Wealthy Exit UK Exclusive, Labour’s Growth Gamble, Unilateral Tariff Threat
21:39 Share

This is an iHeart Podcast. 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. Thrive End can help you plan your finances for the people, causes, and community you love. What makes Thrive End different? Financial services and generosity programs are combined to help you build a financial roadmap for the future.

while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast, free shipping to in-depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals.

It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to AmazonBusiness.com for support. Bloomberg Audio Studios. Podcasts. Radio. News.

This is the Bloomberg Daybreak Europe podcast, available every morning on Apple, Spotify or wherever you listen. It's Thursday 12th June in London. I'm Caroline Hepker. 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 90-day pause.

President Trump plans to send letters to countries on the next fortnight setting his unilateral tariff rates. 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. A Bloomberg analysis of 5 million company filings shows a spike in business leaders leaving. More than 4,400 disclosed an overseas move in the last year, up around 20% on previous years. Bloomberg's James Wilcock has more. The UK government is betting tax changes for non-doms will bring in £33 billion in extra revenue.

But that assumption is based on the vast majority staying. Bloomberg's latest data suggests exits are on the rise. Charlie Sosner heads up Mishcon 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 25% plus heading into the 40% mark. Sosner's one of more than a dozen lawyers and other advisors to the ultra-rich who told Bloomberg...

Between 15% to two-thirds of their non-dom clients are out or making plans to depart the UK. The individuals who have already exited command or share part of fortunes totalling at least $110 billion. 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 data is published. In London, James Woolcock, 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 £113 billion worth of infrastructure investment yesterday, much of it outside of the capital. 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...

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 the far smaller Reform 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 rates. That move comes ahead of a July 9th deadline to reimpose higher duties on dozens of economies once the current 90-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 rocking 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 $23 billion. The figure marks a 270% increase from the same month a year earlier. May's figure helped to reduce the US fiscal deficit for the month by 17% to $316 billion. However, Treasury Secretary Scott Besant says he still expects the deficit for the year to be between 6.5% and 6.7% of GDP.

Well, the latest news on tariffs comes as the US Commerce Secretary Howard Lutnick warned that the EU is likely to be among the last trade deals that the US completes. 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 told Bloomberg that they believe trade negotiations with the US will extend beyond President Trump's July 9th deadline. Lutnick 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 authorised families of military service members to leave the region.

Officials say the decision is due to heightened security risks after Iran threatened to strike American bases if it is attacked over its nuclear programme. 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. Hormuz is the world's most important oil chokepoint and Iran is frequently threatened to close it 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 AUKUS, the 2021 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 Marles 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 is a conversation we are very happy to engage in and we will. And we obviously have engaged in a historic increase in our own defence spending to this point in time. But we will continue to have that conversation with the United States.

Australian Defence Minister Richard Marles speaking there, any major revisions or even scrapping of the AUKUS pact would be a major blow to Australia's defence 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 as racially motivated. The unrest began after alleged sexual assault in Ballymena County Antrim, but has since spread to other areas. In the town of Larne, a leisure centre which was providing emergency accommodation to families displaced by the violence was set on fire by masked attackers. Mayor of Mid and East Antrim Jack Minford says there's growing fear in the community.

I spoke to local people in there who are very scared. People are labelling their houses, I'm Filipino, I'm British or whatever. That should not happen in this day and age. People have to label their house. But there was a lot of properties damaged randomly. Jack Minford speaking there. During the first two nights of unrest, 32 police officers were injured and six people arrested. Police have not yet given any details about Wednesday night.

Now, those are our top stories for you this morning. Let's get to the market. So, stock futures are heading lower. For the US, we're down by three-tenths of 1% for both the S&P and Nasdaq. E-mini futures, Eurostoxx, RIFSI futures are also down by seven-tenths of 1%. 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 is weakening. We are down by three tenths of one percent on the Bloomberg Dollar Spot Index. We've had a number of winners, including the Japanese yen, the euro as well, against that softening dollar gold. As people look for safe havens around the uncertainties, that has also done well. So we're up by half of one percent for the gold spot.

price. And also the tensions in the Middle East have had an impact, it would seem, on the oil markets. So we see Brent crude futures down by four-tenths of 1% after we saw those prices jumping earlier on Thursday or earlier this morning.

In a 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 our 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, 100 million visitors last year, which was a record.

And Lindsay Tramuta has been writing about some of the places that if you're planning a trip to Paris, of course, very easy journey on the Eurostar from London, maybe some places you might want to visit as well. I like this because it's quite easy, which I think is the... Yes, it's the point. ...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, 35 minutes by train from Paris. I have done 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. Yes. You can't be bothered with the train so why don't you just hop on a flight down to the Côte d'Azur which definitely, uh,

speaks to me. Les Roches Rouges was one of the recommendations, but there are lots of lovely places. I mean, it's got this very dramatic saltwater pool. I was about to say, was it the swimming pool that was actually right? It's carved into the rock side on the sea. So yeah, pretty spectacular views from there as well. Great piece from Lindsay. Very inspirational for this Thursday morning. Five French countryside escapes that pair perfectly with Paris. We'll put a link to the story in our show notes.

Now, more than 4,400 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 ultra net worth reporter, Benjamin Stupples. Ben, good morning. So, Bloomberg has analysed 5 million company filings to get to this point. What does it actually show?

Yeah, good morning. And credit to my colleague, our very talented colleague, Max Harlow, for that data analysis. What it really shows is that it signals the disruption that's going on amid the UK business community. What it boils down to is that

The number of departures, the number of individuals, business leaders disclosing that they are now living overseas was up from April 2025 about 75% from a year ago and the highest in four years. And why is that important? That month, the UK scrapped its centuries-old non-dom regime and that effectively allowed wealthy foreigners living in the UK to get tax breaks for as long as 15 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 are going to continue for the foreseeable future at the very least. Yeah, of course, 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 20% on departures from those company director filings. The government has put forward the idea of

that a tax the rich policy would bring in more fresh tax revenue than it lost from those people who are leaving. What are we seeing on that seesaw? A good question, Stephen. This really boils down to one crucial data point. There are about 74,000 non-doms based on the latest government data. And if the biggest category within that group, if about half of them go,

then what the UK has tried to do on the non-dom reforms will end up costing the government money. Now, where are we there now? Some advisors are seeing, as we heard earlier, just a few minutes ago from our colleague, some advisors are seeing maybe 40%, as many as 40% of their clients possibly going. Some are seeing even more than that.

more than half of their clients who've specialised in this space, and we interviewed them for our big take today. We're not there yet where 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's services-heavy workforce,

they're seeing the damage right now. Yeah. And this also goes to the nub of 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, a new four-year tax system available to the most recent non-DOM arrivals. So, there's also a question mark about whether that change helps matters. Yeah.

Again, that's a good point. I think what we had before was 15 years, and now we've got four. Other countries that are rivals to the UK as wealth hubs, like Italy, Greece, Cyprus, they have 15-year regimes as well. They basically copied and pasted the UK's former non-dom regime, took the best parts out of it, and UK has gone, right, we're actually going to cut Ardenhut more than by half. So, what's happening now is the UK has already been seen as

And there's a starkly different perspective. Whilst you might have come here, for example, as a foreign individual, set up a business or run part of your business empire from London, send your kids to school here, 15 years, you've got enough time. Now it's maybe...

being seen perversely almost as like a dividend extraction zone come here have a great time in london for four years go to the west end go to museums but four years you know you can't really get your kids through school in that time um 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 reporting this morning. Our Ultra Net Worth reporter there, Ben Stopples. 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.

In business, they say you can have better, cheaper, or faster, but you only get to pick two. What if you could have all three at the same time? That's exactly what Cohere, Thomson Reuters, and Specialized Bikes have since they upgraded to the next generation of the cloud, Oracle Cloud Infrastructure. OCI is the blazing fast platform for your infrastructure, database, application development, and AI needs.

where you can run any workload in a high availability, consistently high performance environment and spend less than you would with other clouds. How is it faster? OCI's block storage gives you more operations per second. Cheaper? OCI costs up to 50% less for computing, 70% less for storage, and 80% less for networking.

Better? In test after test, OCI customers report lower latency and higher bandwidth versus other clouds. This is the cloud built for AI and all your biggest workloads. Right now with zero commitment, try OCI for free. Head to oracle.com slash strategic. That's oracle.com slash strategic.

Switch to Verizon Business and get more from your internet without paying more for your internet. Get LTE Business Internet starting at $39 a month when paired with select business mobile plans. That's unlimited data and with it, unlimited possibilities. Start saving today with Verizon Business, ranked number one in small business internet customer satisfaction by J.D. Power.

Starting price for 25 megabits per second LTE internet plan with smartphone plan savings, plus taxes, fees and economic adjustment charge. Terms apply. For J.D. Power 2024 award information, visit jdpower.com slash awards. Now let's get to the latest on U.S. tariffs as President Trump says that he will send letters in the next week or two on unilateral tariff rates to the U.S.'s trading partners. This ahead of the deadline of the 9th of July. Joining us now to discuss is Bloomberg Senior U.S. Economics and Government Editor Derek Wolbank. Derek, good morning.

President Trump seems to be moving away then from the idea of negotiating over trade with all of the U.S.'s different partners, as he had indicated before. The end of this 90-day period is fast approaching, right? Trump had put out all of the tariffs on Liberation Day, the 10% global minimum baseline for almost every U.S. 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, Israel, 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. I think that it has been a daunting process.

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 90-plus individual trade deals, or however many it would wind up eventually being, all in a 90-day period.

at the same point, the Trump administration has to figure out what this end game is, um, and what they're going to wind up with, what they're going to settle with, um, 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 end game? How do we try and wrap things up? And the idea that, um,

that there might be some sort of template that everyone kind of draws from or hews close to. I think that's kind of where this is signaling. Yeah, and look, as you say, a lot of signals being read at this point is that it is a story that is evolving now.

Some of the signals we have gotten in the past 24 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 earlier.

now decided in the London talks, it still has to go through and get signed off by Trump and Xi. 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...

from Howard Lutnick and Jameson Greer, who were two of the key negotiators from the United States, that this is intended to pave a way towards a resolution over rare earths and over magnets and things of that nature.

And 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 big sticking points with the implementation of easing the rare earth shipments and getting those sort of back on track, the U.S. very much did not feel that China was losing

living up to its agreements and rapidly escalated in response. Everything sort of went off track. Trump and Xi 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? No. 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. That's something that we've talked about. We have to judge whether or not they're the same or different. But the U.S. side has been way more expansive on what they say was in this. The Chinese have very much stuck to the idea of totalitarianism.

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 $23 billion in May. That's also helped to shrink the deficit just for that one month.

But again, it's quite uncertain about whether those revenue streams are reliable, whether they'll remain. Well, yeah, no, and that's one of the things that I think the 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 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 projected costings of the tariff bill.

or not the tariff bill, of the tax bill. So that still remains a gap there. So when you're sitting there looking at this, that winds up being a disconnect. 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 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 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 Hepker. 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.

I'm Sam Coates from Sky News. And I'm Anne McElvoy from Politico. Every morning, before you're up, we're speaking to the key players, reading all the papers and working out the day ahead in British politics. Then we boil it down into just 20 minutes to give you an early morning shot of political conversation, prepped and ready by 7.45am every day. Hit follow on Politics at Sam and Anne's on your podcast app to get us every morning. This is an iHeart podcast.