>> the ecb talks politics. the vice president walks on -- weighs in on measures they may take. >> if this set of measures is all in the would go same direction. >> germany posner realism on russia. ally saidd the -- an it forced them to step back. and the acquisition is apple's biggest ever.

hello, welcome to "countdown." i am mark barton. stay with bloomberg for the big interviews. we will be speaking to the governor of the central bank of sri lanka. we will sit down with the head of the financial conduct authority. two big interviews coming up a little later. let's check the latest from the ecb. we caught up with the vice president. jonathan ferro is with us. what is the message? week, expectations are ridiculously high. 95% expecting a jump. that is massive. every ecb member adds fuel to the fire. we cut up with vito. perhaps a little bit more

conservative. take a listen. i understand. it is indeed the possibility, the risk, that for a prolonged period of the inflation will create risks. >> low inflation? check. they areor him -- concerned about low inflation. what we do about it? everybody is thinking the right cuts are happening. >> let's talk to the people who are expecting their will not be -- >> i will try to find a couple. what happens if they don't come next week. -- cut next week. be on the rate cut, that is a big question and debate as well,

what will they do be on that? in the survey, over 60% are expecting a liquidity injection. but let's expect a targeted -- i was picking to manus. they may do something beyond next week. but everybody is expecting some sort of credit easing later this year. mario draghi has made that clear. small to medium size enterprises are important. iny of those businesses, targeted countries, spain, portugal, are struggling or will struggle to get financing or the next year. likely to see a whole set of measures to follow. it is whether we get it next week or not. >> rocky shema zoo -- sh imazu. one to forecast

the ecb will keep rates unchanged. we will see you a little later. apple has reached a deal to buy a company for $3 billion. it will be the biggest acquisition ever. adam suffered on all isn't san dam issco with more -- a in san francisco with more. >> this deal is about the music and the people they are bringing in. they acquired the headphones, but more important, a music streaming service where you pay $10 a month to listen to as much music as you want. additionally is the team they are bringing in, with ties to the entertainment industry to help apple keep its leadership position in the music business. >> is there much money to be made, to be frank, in music subscription? >> is a very challenging

business. nobody has been able to make a lot of money and it. -- in it. that is not so important to apple. they are more important in sailing -- selling the iphone and ipad. adding on services like this makes that more of a compelling purchase. it is what they are trying to do. >> as we said, this is apple's biggest deal ever. will it continue to use its cash more aggressively question mark -- more aggressively? >> they have shown a more -- more of a willingness to do these kind of deals. this one is unprecedented in terms of its size. apple has sought on the sidelines of these big deals while facebook and google have done big ones. this one is a sign that they are willing to put that big cash pile to use.

on companies like this, that they think they can -- >> tell us about the man who is behind this deal. in many of apple's other deals. he is known as a deal maker. who is he? >> apple, several years ago, banker byldman sachs the name of adrian to come in internal as an investment banker. he shepherds these details. best these deals. plays a bige team role in starting the process of identifying who they want to buy. it is handed over to adrian. to get the deals across the finish line. he used to be a military intelligence officer in the u.s. he has an mba. a mysterious figure around silicon valley. an interesting person and

important person to watch. fromam speaking to us live san francisco. china is the biggest market for a number of things. they could bag another one of those number one titles. david is in hong kong. what is this title? >> it is the title for the world's largest electric car market. it will happen eventually. the question is, what sort of support will the industry get to get there? what we have is the head of the bmw china business. he reckons that within five years, china could become the world's largest. any foreigns -- businessmen will tell you this -- to get the news done in china, you have to align your strategy with what the government wants. we know with the pollution, the

air pollution, beijing does want more clean cars on the road. we are looking at two models here in bmw's case. .he i three, a city car compact. they are looking to start selling it by september of this year. they are offering this for test drives. the other is the i ate. -- i-8. that is the sexy one. it retails for about $135 thousand. there are other carmakers like vw. they plan on selling 15 models by 2018. tesla motors is also trying to gain some traction in china. >> what is being done to put in the supporting infrastructure for this industry? >> i guess first and foremost, they have eluded the air.

that will push sales. when you talk about the electric car market, it is about whether the charging point, the charging stations are in. based -- are in place. bmw is partnering to put up 50 of the charging stations in and around the city. this is interesting. bmw is saying no state since -- is saying no stations will be compatible with all models, not just bmws. the partner is saying a little bit true, but not for tesla. it is going to be a challenge. there are a lot of things they need to get over before 2019. one is this. target is half a million cars. they are just over 70,000. >> caroline here.

what are you watching? >> body pump. heard of it? >> these are programs, workout programs. they are done around the world. special fitness programs. yesterday, while you are watching the television, i was in a 360 degree black box surrounded by neon lights. it was like i was inside a club why did what was called body jim. a dance routine. then i did yoga overlooking mountains and sunsets. it is called immersive thickness -- fitness. reebok has teamed up to sponsor this. this is their new dawn. focusing on fitness. going back to its roots. it is all about driving up sales. this is an race -- obstacle course.

>> the one where you get electrocuted if you come down the side. >> they will find the fittest person on earth. i spoke to the president of the reebok brand. wewill bury bringing you -- will be bringing you much more. >> the ecb vice president was saying any package from the central paint -- bank will have a target. that is next.

>> first. bloomberg. >> time for company news. apple has agreed to buy beats electronics for $3 billion. that is the biggest acquisition by apple so far. the acquisition is projected to close in the quarter that ends in september. after a pledge to offer access to a small mobile operator. thatators will not -- helps the virtual network operator. and some song -- on the -- and

samsung unveiled a prototype wristband. withll share stats developers of mobile fitness applications. vitor saysesident any measures next week will address similar shortfalls in the euro area economies. let's see how the comments are affecting -- good morning. ecbhere more scope for the the upside or to downside next week? what is priced in? >> we have seen almost qe, 70% pricing. i think it will surprise. if you look at what is coming out of the ecb, they are being

explicit about what they want to do. they are targeting the exchange rate. we are going to see some kind of targeted measure to get credit going. sort of a funding for lending scheme like we had here in the u.k.. we will lend you money, but you have to lend it to businesses. >> something like that. -- to really get the securitized market going again. there is no real lending. if you look at eurozone lending figures, the majority is going to governments. which is awful considering what we have been through. he wants to skip over the banking system and go direct. >> it is a small market. many have called that since what happened 2008. what impact will it be if the ecb starts to dabble in this market? >> the thing is, he would only need to enact about 50-6 he purchases to try to get it

going. it is a small market in the u.k. there are all these concerns -- i think he definitely wants to try it. the banking system is not doing that much. >> what about the non-sterilization of the program? the bond buying program? could it go down that road as well? >> we have seen a lot of that money sterilized. yes, it could have some kind of impact. force the liquidity in the system. but i don't think it could have that they could finance effect. you would not get that massive impact. forould he paved the way outside qe later if conditions warranted? >> he doesn't want to do outward qe until we see disinflation concerns. a massive deviation of inflation

expectations. i think he is hesitant to go into that system. i don't know if it will work in the eurozone. that is where the euro is. almost 140 a month or so ago. is it all priced in? more likely the euro rises after the announcement that declines? >> the interesting thing is, we have seen massive capital inflow into bond markets. everybody is expecting this qe. that has supported the euro. we could see a lot of rapid outflow. we have seen a little bit of signs of wheat is coming into the bond market. if anything, -- >> back to you in a second. the head of market analysis. englandhad the bank of policymakers pay to the financial times.

he is urging a rate rise sooner rather than later? what's that mean for sterling? we will ask her later. ♪

>> welcome back to "countdown," i am mark barton. that -- he is urging rates to rise sooner rather than

later. raiseason why -- if they later, they will have to raise at a quicker pace. divisions emerging? >> it comes out of the woodwork. there is a strong case for rate hikes. retail fayette years >> -- retail figures, there was a ridiculous amount of road. you can see the exuberance coming back into the markets. have ultralow interest rates? stoked by lown interest rates. now you are starting to see the market exuberance, financial instability. you are -- there is a clear-cut case to raise interest rates. a does that mean there is clear-cut case to by sterling?

>> the market is heavily positioned on sterling. that means any kind of -- it will be subject to short-term reversals and profit taking. but we are going up above 170. >> the conduct authority, when they meet next month on june 17, is it possible they could announce measures to slow down the increase in the housing market? could that dan sterling's dentt? -- could that sterling's assent? >> i don't think so. a lot of it is cash buying. there are -- so yes, they can rein in and introduce ratios for loan to income. mortgages. that is a good idea. that consumers do

not by themselves negative equity. you can't take that much exuberance out of the market. legacy of the massive qe we have had in the u.k.. i are getting back into -- don't think they can limit that. >> let's talk about the yen. we had retail sales data. years,gest decline in 14 13 point seven percent. no surprise because of the recent increase in the sales tax. the big question is will consumption bounceback? we have seen some strong is this order data. is the second quarter -- because of the sales tax increase? you expected to be temporary? >> absolutely. we have seen a strong underlying trend in japan. apecially if you look at --

stronger demand is coming through. that raises a different question for speculators. that the bankng of japan was going to do more monetary easing. -- --hought the dollar? dollar-yen was going to go higher. >> is there anybody that thinks the boj is going to?? implement more monetary policy in the coming months? >> if you look at the interest rate differential between u.s. foreseen u.s.is gp why lower -- >> and we get gdp data for the u.s. the estimate showed slight

growth of 0.1% in the first quarter. today past data could show a contraction be read do we ignore it because of weather? should we read into it more closely? thaten you look at 0.1%, is disastrous for the u.s.. optimistic overly estimate by the commerce department. they penciled in much stronger inventory in the initial estimate. we will see a downgrade. it says something about the u.s. economy. yes, i do think it is weather related and we will see a pickup in the next quarter. alongen you are running at two percent, anything can knock you off. bad weather, an external shock, or prices can go higher. until we reach three percent, which is the holy grail when it comes to annualized growth rates, that is when they will get the rate hike.

then the u.s. coming will be stronger. >> take you for joining us. the heads of market analysis. and as brazil read it's -- readies itself for the world cup candidate -- can they win the race against inflation? ♪

>> let's head out to manus cranny. >> let's have a look at sterling. we are coming off a six week low. that there is a mustering of discontent. the hikes are to be gradual. prevent eagers to moves later. the guy market, they will be slow and gradual. very optimistic.

have a look at 15% rate hikes. the austrian dollar -- australian dollar is up. business investment inclined. worse than the market. but forward spending. 2014, 2015. well above expectations. this is a rebalancing the economy. commonwealth take of austria, -- bank of australia. secretary of state says the country will receive a positive impact from a cut in interest rates. the ecb will make the decision next week to read an exclusive, our guests said the ecb has already balanced out the rest of -- risks of inflation. >> it is something that we as

european governments should speak to our job. the rule of mario draghi has been so -- amazing so far in terms of the right decisions. >> former nsa agent edward snowden says government efforts to label him a low level system administrator are misleading. he is responsible for leaking thousands of classified documents and bringing attention to u.s. surveillance programs. he held high-level position in intelligence. that the u.s.cret tends to get more and better intelligence of computers nowadays then people. i was trained as a spy in the traditional sense of the word. i lived and worked undercover overwork -- overseas pretending to work in a job i am not. and being assigned a name that was not mine.

>> the billionaire owner of manchester united has right. he was despised by some fans. but the american who also owns the tampa bay buccaneers won the english premise your -- premiership four times in his first six years. the cell's central-bank maintained interest rates at 11%. this came as the country struggles to tame inflation without jeopardizing growth as it prepares to take to the stage as the world cup host. jonathan has the details. the world's largest tightening cycle? >> we are very used to seeing rates stay on hold. in brazil, they are hiked by 375 basis points since april. some are talking about the fact that you could be looking at 12.5% by the end of year.

you have inflation running around at the upper limit of the central-bank target. there's a political element, the president facing presidential elections later this year. inflation increasing. growth slowing. that is not the message you want to project. >> is the world cup a panacea? this tol will want solve all their economic problems. they will wanted to solve, more so, the problems in society. it comes with an $11 billion price tag. tourists, don't get sick, we have the stadiums but not the hospitals. what is in it for us? why do we benefit from it? when you look at the last cup, the biggest boy did not come from the football fans. it came from the writers. consumer confidence at a low.

italy, germany, england, spain go to pressure -- with pressure to win. brazil needs to win at a minimum for more reasons than just football. chat.d shot -- . let's it more on the opportunity that result presents. thank you for joining us today. couldntimating that rates rise through the end of this year. how long will the pot last? -- pause last? >> it is impossible to predict, but i would be surprised if you see rates go up significantly before the election. election, you get the the more politically sensitive it becomes. >> have they lost control of inflation? 6.31%.

to month, things aren't so bad. what is the true inflation trend in brazil? >> it would be an overstatement to say they have lost control. clearly inflation is above where they would like it to be. i also think the government is on the margin, understating or doing everything it can to keep inflation down. but you have to put it in the context of where brazil has been. it is a country that has had double-digit inflation for most of the last hundred years. if it stays in this six percent or seven percent range, that is not great but not a catastrophe. , 1.6%.th 2.3% last year. before the your of growing less than latin american neighbors. what can it do? >> gross of the problem. -- gorwth is the problem. is feeling- brazil

the hangover from the commodity boom. you will not see growth pick up for at least the next 12-18 months. i'm not sure the government can't do anything about that and maintain the anti-inflation policy. >> do you think the president faces a challenge in elections in october? that is the recent talk. >> a year ago, people expected her to win easily. i think she probably still wins, but it will be closer than commentators were thinking even six months ago. >> what can the world cup do to but fills a brazil -- the ills of brazil? >> they have to win. it is amazing, given how important football is to brazil, that it is not popular.

government hase got the priorities wrong. but at the end of the day, the tournament will go well. brazil will play well. it will be better. it will turn out better than the pessimist think. >> goldman sachs said, by buyilian stocks -- resilient stocks. -- brazilian stocks. cup,they win the world stocks have a balance. what would you advise? how can one take advantage of the potential of brazil winning the world cup? would you by brazilian stocks? >> i wouldn't buy equities because they are going to win the world cup. look at u.k.. we have not won the world cup, but it has been a good market. resiliento buy equities because they are cheap and everybody is pessimistic. in that sense, it will make a

big difference. >> what about the currency? is the best gainer among emerging markets's currencies. will it outperform competitors? >> it has more upside potential in the short term. it is still one of the more expensive currencies in the emerging world. most people have been surprised how well the currency has done this year. longer-term, over the next 12 -18 months, we would expect the currency to weaken. it will cause problems. >> by brazilian socks because they are cheap. bonds? >> you have the highest real interest rates in the world. as long as the treasury market remains benign, people will like us trade.

that is what you have seen in the last couple of months. >> but the risks are -- >> anymore difficult u.s. moreury market -- in a difficult u.s. treasury market, brazil will be hard hit. >> richard. the jp morgan asset manager cio. fancy yourself as a spartan racer or crossfit master. we will tie you by -- tell you why reebok's is spending millions of dollars. these are the future of fitness -- really? ♪

>> welcome back. this is "countdown.:" 6:43 -- time in london is 6:43. angela merkel insisted it was not an either or choice between russia and europe. we have the latest on ukraine and eastern europe. what is the occasion for the comments? >> good morning, mark.

eat prime ministers of moldova, georgia, and ukraine are in berlin. they had dinner with angela merkel last night. that is because there signing and association agreement with the e.u. the same sort of political steps the ukraine took, which precipitated the entire crisis. it is not insignificant that merkel is reaching out to the moldovan and georgian prime minister's. there is a frankness to merkel's remarks. here are some quotes. she talked about not mincing words when things need to be called out. we want with respect to russia no either or but that each country is able to choose its own path. she is talking firmly about russia. but at the same time, she doesn't want to set up confrontations if and when moldova and russia moved closer to the european union.

when you look at the journal that merkel has made, she tried to translate put in. -- putin. now she is going the other way around. translating the west for put in. making it clear that the european union will not abide any further incursions. >> what is angela merkel's stance on additional sanctions? is it still on the table or not? >> what they are saying is the old sanctions, the two other rounds of sanctions, are the reason that russia is de-escalating. and now i close to merkel talked about this last night to read. -- last night. pulling the troops off the border because of the threat of additional sanctions. think that theey

sanctions, which have been criticized in the states for oft, the view in berlin is they are working and having an effect. >> hans nichols in berlin. after years of solid-ish -- sluggish sales, reebok's that's -- bet on fitness is paying off. they are hoping to launch a new concept that it says will revolutionize the fitness industry. for more, our fitness expert and european business correspondent caroline hyde. >> they are going back to what they do well. reebok was founded in 1890 and maybe first-ever running shoe. they are getting away from basketball and football training. and focusing purely on fitness. how to dominate that space. yesterday, it was fun mark.

i went down to tower bridge. vemmersi the project fitness. they are black boxes with the 360 degree cinema. you do personalized workout programs developed by reebok. there are fitness programs that they franchise out. jim's can use. it is a certain way of exercising. they want to have the same concept. franchise these out to gyms. you can go inside and surround her self -- -- surround your self. festival orhe music club, screaming. >> they get your energy level going. >> exactly. but it is peaceful if you want your gut. you are surrounded by the horizon and birds. it is new zealand.

over mountains. that was sensational. that did work. that is what they call studio work out of the next level. they have classes called, the trip. it is all about the products it will launch with this. reebok -- i was wearing trainers by reebok. all made for these sorts of particular workouts. the system that i spoke the brand president about. he said, we are focused on this. we're sort the plenty4 -- they are certainly pumping plenty of money into this. >> we put together all of our marking efforts behind fitness. hundreds of millions of dollars. activating this new form of fitness. consumers get to have a go today. you can go down there and there are still some slots by tower bridge. not just this particular one,

the immersive fitness. there are -- is also spartan race. you throw yourself down hills and you are electrocuted three through tunnels. you are covered in mud. you discover you are in a warrior mode. >> more than one half million people do it. crossfit, since 2011, has been sponsored by reebok. the fittestnd person on earth. >> it was a british woman. >> will it help their sales? >> they are positive it well. reebok has had a rough ride. four out of the seven years, we have seen sales decline. tickarted to see an upward as reebok realized they had to go back to their fitness roots. certainly again, feeling pretty positive about the same, we have big ambitions.

in the next five years, this will turn things around. we are targeting the fitness consumer. there is a big athletic industry out there defined by a bunch of different sports. we are looking to be the number one brand for fitness consumers. that is something that is achievable over the next five years. >> the number one brand for fit ness. they managed to honing for where they can be different and making mark. want to honing. they don't want to be basketball, football, everything. books they can afford to take time and do this. >> focus on fitness. this is becoming fashionable, not only in the developed markets, but fitness becoming fashionable in the emerging market. india is getting into it. china is getting into it. 50% men, 50% women. what about?

hi tops are fashionable. they went to cash in on that you read the street where. they signed up alicia keys to make a brand of trainers. prefer, iabout -- i might get myself some hightops like this. i was going to go for the neck and once, but i like these. >> thank you, caroline. a new country has taken the crown for having the fattest girl. we will tell you where it is. next. ♪

>> welcome back. caroline is here. can't get rid of you. >> i appreciate the enthusiasm. are you sure you want to start with me? i went to apologize to caroline. i would like to preface this statement by saying caroline is in better shape than i am. is,cover of the times britain has the fattest girls in europe. british girls have become the fattest girls in europe. >> there was the thing yesterday about getting people, incentivizing doctors --

british girls under the age of 19 are obese or overrate. they have the 27th worst record in the world. countries like italy and spain do better. united states is higher on the list. take that with a grain of salt to read are doing a little better than girls. two thirds of british men are obese. only 57% of women are overweight or obese. looks like the statistics were dragged down by scotland or wales. >> two thirds of men? unbelievable. >> that is a business opportunity for reebok. >> manus, what you have -- what you have, caroline? >> maia angelo is in front of the guardian. a woman of compassion and a daring dies at age 86.

i did not know much about this lady until i watched all the outpourings yesterday. it has been on twitter on television. television.nd phenomenal woman. the things she achieved. by the age of 40, she had been a professional dancer, a prostitute, a madame, an activist, a singer, and an editor. she was given the medal of freedom by the white house. >>a literary giant three malcolm has died as well. ownedwith his sons, he and owns manchester united football club. and the tampa bay andaneers to read i am a -- the tampa bay buccaneers. fan.a manchester united a sad day. the fans have not been big fans. they put a lot of debt on. but they have had remarkable success. five premier league titles.

and they won a super bowl for the tampa bay buccaneers. greater probably sadness and tempe then for manchester united. a sad day for the family. we continue in the next hour. stay with us. ♪

>> the ecb talks policy. vice president vitor weighs in on measures they might take. >> is tilted be decided next week -- is to be decided next week. they would go the same direction. >> the new realism on russia for germany. the threat of sanctions help prudent to step back -- helped putin to step back. and apple acquires beats for $3 billion. it is the biggest deal for apple ever. welcome to "countdown," i am

mark barton. >> and i am olivia sterns. we have bloomberg reporters standing by to deliver the stories that will drive your day. jonathan ferro will walk us through to stand ceo's comments -- contansio's comments. >> this hour, we will speak with the governor of the central bank of sri lanka. then the polls, -- we will -- -- pulse, we will sit down with the head of the financial conduct authority. let's talk about what is happening with the ecb. we spoke to the vice president of the ecb, vitor constancio, ahead of the meeting next week. what did he have to say? >> inflation is too low. joining the chorus. >> we're going to hear it a lot

more. >> i think we are. it is below two percent. the question is, what we do about it? 95% expect a rate cut. looking at our survey, a gentleman does not inc. there is a rate cut next week. we need to get him on. >> white is coming? but he is quite clear that expectations are up there. they are high. >> a rate cut looks like it is a done deal. how can mario draghi surprise the markets? what else could we see? what other extraordinary measures are analysts thinking might be likely? >> they are concerned about small-medium sized enterprises. concerned about them and spain, and portugal. clearly, it will be a big benefit for those countries if you get the targeted rfo.

thecaught up with secretary of state. >> the ecb will make the decision that you expect and a lot of opinion makers expect. that could be positive. >> it is clear this will benefit orchard goal. -- portugal. it will benefit spain. what is clear is they need to do something for these countries. these guys are profitable and they make money. but they are financially constrained. areird of those in portugal financially constrained. that is huge and will dampen the recovery. weigh on inflation. is the local factor, the individual local factor. thes the conversation >> -- bank of england coming out with a new survey. >> thank you.

bet on fitness is starting to pay off. the company has committed millions of dollars to sponsoring group fitness events. such as the spartan race. crossfit games. >> that, i have done. >> you can tell us about it. a new workout concept. i am surrounded by fitness fanatics. caroline is here. what was it like? >> i had to go at crossfit. with this concept -- it is immersive. it is called the project. immersive fitness. it is like being in an imax cinema. but 360 degrees. you go inside a black rocks. you are surrounded by mountains and sunrises if you are doing yoga. clubng music festival or a if you are doing the dance routine. these are about exercise concepts that are met to suck

you in. it was really fun. i did it yesterday. i did body jim -- jam. it was more the club. you have to be really on it. you had to know your routines. the women were fantastic for getting you involved. 's focus. about reebok the sales have been stagnating. they have fallen four out of seven years since they were bought by adidas. the focus is on, let's get away from football. let's focus on fitness. they are lunch or in sponsorship deals. -- they are launching sponsorship deals. they are launching gyms around the world. they also sponsor the spartan run. is an obstacle race to discover your inner warrior. warrior. >> the stuff is huge. it has been a huge success for

like he -- nikea and lululemon. that has been a big driver for the business. reebok is realizing this. they want to join me bandwagon -- join me bandwagon. >> embracing technology. i will bring you more than just the interview i had with the brand about where he sees wearables going. where the -- how much this will help push sales. >> is like an imax spearing. a small, immersive imax experience. >> still want today. it is by the tower bridge. -- >> no luck yet. he has to go to twitter, he has to go to nightclubs. electrocuted down slides. all the things i have to achieve. >> is your bucket list.

>> it will be interesting to see if that moves the needle for bloomberg -- reebok. angela merkel warning of the stabilization. -- warning of destabilization. she warned it was not an either or choice. hans nichols joins us with the latest. what was the occasion for these comments? the primehas invited ministers of ukraine, georgia, and mulled over to berlin. they had dinner last night. georgia and mulled over our signing -- georgette and the moldova -- moldva our signing this agreement. it is not insignificant that they are moving more to the west. we have heard some clear rhetoric from angela merkel. if she may be taking a firmer

tone. she said she wants to not mince words when things need to be called out. a more assertive merkel. at the same time, she doesn't want to boxers open and have this either or choice. here is the quote there. we want, with respect to russia, know either or. each country is able to choose its own path. merkel herself has traveled some distance, starting out more willing to listen to the russian side of things. to being a little firmer. being one of the leaders in terms of holding the line on sections. to julie additional sanctions. letting about him or put no -- letting vladimir putin no he cannot expect a silent response from that you. >> -- from the e.u. the appetiteike for the third round was dampened. where's merkel now?

is is still on the table, or does she want to give them some time? talkingclose ally is about the importance of additional sanctions on the table, as a stick. the last two rounds were just her mental and having russian troops move away from the border. sanctions are still in the either in berlin. -- ether in berlin. but we will not do it unless it further escalates. it as an to keep opportunity, an option. if things escalate again. >> hans, thank you. berlin.hols live from >> funding the recovery. we will break down the options available to businesses and see if they are working. ♪

today's company news. apple agreed to buy beats electronics for $3 billion. the founders of beats will join apple. the acquisition is expected to close in the quarter that ends

in september. ueu -- owon ece approval to buy another company. and samsung electronics unveiled a prototype for a wristband connected to a cloud service. it will allow users to share their stats with developers of mobile fitness up -- apps. look at the u.k. economy. the bank of england is due to release its latest funding for lending scheme later today. while the chancellor has already increased the pressure on banks to make available alternative funding. are any of these is this is are anyoing to work -- of these measures really going to work?

to talk with us as a lobbyist and small business owner. thank you for joining us. the government has tried to stoke lending for small and medium-sized is this is -- businesses. do you see anything that might mean it will be different this time? >> not really. the problem is the culture and ethos inside the banking system. is not they score credit changing. until you change that, it will not happen. 40% of our members apply for credit across the country have been refused. that figure is not going to change. banks say to them, you have to be more prudent. you have to be stricter on your controls. you have to have all the reserves, and the other hand, you have to go out and lend money. you have to change the culture. there has to be a certain type of change. >> this website that is launched -- this banking insight website

-- will give clarity run the services that companies receive from banks? >> it will show that which banks are more friendly to small businesses. that is why they have been fundamental getting this off the ground. it gives an open access to data. you will not have any different results unless you change the culture in the system. what we are campaigning for is if somebody gets rejected, the somewhered post it where they can get finance. there have been on -- there are a lot of sources out there, but nobody knows where to go. the banks are taking away overdrafts. big problem for small businesses. small website let's business owners review banks. >> is almost a trip advisor for banking. >> sound like a great idea.

another part of this is a potential mandate that banks would have to refer clients to different sources? there are so many different sources of money. family lending three >> at the bank says, we have rejected that you, but we think you have a 90% chance of getting crowd funding -- they will help post you in the right direction. if they can work together they areop a matrix, likely to get this much to fund he worth resources you should try because we think you have a good chance of getting it, you are in the road to the right half. -- path. >> you know many companies that have actually gone for funding for lending, or been successful in the application process? problem is fear.

people are not going through the system because they know it is the same this to him. they will not put themselves to the stress and strain of going through the system. one of our members tried to get funding. she got refused, not because the business was not sound. the business was very sound. but many years ago, she had a bad credit score. wire the two tied up together? it is stupid. managers have a real understanding of the businesses? >> it goes to a central scoring system. even if they do think the businesses viable, they have a fight to get the money through as well. >> you yourself have a business. how did you get funding? >> through family. that's what is the business? >> i have my own pr marketing and exhibition company. it needs cash flow all the time. but now that you have been going

for a few years, are you in a place to qualify for a loan? >> probably. i'm not sure he would. we don't need it, fortunately. we are cash positive. view,om my point of working capital is what the real issue is. that is what the banks are not providing. that is where the money is coming from. is this is tell me they need to read >> what you thinking other scandals looming? >> the way the financing of the bank says, they don't want overdrafts. therefore, they are stopping overdrafts as much as possible and try to get people into invoice financing. that is taking away a lot of profit. when he learned in -- when you are in an overdraft situation, if you have to give 100% of your invoices to factories, you are permanently paying the interest

rate. you are taking up three quarters or possibly more out of your company. the company is going to have less cash flow. that is why the scandal is coming. it doesn't suit most of the businesses. an overdraft is fixable. people have control. when you give away everything, you have no control. >> thank you. the london policy chairman. 7:19. -- horseracing keeps a small iranian village thriving. more on that next. ♪

>> it is time for hotshots, a look at some of the most telling images of the day three at -- of the day. horseracing is in the blood of the local people in iran, the cass -- equestrian capital near the caspian sea. they play host to the biggest horse races. unlike football matches, women are allowed to watch along with the men. it is harvest time in the fields of all gary a. workers are turning up to harvest roses. they make arose oil, fondly known as the wood gold. you oil, which is used in

95 hundredsts up to dollars. -- $9500. park has been turned into a holiday park. this is arabia, not africa. used the island as his personal retreat. now the newest resort, where the animals roam freely, has an african feel. good morning to you all. break someo headlines for you. coming up in -- russia's largest lender beating analyst estimates. 240 billion rubles in the first quarter. we saw shares rise. now they are down by about one percent. the largest lender in russia eating results. moving on to one of our former

stories. taking on the challenge with a new twist by only renovating the cars interior space. bloomberg got an inside look at how the company integrates modern technology with the ditch charm. -- vintage charm. the 1952 chrysler town and country station wagon. let'sr inspired me -- restore the hell out of it. let's not do anything to the outside of the car. we are an alternative transportation company. the idea is to take all the perversions and wonderments and integrate that with anesthetic from when they were more of a design driven

aesthetic. automobiles and design at large are my main passion. having come from classic car restoration, i started listening to people who said, i want something that behaves like a new car but has more character. object -- projects active from austin marten to lincoln. everything in between. we have grown every year for the last 18 years. a big problem for us is tremendously complicated and time-consuming. to do what we do. diversesuch a wildly customer base. the one consistent it is all guys. it helps them shed work in city life.

it is a unique opportunity to be in something that is the spoke -- bespoke. >> what was the first car i ever owned? >> yes. yours was german. >> i got a hand me down. so did i for my brother. we won't say why. >> i saw the hindi. the hindustan. the car of india, which is set to retire. it is the end of the era for indian cars. >> sad, isn't it? >> you have to watch a show called pimp my ride. >> is that the one with the rapper? >> it is not the one with the rapper. >> i thought he was in charge of it? what is he called? >> stay with uber.

we will speaking to the central bank governor of sri lanka. keep watching "countdown." ♪ >> welcome back.

i'm mark barton. let's go for the fx check. >> the aussie dollar rallying. the rebalancing of the australian economy will continue. the aussie dollar had a nice little boost. the commonwealth bank of australia saying $.93 is on the way. we are nearly there. when it comes to matters of grave importance, where should we go with interest-rate in the

u.k., mutterings of discontent are certainly building momentum. are toaying if hikes come, they will be gradual. he has a crystal ball. the first hike should not be delayed. baby steps, start sooner. sterling coming off a six week low. it did break an average. it needs to pop up back there to -- >> thank you, manus. >> i'm olivia in london. here are the top headlines. his country would receive a positive impact from a cut in interest rates. carlos told me he thinks the ecb has ellis out the risks of inflation. >> there are risks, but it is something we had european we as european

governments. the ecb has been doing a good job. but the rule of mario draghi has been amazing so far. former nsa agent snowden says american government efforts to label him a system administrator are misleading to read he is responsible for leaking thousands of government documents. he told nbc news he held high-level positions in intelligence. >> it is no secret that the u.s. tends to get more and better intelligence out of computers nowadays than they do out of people. in therained as a spy traditional sense of the word. i lived and worked undercover overseas, pertaining to work in a job i am not. being assigned a name that was not mine. >> the billionaire owner of

manchester united has died. malcolm glazer was despised by some fans. but he won the english premiership four times in his first six years. economy hasankan annual growth of 6.4% in the decade until 2012. join us as the governor of sri lanka central bank, ajith nivard cabraal. what are easy to london besides cricket? hoping you will not talk about that. the main reason is to be here -- for the symposium conducted by the stock exchange. it is an opportunity to showcase sri lanka to the world. that is a very important

occasion for us. to show sri lanka's potential as invest where people can in stocks as well as in bonds. that is important for us. >> it is an economy that is on fire. growth rates of eight percent in the fourth quarter. can you sustain these sorts of growth rates? >> we have taken many steps to make sure the sustainability is maintained. for any economy, even if you have a snag for one year, it can have a downside effect. that is why we have our economy set up so we have many hubs. which are all growth drivers. we have tourism, boats and knowledge commercial and inner gp read these are big drivers of growth. we believe sustainability created by people making investments in all these areas is how we are hoping to see the sustainability is maintained.

one -- >> one threat to growth is the currency. where do you think the rupee is heading? do you plan to make more dollar purchases to keep it low? >> the main way we have -- hope to bring about stability is by slow one. trend a not make too much of an adjustment for the stakeholders in the economy. that is a challenge, as you know. we don't want to to be appreciating too fast or deep appreciating too fast. >> you have to let it float freely. >> you are quite right here it but any major adjustment in a houseseriod of time difficulty for the stakeholders. we will give it to the normal trends, but in a gradual manner. so stakeholders can adjust

easily. keepingholders will be in interest on interest rates. unchanged in your latest meeting. you are stating this waiting to see if long-term rates will adjust downward. >> that is an area we are watching closely. reasonablethere is the long-term rates to come down a little bit. the banks have been sticky on that. some of the money they have aten in has been unreasonably high rate and it has been difficult to make that adjustment. but we could see the long-term rates making a gradual decline. which means we could be more confident making the next policy adjustment move. >> in interest-rate cut is likely possible at some juncture. >> i thought you would pick that up. [laughter]

actually what we are hoping to do is see that it does take place before we make the next move. we have given clear guidelines to the banks. that is how our policy would move. i believe the markets are adjusting gently. our main purpose of monetary licy is to make sure the adjustments are reasonably gradual. i think that is happening in the case of the long-term interest rates as well. for allig concern emerging markets and also sri lanka has been the keeper in the united states. the central bank of the u.s., the fed, reducing its stimulus program and stopping bond buying purchases. what impact will the taper have on your economy and the rupee? >> the way we will handle the tapering -- lot of people think of tapering as commencing.

we thought it as when the fed started the queue we. -- qe. we were not too keen to go out there and take whatever money was coming in to read we were rather it's slow to take in the money that was doing the rounds all over the world. most of the money that is in sri lanka is fairly long-term. being a purpose of involved in the economy rather than short-term money. we would see very little movement inside the sri lankan economy. even last year, when there was a bit of turmoil and asian markets, we did not see this so much. investors who had invested in sri lanka were people with a long-term view of the country. we did not have the shock that others encountered. save the capck --

in with the next range of tapering. we see the same happening with the next range of tapering as well. >> can i ask you about the indian elections? you think he will be able to deliver the old economic program that many are asking for, whether on land, labor, financial or retail reform? >> a lot of people are saying he needs a miracle. >> i think he did very well. it brings him a lot of confidence into the indian economy. economies are really moving with confidence. the rest of the world sees india as a good opportunity. we see that that titular phenomena -- that particular phenomena will help india and the region. he has shown himself to be a doer. that could be very important in india. the last 2-3 years, there was a

bit of a stagnation of the economy which was reflected in the election results. 's tracke minister modi record will be a good one and hopefully will make a big change and paradigm shift. >> we have to end with the cricket. england and sri lanka are taking part in a cricket series. it is a one-day format of the game. the first game, england one. the second day, sri lanka rushed england. -- thrashed england. yesterday, what happened? >> i don't know, but i think the boys will bounce back. we are looking to see them perform the next time around. >> for those not in the know, -- >> you are just rubbing it in. >> the lowest ever. >> are thanks to ajith nivard cabraal, the central bank

governor of sri lanka. these comeback. i promise we will not talk about cricket. >> maybe you will if we win the next matches. but thank you for joining us. cup kicks off. why are they waiting until it is over to do a promotional push? ♪

>> first. bloomberg. >> welcome back to countdown, i am olivia. >> and i am mark barton. >> the biggest event in football starts in one month. but one brand will not be cashing in and till after the world cup is over. hans nichols tells us more to tell us about uma's post -- pim post tournament strategy. shorttoo expensive is the answer. casual shoes.be mark arden is it knowledge in -- mark barton is acknowledging

that 50 over cricket is something to it knowledge in the world.world to read -- threes like me going to a inning baseball game. >> he did use cricket in one of his hits. you know you are won over by the cricket chat. >> yeah -- look, we should talk about whom a. -- puma. --toried foot all company football company. it is too crowded. they're going against nike and adidas. they're going with the big preschool back to school push. they want to make sure that kids by their cleats in august. that is when they will spend their dollars. they are moving away from th casual section. hard to do that when you don't ante up to the bigs ready to vent. event.he big sporting

mark, what do you wear when you play cricket? >> you should know this, we do not use the word cleats. >> what you say? >> football shoots. >> boots. fair.tball boots to be way, you see the back of my cleats. running over you. that is all you need to know. >> that is fair. >> thanks so much. hans nichols with the latest on uma in berlin. >> caroline hite is here. i had a lot of fun yesterday. i went to tower bridge. reebok is trying to put -- they lost out to people like puma and

desire this. -- and adidas. now they are saying we want to be number one in fitness. they are sponsoring events and runs like the spartan race. an obstacle race. crossfit games. find the fittest person on earth. they have launched what they call immersive fitness. you go into a black box with about 20 other people. you are taught a way of dancing. is the one i did the reviewer led by a woman screaming around you. but surrounded by a 360 cinema. you are either in a music festival or a club. when i did yoga, you are surrounded by a sunset and sunrise. it is an amazing concept. amount of money they are funneling into this -- i got to do it for free. they said they will franchise it

to jim's -- gyms. they say they are pumping millions of dollars in two sponsoring the sorts of evidence. one thing i thought that was interesting, i interviewed the chairman of the reback -- reebok brand. i said, what about wearables? what is real bull -- was reebok doing their? i think wearables will be really important long-term. i don't think they will be today -- in the form they are today, where you are toning your steps. not a great measure of your activity. but it will be something that will be more part of the garments you where. -- wear. it is part of the overall fitness experience as a way to track your movement. we are willing to just very close to -- we are close to

talking about a lot of things. >> there will be ways to monitor your heart rate. we have things to announce soon, the towero down to bridge. they have things set down for today. they are following a similar show dreaded gst nike did. and lululemon. think so much, caroline. >> why france is a problem for kingfisher. we will have more on the copies earnings -- company's earnings. ♪

>> about two "countdown -- welcome back to "countdown," i am mark barton. >> for another look at the earnings, cmc markets analyst michael. kingfisher results king them out -- came out. what are your takeaways from this? >> i'm a little bit surprised to read you got me. surprised they missed. there has been a lot of what i

call speculation they're going to do well. they have come in below expectations. they are better than last year. was very tough comparatively. we had a cold winter. this year, we have had a mild one. a little bit surprised. bullish.still very the concern for me is the french business. that continues to -- >> 27% in the last 12 months. >> they had a good run. dividend yield of 12.5%. i don't see a lot of downside, to be fair. >> seven trend? what were the takeaways? there are regulatory concerns with the pricing. 19 pounds, which is white rich. the dividend yield is good. the utility, a steady stream of income. my concern is maybe it is a

little too high and there is a rescue of a dividend -- risk of dividend cut. >> i thought you always like them? >> i have always liked him. it was a takeover target last year. that is why it is as hard as it is. -- high as it is. simply because utilities provide a steady revenue stream. also in the u.s., the best-performing sector, up 14%. >> income. >> when you have markets where they are at the moment, people want in,. -- want income. they also want growth. what you are getting is a balanced portfolio. you have bonds, look at the bond market. ongoing up. stop -- bonds of going up. stocks going up.

how are you position yourself ahead of the ecb meeting? >> i'm cautious. i expect -- think expectations are up. i don't think the ecb can deliver. the markets are pricing in some form of credit financing. that is probably a little bit further down the line. you look at the eu elections, the anti-eu boat, it will be ethical to sell to german voters any type of credit. >> but there have been signed the bank has been changing their tune. >> it has been through gritted teeth. we'll get rate cuts. but that it financing at this point is a step to far. we are not seeing deflation in germany. need hikest. louis sooner rather than later. meeting- next month's

could be interesting. martin's, and was telling when he said he thinks we are going to see a rate hike. just not yet. >> thanks for joining us. >> suit tomorrow. -- see you tomorrow. ♪

>> welcome to "on the move. i am guy johnson in london. we are moments away from the start of european trading. investors are placing their bets ahead of the much-anticipated ecb policy decision. now, jonathan ferro, hans nichols. >> i do not think expectations could be any higher going into next year. from him, simple -- inflation is too low. >> guys, we have earnings out lender.sia's biggest

their profits down 17%. it is an indication that the first-quarter economy in russia has slowed down. toss it over to caroline. >> my focus is fitness. so is reeboks. they have launched a new immersive concept. they claim it will revolutionize the fitness business. i will bring you an interview with the reebok president. >> looking forward to that. that is what we are watching this morning. european markets -- it is a sentient day. ascension day. markets will see light volumes today. the major markets are open. they are beginning to open up. let's figure out what is happening. our markets editor, manus cranny. >> welcome back.