoing changes create the opening opportunity

for a global euro moment. And this is a prime opportunity for Europe to take greater control of its own destiny. But let's not fool ourselves. It is not a privilege that will be bestowed upon us.

The ECB president called for a closer single market and more joint EU financing to make the bloc more financially attractive. Currently, the dollar makes up roughly 60% of sovereign currency reserves around the world compared to the euro at 20%.

Dutch pension fund PME is issuing a blanket warning to the US financial sector about caving in to pressure from the Trump administration to abandon basic principles. The fund, with $65 billion worth of assets under management, says...

that if firms stay silent on Trump's policies, they could lose the right to manage its money. Bloomberg's James Alcock has the story. PME says there is a fundamental divide between European values and the Trump administration.

The Dutch fund is considering changing its ESG metrics to exclude money managers who don't stand up for environment and diversity goals. They have also put their $5 billion mandate with BlackRock under review after the asset manager quit a net zero coalition. More worryingly for Americans, PME are not alone.

States treat have already lost mandates in Scandinavia and the UK. And Alianza's warning, the US may no longer offer a reliable investment runway. In London, James Woolcock, Bloomberg Radio. NATO Secretary General says that member states are moving towards spending 5% of their GDP on defence.

Speaking during a televised question and answer session, Mark Grutter confirmed the target, which meets the demand by US President Donald Trump that was originally deemed unrealistic. I assume that in The Hague we will agree on a high defence spend target of in total 5%.

Sorry, I would not mention that, but at least I did it now. But let's say that it's 5%. But I will not say what is the individual breakup, but it will be considerably north of 3% when it comes to the hard spend. And it will be also a target on defense-related spending. We need this because otherwise we can never, ever, ever reach the capability targets we have to reach.

NATO Secretary General Mark Rutte's comments. His first public endorsement of the figure as a target for the Defence Alliance. It comes as German Chancellor Friedrich Merz said that Ukraine has been given permission to use weapons from its allies to launch strikes inside Russia with no range limits.

Now to the UK. There are plans to train 120,000 British builders, engineers and care workers as the country tries to curb migration without worsening the skills shortage. The government plans to use £3 billion plus higher taxes on foreign workers to fund new

apprenticeships in key sectors. The drive highlights a problem for Labour who want to oversee both a boom in building whilst also cutting down on migration. So a central issue for the ruling Labour Party. And lastly to King Charles. He has arrived in Canada on his first visit to the country as its head of state. He's in Ottawa to open a new parliament at the invitation of Prime Minister Mark Carney. He will read the throne

setting out his government's agenda in Canada. Bloomberg reports it's partly a move designed to send US President Donald Trump a message about Canada's sovereignty after he said that he wants it to become America's 51st state.

Prime Minister Mark Carney says that that won't happen and he is pleased to welcome the King to Canada. I asked the King when I visited the United Kingdom in March, within days of my becoming Prime Minister the first time. His Majesty was very receptive and we're honoured by his visit. Prime Minister Mark Carney speaking there as the monarch prepares to read the speech to Parliament for the first time since 1977, an honour that is normally reserved for the Governor-General in Canada.

So, those are a few of our top stories for you this morning. Let's have a look at the markets. So, European stocks jumped yesterday because of the delay in U.S. tariffs. They were up 1% at the close. Automotive and industrial goods were amongst the leading gains. Futures, though, for European stocks are down almost two-tenths of 1% this hour. S&P 500 e-mini futures are soaring up by nine-tenths of 1%. The green

back this morning down for a third day on the Bloomberg Dollar Spot Index and we're down something like more than 7% for the dollar this year. So that's a major topic we'll be thinking about today. 10-year US Treasury yields dropping three basis points at 4.48. Japan's long-end yields declining sharply after hitting a record last week. There's an important debt auction on Wednesday for 40-year notes that's going to be closely watched. And then don't forget today the start of a big run of US data.

out, including US durable goods and consumer confidence data today. Right, those are the markets. Now, in a moment, we are going to be bringing you more details on the jubilation that turned into devastation in Liverpool over the weekend, and also this warning to US asset managers about what

what it means if they follow Trump administration policies perhaps too closely, ones which clash maybe with European values. So we'll get into that in just a moment. But there was another story that caught my eye. I don't know whether you've managed to see it yet. This is Tom Cruise and, of course, his Mission Impossible movie that was a huge hit over the weekend. There's a great piece by Tony Capaccio over the weekend called

Tom Cruise really did get a US aircraft carrier for the mission. Yeah, it's completely bonkers. The US Navy and Air Force Special Operations, they decided to accept the mission and to help Cruise's secret agent, Ethan Hunt, save the world, or at least to make

a bit of the movie about it. This is the story on the Blu-ray Turtle that has kind of fascinated all of us. The final reckoning, of course, Paramount reported a blowout budget for this movie, $400 million. Got a break, though, because the carrier and crew were already on scheduled training missions, so they managed to sort of get that assistance. Most of it, if not all, of the aircraft time was logged as official training.

requirements and therefore not reimbursable according to the Pentagon. Sadly, I've not seen this movie yet, but I bet a lot of you already have. It had a massive weekend, didn't it? So one of the stories that I've been reading about this morning and the helping hand for one of America's biggest stars.

Now, let's turn back to our top story this morning. A car ploughed into crowds of Liverpool fans who were celebrating their team winning the Premier League, leaving almost 50 people injured. Joining me now is Bloomberg's Tiwa Adebayo. Good morning, Tiwa. This was really awful, wasn't it? It was such a celebratory weekend, a bank holiday weekend.

And the open top bosses and crowds were out to celebrate this victory. And then it just turned into devastation. What do we know about what happened? Yeah, Carolina, as you say, it was supposed to be a day of celebration for the club and also for the city.

Hundreds of thousands of people had come out to celebrate the team's Premier League victory. It was a victory which had made them arguably the most successful club in England. So there was this real sense of jubilation. But that quickly did turn to terror after the incident that happened on Water Street, which is in Liverpool's city centre, just after 6pm on Parade Day.

Just moments before the incident occurred on Water Street, the Liverpool FC bus and team had actually just paraded their Premier League trophy from the top of an open-top bus, as you mentioned. And just to give you a bit of context, Water Street is just about a mile before the end of the parade's designated route.

So, according to Merseyside police, a car collided with a number of pedestrians who were celebrating the victory. The ambulance service says that 27 people were taken to hospital in the aftermath, with two, including one child, seriously injured. And a further 20 people were treated for injuries at the scene. And four people, including a child, were lifted from beneath the car. That's according to Merseyside's fire chief,

So really tragic scenes happening on what was supposed to be a day of celebration for the city of Liverpool. Yeah, absolutely. It had been a day of celebration and the incident took place around six o'clock in the evening. An arrest made. What have police said?

So, the Merseyside police held a press conference yesterday evening and they also released a statement telling us that a 53-year-old white British man has been arrested and the police do believe him to be the driver of the vehicle. There are also inquiries into the exact circumstances leading up to the collision that are underway and specialist officers have been put in place to support the injured and their families. The police

did also clarify that the incident is not currently being treated as terrorism and that's all we have from the police at this time as they continue their investigations. But the response from the club, from the Premier League, from the Prime Minister, a lot of people have made some comments already.

Yeah, we have heard responses from a number of people. So far, we've heard from both the Prime Minister and the leader of the opposition. So Keir Starmer shared his thanks to the police and the emergency services on X. And he said his thoughts were with those affected. And similarly, the Conservative leader, Kemi Badenoch,

Liverpool Football Club is understood to have postponed the celebrations for its own staff due to the incident. We often forget this is not just the end of a successful season for Liverpool, but it's the end of a football season and all clubs really.

do tend to celebrate that point in time. It's the end of a lot of hard work for the staff, but those celebrations on hold for the moment. They have confirmed that they're in touch with the police as investigations continue. They said they will offer their full support and cooperation. They've also shared thoughts for the victims in a statement. And also their rivals, Everton FC, who neighbour the club, have expressed their support. They're putting on a united front

in the face of this incident. Okay, Tiwa, thank you so much for being with me. Yeah, we are really hoping for the swift recovery of anybody hurt in that incident. Bluebecks, Tiwa Adebayo, thank you for your reporting.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better.

Now,

Now, U.S. asset managers are coming under increasing scrutiny and losing mandates with European pension funds amid concerns that America's investment industry is caving into pressure from the Trump administration on basic principles, including climate change and on diversity, equity and inclusion. Joining me now is Bloomberg senior editor for U.S. economics and government, Derek Warbank. Derek, good morning.

So there is this Dutch pension fund, huge assets under management, PME, which has issued a warning to U.S. money managers. What are they saying exactly? Well, thank you so much and good morning. Look, PME is basically saying quite simply that U.S. funds are not condemning what Trump is doing, how he's operating, how he's handling issues, including climate change issues.

the judiciary, diversity, inclusion, other things of that nature. It's really a continuation of a split that we're seeing between Europe and the United States in a number of different areas. Now, European funds are

have the ability to choose who they want to manage things, you know, and to be involved in what they're doing. To put real quite simply, they're taking a moment at this point, many of them, PME is by far not alone, to say, hang on a second, let's just see sort of

where we are and if you are aligned with what we're looking at doing. Now, I should say here, ESG sort of goes into three buckets, right? There's offense, you're trying to gain alpha and a differential in returns. There's also defense of

of trying to stop having a potential regulatory issue. And we do see some of these issues cropping up in regulation as well. And then there's also values, right? And this is where we're seeing the European funds speaking out. Yeah, and State Street has already lost some European pension money because of this. It looks like U.S. managers are basically caught, aren't they? Between the Trump administration and their goals...

and the Republican Party, maybe more Republican-leaning states, and then Europe and European standards. Yeah, well, and I mentioned the defense and regulation for precisely this point, right? Because Europe in a lot of ways, and certainly I'm sitting in Singapore right now, and European regulations are really a global standard. A lot of firms have to use the European standards because they tend to be the toughest. So if you work to the European standard, you're sort of good throughout the way.

The thing is, though, in the United States, there has been a backlash to that. Certainly with some states, Texas is the big one, that have said, now, hang on a second. We don't like the way that you're doing this. We want it done a different way, and often in polar opposition. So it is sort of taking these firms, many of which can't

candidly would prefer to focus on making money and putting them a bit between a rock and a hard place regulatory-wise between Europe and some of these conservative areas.

Yeah, absolutely. And PME, that Dutch pension fund manager, says that it's reviewing and is going to make a decision sort of shortly and maybe in the next few weeks. Derek, thank you so much for being with me. We'll be continuing to track this story, of course, as you say, globally. Bloomberg Senior Editor for US Economics and Government, Derek Warbank.

Now, here in the UK, the government's expected to confirm that it has fully divested its holdings in NatWest, meaning that the bank will chart its own course. Nearly 20 years since it was bailed out in the 2008 financial crisis. Bloomberg's finance reporter, Will Shaw, has been reporting on this. The government finally stepping back, Will. It has been a pretty long road, though, hasn't it?

It has, yeah. So, this all goes back 17 years to the financial crisis and the collapse of what was then known as the Royal Bank of Scotland. At the time, the bank had a £2.2 trillion balance sheet. And around the world, it employed nearly 200,000 staff. The NatWest that we know today is a very different firm. The balance sheet is just £708 billion. And the headcount is less than a third of what it was at that time.

And the intervening period saw huge restructuring. In the first five years alone, the bank cut more than 39,000 jobs and quit over 20 countries. And it would go on to pivot away from investment banking, which had got it into the scrape it found itself, and to focus on domestic, commercial, and retail banking instead.

The thing is, the sale of the government stake in NatWest has not been without controversy. What has the bailout actually cost UK taxpayers? So basically, after the crisis, Westminster made a series of emergency cash injections.

that brought its stake up to a controlling 84%. And that left UK taxpayers shouldering a bill of nearly £46 billion. Now, after the final sale, we calculate that the government will be out of pocket by about £10 billion.

Now, if you compare that with Lloyds Banking Group, by the time that was bailed out, by the time it became fully private in 2017, the Treasury had actually gained £894 million. So, obviously, there's a lot more money, a lot of money is being lost on NatWest. The government would tell you it's not really the right way of looking at it, and that without the rescue, the UK's financial system might have collapsed.

Yeah, okay. So then what about the future of the bank then? They've been on a bit of an acquisition spree recently. What's the shape of NatWest, which actually is largely a UK-focused bank, isn't it? It's very UK-focused, yeah. So last year they acquired the majority of banking assets from the retailer Sainsbury's. And they also, around the same time, they picked up a mortgage portfolio from Metrobank.

in a £2.5 billion deal. And more recently, it was reported that they'd shown interest in Santander's UK banking, retail banking business, though they were ultimately rebuffed on that front. So, they are, yeah, like you say, they are showing a renewed interest in acquisitions. Paul Thwaite, who's the CEO today, said at the annual general meeting earlier this year that if they have the ability to add scale and add capability, they'll have a look at it.

But he was keen to stress, as he always does, that any deals aren't likely to transform NatWest's overall direction and that the firm will remain disciplined, which is essentially it was undisciplined acquisitions that brought it to the verge of disaster back in 2008.

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 else you get your podcasts. You can also listen live each morning on London DAB 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 1130. I'm Caroline Hepke. 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.

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