>> double act in davos. david cameron and mark carney are due to speak. the preview in 30 minutes. lagardef christine tells me the economy needs a reset. french speak with the finance minister in the next hour. lacks plus, no new boss but record revenue. the xbox and the cloud deliver for microsoft. good morning, everybody. welcome. you're watching1."

-- you are watching "the pulse." >> i am francine lacqua live from the economic forum in davos. we have a lan up heavy hitters for you today. we will be speaking to the italian governor for ike of italia, the italian bank and then we talk to the union credit ceo. we also speak to the chairman of audi. we have great panels as well. that is coming up. we will hear from the u.k. prime minister david cameron. he will be focusing on the economy and job creation. we'll also hear from mark carney. forward guidance, the buzzword here. >> jonathan ferro, very excited about all of this. hans nichols, was outside partying last night or inside partying. where was he? this looks like quite a gig. he said it wasn't as much of

a gig as it looked like but there are multiple parties. had something from mckinsey, we have a google party, i am not sure which one that is. we will have to get it from the man himself. he will tell us where the action was on friday. tonight we also have a party hosted by marissa mayer. >> that sounds like a lot of fun. i have to say, there is a bunch of guys in suits dancing there. that kind of takes the edge off things. still looks like what a lot of fun. what else have you been doing? i hear you had conversations with interesting people. >> we really have. i caught up with george soros last night and we spoke about syria, something he feels that every human being should be focused on. i also had an in depth discussion with the imf managing director, christine lagarde. part of our conversation was on iran. the leader is the first in a

decade to visit davos. rouhani could struggle to achieve big ambitions for his country. relationshipet the on sound footing with appropriate review of the economy and a thorough discussion with all the monetary and budgetary authorities. >> you were saying today that he hopes that he was saying that iran has the potential to become one of the 10 richest most important countries in the world. >> it is good to have ambition. it is good to have objectives. it is a question of making sure that you take the right measures , that you have that level of cooperation. i could not insist more on cooperation. iran or anyether other country, however big it is , needs to cooperate with each other. the economies are two vastly

interconnected through financial channels, through trade channels, through remittance channels to ignore each other and assume they can get on on their own. >> we had a very wide-ranging interview. we have that conversation as soon as she arrived in davos. you can hear that full conversation with christine lagarde later tonight here on bloomberg tv at 7:30 p.m. london time. in geneva, opposition is set to begin talks today with representatives of the assad regime. these are the first to go she haitians since the conflict erupted three years ago. -- first negotiations since the conflict erupted three years ago. the top priority is getting humanitarian aid across the battlefield. >> syria used to be a very well-developed country. it is now being destroyed.

effort to a big rebuild it. the important thing is to stop. >> you can hear more from my interview with george soros a little bit later on today. i did try to ask them about the economy but he is very passionate about syria. he said it is probably the worst you monetary and crisis in a decade. he had dinner with 80 business leaders to highlight this. kofi annan was there. they gave some pretty emotional speeches. >> it is going to be a story that when we look back on davos, maybe we haven't spent enough time thinking about, but soros certainly doing his part on that. looking forward to catching up later. great interviews coming up. "the pulse" is packed once again with the best interviews out of davos. later this hour, we hear from the u.k. prime minister, david cameron at the world economic

forum. he is expected to discuss how to bring jobs back to the u.k.. let's bring in jonathan ferro on this to get a sense of what we are going to get from cameron and carney. carney is making waves at davos. ,evertheless, forward guidance the debate has changed once again in the last 24 hours. the debate now seems to be centered around this idea that forward guidance is disappearing and that is going to be something the british economy should welcome, not resent. >> you talk about jobs, unemployment approaching the threshold of 7% and what happens when we get there. all building up to next month's inflation report. everyone was talking about whether they would refine those thresholds. the signs you got last night is that they will not be refining thresholds. what does that mean? you hear a lot of people talk about whether it is a failure or not. you have to ask the question, what would have happened in the last six months if we had not had forward guidance?

what would we have seen in the markets? a lot of people would have anticipated a rate hike. some banks are anticipating a rate hike now. what happens here is interesting. world,tral bank in the your big name is credibility. what kind of credibility would you have if you turned around six months later and changed your threshold to 6.5% from 7%? you would gain more credibility for doing what you promised to do. it is a stage post. >> we're going to review the situation. is, we're credibility going to stick to what we said we were going to do? that is almost irrelevant. forward guidance is just a mechanism by which you communicate that. we have communicated it. the levels have come down. the markets are aware -- the market is less aware, the

investment community and the general public are aware. we are going to move on and you something else. >> where are we going to look? you have to look at wage growth, inflation, you and i have discussed extensively coming to 2%. we are close to the threshold, but let's not get ahead of ourselves. we could see a take higher. -- next month we could see it take higher. the question for every consumer right now about potential for the rates to start rising, how are they going to behave? this will filter into their mortgage rates should the bank of england move. what does that mean for disposable income? >> i am sensing it will be fairly pragmatic. thank you very much indeed, jonathan ferro joining on the latest out of the u.s. -- u.k. economy. ts this morning

-- in kiev this morning. ryan chilcote is here to bring us up to speed. >> protesters have occupied regional government headquarters in three different cities. in one city, they even forced the governor of the region to resign, to sign his own resignation in front of a crowd of people as you can see right there. pretty extraordinary development. why is this happening? these governors in these regions have been appointed, not elected by the president of the country. the protesters object to the president and they object to his political appointees in the region. there is also a regional theme here. the west of the country where a lot of these buildings were seized, the protesters in many cases don't like people in the east of the country where the president is from. it is something we haven't talked a lot about but that is one of the themes that has been playing out in kiev and

throughout ukraine. in addition to dissatisfaction with the government, there is also a schism between people in the west and the east. no civil war about to happen but there is important geographic component to this as well. >> talk to me about where we are in relation between the government and the face-to-face meetings we have been having. are they continuing? at the moment we are getting into a situation where neither side can back down. that is hard when it comes to a compromise. >> that is correct. the government, the president met with three opposition leaders yesterday for more than four hours. after which, one of the three opposition leaders emerged and said we should have a truce or a cease-fire of sorts. saying that the government had agreed not to use bullets of either rubber or live ammunition against the protesters in kiev as long as the protesters would

refrain from violence. parliament is set to meet on tuesday as part of the talks to vote on perhaps changing or repealing the anti-protest law that was introduced last week that sparked this most recent round of protests. it is a very uneasy peace in kiev. the actual leaders of the opposition really don't carry the support of most of the protesters. they seem to want to go on irrespective of their so-called leaders. >> ryan, thank you very much indeed. ryan chilcote bringing us up to speed with the latest out of ukraine. carl icahn is on the rampage again, focusing on apple and calling for more cash to be returned to shareholders. this is after he has up his stake. , here ishe latest caroline hyde. -- ebay, it was eagle

today it is back on apple. >> the man just works social media like no other investor i know. he has taken to twitter to disclose he is upping his stake in another tech giant, apple. he has bought another cool half-billion dollars worth of apple shares. he now owns about $3.6 billion of apple. that is only half a percent of the entire apple stock. he is 21st in line in terms of the big holders of apple. when a man who has more than $20 billion to his name talks, the market tends to listen. once again he has released a seven-page open letter to shareholders of apple repeating his recommendation saying, look, give back $50 billion in terms of a share repurchase this year. you have so much cash, so much earnings destined for 2014, you can give more back. certainly the market has been listening. since he first disclosed his stake in apple, the stock is up

more than 19%. we talk about another majors, microsoft out with numbers last night. record revenues but no new ceo. >> still no guidance on who is going to replace steve ballmer. he said back in august, five months ago, that he would leave within a year. we don't know who is taking his place. will it be the nokia had stephen elop? hans from ericsson? what we did get was the number. $24.5 billion in the last quarter for microsoft. they were earning about a quarter of a billion dollars per day over at microsoft. finally it is working. they are moving from software back into hardware. the exports flew off the shelves. we saw this hardware really ramping up. they doubled in terms of sales. we are getting the foray into

cloud paying dividends. internet-based data storage is really working. they saw sales double there as well. we saw a record sales, profit climbing, but now we just need a new chief executive to end that period of transition. >> caroline, thank you very much indeed. needof the tech news you to know about, plenty more on our radar. samsung posted its slow it profit growth since 2011. new iphones lord high-end customers and gains in the korean won also curved the value of overseas sales. the biggest maker of smartphones is facing a squeeze on profit margins. dimon is set to be getting a pay rise, the new york times is reporting. the board voted to increase his compensation. esther, his pay was cut by half. a plannedblocking

workers strike according to the german paper. the union is also planning a walk out of the second-largest airline on wednesday. you will see plenty of strikes around europe next wednesday to thursday as well. if you are traveling, pay attention to that story. hopefully francine lacqua will be back by then here in london in the warm. in the meantime, back to you in davos. >> i might just stay here with this beautiful view. still to come, a big day for the u.k. david cameron talks in davos shortly. we will speak with him later on "the pulse." don't miss that interview. the real action happens when the forum convenes and the party starts. we will share top tips from the elite on how to work the room, next. ♪

>> davos is one of the biggest business opportunities for many attendees and the real action happens when the forum convenes for the day. hans nichols joins us. he spent cocktail hour with the elite. >> it was during the cocktail hour, nothing said about drinking cocktails.

you are a davos veteran. for me, a newbie here, there are some do's and don'ts. we caught up with a pro-to walk us through how to do it. >> i am david jones. up until two weeks ago i was the only british ceo of a french company. is main reason i come here because you can see in one day more people who you would love to see across a year here. nobody feels like we have to do half an hour of polite conversation. no apologies about the fact that a 15-20 minute meeting, you can both get out exactly what you want. you can spend half your life in queues. if you are in and out fast for a meeting, don't bother checking your code. -- you coat.

other people who are much less comfortable with having a high social profile -- it is just about knowing people. a lot of work during the day. everybody ends up staying up too late, having a bit too much to drink and having to get up very early the following morning. didn'tcine, one tip we get in there, where sensible shoes. it is icy out there. you don't want to slip and end up in the hospital. >> he speaks -- he says it is nonstop parties but a lot of the participants go to networking events. there are two or three big parties but the rest is kind of exchanging views over a glass of wine. >> this isn't nefarious. there are meetings between people over coffee or chardonnay. they are still serious conversations here. what people like about it, is the ability to stack meeting after meeting after meeting and really get at it. >> i know you will be at it

tonight. we will have to check in tomorrow. guy, back to you. there is a lot we are going to talk about. we have some great exclusive interviews coming up. >> who is the guy behind you? there is a snow man walking around or a very heavily armed snow man walking around. >> we are not allowed to say. you did not see that. it is snipers at security. i don't want to be on the run. >> i have just broken one of the big faux pas is that davos has. i need to go on lesson. >> i am sure david jones will have the to say about that. >> absolutely. we will be back at davos and a little bit. nobody saw that. nobody with that was watching saw that at all. coming up, the british invasion of switzerland is in full swing. david cameron is speaking in davos shortly. then it is carnies turned to talk to the west. we will preview his speech.

that is all coming up right here on "the pulse." ♪

>> welcome back. ." is time for "hot shots skiers in italy completed a course at breakneck speeds. the gold-medal going to the austrians.

states, andd emotional win for snowmobile freestyle rider who took home the gold-medal at the winter x games nearly a year after his brother several fatal injuries in the same event. the final and most impressive jump, look at this, didn't even count. free styling. john ferro, over to you. >> free styling here on the markets. , you see itkets again here with the turkish lira. record though i guess the dollar and the euro. this is the turkish lira against the euro over the last six months. a 24% move lower. each of these countries have got their own respective political instability. risk aversion, that is the theme across global markets. this is not contained to emerging markets. you see the selloff in europe once again.

for the 100 down by 0.25%. down by a third on the dax. a slowdown in the second-largest economy, china on a big concern there. over to the u.k., here in london a big debate about forward guidance. signs that the bank of england may step away from it, the big question, has it failed? check out the british pound against the dollar. one pound now buys you $1.66. let me tell you where or what got us started, right down here. i will let you decide whether that is a failure. >> you could argue that is a huge success or a huge failure. when the pound goes up the view is that interest rates go up. we're going to take a break. still to come, we are speaking to the leaders with their fingers on the pulse on italy's economy. first up, the bank of italy's governor. then, the chief executive of italy's biggest bank.

it is going to be an interesting take on what is happening and italy. then, the speech of david cameron. he is speaking to davos any minute now. ♪

>> welcome back. day three here at davos. let's turn our attention to italy. it is struggling to recover from the longest recession since world war ii. joining us to talk through the challenges of the eurozone's third-biggest economy is the bank of italy governor ignazio visco. thank you so much for joining us. italy is trying. it is stable, more stable than it was six months ago. however, how do you gain momentum? a country has to do something to gain traction.

it is just not happening in italy right now. is exiting from one of the strongest recessions. we have the falling gdp of 9% in five years, six years. signsear was -- the clear that nunnally there is stabilization but there is a push towards increasing manufacturing and exporting. the issue is, how can you regain confidence for the consumer demand? that is the challenge. >> that is a flexible labor market, that is what we need. when would we get that? i am talking about concrete measures. we have labor market first is working in italy that would lead to lower unemployment. there has been a succession

of structural changes in the country. it has not been very clear that these were part of the comprehensive change. it has been more sequential. labor market has been reformed. more has to be done. towards more jobs is a good move. some more flexibility is important. you need those markets to work better. you need innovation to enter into the thinking mode of most enterprises. there is still much to do. i think we are on the right track. >> one of the big problems outside italy, i am talking

about a higher euro. italy would benefit from a much lower euro like many countries in europe. >> the euro, the euro is the result -- the strong euro if you so say, is a result of two main factors. the euro has a substantial current account surplus. it is going to keep it. the move towards improving in the country's most hit by the crisis and the --ain on the german economy this gives strength to europe. at the same time, a fear of the breakup of the euro means there is risk. this also gives strength to the euro. in fact, capital is moving towards the euro.

the thing is how to best use it. of how toow to think go back. point andt from this try to change the way business works. that weere a danger would become very japan-like in europe? the euro, even if it won't rise much further, it is still quite high. we are concerned about deflation. hold, it iss probably the most sticky and difficult thing to get out of. >> correct, but we have to start from one consideration. there is not deflation in the picture now. inflation is low. lower than what we consider to be price stability in the medium term but we are considering on a

daily basis, we have to look at the medium term and see whether inflation expectations are being affected by these low inflation -- so far, they are not. ais implies that there is steer away from deflation. on the other hand, we are seeing a number of countries including the core countries, there is a share of individual prices that compose the general price index which are somehow signing negative. .e have to look carefully in the ecb, we are very attentive to that. >> we heard from larry summers a couple of days ago talking about stagnation. are you afraid the ecb is reaching the end of their powers?

>> first of all, monetary policy has a lot of power but not all the power. you need other forces in society to take that load. it is interesting to consider secular -- cyclical stagnation because there are different reasons for thinking in that way. after these crises, it takes a very long time for you go back to growth. is being created. helping fosterch productivity. there is another consideration i think. observed substantial changes at the global level. very important things are taking place. these may lead to substantial

growth without enough job creation. this, there is potential for demand. i think this is a transition. society has to be prepared in investing in education to change and make us closer to reap the benefits of that higher growth potential. >> that takes time. time which we may not have. on a much shorter perspective, a lot of economists are pricing in rate cuts. does that make sense to you? would we need to have a rate cut? or would it not make much difference? >> i we have seen from conventional and nonconventional somewhat we are in conventional modes with this long-term refinancing.

have conventional too. one of them is the interest rates. the interest rates are low but they can still be cut if needed. >> and that would work? effect loans which depend on them in different countries. also a signaling affect and that is important. case, one has to be careful that the signal is not a negative signal. i think there are many instruments the central bank has and this is one of them. >> a lot of my guests have been talking about qe by the ecb. it is not certain whether it is legal or not. is the ecb looking into it? >> what do you mean legal or not? there is a mandate and there are limits to what the ecb can do. one thing that we cannot do is

go for the treasury bonds, government bonds as they are issued. --tainly there are assets >> such as what? what would an ecb qe look like? >> i am not going to tell you what it could do. certainly we can consider this kind of thing if needed. biggest concern for 2014? complacency? >> there are two concerns. one is complacency because we have seen substantial reduction in silver risk and spread between countries and core countries. they are reversing their direction. over,y think problems are let's go back to business as

usual. it is not business as usual. you have to keep doing what you are doing and restructuring the economy and being careful on the public-sector side. i think at the end, at least for italy, public finances have been kept under control. subtle.r risk is more it is not really complacency. it is fatigue. at the end they will not be able to say -- state patient and you have to give the vision. investment is in between demand and supply. >> thank you so much for your time today. -- that wasice deal ignazio visco.

we have to keep on track to make sure we are not complacent. even if we start seeing real growth, banks, government, everyone just needs to keep at it. coming up, we continue the conversation on italy as we speak to the man at the helm of italy's biggest bank. live from the world economic forum in davos next. we speak to the french finance minister and the u.k. prime minister david cameron. i am about to go do that interview now. you will catch it a little bit later on. ♪

>> welcome back. you are watching "the pulse." let's bring you up to speed with the key company news. we have had some significant developments in the tech space overnight. we have been hearing from samsung, nasa prize considering -- no supper rise considering the warning we had from that business. we are going to see some further deterioration in the numbers. we have also been hearing a report out of the new york times that jb morgan's jamie dimon is going to get a pay rise. his pay was cut by half last year to $11.5 million. just mentioning samsung, let's talk about microsoft.

it rose in late trading after hours. the company topped estimates. revenue climbed 14% to a record $24.5 billion and microsoft is in one of the biggest transitions in a decade. what we didn't get was news on the new ceo. it is a company that is certainly in the process of reorganization. it is absorbing nokia's handset unit but we still don't know who is going to be running that company. we do know who is running unicredit because he joins us now from davos. continuing our conversation on italy, we have just spoken to the nation's capital bank governor. let's talk to the chief executive of the country's biggest bank. federico ghizzoni joins us now. he has led the bank since 2010. let's talk about the bank and the economy. good morning to you. we have been hearing from the governor of the central bank.

he says that deflation is not a concern in italy, in the eurozone. christine lagarde disagrees. how worried should we be? >> i tend to agree with the governor. i do see a big risk of deflation . we may consider this as a remote possibility. not an immediate risk but we need to act quickly. >> in terms of what you are planning for in the next year, we are hearing stories that the bank is putting out a new business bottle, working on a new business plan. where exactly are you in your planning for 2014? are you working on a new plan for the bank? esahas a is looking --int is looking for in our early of

10. we are searching for a target above 10%. with conditions improving, probably we will have to review our multiyear plan. that is something we are doing. we have not decided when to present the plan to the market. reachrget is to medium-term something above 10%. >> one thing that the bank is going to have to deal with this test, thee stress ache you are -- aqr coming from the ecb. are you comfortable with the metrics of the ecb? are there any concerns with smaller banks in italy? aboutst of all my opinion the essay quality review is that -- [indiscernible]

a rule will be applied across the board. as for us, we are concerned that our capital position -- in september it was 7.7%. [indiscernible] some banks may have some issue, especially midsize and small banks. >> the reason why those stress tests are happening is because obviously we are now moving forward with a banking union. can you give me your honest assessment of the progress that has been made in the banking union? some say the lack of a significant common backstop really is going to become a problem over the next few years. it is only going to continue the fragmentation of the eurozone

banking landscape. >> now we are already -- if we want to see this in positive, the fact that the supervision will come is great. it cannot be without a backstop. it cannot be without a proper solution. without that it will not work. it should be for the european market. it will open up the market. banks have a better capital location, improving liquidity positions. it will be good for the real economy. the starting point has been good. we cannot stop at this stage. we must continue.

>> can i ask you one final question -- we are starting to notice a significant tick up in the rates, the short-term lending rates in europe. can i see that as a cause for celebration because it means the banks are paying back some of the ltro money or should i be concerned that that is going to bleed through into higher rates for the real economy? opinionit is good in my that rates are going to stabilize. --m my point of view [indiscernible] it is different from country to country. in italy the key issue is reducing rates. it is good for the banking system. careful ofbe charging customers.

the economy has to pick up. we need to provide competitive lending. when it was too low, it was not good. the landing was not good for the economy. i hope again some equity will be found soon. >> it has been a great pleasure speaking with you. thank you very much indeed for taking the time. we look forward to hearing more news about the business plan moving forward from here. the ceo of unicredit. , as youad into break can see on the screen, david cameron is in davos speaking right now. you are looking at live pictures. we will bring you the headlines as we continue. cameron is going to join us in the second hour of "the pulse" on bloomberg television. francine is off to interview him as soon as he is offstage. ♪

>> you are looking at live pictures from the world economic forum in davos. british prime minister david cameron on his feet speaking. we are hearing from him about reassuring, the opportunity that globalization offers, bringing jobs back to britain. he wants to lure companies and jobs back to business-friendly britain. that is the line he is pushing. let's listen in. >> there is more customization, more personalization. people want better and faster customer service.

for example if you are inspired by some new trend on a london catwalk, you ought to make the product in available in days, not weeks. so will the new technologies like 3-d printing where you can personalize the design and print in hours rather than choose from a more limited range of predesigned goods and shipping them in weeks. there is no doubt that when it comes to re-shoring in the u.s., one of the most important factors has been the development of shale gas. that is flooring u.s. energy prices with billions in savings predicted over the next decade. taken together, i believe these trends have the ability to be a fresh driver of growth in europe too. i want britain to seize these opportunities. i believe there is a chance for britain to become the re-sure nation. for years we have been out there having our business is to export. now i want to give that same dedicated support to helping businesses to re-sure --

re-shore. we are helping businesses capitalize on the opportunities the re-shoring brings. much as britain can be the re-ahore nation -- re-shore nation. we have to be careful not to misrepresent. let me be clear about the three things i am not saying. i am not saying there is some finite number of jobs in the world and our success on some type of war between east and west to win them back at the extent of the east -- that completely misunderstands the nature of what is going on and how economies work. indavid cameron speaking davos, talking about re-shoring jobs to the u.k., shale gas part of the story. "the pulse" continues after a short break. we will continue hearing from the british prime minister and

significantly, we will bring you an interview with david cameron. francine lacqua will be speaking to him as soon as he is offstage. we will bring that to you later in the program. ♪

>> the british prime minister, david cameron, is speaking in daves on as we speak, and right after he has finished his speech, he'll join us on "the pulse." fran clean is about to interview david cameron. the i.m.f. chief says the economy needs a reset. coming up, we're going to speak to her successor at the french finance ministry. plus, no new boss, but record revenue. the xbox and the cloud deliver for microsoft. >> good morning to our viewers

in europe. good evening to those in asia. and a very warm welcome to those just waking up in the united states. i'm guy johnson. this is "the pulse." we're live from bloomberg's european headquarters here in london. my colleague, francine lacqua, is in davos. she is setting up as we speak for an interview with the ritish prime minister. hans nichols joins from us davos, sweatserland. day three of the world economic forum, and all eyes on britain this morning. >> all on britain. there's also a lot of eyes, and this would seem to happen in the last 24 hours, sort of concerns or questions about the emerging markets turning into concern. you have what's happening in argentina with the currency. are we able to trust a lot of the numbers coming out of china? how much concern is there about what's happening in the emerging markets with currencies? that seems to be driving the conversation today. we'll see if there's any

instability later on as the day progresses, and perhaps we'll get into more macro themes. of course, we have a lot of big interviews to bring you here when we're going to wrap the cameron interview that francine is preparing for right now. guy? >> looking forward to that. yeah, the rand is about to break through a key level, 11. we're watching that very, very carefully. just before i let you go, hans, and i would be remiss if i didn't do this, what did you get to last night? >> real shoe leather, trying to get a sense for what's happening in emerging markets, and some of it took place in bars, other visits took place in conference rooms. these were all off the record conversations, guy, and that is invaluable. >> yep. that is what i call an off the record briefing. that's my kind of off the record briefing. that's water, right? >> this is another lesson of davos, nothing is off the record. but there's a shot in there of

rabinee dancing. nothing is off the record, guy. >> i think we've all learned that. hans, we'll catch up a little bit later. you got some sbreat interviews this hour. as we say, cameron on his feet at the moment talking to the delegates here in davos. we've also got another correspondent in davos as well. let's see what it means for the british economy. cameron talking about reshoring, reshoring britain. that's the message he wants to deliver here, we are open and we want the jobs. app yeah, bring the jobs back to the u.k.t. is unemployment, jobs the big focus today, as the unemployment level comes closer to 7%. what does it mean for the bank of england? a lot of people are going to talk about something that david cameron will try to build upon. as growth does go on a bit of a tear, at least we expect strong economic growth this year, that's when we start to get

forensic and ask a couple of questions. you on the street, feeling richer? a lot of people are talking about a cost of living crisis. on top of that, you got to talk about how sustainable this recovery is, because a lot of people out there are saying, you know what, this sounds a little bit like 2007, strong house price growth, strong consumer rebound, how strong are those foundations. perhaps you see it in the data as well. u.k. first-time home buyers, the highest since 2006. >> yeah, they play a part in all of this, and forward guidance is going to be something that we may look back on in history as being maybe a little bit misjudged, but it's hard to sort of tease out what forward guidance mr. carney's pivotal policy has kind of delivered, because it's -- you look at this, you think he could have delivered a lot of positives, but it's almost too positive, i would say. >> what are you comparing it against? that's what you've got to think about. has it been a fame you're? if you look at sterling, i've shown you the six-month chart, and all it's done is get

stronger. how much has it changed your perception of whether interest rates are going to be? then you got to ask, if we didn't have it, where would growth have gone? if you were sit agent home and saw this economic activity building up, how concerned would you have got about where interest rates would be somewhere in the future? the point that mark has made over and over again, if we didn't have forward guidance, you'd all be sitting in front of me, and we would have been doing that since september, six months. >> yeah, some traction at least here in the u.k., and that's a good thing. john, thank you very much indeed. talking traction, let's get back to davos and hans nichols. >> guy, thank you. earlier francine lacqua sat down with the i.m.f. managing director, christine lagarde, here in davos, and she began by asking what advice lagarde has for c.e.o.'s. >> bring women to the table. that's for sure. and celebrate them anden courage them and mantle them

and hold them, you will do good to your companies. and wherever you can, incentivize innovation and create jobs, just go for it. >> is there something in our d.n.a. that has changed because of the crisis? >> i would certainly hope so. >> for the better? >> for the better, and, you being, you s of know, talking some of the old, ancient greek principles of balance, of measure, of fighting against excesses, eliminating abuses where they are, i think if we haven't learned that a little bit on the occasion of the crisis -- >> do you think we have? >> it's a pity. >> have we learned something? autopsy future will tell. we better have learned something. i think we have.

>> you can catch her full interview tonight on bloomberg television. joining me now, we just heard about lagarde's advice for c.e.o.'s. we have a c.e.o. in the flesh, from audi. thank you very much for joining us. you had a good year. you came in second. audi came in second, the luxury space, behind b.m.w., still ahead of mercedes. are you going to stay ahead of mercedes for the year and are you going to close the gap with b.m.w.? >> this is our intention. you're right, last year was a very successful year, so we sold more than 1.57 million cars to customers. we had an increase of more than 8%, terrific growth in china, terrific growth in the united states, and we had been very stable despite difficult situations in europe here on our own tmb. premium brand number one in china and premium brand number ne in western europe, so >> -- >> so your intention is to stay

ahead of mercedes. they grew at 11%. >> competition is very strong between the luxury and premium brands, but this makes us even stronger, because this is probably the result that we leave 80% of the world market segment, and we fight against the competition, and we will grow further on. >> so what models, how are you going to differentiate yourself from your competitors in the next 10 years? >> we have a very clear strategy towards 2020, so we will grow up to two million cars a year. we are investing heavily, so we take 22 billion euros for product, technology, and innovation, and we will enhance the product portfolio from now 49 cars to models to up to 60. >> is that too many choices, 60 models? >> no, it's never too many choices, because the demer -- >> never? >> we see further growth in the segment. we see growing markets in

china, in the u.s. we have a lot of potential, and we will take them. >> yeah, when you talk about investments, 2013, you spent a lot of money on investment. 2014, are you going to stay at the same level? >> we took the position to invest in hungary, so the factory in hung sear now in place. we are investing in china, and we took the position to go to brazil and to invest heavily in mexico, and this is done until 2015-2016, and then i think we re well prepared for the capacity, and the next investment is inowe variation. >> you talk about all those countries. we're seeing currency fluctuation happen today. how much does that erode your profits? >> you always have a small hit in profits. it's the currencies that are highly volatile, but nevertheless, you have to have clear strategy towards the next five or 10 years, and if you count on markets like in brazil, like in india, like in russia, you are good partner in

that country. >> so what's happening in terms of currency, at least in brazil, where you made a big investment, not a concern? >> no. on the long run, not a concern. >> because you're planning what, 15, 10 years out? >> for the next 10 years. >> so 10 years allows us to talk about tech. i took one of your cars on to the ice. you obviously made a big splash at the consumer electronics show in las vegas. is tech going to be what's going to differentiate you from your competitors? >> historically, because this means innovation, and this is one of the reasons why we connected ourselves with the consumer electronics show in las vegas, and being honest, i think we are absolutely in the lead when it comes to autonomous driving, audi connectivity -- >> but the regulators are never going to let you drive autonomously. you're spending all this money on tech. is it just for bells and whistles, bragging rights? >> we don't expect a big revolution, but we migrate the

evolution, and the consumer will decide where it is going to, and the regulators will follow. >> what year am i going to drive down this mountain in zurich without sitting in the front seat? >> i don't know if you have to sit in the back seat. you can sit in the front seat -- >> well, you get my point. >> this is a big question. >> i think we'll see a big step. >> it will be consumer-driven, and the regulators will follow. >> we will talk to the stakeholders. >> whatever stakeholder we need, and today we have a very good discussion with a lot of analysts, and they also see it coming, and when we see how it lets the consumer industry is investing in that chapter, it's like google or others. we see there is a progress. >> last time we spoke, you were in brazil. which of the jurisdictions do you think is most likely to accept autonomous driving first? >> i think we will see the biggest progress in europe.

>> i thought you were going to say texas. even seeing that, for example, in indian customers, they're very looking for their technologies. we see it first becoming in the premium segment. this is europe and the u.s. >> and then markets develop. everyone needs a strategy for china. what's yours, s.u.v.? >> our strategy in china is very, very much clear, so we ended up last year with close to 500,000 cars. this was forwards 700,000 cars a year. and we would like to maintain the premium number one position, for sure, and we have good partnerships. we are investing heavily in the dealer network enhancements and development. >> and you're not sensing any slowdown in china. >> you know, it is about management to tackle with

slowdowns, but we see the economy growing, and there is a strong politician approach going west within china, and there is still a lot of potential for consumers. >> what do you think ultimately the feeling is for demand? you said 700,000 in china. >> that's only for audi. that's only for audi. we see the total market growing up to 20 million, maybe 25 million cars a year, and we see the premium segment steadily growing, because there is so-called middle range of power coming up in china. >> i think i may have called you her best rt in the intro, so if i did, my apologies. thank you very much. guy, back to you. >> fascinating interview, really fascinating interview. it's duly see this company kind of on a collision course with google as well. hans will be back a little bit later. we've got the french finance

minister coming up. what else is on our radar? lufthansa has a planned worker strike, according to a paper. the air traffic controllers union has planned a one-hour walkout next wednesday. mark carney says that no immediate to increase borrowing costs in the u.k. in an interview with the bbc, he indicated a debate has begun on forward guidance after britain's unemployment fell faster than anticipated. and j.p. morgan's jamie dimon is said to be getting a boost in pay, according to the "new york times," which says the board voted for the increase in conversation. last year dimon's pay was cut in half to $11.5 million. still to come -- france is largely seen as the top investor concern in the eurozone if this year. we're going to speak to the man in charge of that economy, the finance minister, pierre moscovici. plus david cameron is still talking in davos.

these are large pictures from the plenary hall. he's taking questions from the audience. once he finished taking questions, he's going take questions from francine lacqua. that's coming up here on bloomberg television.

>> welcome back. let's take a look at the curpts a markets. this is the picture of the dollar versus the turkish lira, and the pressures continue to

mount. yesterday we saw intervention from the central bank. doesn't seem to be doing much good. the sense seems to be there isn't enough ammunition in terms of you look at the structure of the economy, the reserves, the sets, the process. another story that we're working very carefully is the devaluation of the rand that continues to take place. this is a one-year chart. as you can see, we push ever higher through 11, or 11.14 as we speak. that's the currency market. let's get to the tech space. microsoft's overhaul is starting to bear fruit after the tech giant posted a surprise gain in profit. top-line profit was amazing. we haven't seen these levels for really, well, forever. our european business correspondent joins us now to talk through the numbers. xbox and the cloud really delivering. >> they are, and the whole central ji really s. this is a software jeent that diversified itself, gone into hardware, it's paying off. $24.5 billion is what they got for the quarter, record amount.

that is $11 million they were making per hour. that's the top-line number in terms of record sales. profit also climbed. that was a surprise. many thought it would fall for their fiscal second quarter. you're right, xbox one flew off the shelves at the holidays, so that helped. butted cloud, their move into data stored on the internet, which i.b.m. is starting to get into, also paid off. we saw sales of hardware, some the surface sales, they doubled. their foray into hard devices up 68%. we saw sales double for their internet, web-based data storage. o for the cloud, it expires. despite the huge transition we're seeing over at microsoft, the reorganization, the fact that they haven't got a new chief executive, and the fact that they're still definitely trying to acquire nokia's hand set for $7 billion, they're

still managing to drive up record sales. nokia hand set sales really slumped when they came out on the same day. >> and i guess that's probably the story for tomorrow. the fact we still don't have a c.e.o. yet is the real issue that's hanging over this company. >> it is, and who will it somebody you've still got the three front-runners. this is going to be a bit of a strength to his force, his area is doing so well. less of a string to the bow, stephen elop, from nokia, sales down 29%. he's an ex-microsoft man. he knows the business. and hans vestberg still in the front running, so overall, we do have strong numbers coming from microsoft. >> we'll leave it there. thank you very much indeed. caroline hyde, our european business correspondent, covering the latest from the tech landscape. you also have the expected warning from samsung overnight. we're going take a short break. after that, we are going to talk to the french finance minister. france, top of the list of many people's concerns for the

eurozone this year.

>> welcome back to davos. we're now joined by french

finance minister pierre moscovi with his plans. also with me, an he is teamed editor and reporter here at bloomberg. thank you very much for being with us. appreciate the time. last year, growth in france, 2013, flat. 2014 predictions, .8%. >> .9. >> the distinction was worth arguing? >> that's no change, but our prospects on fwrothe forecast is .9, and it was considered as serious by the european commission, by our partners. in a way, i don't care, because it's not enough. i want to do more. we want to do more. this is why president hollande decided to establish a new set of investments to boost growth and job creation, which is the main purpose of our economy. we made strong reforms in the last 20 months as we reformed

the system. we reformed the labor markets. we are performing training. we are reducing our deficits, but this performance also started in the average of the yours, that is want enough, because france needs to be in the lead. france is the second largest economy in europe. it's the second largest economy in the eurozone. and we want our growth to be more creative and bigger. >> how are you convincing -- if this is a perception that you've done all these reforms in the last 20 months -- how are you convincing investors here that these reforms are real, lasting, and meaningful? >> they are kind of france. you're talking about investors, but france is very high and very appreciated for investors. two weeks ago, i watched with the secretary of treasury of the united states.

>> he have kind things to say? >> yes, he did, that we are reforming. if you look at investments in europe, what is the first destination for those investments? france. what is also one of the lowest interest rates for france? we are very soiled, very credible, very attract itself country, but we want to do more. so those reforms, ok, they are done, but we want to accelerate. we want to go further. this is why the president has established a new social talk called the response back in order to tell the firms, the business in france, you want to invest more, you can do it. how? we are going to more production of the coast. we are reforming, we are reforming the taxation for firms, and we are establishing

a huge economic and social contract in order for this ountry to be more competitive. i can see, i've been there last year, that there is a change in the look of our partners towards france. they say you are doing things. you need to do more. but, well, you are on the right track. e want to act sect rate. >> you were well documented in france. how much of a problem are the local and european elections going to be to you in may? will the results of those make it harder for you to push through the economies the french economy needs? >> i'm very attached to europe. i've been there for decades now. of course i'm concerned about the level, around 20%. it's a lot.

it's too much. but it doesn't stop a democracy from working, and we are going to reduce that. how? by economic results. i myself am elected in france, where it's at a very high level. i know these voters. what do they want? they want jobs. they want the country to grow in a better way, and that's that we're doing. it's by economic results that we will find it, but as far as europe is concerned, there might be a populist wave, but not so huge. i'm quite confident that next european parliament will be again a democracy parliament. if we want people to vote for pro-european party, we need to show that europe is not punishment, that europe is not a constraint, that europe is not paid, but europe can hope, and what is the hope for the people when they look forwards europe? it's growth, not austerity. it's jobs, not unemployment. and this is what we are fighting for. we are fighting for that as

well as national country by a etter economic policy. this is why also it was so important to built the banking union. it's a warranty for the future. >> speaking of the eurozone, how much has france prepared to reach out to other countries it's portugal, perhaps extend a credit line. is that something you would support for portugal? >> we are discussing that, which will meet next monday. the question is, how can they get back to markets? is there a need for a program? might be. we'll discuss with the government. we'll discuss that with our partners. if you look at yours, one year ago, the question was, will greece get out?

greece is in. will cypress default? the program is on track. ireland and portugal are get back in the markets. holland already. portugal, tomorrow. i can say also that spain, one year ago the question was, will there be a program for spain? no, now they're performing well. eurozone gained stability, and now we must re-create the sense of growth in the eurozone and make the necessary efforts for those countries who made strong reforms. >> that brings to us greece. are we going to have another bailout package for greece? >> the greek government needs to make further reforms. he's conscious of that. >> so those are preconditions? > no, we need now to have some dispersement on the coming program. we will also discuss that on monday. and we'll see in the time to come if there is a need for more. today, no. >> today you think the current dispersement rate was going to be enough to sustain that.

>> i think it's enough. it's enough. >> you don't see a need for additional funds. >> not right now. >> you also mention banking union, clearly we're having a back and forth. it seems there are efforts to water it down. we know where you are on these negotiations, but at what point, what he wants the red line for you? when do you walk away from negotiations, if it's just too weak? >> well, the negotiations in my view, they are done. we made an agreement on the 18th of december, and we are establishing a very strong single resolution mechanism with a single resolution for discussions with the european parliament, and i think that the parliament can improve, but we must get close to what the council established, and it is strong enough. if you look again at one year ago, and now we've got a supervision system, mechanism, we're going to get the asset review. we have a unique single

resolution fund. we have also a directive for the people. it's building, it's building fast. it's building strong. nd nobody, nobody must get back. my red line is simple. we have an agreement of the council. we have an agreement of the european council to stick with. >> but you're thinking it's to improve it, not water it doufpble >> they must not, and we must cooperate, of course, but it must be clear the council was a compromise. it was a top compromise. we spent two nights in order to establish that, but also months and months of work, it's fragile equilibrium between red lines from this country or the other one. we are always in favor of a very positive attitude for the banking union. i think the european parliament can improve, insisting on the public stuff.

>> more clarity? >> more sterile. >> you think it's been unclear as it is? >> no, i think it's clear. i think the parliament must understand there is an equilibrium reached within the council, but improvements are possible that it's not possible to rewrite the whole agreement. it was so zpill so progressive, i think it's so good in a way that improvement is possible, but no back track. >> ok, well, minister, jonathan, thank you very much. guy, we just heard improvement is possible after a deal hammered out over two nights of negotiations, it's possible to prove what these ministers come one. >> fascinating conversation, thank you very much indeed. the french finance minister. now let me get you up to speed with some of the other headlines that are emerging this morning. david cameron has also been speaking in davos. the british prime minister says the u.k. business story is

coming back. >> if we engage in the right way, if we get the fund mentals of our economies right, if we sort out our debt, maximize our competitiveness, build on our strengths, then globalization offers our businesses the chance to win new contracts, to export into markets what were previously closed, and to create jobs, fulfilling the demands of consumers thousands of miles away. >> now my colleague, francine lacqua, currently interviewing the british prime minister, david cameron. we'll bring you that interview as soon as we have it. three explosions rocked cairo today. tomorrow is the third anniversary of the uprising that ousted president hosni mubarak. and we have some breaking news for you as well. representatives from the syrian opposition and the government will no longer meet face to face in geneva today. that meeting was meant to bring the two sides together for the

first time since the three-year-old civil war began in that country. instead, the u.n. chief mediator will hold separate talks and then hold a news conference later tonight to give us the results of those conversations. now, it's in kiev today, but outside the city, a different story. anti-government protests have spread beyond the ukrainian capital. we've had a fifth night of unrest. ryan is here with more details. >> protesters have now occupied the headquarters, regional government headquarters in three different cities. all of these in the west of ukraine in one city. they actually, in front of a crowd, forced the local governor to resign, making him sign his own resignation. pretty interesting stuff. what it does is it really underscores, perhaps a underrecord theme of what's going on now, which is this geographic divide. the reason why these protests

are happening in the cities they are is if the governors were appointed by the president, and they're per received as local ukrainians. they're appointed by the president, who's from eastern ukraine and many western ukrainians and eastern ukrainians simply don't get along. that is something that is actually playing out in kiev with many demonstrators there more aligned with the west of the country than the east, which is more pro-russian, and now we're seeing it west of the country. >> they've been talking from the european commission this morning, the language that's evolving is starting to get a little bit more stark. you talk about the division. i mean, she said she's considered that the country could be moving forwards a civil war. i think a lot of commentators would say that's prapping taking things too far. this theme ess,

revealing itself, which is the west of the country where you have more ethnic ukrainians that speak ukraines. they're at odds with the east of the country where you have more ethnic russians, where more ukrainians speak not ukrainian, but russian, and are more aligned with russia. this has been going on, if you ill, on the streets in kiev. these two sides, basically the western ukrainians weren't demonstrating their views, but it's not the only issue. another issue is a lot of people on the streets are younger issue. they don't like the government in power now. they think it's corrupt, and they want it out. but this is something we're seeing more of, this schism within ukraine, and it's very worrisome.

as we watch the situation develop, ryan, thank you very much. ryan joining us on the latest out of ukraine. et's find out. >> industry groups are dying, basic resources are the laggard of this marketplace, concern about china, that dominated the stock agenda, the emerging market currency debate is beginning to take root, and that is carrying through. in other words, selling of rand, selling of lira, selling of peso, devaluation by argentina. some people throwing in the towel. have they got the excess reserves to defend themselves? that was the debate last year. look at this, dollar rand, dollar rising, rand falling. look at the indian rupee. again, the pervasive theme is

you might have thought the first couple of weeks of this year was like, hey, paper. not so. that is not the case. the equity market shrugged its shoulders in terms of the e.u. taper mode. now we have the reality of what's going on in the emerging markets. we're waiting to hear from mario draghi today. we're waiting to hear from mark carney. i think the bigger move is on euro-sterling, but i thought i'd put up dollar-sterling, because i think you get the momentum, which is carney is amazing on a big u.k. program that, you know what, maybe the unemployment rate is not a smart thing to do. and then, of course, this morning at davos, talking about exiting and things are getting better here. so you know what? we'll leave it there. back to you. >> good point to leave it on. hank you very much indeed.

>> up next, francine lacqua has just finished speaking, the u.k. prime minister, david cameron, we're going to bring that interview to you as soon as we can, and we'll be back to tell us what he has to say. also, how do you do business in davos? how do you do the real business? davos most of it happens after dark. bloomberg' hans nichols hit the parties at the world economic forum and gathered expert advice on how to work a room. we're going to share some of the skills with you later on "the pulse."

>> welcome back n. 20 minutes' time, "surveillance" within on the air, tom keene in davos. we're going to have francine's interview with the british prime minister, but argentina really in focus at the moment. >> yeah, we've got a wonderful show set up for you. the prime minister's discussion with francine will be front and center, that after we hear from the leadership of japan. robert schiller will join us as well. of course, the new minted nobel laureate. we'll talk to bob shiller about finance in a good society. shiller has done a lot of thinking on inequality. but rip up the script, front and center in the last 12 hours, 18 hours, everyone in davos glued to their blackberry

ofs and i fopes or argentine a. we saw significant devaluation yesterday for the deeply troubled nation. it's a story of domestic politics, and we'll touch on that through the entire "bloomberg surveillance" this morning. >> i to say, it's going hand in hand with significant turbulence elsewhere, turkey, going to go look at the story developing there. south africa, what is happening in the emerging markets, i don't know how much you can pin on paper, but a significant story there. >> we've had the same issue last year, where news events overcame the meetings of the world economic forum, but this year there's a real cacophony to it. things are not as correlateed as or attached as they were a year ago, but i would say this morning what everyone is talking about in the congress hall are the significant turbulences of argentina

domestic politics. >> looking forward to the show. as you say, you've hit the nail on the head. these are the subjects that everybody is focusing, not just there in davos, but around the world. tom keene coming up very, very shortly. now, earlier, francine sat down as well with the i.m.f. boss, christine lagarde in davos. she asked the managing director if complacency is now a risk, more than maybe it was five years ago, and at any time since the financial crisis started. >> complacency is a risk. it's one of them. but what we're seeing at the moment, to go along with the optimism that you refer to, we are seeing recovery in consolidation at the moment. that's, you know, our analysis. but we also are seeing risks that should be of concern. we've got the old risk that are not all sorted out, and we have new risks as well. essential what will we believe is a reset of the way in which

the economy grows around the world. >> how would you do it? >> the risks are, you know, you have at the old run, the financial stability, which is still an insurance issue, especially there are bubbles developing here and there. we have massive unemployment, you know, north of 200 million people who do not have a job at the moment, and the growth rate that is going at too slow of pace to actually respond to the market needs in terms of job creation. and we have still an unbalanced growth and uneven growth. unbalanced, there's been some rebalancing, but we're not there yet, and the question is, will it last when the recovery does consolidate further? in terms of new risks that we've seen, we have tapering, which is on the horizon, which is now beginning in the united states, and the spillover effect that it will have particularly on the emerging market economies.

>> you talk about deflation. this is a concern. are you only concerned about it in europe? is it japan or is it something that can actually spread? >> we see inflation rates in general, a bit lower than where they are targeted by central bankers, and i don't think anybody can challenge and argue that. as a result of that, if it was to last particularly in the euro area, there is a potential risk that long-term core inflation is also lowered. that has consequences in terms of potential interest rates t. has a consequence in terms of the cost of debt and the burden of debt on sovereign in particular, but on corporate as well, which have a heavy debt load, and in case there was a shock, which is something we have to consider and imagine, not that it is in the cards yet, then we have the risk of deflation. >> christine lagarde there

speaking to francine lacqua. now for many, the greatest virtue of davos is the efficiency which it offers. for davos is meeting today, it's never longer than 30 minutes each. that's one of the critical things. our international correspondent talks with the u.s. trade ambassador on how it's all done. >> the value of coming here is that you can very efficiently see people from all over the world. i'll have meetings from 30 different ministers from 30 countries over the course of the next couple of days, and that allows us to collect a lot of information, to negotiate further on some of our agreements. >> how much of your time do you spend explaining to executives or business groups here the dynamics of the u.s. congress? >> there are a lot of questions that comes up, there's a lot of agreements about trade. >> are you able to tell anyone

that trade is going to be in the state of the union address? >> you know, my view is the president should be the one who delivers the state of the union. >> you don't want to deliver it in the streets of davos, give people a sneak peek? >> i think i'll leave that to the president. >> so is it in there? >> i'll leave it to the president. >> who are tough negotiators? >> i don't want to give away the secrets. >> does that mean the specific deal? >> they are -- they're all tough negotiators. >> what's your mix of time here meeting with government officials or private industry officials? >> most of the government officials. >> 20/80? >> oh, 90/10, but the focus is meeting with other ministers, other government officials to see if we can advance. >> the ideal amount of time for a davos meeting? >> for a davos meeting, how many days or minutes? >> how many minutes. if you want to call for the extension of davos, four-day, a week? >> i think you can get a lot done here in 30 minutes. the important thing is take the ideas that are floated here,

take them back down the mountain, transfer them into real action. >> what's more efficient, g-8 or davos? >> well, they're very different. >> what do you like the best? >> they each have their strengths. >> you got a choice between oing with g-8 or g-20 or davos. how much meetings do you have today? >> four. >> how many tomorrow? >> 20. >> busy. >> all day long. >> hans nichols on the efficiency of davos, talking of the efficiency of davos. francine lacqua finished speaking to the british prime minister, david cameron. we have turned that sound around. let's listen in to what he has to say. >> well, interest rates are very much a matter for the bank of england. i remember the days when politicians meddled in interest rate decisions. i never want to go back there again. i will leave that to mark carney and the bank of england. the government's responsibility is to deal with our deficit

they're seeing those raised by independent forecasters. we need to make sure it's sustainable, long lasting, and recovering for all, sandritch poor. we need to take the steps to correct the problems we had in the past, fixing the banks, making our economy competitive, manufacturing more, exporting more. that is all happening, and that must be my focus and the government's focus. >> how concerned are you that the main policy of the bank of england governor that was meant

to bring certainty is now showing uncertainty, forward guidance? >> well, to be fair to the bank of england, he always said that these remarks about unemployment, that this was a threshold, not a trigger, and i think what he said yesterday is consistent with that. >> how can you persuade the north and the middle that they are part of the recovery? otherwise it would be very difficult to win another election. >> this is a recovery for all the country, and i think you can see that in the transport infrastructure that we're building, the electrification of railway lines, the building of high-speed rail, investment in roads and ports. these are to make sure every part of the country benefits from recovery, and she's the fastest growth in jobs. they've been on the auction. so there are good signs of progress. i think manufacturing more, making more, selling more, supporting britain to all the medium-sized enterprises, that will make sure this is a recovery for the whole country. that is absolutely the focus. >> and you're confident that

manufacturing jobs will come back to the u.k. >> well, what i'm speaking about today is there is a small, but discernible trend of companies reshoring, terrible word, but great idea, bringing back to britain some of their production, some of their access. that is something that can benefit the whole of the country. my argument is this is a small trend, but if we take the right steps, keep our country competitive, we can actually speed up this trend and see more jobs for people. and in the end, that's what this is about, to give people the stability and peace of mind that a regular paycheck brings. >> are you concerned that if you did very well at the european elections, it will show panic that the u.k. will leave the euro? >> i think we have a very clear process now in britain that people know if they vote for a conservative government, they're going get a renegotiation of our position in europe and changes in europe, and then a referendum where they can either decide to stay in that european union or leave. listen, i'm the only leader, i'm the only party that is

offering that very clear pathway and that very clear choice. and in the end, i believe that's what britain will vote for. >> how important is it that you are attracting investment from china to the u.k.? >> it's huge willing important. in the first six months of the year, we saw britain was the most popular investment for anywhere in the world, and i see a lot of britain's great advantages is we're not embarrass that had we've got chinese investment into our nuclear industry. we're pleased. we're not embarrassed that indian capital is helping build up jaguar land rover into the international success, we're proud of that. i've been meeting with business leaders who are looking at britain and bringing jobs and investment and wealth to our country. i think it is in a globalized world, business can go anywhere. actually having a country that says we really welcome your investment gives britain a great competitive advantage. >> we've asked all of our c.e.o.'s and all of our business leaders and heads of state coming on bloomberg how they deal with stress. this is one of the things that we've talked about here in

davos, work-life balance. how do you like to start your day? >> i start my day pretty early. my day -- any way with dealing with stress is to get up early and not go to bed too late. more often the stress is three young children and a fantastic wife. >> nothing in the morning? is there something that when you start your day, you say, this will make it a good day? >> no, i do -- i tend to go for a run a couple of times a week. i think that's a good stress buster, getting out. remember, i live above the shop, as it were. so i find getting out of the shop, getting out of the office, going for a run around the park, that's a good stress buster. >> prime minister, thanks for your time. >> thank you. >> francine lacqua there speaking with the british prime minister, david cameron. also listening to that conversation, hans nichols in davos. any thoughts on that other than small children and stress? >> a situation i know well. guy, with remarkable to me about the two interviews we had

with moscivi and david cameron is the extend they acknowledge political fortunes at home are closely tied to what they're doing here in davos. they're trying to get investors to buy into their vision of their country, their ambassador, their salesman. that's part of their job here, and the stakes are high. >> hans, it's been a great few days of coverage. highlights? >> i think highlights had to be the last hour. i think francine's interview with christine lagarde and her interview with cameron really sort of brought home the challenges, this idea from lagarde that you can't be complacent, it overlays everything people are talking about. great deal of concern the last 14, 16 hours on argentina. what do you about emerging markets, but the qualified optimism is certainly more qualified than optimistic. at the end of the week as it was at the beginning. guy? >> hans, thank you very much indeed. safe travels home, and hans nichols joining from us davos.

that is it from "the pulse." keep it right here on bloomberg television. the davos story continues with the "surveillance" team. tom keene is in davos. see you on monday. have a great weekend.

>> played to safety. the stampede out of argentina pushing market currencies and global stocks lower. a call for building the goal will economy is zeroing in on in

economy -- inequality. and the global landscape shifts. an interview with two of the world's top energy players. good morning. this is "bloomberg surveillance." i am scarlet fu with michael mckee. tom keene is in switzerland, attending the world economic forum meetings. you had three days of parties. you look like you need to rest. >> tonight is the big yahoo! party. i could care less. my senior producer, emily, insists that she does. >> you are getting dragged along. >> i said good morning to marissa mayer. i know she is watching. boy have things changed. we will speak to john rice of general electric .