$160 Billion Exits UK, France Debt Crisis Warning, US Bombers Leave Britain

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0:09 This is the Bloomberg Daybreak Europe podcast. Good morning. It's Monday, the 5th of October. I'm Caroline Hepke in London. Coming up today, Bloomberg uncovers the scale of Britain's super-rich exodus as tax changes hit the country's appeal. Ed Yardeni warns that France could be on the verge of a full-blown debt crisis as whispers of European contagion grow. The US pulls all of its bombers from a UK base after a suspected terror plot targeting the site. Plus, why a landmark corruption trial is putting Slovakia's political establishment and its rule of law to the test. Let's start with a roundup of our top stories. The trickle of the ultra-wealthy leaving the UK has become an avalanche. Bloomberg has tracked

0:56 individuals worth $ 160 billion cutting ties with the UK in the past two years of the Labour government. That's more than the wealth held by UK individuals in the Billionaires Index, who still call Britain home. Now, taxing the rich has become a left-wing campaign slogan, but Conservative leader Kemi Badenoch says that growth has to come first.

1:20 I want the economy to be very much at the heart of everything that we do. We can't pay for our defense if there is no money. We can't pay for our health service. We can't pay for education. It all starts with the money that we are creating.

1:36 Badenoch's shadow chancellor, Andrew Griffith, is setting out their rival fiscal plans later today at their party conference in Birmingham. He's expected to say that the current Labour government is pursuing a socialist fever dream. The top 1% of earners account for 27% of Britain's income tax revenue, meaning that the departure of the very wealthy risks taking both tax revenue and spending power with them. Now, France's premium over German bonds hit its highest level since 2011 on Friday, and the country could now be on the verge of a full-blown debt crisis, according to Ed Yardeni. The closely watched strategist says that France is now paying more than Italy or Greece to borrow over 10 years. Alexei Mironenko

2:23 is Global Head of Investment Solutions at Leo Wealth.

2:26 Never thought I'd say that Greece is safer than France from a market point of view. But yeah, that seems to be the case right now. Now, the ECB can easily step in. We saw Europe solve its problems 10 plus years ago with the southern, south European issues. France will be not dissimilar. In fact, it's a bigger systemic risk.

2:44 So the entirety of the EU will join in. The challenge is probably not yet.

2:50 Alexei Mironenko there as the euro fell to its weakest level since May 2025. This morning, as political and fiscal concerns intensify, reports that Spanish officials are preparing for an early election have added to the pressure. Might get more news on that today. The Pentagon has removed all of its bombers from an airbase here in Britain that it had used for its campaign against Iran. RAF Fairford was at the centre of a suspected attempted terrorist attack last week in which six men were arrested. Bloomberg's Freddie Fulston has more.

3:25 An official from the Defense Department told multiple news agencies that all the bombers had now returned to their home bases in the US. Bloomberg understands the withdrawal had taken place with unusual swiftness and urgency after threats of a plot linked to Iran had emerged. The shift takes critical equipment out of the preferred forward operating base for bomber aircraft in Europe. But the Pentagon officials said the personnel who operate the fleet of B-1s, B-2s and B-52s remain prepared to carry out precision global strikes anywhere. In London, Freddie Fulston, Bloomberg Radio.

4:04 Yemen's Saudi-backed military have launched a full-scale operation to recapture all areas controlled by the Houthis. The head of Yemen's internationally recognised government said that the army would fight, quote, until the liberation of the country from the terrorist militia. Bloomberg's Stuart Livingston-Wallace explains.

4:23 As far as they're concerned, they want to just get rid of the Houthis altogether and effectively reunify Yemen. So it's a bold intention. I would say history is not necessarily on their side. You know, we saw the better part of a decade of fighting in which the Houthis gained ground and gained control. And it's true that they didn't gain control over the whole of the country. So there are limits to their own power. So, like I say, past performance is no indication of future results. But you have to be a little bit skeptical going into this about whether they can make any headway.

4:52 That was Bloomberg's Stuart Livingston-Wallace. Brent crude opened about 1% higher as the fighting in Yemen raised supply concerns. Brent crude currently down six tenths of 1% at about $ 101 a barrel. It's reported Britain is preparing to follow the EU and impose import taxes on Chinese electric cars. Bloomberg's Ewan Potts has more.

5:14 The Timu Range Rover, also known as the Jaku 7, with a starting price of £ 30, 000, was the UK's best-selling car last month. But according to The Times, the UK is set to impose import taxes on Chinese EVs, a key demand of the EU. The paper says that Brussels has told the UK without the tariffs, the country's carmaker's force being cut from the Made in Europe scheme, and that would make exports to the EU uncompetitive. In London, I'm Ewan Potts, Bloomberg Radio.

5:43 Right-wing candidate Flavio Bolsonaro is the favourite to become Brazil's next president after a surprise first-round lead. He took about 47% of the vote, compared with roughly 45% for left-wing President Lula. The two will meet again on the 25th of October, with Bolsonaro expected to benefit most from eliminated candidate support.

6:04 Brazilian assets are expected to rally as investors see Bolsonaro as more likely to address Brazil's fiscal problems. Green Party leader Zach Polanski has been banned from Israel after his party adopted a motion declaring Zionism racism. Polanski himself did not take part in the vote over the weekend in the UK, which divided senior party figures. This is the former Green Party co-leader and MP Adrian Ramsey, who disagrees with the result.

6:32 I'm deeply sad that this motion has passed. It doesn't reflect my view and I don't think it reflects long-standing Green principles either because the Green Party has always believed in the right of all peoples around the world to self-determination and indeed that was reflected in our manifesto from the last general election.

6:50 Former Green Party co-leader Adrian Ramsey speaking yesterday after 56% of the party's membership backed the motion which defines Zionism as an ideology supporting an ethno-nationalist Jewish state. Israel's foreign ministry said that the vote was, quote, a stain on the history of the United Kingdom. Those are our top stories.

7:10 Looking at the markets, heavy selling of the euro, euro dollar drops below the 1.12 handle. At the moment, it's also weaker than against the pound, the weakest level against the U.S. dollar for the euro, though, since May 2025. Friday also saw the spread of French oats over German bunds hitting 154 basis points. So, we're on watch today for any more concerns expressed through markets around contagion risks for European sovereign bonds. Eurostoxx 50 futures are down this morning, but only slightly down about a tenth of 1%. MSCI Asia-Pacific Index in the Asia session is up by nine-tenths of one percent, the Nikkei gaining more than two percent.

7:52 Treasury is up after softer U.S. jobs data, less pressure on the Fed to keep raising rates and oil prices at $ 101. 52 for Brent crude this morning. So, those are the markets. In a moment, we'll bring you more on Bloomberg's data on the cost of the super rich leaving the UK. And in Slovakia, an EU country with a long history of allegations of state capture and systemic corruption, a key trial is taking place. We're going to explain all.

8:20 But before that, another story has caught my eye. But another story that caught our eye this morning, even Bob Diamond has joined the biohackers. He stopped drinking alcohol for three years after seeing the negative impact on his fitness tracker data. He told Bloomberg's Laura Noonan, I don't like to think that it is compulsive, but it's very, very rare if I don't read how I slept in the first half hour of the morning. Plenty of others in the finance world, of course, enthralled to the data. You won with a device, an earring, a root band, a Garmin smartwatch, wanting the edge in a competitive world.

8:58 I get it.

8:59 The pressures are there and you want to be the healthiest that you can. I'm also reminded of a bit of dark humor for you on a Monday morning. You'll be the fittest person in the graveyard. There are also concerns about privacy and monitoring, of course, because, as Laura explains, there are some companies using these devices to collect employee data.

9:17 The idea is to make the workplace more productive, to cut healthcare costs. There are also worries about privacy and monitoring, as I say. Didn't know, actually, that the US Air Force, Navy and Marine Corps have all used these devices to try to monitor the health of troops at various points.

9:33 Anyway, great.

9:34 Can it encourage people towards a better, healthier lifestyle? That's good. But you all know the downsides too. I'm going to put a link to it in our podcast show notes. That's a story from Bloomberg's Laura Noonan. Now, let's talk about London. When a man is tired of London, he is tired of life. You know the quote, for there is in London all that life can afford. It's Samuel Johnson.

9:58 But the super rich seem to of tax changes and it is a 160 billion dollar hole that the UK can perhaps ill afford Ben Stupples has done the calculations and joins us now Ben, good morning. As Bloomberg's ultra-wealthy reporter, you track this carefully. How did you come up with this figure, $ 160 billion hit from the super-rich leaving?

10:21 On the Bloomberg Billionaires Index, I tracked the UK ultra-hyno-worths that we have on the index. It's about 1,000 individuals overall that we track. And what I'm seeing is that within that group, we've seen a growing number of both ultra-hyno-worths who hail from overseas– outside the UK, and crucially, British individuals, a growing number over the past two years going.

10:43 Their collective, the represented wealth, the wealth they represent is 160 billion. That's a big number. Most of them, for example, Lakshmi Mittal, Indian ultra-high net worth, he's worth 40 billion. He controls his wealth. We have a few family fortunes in there, where, for example, the son of a patriarch or a matriarch has gone as well. To give a sense and size of scope of what this is, That number is bigger, bigger, Caroline, than the number of billionaires we have on the index who are British and are still living in the UK. Now, this is a potential tipping point, therefore, and this is why we're doing this piece now. This is a potential tipping point for the direction of travel for this globally mobile population for the UK.

11:24 And we're only talking about the top tier here, the Premier League, I would say, of Britain's billionaire elite. We're not even talking about people who are worth the May 1 billion, Caroline. So, I'm sorry, we might have to do another piece on that one.

11:35 Wow.

11:35 Okay.

11:36 Look, this surely can't be seen as a good thing. Is it just about the government's tax changes over the past two years? Because there's also this question of, you know, maybe there also being a level of kind of social media bashing of London of other circumstances. Is it about the tax changes?

11:53 How much do we know?

11:54 Yeah, I think that's a very good question. There is a whole smorgasbord of factors at play here. Tax is a driver, and especially what Labour brought in in 2025 for what we class as non-domicile individuals. That status doesn't exist anymore, but let's just call it globally mobile individuals living in London who typically hail from outside the U.K., And what they introduced was exposing those individuals as overseas wealth to UK inheritance tax. And that's up to 40 percent.

12:25 And that's one of the highest among developed nations. And this is the crucial thing. It's not just the UK tax side. It's also the fact that you've got a growing number of nations lining up. offering lower taxes to live in their territory. So, there's growing competition. And I really liked your Samuel Johnson quote at the beginning, because this whole everything we're talking about here, it goes back to that sort of age of Britain, when Britain really was the premier destination to be in. 1700s, we were a window to the world, both in and out. And now, centuries on, We still have that status by and large.

13:01 London is still great, don't get me wrong. But there are a growing number of countries that are offering a similar level of life. So, it'd be really interesting to know what Mr. Johnson would make of this situation if he were still alive.

13:13 Yeah, absolutely. Look, London is fantastic.

13:16 But who is out and is anyone coming in?

13:19 Yeah, so I think it's very worth saying that the UK has tried to offer a different regime, you know, not to overcomplicate matters. It's brought in a simpler, shorter regime that existed before. The last one was 15 years. The new one is four. And it's styled on what actually Spain brought in to lure David Beckham over to Real Madrid. back in the early 2000s. So, it's only four years. And that is bringing in a few individuals.

13:44 We actually named one at the bottom of our piece today. So, please read to the bottom. A private equity veteran called Raja Makwar. She's great. And she has said, yeah, I've moved over from Belgium. You know, London is still great, but she says she has friends who are living here, who are already living here, who are concerned about future tax hikes. So, there for me is the sort of the balance of if you've been in London for a while, you're worried. If you actually haven't got any ties to the UK, coming here for four years is a great time.

14:12 But actually, any ultra-high net worth will then tell you that that's not long enough for me. I need to be here, especially if I've got children. I need to be here for 10 years. I'm going to really lay down roots, buy a house. That means things like rental market in London going up, property actual sales at the very best, flatlining at the moment. And in the meantime, we are seeing people going. And finally, who's out? Well, this is the big thing. British billionaires are also increasingly going.

14:38 The just gave, you know, at the start of this year, almost 200 million to one of our top universities. So, that begs the question, if he is still going, then we still have a problem. And where has he gone? He's gone to Greece, offering lower tax rates than we have over here. So, London is still great, but London has a problem.

14:58 Yeah, maybe that's something that, you know, the government will try to address and think about that. And you mentioned Raja Makur, of course, that veteran private equity investor who has been a guest on this very program, Ben.

15:11 So, yes, we're.

15:12 Across it and appreciate your story as well. Thank you so much for bringing it to us. And that big figure, as you say, $ 160 billion. It is a big hole, isn't it? That is Bloomberg's wealth reporter, Ben Stuckels. Stay with us. More from Bloomberg Daybreak Hub coming up after this. Now, the rule of law is on trial in Slovakia. The government of Robert Fico plans to pass a law that may invalidate witness testimony in a landmark court case about political corruption. The case is known as purgatory. It's being heard in the Specialised Criminal Court in Slovakia, which is an EU member state. Our reporter Daniel Hornak joins us now from Bratislava. Good morning, Daniel. What is this case about and why is it seen as such a crucial test?

16:02 for the rule of law and overall state justice in Slovakia?

16:07 Well, this purgatory case asks basically one simple question, and that's whether Slovakia's police were captured by a criminal group. Prosecutors say that from 2012 to 2018, under previous Robert Ficu's government, a powerful businessman and the country's top police officials use the police as their own, let's say, private tool to spy on officials' opponents in an attempt to discredit them, to blackmail people, to make investigations disappear for anyone willing to pay.

16:39 Some people involved in this case have.

16:43 Already admitted their guilt and are cooperating with prosecutors. Some have already been convicted for their own small roles. And now the trial that we are following is aimed at the very top, the election leaders of the group who are denying the charges, basically. Okay.

17:01 What's the political dimension then of the trial?

17:05 Well, one of the key defendants in this case, Tibor Gaspar, is not just a retired policeman. He was forced out as a police chief after the 2018 tragic murder of journalist Jan Kuciak and his fiancée here in Slovakia. And then he was charged in this purgatory case. And yet, despite of that, or maybe because of that, he joined Robert Witzel's Smer party. And after Smer won the last 2023 election, Tibor Gaspar became deputy speaker of parliament, a very powerful politician, and Robert Witzel stands firmly behind him.

17:44 So this makes the case deeply polarizing also politically for the opposition. It's unthinkable that someone facing such serious charges should hold such high office. And for Fito's party, they see the trial as a political revenge, an attempt to put Fito's allies, let's say, behind bars.

18:05 Yeah, okay.

18:06 And so in terms of FICO and the ruling coalition and their plans to amend the rules about cooperating witnesses in Parliament next week, so the testimony is going to be key, obviously, to the Purgatory case. What does this mean then for the case itself and for the fight against corruption and organised crime in Slovakia more broadly, if Parliament makes this decision about cooperating witnesses?

18:34 Yeah, the new.

18:35 Rules expected to pass this week or maybe next week, let's see, say that an insider testimony won't be enough as a proof and not even if a second insider backs it up. And as you know, organized crime is almost always exposed from the inside, thanks to these cooperating witnesses by people who are part of the scheme and agree to testify. So while the government says that this amendment will protect people from false accusations, critics say it could sink cases already in court, including this one.

19:09 And it's not just the opposition.

19:11 Many judges and prosecutors warned that without basically an effective system for cooperating witnesses in a country, organized crime simply can't be uncovered and punished.

19:25 Okay.

19:25 How do you think then that this could shape Slovakia's direction going forwards? I mean, FICO is a full-time prime minister, you know, and there may be an election soon. What do you think about Slovakia's future direction?

19:40 Yeah, the verdict in this case is expected sometime next year. So, it will likely shape the election campaign. A conviction would be a blow to Prime Minister Robert Fico, because it would basically confirm that the police really were captured while his party was in power back in 2012-2018. And a quid, on the other hand, would let Fico say that he was right all along.

20:04 But maybe even more important is... you know, the public trust.

20:08 The worst outcome, according to people I spoke to, would be that if the public didn't believe that this case had been judged fairly and properly, you know, the Slovak society is deeply divided, many people no longer trust the police or politicians. Prime Minister Robert Fico himself has been shot in an assassination attempt two years ago. So what the country needs now is a trial that is fair and transparent and seen by the public as fair, whatever the outcome. So, you know, only that can start to rebuild this trust in institutions and in politics.

20:46 Thanks for listening to Bloomberg Daybreak Europe.

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