>> russia sanctioned again. the eu expands penalties against moscow and effective immediately. losing momentum. the latest polling puts the no votes ahead in scotland by a whisker. and the digital catwalk. we are live at london fashion week to see how brands from burberry to top shop are embracing technology. good morning, everybody. you are watching "the pulse."

we are live from bloomberg's european headquarters in london. i am guy johnson. we are going to check out a company using 3-d printers to tackle mobile accessories -- or take mobile accessories to the next level. and a classic car gets a new lease on life. we are going to take a look at the hotly new anticipated hybrid from bristol cars. haven't heard that name for a while. let's get to our top story. fresh sanctions on russia from the eu and u.s. targeting companies in moscow. they are warning retaliation with a clear threat. hans nichols joins us from berlin. in terms of what is on the list, what is on the list? >> we finally have the list. what we have our companies that are more than 50% state-controlled. that includes rosneft, grass ft and- gazpromne

transneft. in terms of international markets, take a close look. when exxon opened, they have that $3.2 billion deal with rosneft drilling for oil and gas. that is of particular interest. other individuals they have sanctioned, they have added 24 individuals to this list. that puts the total at 140, including a close putin ally. we also have some other members of the parliament in the ukraine. these are members from eastern ukraine, the separatist region. two folks from crimea. this also includes some defense companies. when we look at this expanding list, there are reporters out of switzerland who took a look at private flight. you look at all these individuals, they took private ,rights from moscow to nice down month on month.

russian businessmen are being affected. the question is what it will do to the overall market. the ruble has been soft. or that more u.s. companies companies that have exposure to russia's oil and gas industry may be affected, that is also going to be interesting to take a look at. one thing to remember, you can roll them back. not fairly easily. you still need all 28 members of the eu to roll them back. that is contingent on facts on the ground. >> imm press that they have been doing their checks. linesually do line after of private jets. maybe a little easier this year. lock me through the process. how do you actually make that happen? what is the process? well, we basically have a timeline. it is going to start at the end

of september. the timeline to roll these back could start in a couple of weeks. here is what the president of the european council said. we have always stressed the reversibility and scalability of our restrictive measures. obviously, since the nato summit in wales to today, there has been debate on whether or not you should impose this additional round. some of the fighting, if it hasn't stopped, it slowed down. there is a cease-fire in place in eastern ukraine. what officials want to do is have a clear offramp to wind down this aspect of the sanctions. if it looks like the cease-fire is holding and they are satisfied that russia is not throughng separatists its troops, surveillance or artillery firing. so ukraine's president has been speaking in kiev. what details have we been

hearing? >> he is talking about the importance of clamping down and tackling corruption in ukraine. he is saying all the pro-european things you would expect. he wants closer ties, he wants to get into nato faster. his comments on corruption really captured me. when we look at what happens to ukraine in the future, they are going to have to rebuild their economy. poroshenko and his allies want to move that economy more western oriented. they need to have anticorruption measures to attract western investment. in some ways, he is talking to nato in brussels and international investors whose help he will need to rebuild the economy. >> he said a lot of things today which i thought were pretty hard to imagine happening. nato certainly one of those. he talks about ukraine having never been more united. he talks about getting crimea back.

is he being realistic in these expectations? >> crimea seems -- when you look at body language from brussels and what triggers additional sanctions, no one spends a great deal of time trying to rest crimea back from russia's authority. i would put that more on the unrealistic side of things. ukraine, ita united depends what ukraine he is talking about. if he is talking about western ukraine, as ryan chilcote has been reporting, there does seem to be a consensus. he is on the ground in kiev. there seems to be a consensus that you have a united ukraine. in terms of the last point i made, that is positioning. once you have a new parliament in ukraine, they will put forward a bill. the bill will march through parliament and if it is successful and ukraine wants to apply for nato membership, then it gets sent to brussels and the nato high command members

decide. that is a lengthy process. it is not a six-month process. this is a multistage process. a lot of that is signaling to russia that he is going to continue to look to the west for support and he is not interested in suing for peace or protection anytime soon. >> hans, thanks for the update. what else is on our radar? theo draghi says that european central bank is ready to take further action if needed. draghi also said investment is essential to bringing inflation closer to where the ecb wants to see it. he said the level of business investment in the euro area has only slightly improved since 2008 whereas the u.s. has seen it rise above precrisis levels. london houseen prices and the rest of the u.k. has risen to the greatest level in two decades after a surge in

capital. there are signs that london housing is cooling and the money is flowing out in the united kingdom. nationalists appear to be losing ground in the polls after yougov shows them trailing after overtaking the independence campaign. up, more on scotland's economic future. what would scottish independence mean to small businesses? we will discuss that after the break. ♪

good morning, everybody. welcome back. makeand has started to plans if a country decides to vote to leave the rest of the united kingdom. smaller businesses might not have had the insight or know how to do this. as a result, which could now be at risk? what is at stake? that's talk about the scale of the problem. alan ross joins us now from edinburgh. good morning to you. give me a sense of the scale of the sme sector in scotland and then we will talk about how important it is that they get this bid right. >> the sme sector has

300,000 businesses in the scottish economy. it is very important. 50% of people who are employed in scotland work for small and medium-size enterprises. >> 50%? >> roughly. >> 50% of people in scotland work for sme's. how many of those do you think for the possibility of what could be a major disruption to their businesses? >> probably very few. if you think of the dynamic of a small business, the predominantly concentrate in dealing with their customers. most of them probably took the view that the chances of independence were probably close but it wasn't going to happen. the second point is, it is a very complex issue. it is easier to contact -- concentrate on detailed plans

about something that may not happen. >> in terms of what should be done now, i guess it is too late to start serious forward planning in the event of only a week to go. in the event of a yes vote, give me a sense of the magnitude of the change that is likely to affect these kind of companies. companies, ifse you are working in a local community and your customer base is based in the community, there is probably going to be little change for you. you may be caught up in some legislation or tax changes. in the mean, there is going to be very little change. i think the change will occur -- the things you have to manage our, if you are involved in a market where your customers or suppliers or staff are based in other parts of the u.k., clearly you have to manage that carefully and give consideration

how you can maintain a competitive edge. >> and what would your advice be on that front? >> it is about goodwill. the difficult thing in the last few weeks has been -- there has been some good sides and some ugly sides of the debate. regardless of the way that the vote goes next week, we maintain goodwill with our clients and customers and suppliers, and our governments negotiate well and allaborate rather than have sense of competition between one another. that wesolutely crucial maintain the goodwill that has been built over centuries between the countries. >> is it possible -- i guess it must be, because it is a fairly close vote. to seeossible for sme's this as a huge opportunity?

>> absolutely. the scottish people have created a competitive edge from adversity for generations. there will be huge opportunities in the event of independence. there are huge opportunities in remaining with the status quo. we will deal with whatever is handed to us next week. it is as simple as that. >> what about membership of the eu? that we are in a period of time, membership of the eu will be something that scotland has to reapply for. that could be difficult. >> i don't think anybody has particularly concrete answers on that. i think the concern is there are other states within the eu who have similar problems of countries wanting to break away. clearly, people will be concerned about that. again, i think small and medium-sized businesses let the

politicians deal with that one. market tends to concentrate on a local environment. there are industries that do work across europe, including farming. we have a big connection in the farming sector. many farmers are concerned about what could happen in europe. we are very pragmatic. we will deal with whatever is handed to us and get on with it. have you think the sme's been treated fairly in the campaigning that we have seen? the lack of information, some would say, vis-à-vis how the operating market will work has been really quite amazing. we haven't seen numbers. there are actually very few economic facts about how the setup will be established. do you feel let down by that or do you think that has been an inevitable consequence of the

scale of what we are talking about here? >> i think it is an inevitable consequence. it is a very complex situation that we find ourselves in. our first minister doesn't have all the answers. mr. darling doesn't have all the answers. sometimes i think it would be better for people to be honest and say, we don't know about that. we will have to have a degree of as thend deal with it situation arises. think the uncertainties are the key things that businesses do concern themselves with. a view of whatve the future could look like, then that is unsafe for a lot of people. again, it represents opportunity for others. >> we are going to leave it there. we will see what happens. alan ross joining us from edinburgh.

i want to take you over to ukraine. executives are gathering for the annual meeting. it is taking place in kiev. this is a big business for him. here is what the president of estonia had to say to ryan chilcote about a standoff between russia and the west. >> we have the worst violations of international law since 1945. territory isn of in a violation of so many international agreements. until we return to the status quo, i do not foresee a complete removal of sanctions. >> the estonian president. ryan chilcote has been speaking to the ukrainian president. he joins us now on the line. what did he have to say? theetro poroshenko shed

truth is very shaky. i spoke with him about 10 minutes ago. if you will recall, the day before yesterday, he was talking about how by his estimation 70% of the russian troops that ukraine says are in the country have been withdrawn. he just told me that withdrawal has stopped, underscoring the really tenuous nature of the cease-fire in the east of the country. , what for himar equals the escalation. it is with drawl of russian troops from the east, closing the border, and finally, the release of what he calls hostages. civilians of course, but also ukrainian military personnel being held at a pro-russian rebels. if those three conditions are met, he thinks we are moving forward. of course that would involve perhaps removing some of the sanctions that have been put in place today and before today. >> let's talk about the

sanctions. first of all, talking to the community, the business people, political leaders, do they think the sanctions go far enough? what do they expect or what are you hearing will be the response that we get from moscow? whether thesue of sanctions go far enough, i think there is a difference of opinion. not everyone here in ukraine is convinced that the sanctions are actually influencing the russian president's decisions when it comes to ukraine. there is also a question mark about what it means for the ukrainian-russian relationship itself. i was the billionaires speaking with yesterday who is hosting this conference was pointing out that these sanctions are bad for russian business and ukrainian business. really there is nothing good. sanctions if the

aren't influencing the russian president's behavior and they are hurting business, it is a conflict on top of a conflict. conflict on the ground is frozen at the moment. i think that is the real issue. we sort of move into political deliberations. how much is the ukrainian president prepared to give the pro-russian rebels? is there anything that president naresh bingo is prepared -- poroshenko is prepared to give them that will turn this cease-fire into a lasting peace? >> ryan, we will leave it there. thank you very much indeed. we have news from pedroia, where we are getting the judge reading out the latest verdict on a series of charges. oscar pistorius has been found guilty of culpable homicide. oft is following a series

not guilty verdicts that he has now been found guilty of culpable homicide. we will have more on that. we will wait for the reaction to that. he will be sentenced today. anything else coming up? no, that is the headline coming out. see you in a moment. ♪

>> 24 minutes past the hour, we

have breaking news. oscar pistorius has been found guilty of culpable homicide. the judge has just read out that verdict. he has been found not guilty of murder. convictione homicide -- the sentencing will probably come in a couple weeks time. the judge is saying that the story is acted negligently when he shot at the door but his conduct is not consistent with murder. she also is saying that the phone records that have come out subsequent to the shooting support pistorius' version of that shooting. he was acquitted on a number of other gun charges as well but has been found guilty of culpable homicide. there does seem to be a little bit of ambiguity as to whether

or not he will face incarceration as of today. or because he has been granted bail under south african law he will be able to wait until sentencing, which happens in a couple weeks time. we will find out the details over the next few minutes. this is down to effectively the judge. south africa does not have a sort of trial by a group of your peers, jury selection process. it is basically down to what she is saying. anyway, a few things still to be cleared up but nevertheless oscar pistorius has been found guilty within the last few minutes of culpable homicide. we will now wait to see sentencing which will not happen today. it will happen in a little while. the ambiguity is due as to whether he will face incarceration today or wait until the sentencing takes

place. right, we are going to take a break. you can follow me on twitter. "the pulse" will continue after this short break. ♪

>> welcome back. you are watching "the pulse." i am guy johnson and these are the headlines. oscar pistorius has been found guilty of culpable homicide. the last fewke in minutes. you are looking at live pictures. he was found not guilty of the more serious murder charge. expandedean union has sanctions against russia by adding 15 companies and 24 people to the list. these targets include rosneft

gazpromm. the sanctions will take effect today. and scotland's nationalists appear to be losing ground. survey show support for breaking away from the u.k. at 48%. backing the status quo. many companies are warning that a yes vote will be bad for business. but nationalists say two companies will. benefit -- berdych airways and easyjet why? let's find out. so, why will this help? >> i spoke to both of these airlines and they said scottish voters should do what they think is best. having said that, the scottish

national party has said if they do become independent, they will scrap air passenger duty. a tax put in as an environmental tax. 700,00-million pounds last year -- over 700 million pounds last year. it will add on about 400 pounds to your ticket. not insignificant. 2 million passengers a year choosing not to fly to scotland because of the tax. scrappinglanning ion it. if you talk to the airlines, they may not say that they are in favor of scotland be an independent, but when it comes to this tax, they are happy with a getting scrapped. >> i wonder how expensive it is a repaint the tail fin of 747. >> it is a good question.

looksve to wonder what it like a scotland becomes independent. i asked them about that this morning and about the name. the name has to change. they have yet to come back to me on that question. >> what is the story on heathrow? a baggage handler strike their overpaid. it should be fairly small. heathrow has 8000 baggage handlers. this is one of eight companies that services heathrow. it will affect terminals 1, 2, and three. it's airlines like emirates, sas, new zealand. but it should be fairly small. in the grand scheme of heathrow, strikes at this point are never a positive thing. they want the whole story around heathrow to be positive. they are looking for a third runway. that aspect is not great for them. earlier i spoke to him

this week, and he has been in china. he has been in scotland talking about regional connections. he is definitely out there. he is the new ceo trying to get the heathrow message out and really trying to connect people to a new -- convinced people that the new runway should be at heathrow. does not help. >> those were pictures of toulouse. we will leave that one. let's go from the runway to the capital. arebiggest name in fashion showcasing the latest innovations alongside their spring and summer collections. london fashion week officially kicks off today. we have sent caroline hyde down to the hub of the action. nice glasses. check out what i managed ot to nab. the are the google glasses. it is not just about fashion in

london. it is about fashion tech. we have got so many started kicking off at the moment. all to do with making purchasing that much easier. they are like magazines online now. it's all about bloggers. it is not just the exclusive editors of vogue. it is all about getting the bloggers out, and cultivating social media and making purchases that much more real time. of course, we have the stronghold of the likes of burberry. but they are really embracing social media and trying to get out there and break down barriers. it is exactly what i spoke to the chief executive of the british fashion council about. the british fashion industry is billion each year and

generates 800,000 jobs. they are incredibly important. this is the showcase. we have five days of shows and sales and exhibitions, events. and we have the international taste makers coming to london. so, it is not only great for the designers, but great for the economy. these visitors spending. >> we are a hub for fashion. but london is also trying to make itself a hub for technology. how much do you think the digital innovation that is going on is changing things? >> london is definitely a hub for tech. when you speak to the fashion tech businesses, they love the great opportunity in london. one of the things we want to talk about is part of our strategy is make sure young talent knows the best way to

interact with technologies to make london the. tech first in fashion. also, and to make sure that we are first to embrace new technologies. we have google. 's helping hundreds of disasters have master classes on twitter and instagram and pinterest. e social media challenge to prepare for their fashion shows and to make sure they are reaching a larger audience. >> it's almost making fashion and fashion week less exclusive. it is breaking down barriers. how hard is that? the trend.te to set now people want it today. they want to buy immediately. >> they do. social media has changed the idea. everybody can see behind the

scenes. and the designers have to rely on editorial. they can go directly to the consumer. the role of the editors is to be the pacemaker. is becomingr role more important. there's so much information out there that we look to them. to make right choices. >> you're talking about digital innovations. what about all of this 3-d printing? people are talking that up. but i'm not seeing it on the catwalk. >> i think you will see it on the catwalk. many of our businesses are exploring opportunities with 3-d printing. we did a forum in june. we had 3-d printmakers there. it was incredible. a new ring comes out. some of the challenges in manufacturing around sourcing the right -- or fitting. so, the idea you can do that, you can create the product you

need is incredibly exciting for the industry purdy >> london fashion week is putting on digital events every single day trying to explore and break down barriers. and understand where technology and fashion can help. those thatyou say to are actually saying, look, we might not even need a fashion week at all? that anymore because we have instagram and pinterest. making the audience on the catwalk anyway. you do not need a week to encapsulate the event. >> this is a trade show. it is about getting that international audience in one place to focus on the collection, to think about sales, to think about editorial. if you do not have a fashion week, it becomes hard to get standouts. in london, we are known for emerging talent. we have real startups.

they are building local fashion houses like burberry. have fashion week to reach those audiences. cracks are we -- >> is new york slightly ahead of us? are we ahead of milan? >> i think london is owning it. >> it is not just about the latest design is. this is all about is this. the business of designing. it is also but a small start up. i say look out for the ofpanies, the brand new way following new trends and buying online. look out for far fetch. it has already raised more than $100 million. 300 million in sales per year. it's revolutionizing the way of buying and e-commerce. u.k. is a hub for that.

it is not just fashion. it is fashion technology. >> caroline, put the glasses back on, because there seems to be a level of interest in finding out whether these look good. whether you would buy them. what do you think? yay? nay? not quite on it yet. because it would take so much to get used to this thing being on my face. i need them. why not make them part of a wearable device? it might take me a few more months of just practicing with them and working it out. i think they will catch on. this morer me, i want integrated. i do not want it standing out so much. i do not want it to be so in-your-face. i want a wearable to become part of my classes and part of everyday living and not be quite so demonstratable. these will catch on. is diana von furstenberg think

so, i'm pretty sure many will follow her. and the crazy outfits people are wearing, i am pretty sure the care of rather bright blue glasses are not going to bat anyone violates. eyelids.'s goodroline hyde, always a sport. we will have more from london fashion week. what else have we got coming up? russia is slept with more sanctions as the west runs out of patience. will the penalties make a difference? we will get a perspective on the story right here on "the pulse." ♪

good morning. welcome back. you are watching "the pulse." no more waiting. the eu and the united states have a new set of sanctions aimed at the energy sector of russia. how effective will this be? how targeted are they? let's find out. a russian analyst joins us. in terms of the effectiveness of the sanctions vis-à-vis regarding what we had so far. is it a significant step? >> i do not think it is a significant step up. it's a further tightening of the

screws. very similar to what the u.s. imposed after around the mh17 disaster. intensification of what the eu put in place. it is a ratcheting up, rather than a move towards more broad sector darrelle sanctions or something designed to really hit the russian economy very hard. >> there seems to be a duration element to this. this is not something that is going to have an effect now. if you are targeting the oil and gas industry, that is a very long-term industry. we finance it over a long time. the investor story is the long-term one. is that part and parcel of it? of the thinking that this is something that we will keep on for a long time? is this something that can be withdrawn quickly? the messageted in

communicated between allies. >> it is difficult to see a message being firmly communicated by the eu, because obviously, this is the result of 28 member states getting together and deciding to do something, finding a minimal list of sanctions they can post. it is a mixed message. you talk about the long-term investment in the oil and gas industry. the gas industry has been left out. gazprom has not been targeted. others have been locked out of european financial markets for any estimate longer than 30 days. this is stopping their long-term investing. this is having an impact on gazprom, sorry, rosneft which has a very large debt loan. it has asked the russian government for $43 billion in

refinancing. medium-termit is a over the next six months, as these companies find their corporate debt levels become more difficult to service. they would look to the russian treasury. and russia does have very large financial resources but they are not infinite. the question is how much are those going to come under strain, given the fact that the $113 forudget is at a crude oil at the moment. today i believe it was 98 dollars. there are long-term troubles, but it is not something that will stop them in their tracks. >> i'm curious as to why not. is it because the symmetry of a littlehat this has effect in the west but has a more meaningful affect in the east. few specialist companies that do with investments into, drilling in the arctic. but there are not many companies that do that. t iscurious as to why i

going to take so long to have an effect. if you want to stop putin, why are you waiting six months for thesefect and for companies to go to russia, the authorities and start talking to them? it feels like a very drawnout process. >> i would agree. the first point is that if you want to stop putin today, you have to send nato troops into ukraine and you have to put them at the border and use them to push russian troops out. that is not going to happen -- >> the tools do not exist today. >> the tools do exist, but the problem is that putin has emphasized that russia has the bomb. this is not a risk that western states are going to take. >> the stream of events. >> it is. once it becomes a shooting between nato and western troops and russian soldiers, then y9ou of nuclearisk

escalation. it is not a risk that the west is going to take over ukraine. >> then you have a proxy war. >> precisely. we have to go this indirect route. gazprom, what is that going to do to every european company that buys gas? you have to go at the defense industry into what various because youd putin, have to keep some sort of line of communication open. you cannot go after him directly. so, it is very complicated. 28 memberhave, again, states with different interests that all have to agree on the sanctions package. so, you are going to be minimal and what you can do directly. >> i am curious as to the duration. six months takes us beyond the winter. and the winter is going to be very interesting. russia seems to have more short-term tools. the western powers seem to have more medium-term tools in terms of behavior changing things they can do. there's an interesting duration

mismatch of what is going to happen over the next six month. you've gottime, russia reducing the pressure into poland. you got more immediate tools, very immediate tools. that are available for russia. >> correct. the winter months are going to face gently difficult for ukraine, difficult for the east. you mentioned the reduction pressure to: that was a matter of technical problems. -- you mentioned the reduction pressure to poland. it is going to be very difficult for ukraine. it also depends on the terms of the peace settlement that is reached if there is one. poroshenko has acknowledged that ukraine has lost this war. but he also has limits to what

he can do with that anger in the street. it is an extremely difficult situation to resolve. >> nice to see you. thank you very much, indeed. we're going to take a break. we will continue in a couple minutes. ♪

>> welcome back. revival.he good --

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>> russia sanctions. the eu expands sanctions against moscow, effective immediately. the latest polling puts the no ine ahead by a whisker scotland. guilty. oscar pistorius is convicted of culpable homicide in the killing of his girlfriend. 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 u.s. i am guy johnson.

this is "the pulse." live from bloomberg's european headquarters in london. --aight to our top story fresh sanctions on russia. from both the eu and the u.s. targeting state-controlled companies. moscow is warning italian nation with threats -- moscow is warning retaliation with threats . hans nichols joins us from berlin. what is on the list? 15 companies. three of them are oil companies. total ofhree, these six are locked out from financing from anything other than 30 days. gazprom, transneft. 2% forle is down almost the week. some defense companies as well will be restricted from

importing dual use technologies. then we have some individuals. an additional 24 individuals. russian parliamentarians, separatist leaders in eastern ukraine, two individuals that reside in crimea. theave a key putin ally, rostec ceo sergei chemezov. they have hinted they will go after cars. also transnational routes, a lot of flight fly over russian airspace. we have not gotten the specifics of what the u.s. is going to do. sometimes there has been overlap between the u.s. and the eu, we will see if they have more individuals on more companies or fewer. maybe after the u.s. gives more specificity we will have a sense of what russia's land is. so far, only threats and nothing concrete from russia. >> part of the process is that

we need to keep the idea alive that sanctions can be rolled back. behavior change generates behavior change. how is that going to work? are we talking about that? >> there will be conditions on the ground. in some ways this is why it took a couple extra days to implement these. they wanted to have a clear off ramp. starting at the end of the month, they will assess conditions on the ground. -- anditions improve cease-fire is maintained and it looks like russia is no longer meddling in eastern ukraine according to the eu, you can have a walked back. you need all 28 member states to agree to walk back. if you have one objection that says russia is not abiding by what the eu thinks should be international norms, you could have a problem. there is a clear off ramp and officials want to make that clear. you very much indeed.

hans nichols, our international correspondent, joining us from berlin. we have got a great decision today out of moscow. it is coming up in half an hour's time. now. get to ukraine politicians and executives are gathering for the annual ya lta meeting, which cannot take place in yalta, for all these reasons. here's what the president of estonia had to say to ryan chilcote. >> we have the worst violations .f international law since 1945 we have the annexation of territory, which is in violation of so many international weeements that -- until return to the status quo i do not see a complete removal of sanctions. they will be in place as long as we have a major violation of

international law. >> let's talk to ryan chilcote on the phone. he's been speaking to the ukrainian president. what did he tell you? >> it is interesting. petro poroshenko focused on the fragility of the truce. thatg perhaps alarmingly the troop withdrawal that he was seeing, the removal of russian troops two days ago -- he said he thought president putin had pulled back 70 forces cash pull back 70% of forces from within ukraine. ithdrawal has stopped. giving you a sense of how far we are from a lasting peace. he said that is one of the conditions he needs to really say that things are the escalating. seeher one is a he needs to the russian-ukrainian border sealed off. so that fighters and weapons

cannot come across it. that is something you has not seen. finally, he said ukraine wants the return of its hostages. that refers to civilians have been kidnapped by the pro-russian rebels. also, ukrainian troops. we just heard a couple minutes ago from one of the pro-russian rebel leaders saying that that pow swap, if you will, will happen in two days' time. sounds good, but that is the third time it has been delayed. we could cease-fire but we seem to be a ways from a lasting peace. >> winter is coming and gas supplies are on a lot of people's minds. did we hear anything about that from what he had to say? >> quite a bit. spoke with the top gas official in this country, the chief executive of naftogas. was saying that they are

getting about 75% of the gas they need. he said they are going to have to lower the temperatures and ukrainians' homes. power cuts, energy cuts for the ukrainian industry. and he believes it is russia's plan to deny western europe some has beens that gazprom tracked to supply. over the last couple days we have seen concerning reports coming from various countries -- poland earlier in the week saying they have less gas than they were expecting from gazprom. one of the reasons why they stopped one of their reverse gas flows to ukraine. ukraine is getting even less gas than planned. in the last half-hour, we have heard from omv, an austrian oil company that imports gas from russia. less thany got 15%

they were expecting from gazprom yesterday and did not get any explanation. this is definitely the space to watch as we go into winter. ar this country to avoid really massive problem when it comes to people staying warm in their homes and having any energy to keep the plants going, they need a very mild letter. guy? >> thank you very much indeed. ryan chilcote joining us from kiev. what else? after a 41 day trial, oscar pistorius has been convicted of culpable homicide in the killing of his girlfriend, reeva steenkamp. the judge delivered the judgment in the last hour. acquitting him on charges of murder and two other gun related offenses. mario draghi says the european central bank is ready to take further action, if needed. an, draghin mil

said the level of business investment in the euro area has sincelightly improved 2008. in the u.s., it is above precrisis levels. scotland's nationalists appear to be losing ground or at least momentum. than a weekess after overtaking the campaign for the first time. coming up plenty of uncertainty for scotland. the historic independence vote. what is the implication for small businesses? we will talk about that next here on "the pulse." ♪

>> welcome back. you're watching "the pulse." let's talk about the currency markets. talking about russian sanctions. a five-day chart of the ruble, under pressure. dollar-ruble higher again today. market had astock bit of a pop, maybe the suggestion would be that the sanctions could have been tighter. the momentum is behind the idea that sanctions will get tighter. even the sanctions we have seen impose today will have a

cumulative effect. the problem of financing and the problem of finding decent technology for russian oil companies is only going to get greater and greater. this could further enhance capital flight as a result of which we are seeing the dollar rising again. the dollar is up more broadly, but part and parcel to that story is the dollar-ruble from what we are seeing with sanctions. let's look at the pound from an sme, a small and medium-size enterprise, angle. if the scots vote to leave the u.k., smaller businesses might not have the insight and know-how to mitigate the risks that their companies face. how do we do this if we are an sme in scotland? david is the head of partnerships at u.k. for x and joins us now. part of theg scottish economy. we had a guest earlier who said nearly half of those employed in scotland work in smes.

until two weeks ago, many of them had not thought through the applications. >> research from the scottish government indicated that the inrease in transaction costs the event of a yes vote and got on having to adopt a new currency could be two 5 billion pounds. that could come from an increase in bank fees, hedging costs in the event that they have to manage cross-border trade with a new currency. what we see at the moment is big banks making contingency moves and future proofing. we see bigger businesses doing it as well. the small and medium-size businesses are aware. what steps should i be taking in the event of a yes vote? cfo of a smallr or medium-size company, what is the advice? vote, it isis a yes

not going to be in immediate change in the currency. tohink what you need understand is what potential impact that will have on the showed a new currency be introduced. at the moment that would be the only solution on the table according to westminster and the bank of england. in order to do that, if you find yourself working in international trade -- look at the bank accounts on both sides of the border. in the event there is an introduction of a new currency you have a natural hedge. you should also be speaking with ialists forec your bank and understand how the transaction flows could impact your bottom line when spending on fx margins and increased transaction fees. the third thing, if you have customers on either side of the border, the relationships are going to have to be very strong. speak to your customers and make sure both of you are comfortable with how you're going to be planning for any changes that

might be on the horizon. >> not particularly complicated things. you pick up the phone and talk to your bank. open a bank account, not come located. you do not need to get into complicated hedging of currency risk that the big companies will be doing. >> you don't need to get into anything complicated. simple but a large amount of small and medium-size businesses have not been exposed to this before. they will not understand exactly what they need to be doing. they need to bring themselves up to speed on the relatively simple world of international payments and managing risk exposure. they are comfortable with it. what we need to be looking at is helping small businesses and medium-size businesses manage the uncertainty. we see banks making moves and we see large businesses saying that prices may rise. small and medium-size businesses perhaps do not have that luxury of passing on an increased cost onto their >> customers.

>> what about the regulatory side of things? never hip in the eu -- -ship- in the eu -- membership in the eu? shipping things outside of the eu. have you seen any assessment of what it could cost and the cost litigation some companies are going to have to do. >> the only thing that we have seen at the moment, the research that shows the increase in transaction costs could be to 2ere from 500 million billion pounds. we would expect the burden to fall largely on scottish businesses, more than businesses that remain in the u.k. that are more equipped to deal with this. i am you have a sense -- sure you are talking to some of these companies -- that they feel they have not been giving

the necessary information. there'll be a transition. of -- there'll be a transition period to allow businesses to adapt. the risks involved and the opportunities that could exist -- there has been very little communication. >> there's been nothing. i suggest that if businesses want to find out more, speak to their banks and have an open dialogue. speak to a currency specialist and their accountant about what tax implications and increased regulatory burden. >> communicate and keep the lines of communication open. do not believe it is only the big banks that this is going to affect. >> nice to see you. david nickel from u.k. for ex. the british countryside switches to solar. muniany bonds -- how bonds are bringing researchers to communities.

>> good morning. 21 minutes past the hour, you're watching "the pulse." live on bloomberg tv, streaming on your tablet and bloomberg.com. a right solution for the countryside economy. company has raised capital direct from investors using mini bonds. the scheme promises returns of

7% per annum and is creating clean, green electricity for oral homes. joining me now is the ceo. why mini bonds? we will talk about solar and other things. i'm curious about the financing structure you have chosen. mini bonds offer what? they offer your customers what? >> mini bonds are a straightforward type of investment product. investors can invest for as much as 60 pounds -- as little as 60 pounds and get a fixed interest rate. after five years, they have the option to take their investment back in full owner of full rights for another 20 years. >> are you paying them enough? do you think the risk-reward is right? >> trying to put as much benefit as possible and solar energy into as many hands as possible. the name 60 million reflects

that there are 60 million people in the u k try to get as much benefit as possible. a 7% return is the maximum benefit it would return for this project. >> if you are to have chosen a different vehicle to find what you are doing, what would your cost of capital be looking like? below, above -- why did you pick this vehicle? some financing benefit. i'm sure there is an altra's development and you want to return money to the countryside. -- i am sure there is an altra estate -- i am sure there is an you wantc element and to return money to the countryside. >> the 7% is very much in line with what institutional investors invest in solar projects. the main purpose is rather than concentrating all that money in the hands of a small number of institutional firms in the city of london, we are able to share those benefits with as many

people in the country as possible. if you are able to share the benefit it is more likely that people will spot their energy. we willre likely be able to continue solar energy. this country has a shortfall in energy. we import nearly 50% of our energy. if we are going to change that, we need a lot of her nubile energy in a lot of places. you want people to support it. if someone knows that solar farms are going to give them money in the local area and they can have the first rights to benefit, they are more likely to support it. >> did you look at crowd funding? is crowd funding a viable option? >> in many ways, what we are doing is like crowd funding. the difference being is that we have an sta-authorized bonds theger who supervises process. who tells us what we can and cannot do to ensure that we are compliant as-- as

the legislation requires. we are able, provided that they authorize the marketing materials and so on, to reach out directly to the general public. people can invest whereas little as 60 pounds. >> what has taken a been like so far? how scalable is it? >> it has been fantastic. we are in our seventh week. the initial bond -- this was a trial to demonstrate the model -- 4 million pounds in total available. we have raised 80% to 90% of that in seven weeks. -- give us aom sense of the scale. have invested 60 pounds and how much of that is people investing more? >> the vast majority of people have been investing around 10,000 pounds. a really interesting number. anywhere over 8000 pounds

reduces enough income -- produces enough income to offset what the average household spent on electricity per year. if they can invest 8280 pounds before tax, they can receive the equivalent of their electricity bill each year for the next five years, which is really interesting. , that is what the median number is, just under 10,000 pounds. >> have you thought about what the scenario is going to look like when interest rates are at 3.5% and other assets are yielding more than 7%. >> i think there will always be a strong appetite for steady, long-term, low risk cash flows. energy, sun providing and if you build the project well, we think there is going to be a strong appetite of people wanting to invest money in

places they can be comfortable with. our next project is going to be a larger project. it is currently in public inquiry. a much bigger bond so we can share more energy. >> looking forward to hearing more about it. ♪

areelcome back, you watching "the pulse." we are here in london. i am guy johnson. top headlines -- oscar pistorius has been convicted of culpable homicide in the killing of his girlfriend. the judge delivered the judgment within the last half hour. after a 41-day trial in pretoria. the judge acquitted him of the charges of murder and two gun offenses. we will get a decision on bail after an adjournment.

that is reasonably critical -- whether or not he will wait until sentencing before he is incarcerated, assuming he is going to be incarcerated. the eu has expanded sanctions against russia by adding 15 companies and 24 people. muhtar kent include oil producers like -- the new targets include oil producers gazprom.eft and headiduals including the of the self-proclaimed donetsk republic. nationalists losing ground in the polls in scotland. less than a week after overtaking the independent campaign for the first time in that poll. we have got the russian central bank rate decision. rates have been left unchanged at 8%. the next central bank meeting will take place on october 31. put that in your diary. rates left on hold today.

russia may raise key rates again , that is inflation risks. inlation likely to exceed 2014. let's find out how the markets are digesting this. jonathan ferro joins us. >> two hours, 30 minutes into the trading day. russia, scotland, and the third until-- i will leave it the end. equity markets, ftse 100. check out the micex. the stock market up by .4%. listen to some of the things-- gazprom. they are restricted at tapping the eu markets for capital. that is the oil industry. the gas industry is relatively

untouched. the eu gets one third of its gas from russia. by's look at the dax, down .3%. not so much european sections that people are listening to. that could be noise. the noise will come from the reaction from russia if and when we get one. that is why these sanctions from the eu. sterling, 1.5254. survey, 61%ws expected a 5% to 10% drop on sterling if we get a yes vote for the scottish independence next week. this is part of the story. this takes me to number three. maybe number one for next week. the u.s. dollar. just as the dollar index lows, look at this over the last three months, up by 4.61% of the last three months. this is heavily exposed to the euro, it accounts for about 57.6% of the euro.

independently, every major currency is down against the dollar over the last three months. that is not just about scotland and russia. we need to think about a day for your diary next week, september 17 is the fed. it wasn't busy enough. thank you very much indy. time for a holiday for tom keene. "surveillance" in 25 minutes' time. what have we got? >> a new volatility in the markets. we talked to jonathan of rbc capital markets. we speak to him about the equity markets. fairly quiet around the foreign exchange and bond volatility. you just saw the russian central bank keep their interest rate at 8%. some interesting international relations. a conversation with paul bronner. -- paul bremer in our second hour. mr. bremer is so much a part of

the american effort in iraq in 2003. we talked to paul bremer about the islamic state and boots on the ground. james will join us from the university of texas. he's out with a very important and dark book on a few forward. a non-normal view for america. >> those books are the ones you want to be reading. looking forward to it. tom keene joining us with adequate surveillance was culturally. tom keene joining us with "surveillance" shortly. london fashion week kicks off. we sent caroline hyde to figure out what is going on. let me take it to her now. thank you. the models and the reporters are all streaming in to somerset house for london fashion week. i'm joined by a company that has

been disrupting it in terms of technology. bringing forward young, new designers from around the world. it is called not just a label. i'm here with the founder. you set out to disrupt long-standing institutions like london fashion week that perhaps are not the most new and up-and-coming. makings that are already it with a lot of money. how are you changing things? >> it is all about helping young artists and connecting the fashion graduates with the industry and consumers. we want to show the world that there is a genuine arches in the fashion industry. artisanals a genuine, fashion industry. in company started in 2008 not only an online space, a way to retail collections around the world. fashion down and giving consumers the opportunity to

purchase directly from young designers. is invested is being reinvested in the business of these young talents around the world. there are about 17,000 designers hand-picked on our network from what hundred 10 countries. there is the fashion world out there. >> it is amazing. i likened it to free trade. they are getting the cash in hand. is breaking down political turmoil to a certain degree. you have designers in ukraine. >> ukraine and countries like lebanon, we have been working with designers intensely. especially because they saw certain financial hits. they are getting paid by our website and being blocked by certain sanctions. out to ukraine and organized educational work. we engaged with the local industry and saw young designers sellers.one of our top

being able to reinvest in the local economy. even getting small factories to floor shaken thanks to their -- even getting small factories to force again -- even getting small factories to flourish again. >> you started in 2008. you are one of the first people talking about a vision of tech. now we are talking about fashion tech. are you surprised by the level of growth? is it a good thing we are seeing this flourish in london? theondon is definitely right spot. we have the leading arts and fashion design universities here. we have a graduates coming from the universities. what london elects is the support for them once they come out of university. at the same time, london has been driving and offering tech startups a place and a home. we've been part of a project

called tech city for a long time. it's saudis london being turned into a vibrant place -- it saw east london being turned into a vibrant place. sive now?en >> it is very expensive. sometimes we are struggling. , this is whatme we are trying to do. >> give me a sense of in one year or two years' time. how much will we be purchasing? at the moment, 20% of commerce for clothing is done online. need an upgrade for physical retail. consumers no longer want to be sold the same products in the same shops. online come as welcome and needs to grow into something different.

for us, this is about connecting a consumer with a young designer and knowing that your money goes into the pockets of the young designer. you will him something that nobody else in the world has. which i think is luxury. at the same time, physical retail needs to upgrade. we need to have the element of curation. it is not about numbers and pushing high street pieces and consequences for the environment. it is more about providing .onsumers with added value >> which brands out there are getting the move to social media right? >> there are some really interesting ones. and antwerp-based designer who brand that is

taking the online space. his shop allows you to transparently see how much he invested. where the threat is coming from. it gives you a really good price breakdown. that is what the consumer is confused about. we do not tell the consumer anything about production. we just tell them about the fashion world a happens before retail. it is all about celebrities and shows. we need to tell the story of manufacturing. >> thank you very much indeed. a bit of social responsibility when it comes to fashion and technology. i'm sending it back to you. not just a label. >> thank you very much. caroline hyde joining us from somerset house in london fashion week. the rise of smartphones and tablets has given birth to an

industry of high-tech accessories. last year, the sale of premium headphones exceeded $1 billion. shelby holliday visited a new business that is trying to raise the bar on earbuds. >> at this store in new york city, it is all about years. -- about ears. >> did you ever think you would talk about ears this much? >> i never thought i would look at ears this much. i never really knew that right and left could be so different. also, family ears. >> those differences are what gave make you the idea to start a customize your phone company called "normal." >> it is normal to have an ear that does not fit regular headphones. one-size-fits-all -- none. >> using 3-d printers, nikki

figured out a way to size, print, and chip headphones that fit perfectly. snap a few pictures and upload them using the normal app. choose your color scheme. >> now we get to design them. >> once you build your buds, they aren't formed by engineers and molded by 3-d printers. are trying to tackle three things. customization, and the sound quality. they are superpremium. >> normal promises to ship every pair within 48 hours. >> how scalable is this? >> very. we are not just headphones. the potential of mass customization and a 3-d printing of other goods is there. something we're thinking of for the future. >> interesting stuff. let's move on. here's a tip for anyone heading to heathrow today.

light.ent and travel details on the baggage handler strike. causing a little chaos. not as much as you might expect. we will do that when we come back. ♪

>> welcome back. let's get back to one of our top stories. with less than a week to go before the scottish independence ballot, many companies are worried a yes vote will be that for business.

some are threatening to relocate. specialists say that the companies will benefit. one of those is british airways, another is easyjet. why are they going to have a better time if scotland is yes? kari lundgren joins us. >> i spoke to these airlines. i think it is important to point out that when it comes to the scottish folk, they say voters should do what they need to do. scottish national party has said if scotland becomes independent able scrap something called air passenger duties. , the airlines hate it. if you are a family of four traveling to australia from london, able will add 400 pounds to your ticket. iat, which controls ba, it's 700 pounds. airlines would be in favor

of scrapping the tax. they say it would encourage tourism there. >> ba's got interesting things. tax story. is the it has this, looks a bit like a flag. are backr whether we to the days of having to paint someone else on the tail. >> norwegian air has margaret thather. -- margaret thatcher. they are not commenting on discussing thee issue. we have to wait and see what the options might be.

>> i bring up margaret thatcher because of the famous photograph of her with one of the ba models . let's stay at heathrow. unknown. not a baggage handler strike. how they can affect -- how big an effect? >> this one should not be too bad. disruption at this point. they are handling this. there are 8000 baggage handlers at heathrow. 8 companies run baggage and handle that. one company is a small percentage of their stock, it 2 ands terminals 1, 3. emirates, new zeland. it never hurts to get to the airport early. kari, thank you very much.

our irrigation -- our aviation reporter. the eu puts new economic sanctions on russia. ♪

>> welcome back.

a second european country this week has complained it is getting less gas than expected. says supply was down around 15%. is this the beginning of another gas war? ryan chilcote conducted an interview with ukraine's gas boss, who said scheduled talks with russia are in doubt and the country should forego russian gas this winter. we have a deficit of gas supplies this winter. approximately 25% compared to the level of consumption we had the previous year. >> for a 5% less than you think you are going to need. firstly because of the price, secondly because of the war. the variable we are trying to assess is difficult to predict.

>> give me your worst case scenario for ukraine in terms of a gas shortage. >> our worst-case scenario is saveukraine will have to heat, industrial enterprises will have to switch to different fuels. some industrial enterprises would have to work at lower gas consumption levels. >> how's this going to affect europe? that will defend on gazprom, not ukraine. if gazprom wants to stop gas to ,urope, we believe they will that is going to be quite a big problem for europe. we warned europe six months ago that if the crisis with gazprom is not resolved, gazprom will >> try to use it with their benefit. -- gazprom: says gazprom poland says gazprom cut their supply earlier in the week. is that the first shot in the

winter gas war? a sign of what's to come? >> probably yes. it isooks very much like not only connected with fewer gas disputes. it is also connected with the context of sanctions from europe to russia. >> the russians feel that if they are selling gas to the sell. it is very gas to if ukraine wants to buy gas, they should buy it from russia, not poland. point customerir >> no. >> why? >> this was prohibited in europe. gazprom knows that when gas is crossing european borders is european gas. >> ryan chilcote in kiev. more interesting interviews.

i want to talk you through another russian angle, the ruble . we've had a rate decision at 10:30 the time. rates were left on hold. you sense within the language coming from the central bank in moscow that might be an upward bias on rates. another meeting on october 31. fromisks coming through tax and tariff policies. it is interesting that the central bank talks about sanctions as well. the upward bias on the inflationary story as a result of sanctions is understandable. .hat may cost you more there's also the import cost associated with it. there's an upward bias from inflation, that might force them to hike rates further in the future. the dollar has been strengthening against a number

of pairs, certainly against the ruble. that wraps up the week. next week is going to be busy with scotland. watching that story carefully. is next, have a great weekend. ♪

>> this is "bloomberg surveillance." >> tension in ukraine mounts as they force new sanctions on putin. the rubel index --

numeral at a. should you fear the stock market? cool foraraleley is too school. adam johnson is sculpted and powerful. good morning everyone. we're live from our bloomberg headquarters in new york. i am in tom keene. me, scarlet fu and adam johnson. morning freezes about players. with the ceo.fun survey concludes that japan will need a new stimulus again of $50 billion to offset a shrinking economy. how is your bowtie? >> i was with christy turlington yesterday at cantor fitzgerald.