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Quest Means Business
Wall Street Rallies as Negotiators Close on Deal; Fed's Preferred Inflation Gauge Heats Up; Vatican: Pope Francis Cancels Meeting Due To Fever; FBI File Reveals 1983 Plot To Kill Queen Elizabeth: Resilient Amidst Challenges. Aired 3-4p ET
Aired May 26, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:30]
RICHARD QUEST, CNN INTERNATIONAL HOST: Well, I made it across the Atlantic and now yes, Friday night, in the city of London. There's one more hour to
trade on Wall Street. The Dow once again. Look, the Dow wasn't up yesterday, it was the NASDAQ that roared, now the Dow is following on.
So, there is a good strong rally underway at the moment in the market. We'll have the closing numbers, obviously as the hour progresses. Those are
the markets and the reasons why we are with you: Tonight, US politicians are inching ever closer to a debt deal. There are signs of progress. It's
designed to avoid, of course, the dreaded default.
Here in London, a new study: Workers in the office, 2.3 days a week. What's the 0.3, I wonder? How do you work that one out -- 2.3 days a week -- the
impact in the future of the city of London. You're going to hear about it from those who know.
And a man opens a plane emergency door while the plane is still in the air, a terrifying experience for all involved.
Live from London tonight. It is Friday, it is May the 26th. I'm Richard Quest and in London you bet, I mean business.
And a very good evening to you.
We are at the cheese grater. I will explain how where and why in a moment. We are in the city of London, the heart if you will, of the UK's financial
center and one of the questions we'll be testing is, how much is the city as we will call it still part of Europe's financial center in the post-
Brexit post-pandemic world. Shaken by Brexit, and now, of course the work- from-home revolution.
So the cheese grater, Leadenhall Building, we are 42 floors up. It is known as the cheese grater, the building. To give you an idea, over there is the
shard, behind the walkie talkie. Over there is the Gherkin. It is London's sixth tallest building. It's nestled closely to all the other famous
buildings that have come up over the last few years. You can see from the sky.
Of course, when I started as a financial journalist, none of this was here. The NatWest tower, I think it was then in those days, I can see the Lord
Mayor of London agreeing with me, was the tallest building. That of course has all changed.
So tonight, we're going to be putting some perspective into all of this. Tonight, I'm going to be speaking to the owners of the building, CC Land.
You're also going to hear from the Lord Mayor of London, and it wouldn't be London if we didn't have the renowned HSBC economist, Stephen King, to
guide us through it all.
And I mean, you have to say this is an absolutely extraordinary setup that we have here this evening, on a Friday night, delighted to be here.
First, though, let's go to Washington. Time is now growing ever shorter, to raise the US debt ceiling. Wall Street is higher on hopes of this last-
minute breakthrough.
Look at that. It's been up all session, strongly up, and I think we may put a bit of weight on in the last hour holding on to triple digits, more than
300 gains, and the triple stack shows a similar situation.
The NASDAQ is on a tear. It was NVIDIA yesterday that did the deed. Now, I wonder where the 13,000 on the NASDAQ, we might see it before you and I say
good night tonight. The S&P 500 is up more than one percent.
Here is what we told is the rough outline of the budget agreement to raise the debt ceiling. It will be a two-year deal. It would cap discretionary
spending except for Defense and Veterans programs, and they were cut funding to the Internal Revenue Service, the IRS. This is by the way, money
that they only just got in the last budget deal.
Matt Egan is with us.
Firstly, Matt. Number one, how close is this deal to being done? And secondly, I imagine it is going to have to be Democrats and middle of the
road Republicans that will push it over the over the edge.
MATT EGAN, CNN REPORTER: Yes, that's right, Richard. I think you would certainly need to see a compromise. You need to see both -- some moderate
Republicans and Democrats -- to get on board. We don't actually know exactly how close this is to being done.
[15:05:10]
We do know that there's signs of progress, that there is some optimism here, but we have heard that before. And, you know, there's nothing final
just yet.
And so I do think -- I don't want to be a downer, especially not on a Friday, but I think there's a good reason to kind of tap the brakes here on
at least the enthusiasm on Wall Street, you know, looking at the Dow, up almost 400 points and the NASDAQ, up more than two percent, these are
pretty sizable gains, when you think about the fact that one, we don't actually have a deal yet; two, when the leaders reach a deal, they still
have to sell it to the rank and file members; and three, all of that is going to take time. It takes time to go through the legislative process.
So I think it's great that they're making progress, apparently, but I don't know that it's time to celebrate just yet -- Richard.
QUEST: Yes. I mean, they could always do a quick continuing resolution to sort of -- to paper over the cracks while they get to the final line. But
the deal is there, what could scupper it?
EGAN: Well, I think just the slow wheels of deal making in Washington could scuttle it. I think that the fact that any one House Republican can sort of
object and really put a stop to it, I think those are real issues.
You know, neither side is going to be thrilled with what actually comes out, but that's what happens when you get a compromise. Right? Both sides
are going to have to give something here or there.
I mean, Democrats are not going to be happy about cutting the funding for the IRS crackdown that they just got. I don't think Republicans are going
to be thrilled about lifting the debt ceiling for two years, perhaps not capping spending as much or for as long as they want to.
You know, I think ultimately, they have to get something done, because the consequences of not are just too great here -- Richard.
QUEST: Matt Egan in New York. I bet you wish you were with me here in London. It's a wonderful evening, and there's going to be a magnificent
sunset tonight. Thank you, Matt.
Amid this debt ceiling drama, the Fed's preferred inflation gauge is now heating up. It's the PCE. It's a measure of personal spending, 4.4 percent
year-to-April, it rose. And that, of course, is increasing the possibility of a rate rise in June.
Stephen King, he is the author of "We Need to Talk About Inflation." He makes the argument that we're on the cusp of a new inflationary era,
blaming it on the hubris of the world's central bankers.
Did you always think, Stephen, that we were going to end up with inflation again?
STEPHEN KING, AUTHOR, "WE NEED TO TALK ABOUT INFLATION": The simple answer, Richard is absolutely not. I had a long career worrying about deflation
rather than inflation, a world of falling prices rather than rising prices.
And I guess, I began to worry probably the beginning of 2021, because you had this extraordinary collapse in the pandemic in terms of economic
activity, but rather than inflation surprising, on the downside, it began to surprise on the upside. And that I think, was a clear indication that
something was going wrong.
QUEST: And this is, of course, because not only did we have massive stimulus from fiscal monetary, though a lot, but also the supply chain
problems, which pushed it up. But why has it become sticky? Why have we had such huge interest rate rises? That I mean, textbooks would say this should
have clobbered it on the head.
KING: Well, to a degree, they would have said that, but the truth is, interest rates were starting off at incredibly low level because central
banks, mostly we're trying to fight deflation in the world of falling prices rather than inflation, the world of rising prices.
So although we've seen a significant increase in interest rates, actually, historically, they're not terribly high. And in some cases, particularly
the UK more so than the US, you've got signs of inflation being embedded in wage negotiations, and so on and so forth.
QUEST: On the debt ceiling, because we're going to talk to you about the UK in a bit more detail in a moment.
KING: Sure.
QUEST: On the US side and the debt ceiling. I sort of -- everybody says they're going to do a deal, but I'm starting to wonder, look for that part
of the financial plumbing that's going to find tension, a bit like the Liz Truss, you know, it was the insurance contracts that finally sort of just -
- that's how an accident happens, isn't it, somewhere in the financial plumbing?
KING: Yes. Basically, you always assume that policymakers do the right thing rather than the wrong thing. In the case of the debt ceiling, the
right thing to do is to raise the debt ceiling to make sure that the American economy doesn't default to its creditors.
If that were to happen, there would be a terrible, terrible mess. I think everyone recognizes that the mess is there, which is why I think people
want to do a deal. But this is partly a game of chicken, isn't it? It is people all trying to push to the very, very deadline itself.
QUEST: Right. So let's say we all know that they can afford it, we will know that they will eventually afford it. Let's say they decide technical
default. Why is that a catastrophe?
KING: Because the rest of the world believes that Treasuries, basically US debt are the safest thing out there. So, if the US itself technically
defaults and basically says we're not actually paying out on some of the stuff that we borrowed in the past, that looks very, very messy indeed.
[15:10:12]
QUEST: Right. But it's not like Argentina that says we can't pay. If they're saying, well, we won't pay this week, but we'll pay you next
Tuesday, we'll pay you a bit extra because it's late.
KING: Well, yes, that'd be obviously a possibility. But then, of course, you're paying a bit extra, you're effectively paying higher interest rates
than was the case previously. So that has a big effect on borrowers in the economy, including people with mortgages, companies that have raised lots
of funds.
Under those circumstances, borrowing costs go higher.
QUEST: Last thought though on the US, is the US economy fundamentally sound? It may be the largest in the world, and you know, you talk about a
$31 trillion -- yes, but it's a $20 trillion economy or whatever. So, it's all relative.
But is it fundamentally sound, bearing in mind the Inflation Reduction Act, the CHIP Act, all of which has created a resurgence.
KING: Yes. So, it is fundamentally sound, but there is still a residual problem, and that residual problem, frankly, is inflation. So even if you
get the debt ceiling solved, inflation is still too high, it's still too sticky. You haven't had the Federal Reserve pushing inflation down far
enough as yet, as --
QUEST: You think rates are going up, don't you?
KING: I think they are going up.
QUEST: They are going up.
KING: Yes, I'm afraid so.
QUEST: We'll talk more in a moment about the UK economy. So please, stay with us, Stephen.
KING: I want it.
QUEST: Very grateful for that.
Now, Stephen and I will discuss the fate of the UK economy after the break.
We're here at the London financial district. It's some of the hottest real estate in the city. The UK head of the company which owns the building,
it's called the cheese grater. I'll leave you to imagine why. In a moment.
(COMMERCIAL BREAK)
QUEST: I always think the end of May beginning of June is the best time to be in London. Particularly this year, it has been a momentous year.
The coronation of the King ushered in the new Carolean era as it is called. The city and the country's economic future is not nearly so bright.
While the UK will likely avoid a recession, inflation remains stubbornly high, growth sluggish. The IMF expects GDP to fall three-tenths of a
percent and grow just barely one percent next year.
And now economists are asking if Britain is becoming the sick man of Europe.
Stephen King is with me. We talked about the global economy. The UK and the trajectory that the UK is on --
KING: It is not great. I mean the growth rate has been very, very disappointing for a number of years now. Productivity, which is a kind of
secret sauce of economic progress has been very, very weak, indeed.
[15:15:09]
And now, the UK is trying to tackle an inflation problem that, frankly, the Bank of England and the UK authorities in general just didn't see coming.
So, it's a messy situation.
QUEST: Right. Okay. And you would expect a higher policy rate from the Bank of England.
KING: Absolutely. In fact, the bank once it has admitted this now, because it is now saying that the model it was using to try and forecast inflation
is basically on the blink, it's not working very well, and they've admitted that there are more in the way of what I would describe as second round
effects.
So you have prices of goods, prices of services going up, but now you are seeing wages rising quite rapidly.
QUEST: But that said, but to a certain extent, those second round effects were exactly what they said they wanted to avoid when they started the
monetary tightening too late.
KING: Absolutely. I mean, they argued that their policies were credible, and therefore there would not be any second-round effects, but as it turns
out, the more that headline inflation was higher, the more that those second round effects began to come through.
QUEST: Yesterday, on this program, we were talking about Germany being in recession, maybe a technical recession.
KING: Yes.
QUEST: You know, that will spill over. And yet, we have this contradiction, Stephen, between the IMF, the ECB, the BoE, saying there won't be a
recession, but the numbers are not good. How do we square that?
KING: Well, everyone always says there won't be a recession until there is one. People don't like forecasting, or they're interested in Jeremy Hunt,
the Chancellor of Exchequer in the UK did say today that he will be happy or not happy, but he said he accepts a recession as a price worth paying
effectively for getting inflation down back to two percent.
So I think there is the beginnings of a discussion about how much of an output loss there has to be to try and deal with the inflation problem.
QUEST: Here in the UK, it is difficult to overstate the pain from people who've seen their mortgages double. I mean, I have a mortgage, and it has
literally doubled.
KING: Absolutely.
QUEST: And there is more to come. Do they need to get inflation down to two percent? Can't we just simply say, well, three percent, close enough. Let's
all go home and have a cup of tea.
KING: The problem with saying three percent is close enough is that you go to three percent, people will say, well, we raise your inflation target
from two percent to three percent. The next time you have problems we raise from three percent to four percent. So you begin to lose, like the
underlying credibility of the policy.
I also think over a very long period of time, once you allow inflation back into the system, inflation is a grossly unfair process. It creates winners
and losers in terms of borrowers and lenders and so on. It's a messy situation, which is socially divisive.
QUEST: But then the same question to you about the UK, that we talked about with the US. Why -- I mean, the Bank of England has done however much it
is, 450 basis points. Why is it not bringing inflation down quicker?
KING: Well, one reason is lags, you know, monetary policy has changed this year. It has an effect on inflation in a year or two years down the road.
But the second reason is, because you're starting from such a low level of interest rates fighting deflation, you may have had to have to raise rates
more than you were originally anticipating.
I think that's been one of the big problems that economists have had in forecasting where interest rates are going to go, because effectively, the
inflation itself is coming higher and higher than expected and therefore interest rates themselves have had to be higher.
QUEST: Think carefully how you answer this.
KING: I shall try.
QUEST: It's a Friday night.
KING: Yes.
QUEST: If we look at Europe, US, the developed nations -- are we in deep trouble?
KING: Well, things could be worse, obviously. I think that's the easy way to answer it, but I don't think we're where we would like to be. You want
to have flourishing economic growth and you want to have low inflation.
We've actually got stagnant economic growth and high inflation which is exactly where you don't want to be.
QUEST: Good to see you. Thank you, sir, for joining us now.
KING: Thank you.
QUEST: Now, the London skyline. It tells a far more dynamic story about Britain's place in the global economy.
Its buildings have come to represent the city's imagination and resilience.
(BEGIN VIDEOTAPE)
QUEST (voice over): The city of London, the traditional home to global bellwether corporations and dealmakers and it is all concentrated in one
square mile.
Here you'll find the London Stock Exchange, Standard Chartered Bank, and of course, the consumer giant, Unilever.
In the past two decades, some of the world's most ambitious architecture has sprouted from this soil in the city. Each skyscraper has been given an
irreverent nickname by the London public -- 30 St Mary Axe, the Gherkin, 20 Fenchurch Street, the Walkie Talkie, and just over there across the River
Thames, the tallest building in Britain, the Shard.
And where I stand today the Leadenhall Building known as the cheese grater.
This affectionate nickname coined after a planning officer quipped one could grate Parmesan cheese on the building's facade. It was designed by
the architect, Richard Rogers the brains behind London's Millennium Dome and the bamboo spires of Madrid's Barajas Airport ceiling.
[15:20:15]
The iconic wedge shape is designed to preserve views of St. Paul's Cathedral and the Houses of Parliament.
The building celebrates its 10th anniversary next year. Again, close to full occupancy, post-pandemic with current tenants, including the insurer,
Aon; and the UK Head Office of Ukraine's largest private energy investor.
These buildings in the city, an area that was once thought, so passe, proving they are integral cogs that keep the vitality of the financial
world amidst a cost-of-living crisis, and a post-Brexit Britain.
(END VIDEOTAPE)
QUEST (on camera): It is a stunning skyline, whichever way you look at it, and now there are signs of life after the pandemic dormancy, if you will.
London workers are back in the office apparently 2.3 days a week. Let's just say two and a bit days a week. Remote work threatens the area. The
Center for City says workers in the office is at 60 percent pandemic rate and it's stalled things, we seem to be in a position where they're back,
but not fully back.
Adam Goldin is with me, the UK Head of CC Land, the company which owns the Leadenhall Building, which is where we are.
First of all, so thank for allowing us to interlope on a Friday and be here. It is good to be here, sir.
This and other buildings, there was a fear that post-pandemic, you'd just have empty space, it would just be nothing. But what's happening?
ADAM GOLDIN, UK HEAD, CC LAND: Well, I think that if you look at this building, for example, you're correct, that occupancy is sitting around 60
percent. Now, that's not in terms of how full it is. It's actually a hundred percent leased with a waiting list. But 60 percent in terms of pre-
pandemic numbers, how many people were coming in sort of 5,000 people is now down to regularly circa 3,000 people a day.
QUEST: Okay, that's fascinating. Does it matter? I mean, I suppose from a bottom-line point of view, if it's all rented out, well, that's good. Fair
enough.
But you actually want people to be in the building, because of the local businesses, the entire infrastructure.
GOLDIN: Yes, a hundred percent it does matter and we're doing everything we can to encourage people back into the building. And I think landlords
around this area are really looking at amenity and the way in which they engage with their tenants in order to help them, help staff come back into
the building and it is about building a partnership.
I think gone are the days where you had a landlord and tenant in a hierarchical relationship where the landlord collected four checks a year.
Actually, it's about engaging with the tenants to create a vibrant and alive city.
QUEST: So what can you offer them? I mean, never mind whether or not you're going to go to the Gherkin or the Walkie Talkie. I think this is called the
--
GOLDIN: Scalpel, yes.
QUEST: The Scalpel, isn't it? And what do you say? I mean, we'll put on concerts outside and will give free ice cream?
GOLDIN: Well, I think you have to be realistic. And clearly there are costs involved in upping the amenity services. But I think it's about deep
engagement with your tenant base.
So we've looked at things like yoga sessions, we've looked at escape room. In fact, we did the world's highest escape room, which we engage with our
tenants to come and have a go at.
And really, it's about energizing the building and working in partnership with what your staff and their staff actually want.
QUEST: Right. I'm looking around, there are cranes, there are cranes over there. There are quite a few buildings going up.
GOLDIN: Yes.
QUEST: Competition for you.
GOLDIN: Well, I mean, I see it as an opportunity because --
QUEST: Because you're in real estate.
GOLDIN: You've got two million square feet being built pretty much within 200 meters of the building here, something like that. And it's a great
opportunity, I think, for the city to evolve and to change. And it's done that from the time of the Great Fire in 1666. So, you know, this is just
another opportunity like Brexit was.
QUEST: We're going to be talking to the Lord Mayor of London in just a moment. Now up the river that way is Canary Wharf and the whole east sort
of end financial district which was very big in the 1980s and 90s. But I'm guessing people want to be back here in the traditional city. Why is that?
GOLDIN: Well, I think the city of London offers incredible things. It offers first class transport links, it offers first class buildings,
landlords that actually care and engage with their tenant cohort and obviously as a historic center.
[15:25:10]
Tenants like to work within clusters but those that actually care and engage with their telling cohort. And obviously, it's a historic center.
Tenants like to work within clusters, but they also like good buildings with good amenity and an engagement with each other.
QUEST: So what are the new buildings that are going up? But what are they being called? Do we know yet?
GOLDIN: I don't think any of them have got the names like the Gherkin or the cheese grater have, but --
QUEST: Do you like this being called the cheese grater?
GOLDIN: Well, I think it's a great way of identifying it. And of course, being the shape, allows us to accommodate a whole bunch of different
tenants from Aon on the lower floors to smaller tenants all the way up the building.
QUEST: And it allows you to accommodate us. We're very grateful that you're with us tonight. Sir, thank you very much indeed for joining us.
The Turkish lira is under pressure ahead of Sunday's presidential election. You can see the price there. The decisive second round will determine the
future of Turkey's economy.
We're live from well, with the cheese grater. I think it's 122 Leadenhall is its exact official title, and behind me is the Shard and there you have
the Walkie Talkie. I don't know -- very strange names, but yet, it made sense to someone.
Thank you.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest in the cheese grater. There's more QUEST MEANS BUSINESS up in the sky in a moment, and investors are on edge as the
Turkish voters appear poised to reelect President Erdogan with his somewhat eccentric economic policies.
I'll be joined by the Lord Mayor of London. He holds one of the world's oldest public offices, and he'll explain what he did during the coronation,
if you like.
We'll get to all of that only after I've updated you with the news headlines. This is CNN, and here, the news always comes first.
The Vatican says Pope Francis has cancelled all his meetings on Friday because he has a fever. The Pontiff was in hospital in March for
bronchitis. The Pope is 86 years old and sometimes viewed with a walking stick or wheelchair because of pain in his right knee.
[15:30:00]
Newly released documents from the FBI say Queen Elizabeth faced a possible assassination attempt during her visit to the United States 14 years ago.
One document involves what seems to be a tip off from a San Francisco police. A man said he would drop an object off the Golden Gate Bridge as
the royal yacht Britannia sailed underneath. All and he tried to kill the queen during a visit to Yosemite Park.
The world's biggest investor is telling Exxon and Chevron to get more aggressive about fighting climate change. Norway's $1.4 trillion sovereign
wealth fund will back stricter emission targets as the company's uphold upcoming shareholder meeting. Exxon and Chevron have told shareholders to
reject the proposals by an activist group.
And Celine Dion is canceling all her world tour dates through next year because of a worsening medical condition. She suffers from a syndrome which
affects her brain and spinal cord. And Dion says she isn't giving up. But a source close to her tells CNN she will likely never tour again.
Turkey's lira has hit a record low as investors in the market are ready for the presidential run off this Sunday. The lira close slightly firmer
tonight. Its selloff nearly seven percent so far this year. And Turkish assets have been under extra pressure since the first round of elections,
which hinted that President Erdogan will win a third term. Market analyst (INAUDIBLE) Erdogan win will mean more of his unorthodox economic policy.
Nada Bashir is with me from Istanbul. So, the polls and the way things are looking at the moment from what you can tell, is that it does or would
appear, I mean, we can't prejudge the good Turkish voters. But it would appear that the President will get a third term.
NADA BASHIR, CNN INTERNATIONAL REPORTER: Absolutely, Richard. I mean, when you consider that two weeks ago, that first round, the President Recep
Tayyip Erdogan was successful in achieving 49.5 percent of the vote. Just short of that 50 plus one percent threshold needed to declare a victory. He
has now in the last few days had the support of the party, which came third in that race.
That is about five percent of the vote. So, if you consider it from that perspective, he could potentially have the votes now in this second round
to declare a victory. That said he may have the support of the head of this Nationalist Party but there are other members of this party that are
throwing their support and their weight behind. The opposition leader Kemal Kilicdaroglu. So, it still remains to be seen of course.
And this is a significant feat for the opposition. We are talking about six very different parties on the political spectrum coming together in the
most unified way we've ever seen the opposition really here in Turkey behind Kemal Kilicdaroglu. And of course, this is a significant step for
them. So, a loss at this point. They did, of course, achieve just under 45 percent of the vote in the first one would be a significant blow to any
hope, really, of the opposition being successful and taking down a president who has been in power now for more than two decades.
But look, the campaign is still ongoing, even though we are very, very close to those ballots opening on Sunday morning. We were at one of those
rallies earlier today. We had the opposition on one end of the street, the A.K. Party, of course of President Erdogan. On the other side of the
street, Turkey's interior minister even stopping by for a visit. People are really out there pushing for the vote.
And of course, both sides really trying to get as many voters as they can to turn up to vote on Sunday. It could make all the difference.
QUEST: OK. So, on the economic front, the good people of Turkey are sort of in some distress from inflation, which is record highs. The currency is
record lows, and if he is reelected, there will be more of the same and similar. That seems to be the answer.
BASHIR: Yes, absolutely. President Erdogan has been clear. He believes that he is playing the long game here. His insistence on low interest rates, of
course has been criticized for seeing those inflation rates soaring. But he says he believes that this is the right way forward that he wants to stick
to that pardon that he will see positive returns in the end. But of course, he is under a lot of pressure.
This is a country facing a severe cost of living crisis. People are really struggling across the country. There are also questions around who he will
choose to appoint as his finance minister if he does win. So, there will certainly be a lot of questions around that whether or not he bows to that
pressure and perhaps makes a U-turn on those policies. At this stage it doesn't seem likely but of course, people are struggling. And that is one
of the key criticisms Erdogan has faced.
[15:35:02]
And it's certainly something that has been at the forefront of voters' minds. And of course, on top of that, he is facing severe criticism over
the erosion of democracy here in Turkey. So, there is really a lot at stake.
QUEST: Thank you, Nada Nashir. And I'll be in Turkey this weekend, flying that tomorrow. Part of our live coverage of the election results which were
hosted by Becky Anderson. Join us this Sunday, 6:00 in London, 7:00 in Europe and 8:00 p.m. in Ankara here on CNN.
A Russian attack on a Ukrainian medical side has been called a war crime. But the mayor says it could have been much worse. Ukrainian authorities are
reporting a wave of Russian attacks in several regions overnight. Rescue teams race to save lives and put out the flames in Dnipro. Officials there
say the attack hit a hospital and a veterinary clinic. At least two people were killed and children are amongst those who are injured.
The mayor says it's a miracle doctors were changing shifts when the attack happened. It means fewer people were actually working in the hospital
during the strike. CNN's Sam Kiley sent this report from Dnipro.
(BEGIN VIDEOTAPE)
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Dnipro, like so many other Ukrainians cities is no stranger now to scenes like this after more
than a year of Russian bombardment. Now this though, is a medical clinic. A neurological medical clinic. It's one of dozens of hospitals and other
medical structures that the Russians have attacked. According to the World Health Organization, close to a thousand medical personnel and other
medical facilities as well as buildings have been bombed by the Russians over the last year.
And according to the French government, that amounts to a war crime. But even if this wasn't deliberately targeted, we're in a residential area.
There's an apartment building there. There's more medical facilities just down the road. There are more apartments here, and indeed, a sports stadium
under construction. Now we've seen the systematic destruction in Syria of medical facilities by the Russians and that continues.
And for the last year and a bit, we've seen it here again by the Russians.
Sam Kiley, CNN in Dnipro.
(END VIDEOTAPE)
QUEST: As we continue tonight, I'm going to be joined by the Lord Mayor of the City of London. Nicholas Lyons is also its business ambassador. He was
part of the coronation. He'll tell us which bit of the coronation he was after the break.
(COMMERCIAL BREAK)
[15:40:23]
QUEST: When you talk of the City of London, well, colloquially of course, you're meeting the whole lot, the big city, but actually, let's be precise.
The city itself is the square mile. Starts around the first century of the Roman settlement with River Thames going threatened. It was the early
commercial center. This city, as such, as you can see, delineated on this map is a very small area with lots of history, tradition, and the home of
the financial headquarters, if you will, of the United Kingdom.
The financial hub. Brexit has put that financial center very much at risk. There's a Tower of London and Tower Bridge. You can see over there. The
whole area is overseen by the Lord Mayor, which is one of the world's oldest official offices. He acts as an international business ambassador.
He had a role in the coronation and ceremonial robes. He carried the Crystal Scepter during the coronation.
And of course, as always, the Lord Mayor's parade when he gets dressed up and goes around with the gold coach. And Nicholas Lyons is the Lord Mayor
of the City of London. Lord Mayor, thank you for joining us. We'll get to your ceremonial bit in a moment. But the city itself, the fear had been
post Brexit, everybody was just going to, you know, it would no longer be Europe's principal financial hub, is it?
NICHOLE LYONS, LORD MAYOR, CITY OF LONDON: It is. It is unquestionably Europe's financial hub. It is for the EMEA region and that's not going to
change. The competitive advantages that London has and has had for many, many years have not changed. We are the second largest, you know, capital
for managing assets and attracting foreign capital.
QUEST: But you -- that traditional relationship of bridging E.U. with U.S. is no longer played. And of course, we've lost a lot a lot of forex which
has gone over to Europe anyway, a lot of clearing through Euro clearing. That's gone across to Amsterdam, Paris and Frankfurt and Dublin.
LYONS: Well, it hasn't yet. The E.U. like to talk about Capital Markets Union. But still 90 percent of Euro denominated transactions are cleared
through London. And when you talk to financial institutions on the continent, they say we want deeply liquid pools and we want efficient, low-
cost clearing.
QUEST: You were saying to me moments ago that there is a tonal difference since the Windsor framework on Northern Ireland, and a better working if
you like with -- of the E.U. How does that manifest itself? Can you see more business staying here?
LYONS: Well, we saw in the wake of Brexit, actually, what about -- 7000 jobs left London to go to continental Europe. But lots of jobs came to
London because European financial institutions needed to build up their U.K. businesses. Now since that Windsor framework, there is a very
different tone and I had a meeting just last week with the E.U. commissioner Mairead McGuinness talking about memorandum of understanding
and greater cooperation.
QUEST: We'll never go back to the days of a single market.
LYONS: No.
QUEST: So, to some extent, has the city, the spit, the financial industry, has it made the most of a post-Brexit world? Most people say not yet.
LYONS: Not yet. I think that's exactly the right way that I -- that's the way I would describe it as well. But there are a lot of changes in train at
the moment, particularly with the Edinburgh reforms, the financial services and markets bill. And, you know, we've got the governor of the Bank of
England even saying we have become too risk averse as a country, we need to move the dial on that. That's a good sign.
QUEST: I was hoping you might have a bit of, you know, the old ceremonial robes and I would have a hat. And I suppose I didn't ask for that. So, it
doesn't turn up for us on an average Friday night.
LYONS: I wouldn't walk through the streets with the -- with the coronation robes.
QUEST: What was it like?
LYONS: It was amazing. It was absolutely extraordinary. I arrived at about five past 10:00 before the 11:00 ceremony, so I missed everybody
congregating in Westminster Abbey from 8:00. When I arrived, the picture that you showed up me there grinning from ear to ear. I had just sorted out
my coronation robe because there's a long train on it. And I got the Crystal Scepter in my hand but the Archbishop of Canterbury and the dean of
Westminster were standing at the door saying, oh, it's the Lord Mayor of London, he said, addressing us again.
[15:45:02]
QUEST: You had to actually prove that you were entitled to be part of this. The Court of Claims.
LYONS: Yes.
QUEST: You don't get there as of right. Even though every Lord Mayor has been part of every coronation.
(CROSSTALK)
QUEST: Look at you.
LYONS: The Court of Claims is there for everybody to prove their case. I -- that Crystal Scepter has been carried by Lord Mayors for the last 600 years
at coronations.
QUEST: Come on. You must have had a moment. Don't drop it. Don't.
LYONS: Oh, I did it. It was --
QUEST: Don't drop it.
LYONS: It was -- it was petrifying. I wore calfskin gloves so that I didn't have a sort of sweaty hand with the Crystal Scepter, but it was fine. And
this Crystal Scepter was given to the city by Henry V after the Battle of Agincourt. The city always used to give the money to the king to raise an
army and this was the thank you letter --
(CROSSTALK)
QUEST: On this question of the City of London, the square mile of which you preside. Over there, of course, is Canary Wharf. Bigger buildings, more
modern financial industry, and you're snarling.
LYONS: No, I'm not snarling to --
(CROSSTALK)
QUEST: But you're sort of snarling.
LYONS: No, it's part of my -- bit nouveau over there.
QUEST: Oh, there we go. Him with the -- him with the Crystal Scepter. Bit nouveau.
LYONS: But it's all -- it's all part of my responsibility. I'm the -- I'm the U.K. ambassador. The ambassador for U.K. financial and professional
services, and for London as a global financial center. So, it's all included. And of course, we've got lots of hedge funds over in Mayfair too.
We've got more foreign financial institutions in London than there are in any other city. They're all part of my constituency too. I need to look
after them just as well as I do U.K. finance --
(CROSSTALK)
QUEST: And finally, I was reading your sort of manifesto subsidies for what you want to do. When you finish your term of office, what will you have
been please of notice?
LYONS: Look, what I really want to -- there are -- there are two really important things. One is I wanted to have changed the narrative about
financial services in this country. It's such a jewel in the crown. We need to be bigging up financial services much more than we are. We can't have a
strong national economy. We can't get that productivity back into the U.K. without a thriving city of London.
And the second thing is I want to mobilize our pension fund to be much more in, you know, invested in productive assets. We've got four trillion pounds
sitting in our pension system, but in an environment where you've got inflation, you have to have that invested in productive assets, not fixed
income.
QUEST: Did you enjoy being Lord Mayor?
LYONS: It's been great. I'm six months in. I've got another six months to go. It's the biggest privilege you can imagine.
QUEST: Thank you, sir for inviting us and (INAUDIBLE) here tonight (INAUDIBLE)
LYONS: Thank you.
QUEST: A terrifying to a flight in South Korea. Passenger somehow opened a plane door while the plan was still in the air.
(COMMERCIAL BREAK)
[15:50:24]
QUEST: A man in South Korea is under arrest after he apparently opened the drawer of an aircraft just as it was about to land. Here's the video of
that terrifying scene. It was an Asiana Airlines (INAUDIBLE) short flight. It's an A-321. And the wind tore through the cabin. The plane landed
safely. Officials say 12 passengers suffered minor injuries. One aviation told us that the landing speed of an aircraft is around 172 miles an hour.
CNN's Tom Foreman is in Washington, D.C. Two aspects here, Tom, since you know your planes. I mean, there wouldn't have been a massively
pressurization the plane was 700 feet. But the ability to open the door into that -- into that jet stream or into the air, that's interesting that
they were able to push it out --
(CROSSTALK)
TOM FOREMAN, CNN CORRESPONDENT: It is interesting. Well, there's a lot that's interesting about this. You're correct when you're up at full
altitude 30 to 40,000 feet, you know, aviation experts say trying to open a door at that height because the pressure inside the plane would be like
lifting a car virtually impossible to do. It also depends on the age of the plane. One aviation experts had maybe, maybe this one didn't have the kind
of failsafe measures that you might have at a lower altitude.
So, the pressure is not an issue. But yes, if you had to push this into that wind at that speed, Richard, I can't imagine that it would be
possible, you know, a great deal about airplanes. So, I think there's a lot of investigation to go on to hear about exactly how he managed to get the
door open. And what didn't happen that would have prevented this.
QUEST: See, that's crucial because the flight attendants were heard calling for help at the same time. I mean, he must as, you know, that -- just
thinking about the logistics of it -- of that emergency exit. He's going to have to get out of his seat, turn and push the thing out I supposed it's a
miracle he didn't fall out the plane. And we don't really know there's any motive.
FOREMAN: Yes. We don't know if there's any motive. The authorities when they arrested this man, you saw him they were being taken away on a
stretcher. They said he couldn't even sit up right, that he was not in a good mental state. So, as of that point, they had no real answer as to what
was possibly driving him. We do know, Richard that we've had incidents like this in recent years. Other people have tried to open plane doors.
They have not succeeded at altitude, although there have been several on the ground who have opened doors, popped to emergency shoots and jumped out
of planes. One guy in Chicago here opened the door and walked out onto the wing of the plane. So, there are real questions about this and again, about
the protocols about what you do. As you point out for him to get out of his seat, get to the door, get the door unlocked, get it open. It's a pretty
good bit of action with nothing being done.
And then the flight attendants yelling for help, as it was. We don't know how fast that happened. Or if this was, in a sense, just bad luck for
people on the plane. Good luck for him trying to open the door. But you know they'll have to look at it closely because what else can be more
terrifying than this?
QUEST: Yes. And this is interesting because Airbus, makers of the aircraft, they are -- they are obviously saying they're going to investigate. And I'm
guessing they're going to be slightly cagey because their relative and it's my word, the relative ease with which this door was opened raises a raft of
questions for them.
FOREMAN: Yes. I think it does, I would be very interested to hear more about the details of how it actually was opened. Because, you know, in my
reading of it, some planes have a capability for the cockpit to more control the doors electronically and mechanically to keep them locked. In
other cases, it's a little more in the cabin. One of the reasons sometimes that flight attendants have to be near a door is if there is a question
that they could be opened.
So, a flight attendant needs to be there just to keep you away from the door at that time. You know, you hear flight -- when they take off and they
say doors are armed or doors are unarmed. That's in reference to those inflatable shoots underneath which come out with such force that if you
were at a jetway and one came out it could, you know, possibly hurt someone or damage the jetway in some fashion.
So, it's more complicated than people think. These doors are not designed to be --
(CROSSTALK)
QUEST: I'm glad you mentioned -- I'm glad you mentioned the slide. Because looking at the pictures, it looks like the slide on this aircraft deploys
beneath the door as opposed to deploying from within door. And in fact, your -- if I look to this picture, I can see the door opens out like that
around and as opposed to straight out where it would deploy.
[15:55:07]
And it looks as though it's deployed from underneath the actual door itself.
(CROSSTALK)
FOREMAN: It does indeed, yes. It looks like that. I'll be very interested to hear what they find out about this just to see if they come up with any
real answers to this because, you know, as we've had more of these incidents in recent years, Richard, of unruly passengers, upset passengers,
people who have, you know, various mental issues, that sort of thing. You know, airline travel has been remarkably, remarkably safe.
It's something most of us can rely upon. It doesn't take many of these things, though, to make people very uneasy and think maybe it's not as safe
as they want it to be.
QUEST: Have a good weekend, sir. Grateful for you this evening.
FOREMAN: You too, my friend.
QUEST: The markets are entering a long weekend. It's a Memorial Day holiday weekend. And it's a high note. Look at the Dow. I'll show you. We're up
three and -- look at that. Solid green throughout the whole day. Investors are optimistic that Washington is close to a deal on the debt ceiling, on
the Dow 30, Intel is leading. It's been a strong week for chips of -- on the back of A.I. Amex is up sharply. Tech stocks are performing,
outperforming the Index.
We will take a profitable moment after the break. QUEST MEANS BUSINESS for a moment.
(COMMERCIAL BREAK)
QUEST: Standby. Tonight's profitable moment from -- well, the cheese grater. It is lovely to be here tonight to see basically London at its
best. The time of the year when the spring turns into summer. And everybody's out and about. And for the City of London who have been our
kind hosts this evening, it's been a real achievement. Having had to deal with Brexit and then had to deal with of course, the pandemic.
And of course, the jobs that have gone overseas and not necessarily have come back. How they are managing it is a testament to the resilience of the
U.K. economy. But as you've already heard tonight, the U.K. economy is not in good shape. Inflation remains high, interest rates will go higher. There
won't be a recession per se, but things are going to be more difficult on the way.
But never mind. It is just about some up and that means things are knocking up. Thank you to everybody who made tonight possible at the cheese grater.
[16:00:007]
And that's QUEST MEANS BUSINESS for this Friday night. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.
I'm in Turkey on Monday.
END
