-- >> the big is in. the focusered it -- is in. they delivered a speech. the government. you want budget flexibility. forget about it. you have a warm to -- you have reforms to get through. >> thanks. barely over delivers. burberry. digital dominance helps drive the sales. is it enough to calm concerns about the hefty paycheck? i will be back with more a little bit later. >> thanks. we'll will be looking at airbus. new plane. could be changes to the a 330. new fuel efficient engines on the bottom.

you have a busy day when you are there next week. >> yeah. we certainly are. a busy couple of days. a lot of announcements. airlines are in focus. we are watching. among other things. starting to trade now. down.es are you will see a similar thing over here. we have banks. in focus, as well. central banks. let's go back to jonathan ferro. >> thanks. we had a rebound. equities yesterday. there was a sense that there could be -- they could be a little more hawkish. exit strategy. markets.concern about there is no indication they are going up. guess whose fault that is? it is the federal reserve. janet yellen. you are the reason there is insufficient certainty in the market. it is not about investors. they are listening to the message you are giving them.

let's see what it does to european stocks at the open. pointe it going down by 1%. the dax is down. the minister side. let's put that data to the side. look at the french data. what is it doing when it came out this morning? economic data is pathetic. the euro-dollar. the french have work to do. draghi has delivered a speech last night. they got political. you guys have reforms. french data illustrate that point. elsewhere, the sterling. check out the pound. .2%. this one still. the best-performing currency. there is a reason for that. they could be the first central ecb.out of the the bank of japan. the bank of japan. they meet today. today could be the last time that we do not get a rate hike.

1.71.ne is who puts their hands up and asked for a higher rate in the next couple of months? >> interesting to listen to them talk about the rates and the productivity story. we will have more on that. let's bring it together and get a sense of where they are. central banks and markets. the executive director at schroeder. thank you. let's talk about central banks and the u.k.. -- the u.k. you do not think the bank of england is in a rush. >> i do not. kid havence i was a been a subject and people say that we need to cool the housing market. comments intelligent when they say that the bank of england cannot build houses. it is and of the day, factor. sure. like any market, profits get

high and they come to bear. we are seeing that now. i expect to see that cool off. many houses as they can. there is a shortage of labor. all the results are coming out and they are good. if i am mark carney, i look at factors. sure, on employment is coming down. wages are not going up. at the end of the day, you put interest rates up and is this too much money in the economy? you are seeing the money supply. >> you bring up wages and you are starting to see them go up in the housing sector. there is a bit of a survey. you see wages going up across the board. a lagging indicator. you get more of that. can they change the game? >> the government desperately needs higher wages. if you are looking, the only way they can increase income is to more and and they take

say that you had a 10% or 5% wage increase and we will have that. the only way out of this fiscal mess that the country is in is to get higher wages and more tax costs flat.eep that has been missing from the economic recovery. >> trading 121. how big of a break could this be? >> well, fortunately, successive governments have destroyed the manufacturing sector of this country and is only 10 percent of gdp. there is a silver lining. >> there is a silver lining. >> there is a silver lining. this could be the germans. is, there is suppressing inflation. we are keeping the eye out of the --

it has barely moved. despite the price going up. the sterling, if you like, has taken the strain and is not so strong that the dollar. we're seeing a lot of companies export or have overseas operations and continue to downgrade earnings because of the foreign exchange. -- born exchange impact. >> was talk about the other way. it is a steep hill. the markets climb a pretty steep hill. the markets, that is. the central banks are not going theighten and you can keep equity market. >> i think so. it is hard to believe. we are on the bloomberg screen this morning. [applause] virtually flat for the year. there are people all over the place. >> yeah. -- >>he results is results are that it can only go up. they are reporting earnings and increases. virtually every day, the

reporting of the results are good and in line with expectations. dividend increases and a double-digit against a backdrop of low saving rates and inflation. i think it is right. i am not saying it is going to shoot up. saying iator for me is have to invest in the equity market. >> has that happened yet question mark >> that happened in february. it is quiet now. relative to other assets, equities look ok. >> yeah. yes. i went contract what i was holding -- i went to track what i was holding in my funds. tracking what was i was in to prices and an auction. there are people there who are willing to invest in these assets should -- it needs acid.

-- in these assets. seeing companies last year get a bit of a shakeup. they have done well. i think it will recover. >> will talk about . we will see

>> welcome back. we are streaming. we are talking about anxiety move. missing a payment in the credit world is a big deal. has taken a bit of a knock. this is the two-day chart and it is down 8.7%. first thing this morning. the real action is in the credits phase. yesterday, keep an eye on this one. the european banking story. there is more on this one. central banks are paying a great deal of attention, i suspect. on president has weighed in the austerity debate and he did so in a speech last night in london. jonathan was there and joins us now. what did he have to say and how does that match with what he had to say recently? >> he has his man.

his man is the bundesbank president. he wants routes of the -- you want flexibility? forget about it. we are not changing the rules. if we do, it undermines credibility. this is a big deal for europe. just an example for mario last night. he said, what is the point of doing all of these unprecedented measures if it takes nine months to put a new business in the country and it is overwhelmed by taxation that makes it hard for the business to get credit. these guys have to deliver big reforms and, you have to say that the data does not illustrate that they have more work to do. it illustrates that they have a hell of a lot more work to do themselves. >> yes. it is interesting. comparisons are being made between the u.k. and the labour party and what is happening in the far left in france -- in france. i will come back to you later. thank you very much.

jon ferro walks us through the central bank story. it continues on bloomberg television throughout the morning. we bring you the rate decision 12:00 p.m., london time. let's get back to andy. executive director. it was hard. credit took a big hit. we underestimate what is happening in the eurozone? >> look at the data coming out of france in the core tds bank having problems. this is something as central banks and markets may not be looking so favorably at. >> it is interesting. you take the u.s. and it has written off 10% of the assets the banking assets. this is the way. it was lending again. the u.k. is a long way down that route.

markets and what could come out of left field. let's not forget when greece started running into a few problems. the whole thing fell apart. i think people forget how interlinked they are. the question is what is our exposure. do you want to hold the paper if people are not going to pay you for it? when it starts, it is hard to stop. they have a blind or over time and say that they will do whatever it takes to save the euro. and the yields on. for all countries is that it is popular.

i think it is wrong. you look at france. economicssity and back in the early 1980's and the subject was the french economy and how it works. i am still writing it. nobody really knows. and you are on your own. yields is proof role trading at low levels and they have flatten the curve pretty much everywhere. of that, central banks are pushing down on everything and you are getting the hard to differentiate asset class. >> he is saying that he has done

his bit and he has the boring cost down. all in he is doing is taking the money and spending it. you have to do the structural reform. it is going down. the --. it leaves you with a confusing picture. still attached to that. there is no differentiation between stocks. it is being manipulated by central banks. it is a net result of what they are doing.

what they have done. they have brought down yields and management is looking for a home in property. in the past, people have done their best and if it is people will be confused and go back and say, is that equity and delivering a long-term increase in earnings. to growth is what i expect come through. it is a big difference in increases. >> on that note, we will leave it. .oining us schroder investment management. is the new ceo worth more than 10 million pounds? we will talk about that after

the break.

>> welcome back. you are watching in london. shares are surging in london. the maker. this may take the pressure off.

has been called into question and may start to fade into the background. there is the correspondent. check. >> check. you pardon the pun. 12%. sales growth is expected and is outperforming the estimates and the peers. it is about asia and hong kong. it is about digital growth. this is a company that was a little bit nervous about what he -- what getting into digital would do with the brand. they have taken it on board and are trying to hit the aspirational buyer. also, they are selling new beauty products that were taken and selling it to amazon and and it is taking risks when it comes to digital.

greatly concern is the british pound. that is currency. that is nothing of their doing. let's talk about the check going to bailey. quite large. you need to put it into context. it is not that large, compared to what was paid. you get two for the price of one. you are not only getting a ceo. you are getting a creative director. >> the maximum he could get, if the share price stayed as it was is 10.3 million pounds. that is the top and that he could be taking home a year in the first year of working. the least you will get, if he heages to under perform -- gets 2 million. that is salary and pension payments. a cool cash allowance.

bonus ifat some 200% he does well. and hes incentive shares is getting 10 million this year. what hasn top of already been in the past years. ais has gotten shareholders little bit worried that it is out of kilter. it is not as much. the chief executive has paid. not as much as the other one paid. in terms of the u.k., perhaps doing very well. it seems to be ready on trend. >> thank you. caroline hyde. european bloomberg correspondent. let's continue in geneva. we are joined now by the managing director of the global luxury goods division. good morning. love.

the numbers we are seeing this arning, presumably, there is bit of a hangover from the air out. is this a true reflection of the skill set? >> i think the numbers we are seeing today are certainly the results of a number of initiatives and a strategy that has been rolled out over the course of the past 5-10 years. mr. christopher bailey. this has been a continuing effort and we are certainly seeing the results of that today and not being creative in this. >> do you anticipate seeing more of the same? or, do you think he will get creative. -- creative? do you think we will see more of the same? or, do you think we will change

the trajectory of the business? seeing thewe are same and the communication from the company is business as usual. we have a strategy that will continue to execute against an the only difference from what was announced before was the black and blue licensing agreement in japan that i way to was a pragmatic get the business there created. my view is that a lot of investors are keen to see christopher come to the market and announced his vision for the brand. you see what i mean? >> yeah. let's talk about whether he is worth it or not. i made the point. you get a ceo and a creative

director. >> yeah. it will be busy. that is for sure. of -- dou -- in terms you think he is worth it? do you think he is worth 10 million, compared to others? do you think he is worth it? i think it is a matter of debate and a matter for them to take a view on that. creationholder value could be in the hundreds of millions and would justify an investment like that. research, we had noted that the ceo paid above most of the other luxury goods. that was a couple of years ago to thet was second only

ceo pay and marginally. -- luxury paris and europe >> we are going to leave it there. thank you for joining us. >> outperforming peers and

>> how are things shaping. up is not the opera very -- operant word. a little bit of red. equities bounds. they have all come back down a little bit. the attention to that. central banks are in focus. there are stocks on the move that you need to pay attention to. but go and see what is happening. jonathan joins us with the details.

once we start here. caroline gives you a breakdown of this one. it is over 4%. a big mover here. the estimates. her hundred 70 million pounds. just 370 million pounds. -- 370 million pounds. nothing good to say for this company. nothing good enough. disappointing developments. the stock goes out. the portuguese bank. issued questions over missed bond payments. it goes down. is this something that could have been a bigger deal? >> thank you very much. some of the other key things you

need to know about. indonesian stocks are at a high this morning. as the strongest level in seven -- then the floor -- floor. you're looking at pictures. finances, move for despite concerns worldwide. the subsidies are removed. argentina, as you know, has secured a space in the world cup. issued out follow the scoreless game. there was a shootout. it was between argentina and germany. let's get back to the rate decision. raging in the u.k. , if we are not expecting

anything. they another banker -- another banker. good morning to you. if you are sitting right now, where would you be? allou would be looking at the relevant data and what you would see is that the economy is recovering strongly and that is good news. the unemployment is contained and coming down. good news. you see inflation low and subdued and that is good news for the time being. i do not think any of that would give any reason to change rates at this stage. >> do you think that the trajectory for the economy is on and that the decision will become increasingly balance? >> we are going forward and the economy goes strongly. andlong can that go on build up inflationary pressures that will require high rates depends on productivity so far. if one sees increases?

it could go a while. if it does not come through, at some stage, they will have to have restraint in order to moderate the pace of the economy. >> do you think should the decision will be taken? stay where it is? is it a 2014 decision to make a call for a rate hike or early next year decision. >> that timing is not something that one can predict ahead. we have the data each time that it needs. they could be in the first half of next year or next year. the datas on how developed. we will not know until we get there. >> do you think it will improve? there is evidence. is starting to rise and point in a different direction. >> i think it is unlikely to

improve from the levels we have seen. there are a number of reasons i would not expect that to happen with a lag from the recovery of the economy. that is a crucial thing that they have to wash. you have to guess and see what happens and set policy accordingly. >> policy is not set in isolation. do you think this concerns the eurozone and european banks this morning? think the export story is a cause for concern? >> i think it is an important factor and there are two there. europe is weekly and clearly making export performance weaker than it would be. that is a constraint on growth and affects the balance.

that drive the economy and we are seeing a recovery. the data has been variable. important effect on the economy. >> what about political factors. >> we have a -- we have an election. will that have a bearing on monetary policy? >> it will have a bearing on confident in the economy. policymakers had to take into account. we operate in a democracy and it is not unusual. you taken into account in considering how strong the economy is growing and generating. >> we have elections all the time and the selection is a political story over the next 12 months and towards an extreme, in terms of ramification of

those votes. we have a prospect of breaking up the union and that has not happened for some time. there is the prospect of leaving the union and that has not happened for some time. >> they have the same type of challenge. but, you not set monetary policy on the basis of politics. it affects the performance of the economy from politics and other sources. it is a factor and that is a way you parlay it. >> you think they can deliver on willromise that the rate be gradual. >> it depends on performance of the economy. the policy is set to keep inflation close to the inflation target. if it begins to build up, it is abe evidence and there

reason why the policy cannot be adjusted in a gradual fashion. how quickly and soon it comes depends. >> i take your point about the facts and needing to change reactions. >> they develop everyday and bring new data. you fit that into a picture of where you are. >> changing on a daily basis. and have been keen to try dampen expectations that we are going to see an aggressive rate path. i am wondering about the relationship with the aggressive hiking path and the reality. day to the data changes day. >> there is a process that is gradual and we have signs that the economy is recovering and not suddenly going to shoot off in a direction or another. monthmmittee meets every

and makes gradual adjustments as we go along. >> what do you make of the communication strategy? >> i think it is fine. it is very challenging to move out of three or four years of monetary easing. gradual move back to a normal structure of interest rates. clearly, it was a risk that markets would overreact to recover and we would see a rush in rates that would be unhelpful and the guidance that the bank was able to give would be -- anded in helpful helpful in dampening that. it gives us a view of the data as a goes along and the data changes from month to month. >> thank you for sharing your time with those. the chairman and former executive director.

we're going to take a break. coming up, airline deal. we take a look at the latest model after the next break.

>> good morning. welcome back. i'm guy johnson. your companies on the move. creating a long-haul discount

hard to compete with gulf carriers. with a turkish airlines about partnering. travel remains a priority. on our fleetusing with a new class. with thell-positioned add to the it will winning spot on the edge. >> airbus is preparing to of -- at theersion air show. will havegine option a more fuel efficient engine and new wings. they are likely to be a aluminum. enough early buyers. they have been pushing hard to

see. requires go ahead board approval. a very strong seller. staying with airbus. they are in talks with the company and it is valued. 200 more. the purchase may be announced. we talked to tony fernandez and he has gone into india. the story will be aggressive. let's get more. indigoalk about the story. what is going on? >> they want to get to 1000 claims and they are talking about a catalog rise. that is how we get to 200 billion. the actual price will likely be less and it is a gross story in

india. it is competitive. you look at the competitors. they have not done well. some are trying to make it work. the reason is the numbers. takes 1.8e american flights a year and in china, it is 0.2%. they want to bring the numbers up and capture some of the growth. they do sales and by the planes. they sell them immediately and it is a way to keep the fleet yellen and make sure that they have fuel savings down the line and they upgrade the fleet. the planes are on the market. we can find a discount price for au and i'm sure you'll have sports team by then. looking forward to that. >> a nice choice. things coming out of

the budget is a desire to spend more on the railway. you talk to a guy like tony fernandez and you can get a tiny fraction of the people into the air. that business starts to take off, quite literally. more on that later. let's talk about it. they have been pushing hard. leave he pushed through 20. pushed the 320. >> the business case is a successful fuselage and the plane has done well. it loses on fuel efficiency and other airbus models. wings anded with new fuel-efficient engines down below. the big difference here is that customers have an option of choosing makers for engines. it looks like they will be

exclusive. right now, they have 80% of the market. this is a way to extend the life line and it has been successful. new leasenew you -- a on life and bridge the gap. the dreamliner becomes available and can go head-to-head. it isou go head-to-head, more expensive and probably more cost-efficient. >> it is balanced. 330 and it is interesting to see how they do it. one of the criticisms is that they have been too complicated and what they are trying to do on the engineering front. keeping it simple and making it out of aluminum. storage versus fuel starts to even out a little bit. it is like buying a pickup truck in the united states where they

are nice and cheap instead of a fuel-efficient car. at some point, it is better to buy a big one. >> i thought you were making the analogy to the fuel-efficient fryer. you spend 600 for a new dryer and it is a similar principle. nobody knows the cost of fuel and 10-15 years and that is the lifeline of these claims. they could be higher or lower. make capital investments. either way you look at it, -- >> tumble dry, relative to the number of children. thank you very much indeed. international course on them. it is the pulse. olivia joins us. what are we talking about? thee are talking about

dryers in the u.s. that use a lot more energy. >> in the top, as well. >> they do not come out the same way. on the pulse, we talk about a different kind of pressure that is building in portugal. one of the big banks missed debt payments and there is concern about the bank and whether the state will be on the hook to bailout the banks. we have seen pressure building across a proofread. even greece. we will talk about that. don't you love talking about bitcoin? you should be excited about it. we have michael jackson on the show. not who you think. -- an investor. he is a former ceo of skype and will be coming on to tell us what bitcoin could learn from skype. a lot of similarities. >> skype was never a telephone

company and people try to make it a telephone company. think of it the same way. >> a very interesting point. of course, because it is you, a little bit of luxury. we are talking burberry and the key question is whether chris bailey is worth it. >> it is buy one get one free. you get a ceo and the creative director. >> that is rare. you see that and the founder -- i do not know if they are majority shareholders. say, who cares. they have big paydays and you're right. maybe he is worth it. there is a half a billion closing line. that is making you weep.

>> i am in the wrong industry. again. >> back in a few minutes time. we will see you after the break.

>> good morning. welcome back. you are watching. it is a smaller version of it. bloomberg businessweek. a tech expert.

car for a spin. >> here's the situation. i live here. with these people. i drive this. i am not your customer. car.have a family-friendly here ono check it out the highway. a long racetrack. california. .ooking at a car who is this for? we know who the old one way or for -- the old ones were for?

they really like to talk about the dna that is in all of the vehicles and how there is is wrong family resemblance. that every i think car they make looks like the 9/11. -- 911. it is the most successful part of the exterior design and it is so sleek that you might wonder where the handle is to open the hatch stop they have put a button right here. push that. you'd expected to handle well. it does. it can be good for handling and it makes the car neutral. everything is moving in a printable and reassuring way. yeah, i am in it. and as a top speed of 164 miles

an hour. that is great. who gets up to 164? a lot of them have a test like this. probably nobody will take theirs to the top of the mountain. they know that. they are selling the security. i will be doing a lot of this. have they created was the best compact suvs on the market? probably. it meant to scale mountaintops and run race tracks? no. you want to see it in the natural habitat, come here. >> the suburban jungle. it looks like a great car. you have to think about what

they are doing here. of the platform that they are going to roll out and they have been successful in this space. if you want to check out more, check out the latest edition of bloomberg businessweek that is on stands. a great cover.

>> portugal under pressure. government bonds fall further as concern grows over the future of the owner of one of the country's biggest banks. >> flying high. airbus is in talks with indigo. >> big box for bailey's. burberry beats estimates. is its new ceo worth the price tag? good morning. you are watching "the pulse." we are live from bloomberg'