>> a tale of two tech companies. amazon posts its biggest quarterly loss in more than a decade. microsoft tops sales estimates as chief executive satya nadella pushes ahead with his rebound plan. the slowing growth hurt world's biggest chemical maker? earnings are breaking now. we will speak to the ceo. third-quarter growth figures in 3.5 hours time and ebola in new york. american authorities confirm a doctor recently returned from west africa has the virus. >> today, testing confirmed that

cityient here in new york tested positive for ebola. >> a very good morning to you all. this is "countdown." >> welcome to the show. we have breaking news. we kick it off with basf. chemicals,es to plastics, oil and gas, that is the mix of basf. let's give you the numbers. earnings, 1.84 2 billion. they were looking for a number of 1.7 6 billion. that is a little better as well. they beat analyst estimates. the big discussion was, will they hold on to their targets for 2015? let's see what else they are saying here. 2013 slightly below

levels. they still see slight increase in their earnings this year. that is a very robust call. a lot of the analysts out there were saying this institution is going to find it pretty difficult to stick to their targets for 2015 and beyond. att to recap, revenue, sales 18.3 billion. that is a beat. earnings come in at 1.8 billion. that is a beat. 2014 will see earnings rise. ."ay with "countdown we will get the insight into those numbers later. that will be in the second hour when we speak to the basf ceo at 7:30 london time. set to openares sharply lower today. the e-commerce giant posted its since it first sold

shares 11 years ago. caroline is here. investors losing patience? >> i think they are. this company spends big on the idea that you will have growth tomorrow. at the moment, we are seeing a loss. 10 times the size that it was this time last year. almost half $1 million. worse than 2003 when shares were initially sold by amazon. sales are still growing. you are seeing sales up 20% but they are spending more. they are spending such significant amounts of cash that they are outstripping this. they are seeing a miss on the third quarter, and it loss. the fourth quarter, which is their killer quarter, when you and i go spending big online because we are buying christmas presents, projections also missing analyst estimates for their future sales and profit

for that quarter. this is why we saw shares selloff 13% in after-hours. >> we know that they are in a myriad of different businesses. some say they are at the front. they are continually looking. within this spectrum, everybody talks about cloud. is cloud computing the silver lining in the amazon story? >> they are spending big on drones, spending an awful lot on smartphones. where there is a silver lining in the numbers is cloud computing. they offer amazon web services. this is where all the startups have gone to. ,heir websites, their apps companies are changing the way in which they work. they don't want you and i to be locked to our pcs. us with cloud computing so we can work at

home, use our tablets, smartphones, access any document anywhere. last quarter, it was difficult for amazon. they had so much competition. microsoft doing very well as well. we have seen a bit of a price war going on. amazon slashed prices. we saw 40% growth in their cloud business. there is the silver lining. sales missed, profit the worse since 2002, but cloud computing -- >> and you mentioned microsoft. microsoft released earnings last night. it did get a boost from the cloud business. >> it did. board andlla came on said, i am focusing on mobile and cloud. that bet is winning. we saw sales up 25% in their last quarter. even saw a profit of 5%, beating analyst estimates despite the

fact that they are slashing jobs. 18,000 jobs -- >> this is the gnocchi a mobile phone arm. --hat is where the houry are seeing jobs go. even the old unit that has been seeing poor performance, they are turning a corner. commercial clout is where it was at. than doubling in terms of sales. i love this quote, how many vendors that size are growing that fast? ony have not just a buy microsoft, they are saying it is a pound the table performance. the ailing businesses, phones outperformed. we suddenly saw pcs not falling off a cliff. >> a lot of people, that is the big contrast, sap, the migration to cloud, that didn't come

through for setting a medela. >> many felt the move to cloud that meant the margin heavy businesses would deplete. actually, they are not falling off a cliff. they are outperforming. >> they turned a corner. >> at last. not that tablet. 3 outselling previous versions. >> that tells us more. >> i don't know about you but i have seen the markets looking pretty persuasive. they have great adverts across the board. >> there is a huge shop in westchester, just outside new york. very upscale. you want to see the actual shop. dedicated, and it

looks like an amazing product. i am in any go system. -- an ecosystem. >> shelley get back to basf? >> slightly more serious matters. basf are cutting their 2015 target. this is what a lot of the analysts have been saying. reality has got to kick in at basf. they are cutting the 2015 target in terms of revenue. , that12 billion euros originally was 14 billion euros. oil and gas is about 20% of their profitability. they are moving their target on to $105.m $110 down they are working on a euro exchange rate. they affirmed the average euro exchange rate of 1.30. well above current levels.

into all of those issues when we speak to kurt bock later. >> let's move on. new york city has its first case of ebola. a dr. who returns to the city after working in west africa, with thencer organization doctors without borders. he was tested for ebola after developing a fever. he is being treated in an isolation chamber in new york. mayor bill de blasio struck a reassuring tone. >> today, testing confirmed that a patient here in new york city tested positive for ebola. the patient is now here in bellevue hospital. there is no reason for new yorkers to be alarmed. ebola is an extremely hard disease to contract.

is highhreat of ebola on the agenda at the eu summit in brussels. european leaders have been discussing energy security and unrest in the ukraine. hans nichols joins us from berlin. i gather that this news on the a bola case came a little bit later in the evening. what is the reverberation on the ground for you? acknowledgment that there needs to be a coordinated response from the eu on ebola. i suspect we will be hearing more about it today. there have already been cases in germany and spain. the mayor of london has talked about the likelihood of it coming to london. a coordinateda of response that is driving the discussion. last night, it was all climate change. they reached an agreement to cut greenhouse gas emissions from 1990 levels, 40% by 2030.

environmental groups are criticizing this as being too soft, not ambitious enough. francois hollande said, like all good accords, this is a compromise. not all countries are in the same situation. this agreement is expensive for some countries. they are going to have to spend 38 billion euros in transfer payments. most of this from the west to the east where some of the former eastern bloc countries have some pretty antiquated coal systems. that is where most of the money will go. we are going to 40% by 2030. the current goal is 20% by 2020. one final note, they reached somewhat of an agreement on energy transfers. by 2020, 15% of countries will be able to export 50% of their energy. really significant in iberia

where spain wants to bring their energy across the pyrenees into france. >> hans, very good morning to you as well. ukraine is going to be top of the news flow over the weekend with the election. george soros making comments over the weekend, saying that the european union must do more to counter russia's interference in ukraine, where the very existence of europe is under threat. these are strong words from a huge ambassador. there are comments from merkel as well. >> the issue right now is whether to lift the sanctions in place and monitor the current cease-fire. merkel was quite strong, saying there are deep differences and it is unlikely the current round .f sanctionsk will be lifted there is a great deal of disagreement on that. she also said the cease-fire is not being observed, not being

properly implemented and their need to be changes there. some strong language about not repealing sanctions. at the moment, no talk about additional sanctions. everybody is waiting to see how these elections take place. ans, it is going to be a busy day for every analyst in town. stress test sunday. >> we will be there and we will be trying to sort through all this like everyone else. this is the challenge of stress tests. are they hard enough to be credible? how many banks are going to fail? there. be hopefully we will be able to break it down. the goal is to have more confidence in the banking system so banks can start lending and get the european economy moving again. see whether this stress test accomplishes that. >> have a good weekend. hans nichols in berlin.

i am manus cranny. where is mark barton? there is mark barton. >> tell us the story you want to hear about. tell us what you think of the show. >> absolutely. mark is very good with pictures. i have to take a couple lessons. >> you can join me for a lesson on how to attach pictures to your tweets later. the u.k. prepares to release it latest data. we speak to the head of u.k. rates at ubs about the health of the british economy. stay with us. ♪

>> the u.k. releases gdp figures for the third quarter at 9:30 london time. that is not quite yet. the economy expected to grow by 0.7% in the third quarter. for more, we are joined by the ubs head of u.k. rate strategy. welcome back. should we start with the boring stuff?

0.7%? >> that represents a bit of a slowing from the second quarter, but still healthy rate of growth. the average rate the u.k. has been growing at for nearly two years. 0.7% or thereabouts. the nuts and bolts of what the bank of england will do. i want to go to our top story, cameron getting together with mark. the european union have said, you owe 2.1 billion euros to europe. we are giving a rebate to france and germany. is this big political pressure? are bond markets considering political pressures on cameron? another election coming up. these are risks for the bond market. >> absolutely. they will become ever more increasingly in focus as we had awards the election in six months.

the numbers in the grand scheme of things are not big. spending is 700 billion a year. another couple of billion doesn't alter the dynamics. in the current climate with another election coming, this is very problematic. that is an illustration of where the friction has come from in terms of the u.k.'s relationship to the eu. >> talk about monetary policy. expectations are being pushed back. ubs pushed back their expectations from august to august next year. >> why august? >> various reasons. the data has plateaued in some indicators in the u.k. buting going wrong manufacturing is well off the highs of the second quarter. inflation and inflation expectations have rolled over sharply. and of course, the eurozone

remains a serious drag as well. it looks as if a hike in the next few months, which the bank of england had been starting to indicate -- >> there is this credibility gap with this forward guidance. the data has slept. >> with inflation coming off the boil, it means it ought them more time. we have the election in the middle of next year. there is going to be uncertainty around that. the firstat pushes hike out beyond that election. >> where are we? all that pedaling. you have the fed act had a link, on ecb putting their foot the accelerator. what is your biggest concern? everybody talks about another lost decade like japan. what is the risk in the u.k.? we are not going to fall over

it? >> we have had seven quarters of decent growth. it is pretty striking that after that length of time, going at or about trend, the bank of england doesn't feel able to move rates at all away from the lower bounce. as we start to lose a little bit of momentum, questions grow. this isn't the first time we had this debate. whether we are just coming out of a painful episode or whether it is more serious damage, more long-term damage. if you look at the speeches last week, even senior members of the bank of england are starting not to entertain the possibility that that is happening, but to talk about the risks of stagnation and whether they should be setting policy and thinking in terms that are different from what they hoped to see, a recovery that would take rates back to normal levels. >> stay there, back in a second. ♪

john wraith, head of u.k. rates and strategy at ubs has decided to stay for part two. you get the hard question now. -- help us a says

make sense of the volatility in the bond markets. >> first of all, and this is telling, as soon as the fed comes to the end of qe, the markets go through this violent the obama of volatility. a lotk it tells you that of money is going into relatively risky assets. now they know the source of the money that has been pumping up those valuations is no longer on tap. some of them are positioning to get out in case there is more of a route. that is the concern which has led to questions from some fed members as to whether they continue yet longer with qe. it has created this concern about the central banks. in theer thing is that, current environment, the banks don't have the balance sheets to warehouse a lot of risk. >> and people do run for the exits.

is it the high-yield market we should be aware of? >> to generalize, it is risky assets. the ones that have seen yield come down way below where ordinary valuations would put them. high yield, but also peripheral sovereign bonds in the eurozone are questionable levels if you take away the corporate data benefiting them. >> i wish we had more time. if we get quantitative easing, does that rivers the story? time buys a little more but it doesn't necessarily fix the problem. >> john, great to have you with us. very well done. >> much more to come on the economy later. just afterat guest 7:00 u.k. time. >> also coming up, subterranean secrets. the ghost station under the

streets of london. ♪

." welcome back to "countdown time for a quick check on the currency markets. the dollar is down, they yet is up by a 1/4 of 1%. there are a number of factors in play. the first case of ebola has been announced in new york. extent hasertain potentially unsettle these markets a little bit. so you are saying a little bit of a drop in u.s. equity

futures. nothing momentous. . rbs say these issues are percolating. fear that the ebola issue is on the markets writer. trading at 1.08 for cash. in terms of support, you're aboveg at $1.0760 and $1.08. it is gdp day. we will talk it through. 6044 is where we are on dollar-sterling. gdp expected at .7%. the uk has had wins. support levels for trade. 1.5944. 1.6184 on the upside. credit suisse says we will be at 1.62 by the end of the year. the bank of england

is likely to be cautious in the timing of a hike. they say politics will drive 00 up froming to .78 .7600. politics, politics, politics, and growth. >> these are the top headlines today. authorities in new york have confirmed the city's first case of ebola. hris spencer returned from guinea where he treated patients. he tested positive for the virus. he is now in a special isolation ward in bellevue hospital. we'll be live outside that hospital later this morning on "the pulse." new york governor andrew cuomo said that people that came into close contact with him have already been tracked down. we've already acted very, very quickly. and identify about four of the

people who we believe, we believe there are four people he came in contact with. . we are already in contact with all four. >> stopping the spread of ebola in west africa is one of the main focuses at the eu leaders meeting in brussels. europe must give more money to combat the virus which has killed 5000 people. ikea has donated more money than some member states. forecast sales and profits for the holiday quarter that missed analyst expectations. the online retailer says revenue for the quarter will be no more than $30.3 million. shares are down by 20% for the year. a break in earnings from ericsson, the swedish telecommunications equipment company. narrowly below

estimates for the third quarter. swedish kroner. sales narrowly ahead of estimates. analysts estimating 54.8 billion. the gross margin, which is a key measure of profitability, interestingly missed estimates. 35.2%. but the margin has recovered ince shrinking to 30.2% the first quarter of 2011. that is the lowest since 1989. what is happening now is that wireless carriers are spending more on expanding and improving their networks as consumers increasinglyly use mobile phones and tablets to stream video and music. still, copetitioner is tough. it is tough from the likes of nokia. they are keeping ericsson's heck.ns in c that is prompting ericsson to expand its services business and

more lucrative contract. the net income narrowly below estimates. sales did beat. don't miss our interview later with this man. the ceo of ericsson. hans vesteberg. >> everybody stay tuned for that. the u.k. releases the gdp figures. we have been flagging it for the morning. it is for the third quarter. the data arrives at 9:30 london time. expected to grow by 0.7%. we have our bloomberg economist. david powell. look, we just had a conversation. things are slwoing. -- slowing. gdp wristers coming off the boi -- gdp is just coming off the boil. >> how long can this last? especially when the euro area is going to another period of slwo ow growth.

uk has not been dependent on exports for its recovery. it is domestically generated . nonetheless, with the turmoil on the continent, there are risks to be highly. >> we just spoke to ubs. and you listened to the interview. he told us that ubs pushed back their rate hike expectations from november to august next year. that is quite a push back. ubs?e market going with > if you look at the market right now, the next rate hike is priced in for august next year which would coincide with the inflation report. what has gone on recently is the bank of england has become a bit more dovish. we have seen that in speeches from broadbent. just looking at sterling. i'm trying to pull up my bloomberg weighted. outdo barney. if you didn't know about it.

i have to ask for it every time. i'm looking at sterling. we are flat today. over the past three months, right, sterling against g-10 currencies is down by 1/4 of 1%. sterling is trysting lower -- drifting lower. slightly bad news, worse than quarterly performance of gdp stakes. sterling and the bank of england. does it -- where are we in the sterling debate? >> sterling has been driven by the monetary policy outlook for the u.k. the u.k. went through a crisis economy to all of a sudden the star of the g-7. sterling went up and then the market reset. lastcome down over the few months. if we put that in the present context, we have it priced in for the august of next year. there is a potential of these headwinds that that gets pushed out further. the market is priced in tightening for the fed in the fourth quarter. >> will they ever be able to

raise rates, any of them? isthe end of tapering probably possible. we'll go first, the fed or the bank of it went? -- or the bank of it with? >> inflation is higher in the u.s.. unemployment is lower in the u.s. there is an argument that maybe the market has got this wrong. the fed could be going before the u.k. but a lot can change between now and the fourth quarter of next year. >> whose the bravest of them all? what's change between now and next week? >i'm away. david, thank you very much. great to have the in-house view. >> let's keep our focus on the u.k. dormant.stations lie one organization is working to lease these ghost stations and transform into museums, bars,

and restaurants. with the man who has been on a mission to open up london's subterranean areas. >> this is a world locked away to most people. and bustlingds footpaths of london hide subterranean tunnels and diffuse ghost stations. >> when we went in there with torches, i am getting chills thinking of that experience. mission.here on a is with the film crew underground in clapham. exploring rooms undisturbed since the 1950's. ove the pastr five years, he has dedicated himself to researching and loving to open up stations td transform them -- lobbying open ofo stations and transform

them. >> the become tourist attractions. you get to see and touch and feel the history of being down there. all of the ladies to walk around down there. >>-- all the people that used to walk around down there. >> transport for london, the organization which manages the tube stations, says he cannot give a definitive figure, but it has got people's attention. he says he's identified 26 sites, some like these sitting on prime real estate. >> it is not all underneath. a lot of the sites have air ri ghts. developers are very interested in building upwards in central areas of town. some of which look over parks and are overcrowded as they are. told bloomberg it has no intention of selling the stations but it is considering if other parts of the size could be used. sites could be used

in. he's putting out his strategy. he says he is ready to hit go if tfl gives the all clear. >> we have sourcing ready. we have got the project managers, the investors. >> he believes in announcement is imminent, possibly starting a race to develop london's subterranean secrets. >> right. coming up, the pc business may be dying but microsoft is showing signs of life. sales increased, investors -- we are talking. tech next. ♪

>> i'm manus cranny. bnp is discussing a stock sale which would value the rental site at $13 billion. that is according to people familiar with the matter. quoted in "the wall street journal," they declined to comment on the report. in the s -- growth in the sales of puma sports gear helped to product.ir

america mobile has benefited from the growth in brazil. billion.at $5.1 it gets about a third of its revenue from mexico but is is facing new antitrust laws there that will force it to stop charging competitors to connect calls to the network. right. >> welcome back. 6:45 in london. we have results were two of the tech world.n the amazon and microsoft. who will come out on top? let's bring in the chief executive. g, john davis joins us. thanks for joining us today. tell us about bcsg. what do you do? >> we work with large corporate, typically banks and telcos, to bring cloud applications for

small business companies. we work with large corporate, but also, we have a close touch with lots and lots of small businesses globally. >> what i find interesting when i was reading, we both look at the website -- it is nice, easy, and clear in what you do. what i enjoyed in the notes is the fact he said that big business is in britain are happy to engage with smaller companies such as yourself that innovate a nd are smaller. that is quite refreshing. >> i have spent more than 10 years of my career at our quiz. i think back when i left in 2010, there was probably some reticence to working with companies like bcsg who are quicker who can get things done at a cheaper cost. i think the willingness to partnership has grown significantly. >> what is unique about your

company, john? because we get a lot of companies coming on to tell us about their versioning cloud -- clo businessu in ad very competitive space and a very competitive space and the space that more and more people are becoming aware of. >> we work as a cloud services we are brokering services between small businesses and their large service partners. what we think we do is different provide full-service provision both to the large corporate but also then we offer great customer support to our small businesses. so we will work with our large corporate to design what they want to bring to their small businesses, how they are going to differentiate themselves, how the smallcquire business customers. but then we try to offer deep expertise to small business to help them to get the most out of these cloud applications in their businesses. cloud.o -- on the

sometimes they can turn into ethereal thing. explain to me. what do small businesses need? what can they use the cloud for? why would a small to medium enterprise sit down and talk to you about the cloud? >> another huge change in five years has been help applications delivered to the cloud can be designed directly for small businesses, rather than where software was for enterprises and for smalld down business. if you go to the web now, you will find 6000 applications, specifically designed for small businesses to pick up the key headaches they face. the reason it works for them are low-cost. it's now paying on a monthly basis rather than upfront cost of software. they are relatively easy to start to use. you do not have to have expertise in an area. >cloud applications from bookkeeping or h.r. or website

creation or e-mail or data protection. really the opportunities for small business owners are there now to improve the way their businesses perform. what i think is encouraging for us as we are seeing banks and our job toit is educate the small businesses about which applications to use. it is our job to help those small businesses to be more successful. >> today we get gdp figures for the u.k. we are expecting growth that .7%. how important to companies like yourselves, the small, technology startups, how important are they right now for the u.k. economy? >> the tech sector contributes a huge percentage of gdp, up to 10% is accounted for by tech. in london, we're right near silicon roundabout. where our offices are. there is a real vibrancy around that market. i think the tech sector can drive the u.k. gdp forward. of gdp is driven by

small businesses. we see a real opportunity around helping small businesses be more successful, which then can become hugely successful for the u.k. overall. >> on ete thing i'm interested n is you say this: should government focuses its energy in the wrong place. of small to medium enterprises never bar. borrow.ey -- never what would you ask him for? >> there is a void in the small-business business market for true, trusted guidance about how to run your business better. we all understand the small business owners are terribly short on time and often short on expertise. to set up their business because they are passionate. enterprisee new

opportunities. i have been number 10 -- at number 10 downing street for conferences. >> there used to be business link. that no longer exist. people go to their accounts. you do not get a lot from the government in terms of hands-on support, advice, recommendation of tools to help your business . there is plenty of information online, but i do not think -- >> how do you view the amazons, ogles,crosofts, the go they are all clamoring for each other's territory. how do you view the beasts? >> clearly, those are very interesting competitions going on. i think their focus on the clouds is only helpful for us in the sense that we see huge potential growth in the cloud for small business applications, and that that. >> good luck to you.

managing director of bcsg. >> coming up, you want to improve your memory? perhaps a glass of wine.always helps , i find. find out why in the newspaper section next. ♪

>> i>> wish i could repeat what manus cranny just told me but i shan't. off air. the stones are back. they called off their tour earlier this year to australia because mick jagger's girlfriend died. this is my story. a daily glass of wine aids mem ory, but you have got to be over 60. we are not quite there. caroline is about 40 decades away. it can sharpen memory in the over 60's. betweenle who consume one and six alcoholic drinks a week have a significantly better ability to recall memories of events than those who do not drink at all. or who drink a lot more according to scientists. >> after the drink, can you recall memories? drank less inple older age.

middle-aged men are more likely to drink more. i'm middle-aged. what have you got? >> i'm being slightly selfish because quite the british thing. the chuckle brothers. they are now 67 and 69, and they are -- have released a duet. but it's oeiras. -- it's hilarious. all of it is going to charity. you shouldn't like it, but you cannot help but like it. they are not wildly musical. apparently, they met on a tv program. >> i've seen it. >> you love him. jay-z.p there with >> i'm saved. i tell you what, quick look at

twitter. >> here are the addresses. >> there's a plea in the city to give up one another. ♪

>> amazon post its biggest quarterly loss in more than a decade. microsoft tops sales estimates as the chief executive pushes ahead with his rebound plan. >> the world's biggest chemical maker has cut its 2015 profit targets by more than expected. we will ask the ceo why later on "countdown." economy will get third-quarter growth figures in 2.5 hours time. >> and ebola in new york. american authorities confirm a doctor recently returned from west africa has the virus. >> today, testing confirmed that a patient here in new york city

has tested positive for ebola. hello. very good morning to you all. welcome to "countdown." friday.hted it is our top story. it's new york. a 33-year-old doctor who returned to the city after working with patients in west africa has ebola. guinea withr was in doctors without borders. he had been -- he's being treated in new york's bellevue hospital. yor bill de blasio struck a reassuring tone. >> today, testing confirmed that new york city in

had tested positive for ebola. the patient is now here in bellevue hospital. we want to st ata the outset there is no reason for new yorkers to be alarmedte. ebola is an extremely hard to see to contract -- hard disease to contract. >> governor andrew cuomo confirmed the authorities had traced four people that spencer had been in contact with, including a car driver. >> our best information is that for the relevant period of time, he was only exposed to a very few people. kne exactlycause he what thew own list was all about and he was taking precautions on own. >> the n threat of ebola is high of the summit in theow, -- the agenda at the eu summit in brussels. they're also discussing energy security and ukraine. hans nichols joins us now from

berlin. good morning. what are the leader saying about the ebola outbreak? >> in some ways the news out of new york broke a little too late affect the agenda last night. he was on the agenda or will likely be on the agenda today. leaders want to have a coordinated response. there is acknowledgment that everyone needs to be on the same page within the eu. we have seen cases in spain, germany. the mayor of london forest johnson said a case in london is likely. it was really the climate change and what you are going to do about climate change that dominated the discussions late into the night. they have an agreement. the agreement is to reduce c02 emissions by 40% by 1990 levels by 2030. environmental groups already criticizing this as being a little less ambitious. ollande address those criticisms. he said, like all good -- this is a compromise.

not all countries are in the same situation. this agreement is expensive for some countries. it is going to be expensive. meeting that goal, he estimates it will cost $38 billion in transfer cost mostly from the eastern bloc countries. they are earning some antiquated fuel sources. another movement on the energy front has to do with transferring electricity. there has been a dispute between spain and france. spain was to ship its electricity over the pyrenees. country's 15% of the electricity will need to be export-ready and accepted by other countries. >> crucial elections in ukraine on sunday. will eu leaders touch on the matter? lastat angela merkel said night is that there is no appetite for rolling back sanctions. there is still a great deal of disagreement on what you do

next, but in terms of rolling that back, you would need unanimity. and that is not there. >> sunday is not just about ukraine. because i know you are holding your breath for those ecb stress test results. banks that are going to be under pressure potentially. sometime in the next week -- we get the results on sunday. sometime in the next 48 hours, maybe in some cases, the banks themselves no whether or not they have passed or failed stress test. we will get the official data. how rigorous the stress test were on sunday. we will have a busy sunday night, but we will have a fun monday morning. >> we certainly are. manchester united are playing chelsea on sunday as well. it is a triple whammy. ukraine, manchester united -chelsea, and stress tests. >> i am going to be sitting somewhere quite warm. >> you got a big week. breaking news? of piercings is to

stand down in 2015. so this was released -- the release their nine-month salesy numbers. up 1%. saying, reiterating the guidance in terms of the numbers, i'm assuming the a change rate in february is down 6%. core sales are down 10%. when you think about it, the challenge is not least education. "financial times." there is that constant argument about technology shoving hard copy. breaking news is that the cfo is to stand down in 2015. robin freestone. wetwo and a half hours time,

are counting down, we will get the latest figures from the u.k. someone who knows the workings, the intricacies of the bank of england's monetary policy committee --a former member of the committee. he's at price waterhouse cooper. drew, great as always and have someone like you to look over the ruins of what is going on. the gdp is going to go down a little bit. we have big relationships with europe. should we be that concerned about the small slowdown? >> i think we will see quarterly growth figure of something like till quite respectable in this relatively slow growth world. not quite as strong as quarter two. i think europe is one of the clouds on the horizon, but i do not think we should get overly excited about some of the

negative news. the markets have had a tendency to focus on the negative data, when there has been mixed data coming out. if you look at the broad pattern of data for the european area, some of the figures like retail and car sales have been relatively positive. it has been a bit of a mixed picture. >> you won the award stat of the day. this year will be the 10th time g-7 growth since 1980. i'll tweet that out. can we sustain that? can we remain top of the g-7? >> i think will remain towards ar, but i think united states will grow more strongly in 2015. that is what most forecast suggests. the u.k. is due for a slowdown. interest rates probably going to start to rise next year.

some of the factors that have supported growth recently are to aren't factors that going to be repeated. consumers have had a boost from inflation. that might not continue to be so helpful. it's reasonable to expect a bit of a slowdown. we are still going to get 2.% growth next year which is pretty respectable in the post-crisis economic environment. room tov've sat in that discuss rates. two topics we are discussed by the price of oil, the alck -- the lack o inflationf. how do you view energy prices? is it an opportunity for us, the three o f us who runs cars? is it a good one for the the bank ofis

england saying that we can hold off raising rates. >> two effects. lower oil prices brings down headline inflation. we have to remember that can prove to be a temporary factor. is volatile. one of the things that the two members are voting for is a rise in interest rates. they think that inflation is benefiting -- the underlying picture is not quite as healthy inflation suggest. but from a growth point of view, lower oil prices are good. good for businesses, reducing costs, good for consumers, take pressure off consumer spending. so i do not think it necessarily shifts the balance fundamentally away from the notion that to startrates do need to rise. >> you have been vocal.

you said, let's get the process under way. a lot has changed in recent weeks. if you look at the markets, look at the economies, they are telling us they think rates are going to go up later now than they thought maybe a couple of months ago. are you changing? are you standing firm? banks have to raise rates sooner rather than later. >> the mpc has to make a tactical judgment about the state of the financial markets. when they are nervous, you have to be careful about changing policy. i think the fundamental economic -- case is intact. it is not just come from the short term indicators. it comes from the fact that the u.k. economy has been growing strongly. unemployment has been coming down rapidly. we had the biggest fall in unemployment in numerical terms over the last year since records started being compiled in 1971. so there is strong growth. l, the level of

interest rates set in the financial crisis is low. has to point, the mpc start moving them off the floor. if they do not do it sooner, they may find they have to go quickly later on. >> before the election? >> i think there is a strong case for raising rates in november or early next year. does not want to raise interest rates around the time of the election. central banks do not like to offer a close to big political events like that. the seconde till half of next year, you could well find yourself behind the curve. >> stay there. senior economic advisor at pwc. we will talk about the u.s. economy. >> join us on twitter. whatever you would like to ask. pop on twitter. >young mark barton. we are all young.

you speak for yourself. @markbarton. ♪

>> welcome back. still with us is pwc's senior economic advisor.

was on the h3e mpc. number of issues in regards to central bankers, but the past weeks have been amazing in terms of the backpedaling from, starting with janet yellen. to bullard in the u.s. mr. broadbent has found headwinds around the bank of england. what do you make of all of this, this shift in gear? >> if you look hard enough and the global economy, you will find headwinds. the data has been mixed in some areas in europe but there have been positive send negatives. some worries about china. influence on the global economy. but i think, i feel that central bankers should be taking a more strategic view and not be

buffetted around by short-term market movements. we know that markets can be volatile. one of the things that it is making financial nervous is the fact that central bankers are nervous. a firmer hand on the till from central banks. they've got a strategy for moving in the u.k. and the u.s. in particular away from the very low levels of interest rates we one got and not keep shifting grounds. that adds to market nervousness. > inwith inflation coming down many countries, and in many places, many are saying is this a harbinger of deflation? what is your take on deflation area pressures? what it means for central-bank policy going forward? >> i think deflation is the dog that has not parked. everyone has been worried about it since 2008, 2009. in many countries, we have had higher than expected inflation,

particularly in the u.k. inflation averaged over 3%. i think we should be seeing inflationary pressures are subsiding in the global economy as a good thing, which is taking some of the pressure off consumer spending. think, should, i be a benign factor. there is a bit too much paranoia about deflation. low rates of inflation can be very good consume -- for consumers. particular when oil prices come off. and there is less pressure. >> that is a very optimistic take on inflation, relative to some of the conversations we have had. david bloom was part of a piece the other day about currencies. my deflation problem here. heck going to trash the

out of my currency and pass it over to you. people are sort of thing, everybody wants the slower currency. the euro, etc. it is a race to the bottom to help fight deflationary processes. do you accept that? >> i do think in the euro-area, the european economies will benefit. if you look at currency movements since the financial crisis, the surprising thing has been held strong the euro has been against the dollar and the pound. i think we are overdue some form of correction. correction is going to occur, particularly if we find that the u.k. in the u.s. are raising interest rates. and the euro-area is going to lag behind. e stress of th test results, what is it going to uncover? >> we may see some exceptions. i hope we do not find some very big black holes. there may be some small areas of

concern. but -- >> should we trust the process? the last two rounds did not go down so well. is this it? third time lucky? >> we'll see. the markets on monday will reach their judgment. let's see what the ecb have come up with. here.is >> amazon will post a huge loss. they have warned more to come. has wall street run out of patience with the tech giant? that is on the table when we come back. ♪

>> a little bit of company news. we have breaking numbers from tsd. the uk bank says profits rose more than 28% this quarter. 33.1 billion pounds. tsb say they are attracting a lot of new customers. in 10 of new accounts of u.k. &b is discussing a stock sale. air b&b has declined to comment. growth in the sales of puma

sports gear helps carry into third-quarter revenue of $2.6 billion in line with analyst estimates. sales helped offset sales in china. >> welcome back. 7:24 in london. let's talk tech. amazon shares sharply lower after it posted its worst loss in 11 years. are investors losing patience with amazon? >> if you look at how they traded after-hours, they are losing patience. they fell 13% after hours. no wonder they are expected to slump on the open. third-quarter net loss, almost half $1 billion. this is 10 times worse than it was this time last year. sales are still rising. this is a company basically burning cash. why? they are investing in the future but investors want to start -- >> is that innovation? >> this is the question. they are putting>> money into

drones and original programming. they are in content. they have added new smartphone they have launched. they slashed the price to $.99. down from $100. they are being all over again. scatter gun. but do they just want to own everything? is hugely profitable. amazon is making $20 billion worth in sales. but they are spending more than that to innovate here and it is the question of when do you start to reap the rewards? they are spending, but at the moment we are slow to see, the with us, our stick investment mode is not over. >> is there any silver lining in this? other did sap the

morning, they are having a hard time transferring people up to the cloud. is that this of lining, because they lump it all together. they chuck into one big area. amazon is an e-commerce business. you stream videos and films. this is a very interesting enterprise area. inroads intoe silicon valley, offering ways to host a website, ways to host apps. ways to have access the internet, access your documents. that is a huge service on-site. you can use the cloud instead. they are doing well. we saw sales up 40%. they had a problem last quarter. falling.re they had competition from microsoft and google.

with amazon. it is silver lining in terms of cloud. 25%. >> we have got the basf ceo after the break. ♪

>> 7:30 in london. >> i am glad it is friday, but we got a really big result for you. basf. results this morning. they have cut its 2015 profit targets by more than expected. the ceo joins us now. headquarters in germany. great to have you with us this morning. listen to the numbers. many adolescents said -- many

analysts have said you would have to face the reality that your targets for next year were not achievable. why pull the trigger now? you look across the world, where are you most concerned about and which products are you most concerned about? in order to understand what is going to happen next, you have to look at q3 as well. you have to see flat demand. it was disappointing in terms of european demand. however, we have still proved -- have still improved earnings. looking into 2015, we set targets three years ago against the background of certain like gdpparameters growth, international production, chemical demand. we also set earlier this year, before we talked about 2015, but see how 2014 will develop third 2014 has shown a further weakening of demand for our business. rightat reason, it is the

point in time to say it is not very likely that we will will achieve these very ambitious targets. however, continue to grow and we are also determined to growwe our profitability going into 2015. >> growing profitability in the market with growth rates as you pointed to. it is going to be tough. you're not a man who has done huge acquisition. is that how you transform the growth story? would you buy clarion? is that the kind of company you will have talks with? i will never, not any special -- we have done quite a bit of acquisitions over 10 years. we have slowed down a bit over the last two years because there is a lot of integration. we also have divested quite a few businesses, 20 within the last three years. really to improve the profitability and performance of our overall portfolio. going into 2015, i think it is too early to speculate. what i can tell you is that this amounts being paid in

the market are astonishing. >> that sounds like there would be better value out there if things get tougher and 2015. n idea of whata the strategy is ther given the challengese,. . >> we have done all of these acquisitions between half a billion and one billion, which fits perfectly to our portfolio. which is technology driven. we need to integrate, generate growth immediately. that is something which is going to happen in the future. everything would be pure speculation. talk about germany. a great deal preoccupation at the heart of europe is on the point of recession. what is your take? you are there. you produce their. how tough is it in the german economy right now? >> just to give you one data point, and q4 our chemicals had

decline which i think is unprecedented. that clearly shows there is some slowdown. there might also be a little bit of inventory trimming at our customers, but we perceive that slowing down. i cannot see the positive momentum which could stimulate growth going into 2015. fairlythat's fairly -- a damning indictment of growth. oilcut your oiling -- and gas growth. how low can these prices go? do you see this as being a temporary move in the oil market? give me your take. this is a sizable part of your business. speculate on the oil prices.

we have seen faster reductions in what we had expected. 12 months ago. oil pricecertain to justify investment. going forward, the 90 oil price is too low. we still work on some technologies to close the deal. prices is probably going to help the comical side of the business. is it a real potential boost for 2015 to give you some time in terms of input costs? >> i think that is too early to say. that will reduce our oil and gas a bit. not to the extent woke -- the extent most people would expect. in the chemical businesses, our customers are expecting lower product price. the specialty business, what

we call downstream, they oil price has very little effect on our business. there it is about innovation and technology. >> i am trying to have a conversation with a ceo who has dealt with the route of the problem. heineken ceo. the a lower euro help european story? where do we need to be? you are giving us an average target of 1.35. give me a sense of how important currency volatility of movement and averages are to you. our business is not important. going into 2015, we would not go with 1.30.

we do believe that a weak currency is a good reason to be successful in business. however, it will probably be the only way to help the europeans. many of our customers will europe -- in europe will have a little bit more tailwind and that will help us. for us, our chemical business -- give us one example, oil price weaken we haveo to pay more for barrels ofs o il as well. >> one final issue. it's probably one of the biggest issues facing europe. if europe does not get its house in order in regards to ukraine it could be catastrophic. angela merkel has said that she is not in the mood for changing sanctions. what does it mean to you? what progress you want to see on the political platform that

would have an impact on your business? it's impacting everybody's business, the whole debacle around ukraine and russia. a very simple is position. we have never been in favor of sanctions. we do not think they work. however, at this point, i think it is very important to improve the dialogue and business can play a role. to stay close to our companies because they're asking us what our commitment is. ac only hope thatan we have constructive political debate very soon, that sanctions can be lifted. certainly, the current debate or discussion or negotiation about the gas price between ukraine and russia is very important. with us on have you bloomberg television. please join us in 2015. the ceo of basf.

>> ukrainians go to the polls on sunday. conflict with russia, the economy, the eu will all be on. ryan is joining us with the latest. is poroshenko going to hang onto power? >> absolutely. this is an opportunity for him to consolidate his grip on power. this is the second step in a two-step political process to we hadze the revolution in february for the first up was a presidential election. what most people wanted at the same time where these parliamentary elections, but everyone in the elite thought that was a bit quick. so now they are having the parliamentary elections. shenko'snkel' -- pory bloc is expected to get 30% on its own. he could cut a deal with some other parties to form a coalition. so he is going to get a majority. the interesting thing is that the people that supported the ousted president goes with a pro-russian position, not much

of a political threat. it'll be interesting to see if threshold they need to remain in parliament. the threat comes from more of the pro-ukrainian hardliners. one of the candidates running who has 13% of votes. these are guys that do not want poroshenko to forge a cease-fire with russia. this is interesting. it definitely should consolidate poroshenko's powerbase. >> let's talk about europe. you were sitting here when i was just talking to kirk. angela merkel has set not much onthe mood to recant sanctions. the unions are meeting today in brussels. the european leaders are there today. what do you make of those comments overnight from angela merkel? man chancellor is well

aware of any economic damage that these sanctions and conversations that russia has introduced might be causingthe. she is steadfast. she sees no reason to to remove the sanctions that exist not against russia. -- now against russia. she spent a couple hours in a one-on-one meeting last friday meeting with putin. it was then that she formed that view. there has not been enough change. lowering o see a sanctions. fshe seems to be prepared to ignore the pleas from business leaders. she also said -- not just sanchez -- sanctions against russia, but more hope for ukraine. if you remember, the russians tuesday.nians met ioon the ukrainians turned around and went to the european union and said, we do not have any money. can you give us some?

it sounds like the german chancellor has thought about it, and that is a likely scenario come monday. maybe there will be resolution. there is more certainty now after the comments from the german chancellor then there was just a couple days ago that we will get that gas deal that is so important. >> things a lot. 7:42 in london. i will look at the performance of sterling versus interest rate expectations in the uk. ♪

a very strong case for raising interest rates before the election. the mpc does not want to raise interest rates around the time that the election. central banks are not like to operate close to big political events like that. until theve them second half of next year, you could well find yourself way behind the curve. >> former bank of england mpc member andrew stanton speaking to me earlier with his prediction about when they may raise interest rates. time for today's -- gdp day in the uk. i thought i would look at the level of sterling versus interest-rate rate expectations. show you how the pound's fortunes are links to the rates. is top line, the white line,

sterling against the dollar. since the beginning of this year. now sterling peaked on a closing basis. 1.7166. since then, it has dropped by 6.6%. nge lower chart, the oragne line, is the short sterling contract expiring in june next year. on june 16. that is when the implied yield was at 1.41%. that indicates a pickup in rates through 2015. mark carney said on june 12 that tightening could start earlier than anticipated. that spooked markets. investors priced in earlier rate hikes. as you can see, a lot has changed since june. carney has backtrack. the rhetoric has been that rates will be put back. maybe rate hikes.

less and less of a chance of a rate hike in the middle of last year. the implied yield on short %,erling yesterday was .84 which still suggest there could be a rise but a much smaller one than markets felt back in june. forward contracts based on sterling overnight inter bank ever show investors have pushed back the hike to september from february. are penciling in a .40% rate in the second quarter and a .70% rate in the third. what is important is that sterling, rate expectations, the forces of the two linked. which has shown very clearly by this chart. >> what is the function? e, c?

i will have to go to school to learn more functions. our house economist has joined us to talk about gdp. the whole market is pushing back their estimates on when -- these rate hikes will come. i need to do my red lorry, yel low lorry. >> we have had a bit of volatility in terms of expectations. they were pushed back even further even a week ago. the boe, we know from the latest minutes is now sounding more dovish. no one else to join the two members that voted for rate hike anytime soon. >> can the uk on the to a release the gdp data, can it withstand th headwindse that are the eurozone economy? risks tomed like the

the outlook to the bank of england are to the downside, meaning that the less inflation report, the bank of ireland had forecast and penciled in strong growth numbers. if there is any room for disappointment from those headwinds in disappointment in terms of changing that monetary policy outlook, it is for a surprised from those headwinds to push out those expectations. >> i was surprised. andrew stenton. you are walking out as he sat down. he said, -- >> too paranoid about low inflation. >> too paranoid about how weak things are in europe. i wonder is that just blind optimism? thinks they have got to get cracking. >> two members voted for rate hikes. the mpc always has some hawkish people on it.

that stance.s his view for rate hikes is not the mainstream view. >> would you expect the wheels and t mccafferty'she to vote for change? they capitulate in the next few months if we continue with volatility, the data? >> it is possible if the data gets really bad. wheel is in line with him and taking the economy could withstand small hikes now better than rapid hikes in the future. i do not suspect that view is going to be shifted to much. >> i think they all. have they all forgotten what happened in 2004? i think they need to go back and look at what happened. they are also confident that they can only move rates a little bit. nobody would knows what way rates are going to go? >> theyrre you go. >> that is my friday rant.

is usually offscreen. david powell there. >> 7:50. this is a live shot of the city of london. in 10 minute's time. take a look at what will be driving markets on this last trading day of the week. ♪

>> jon is huge and tells about what big things are going to drive markets today. >> you have the ebola scare on the one side of things. the market reacting. future indicating a little bit of a lower open. just fear mongering. we will talk about that with a guest at the top of the hour. then you have got the price of success. u.k. gdp day. 0.7%. david cameron arrives in brussels facing request for 2.1 billion euros for the budget. he's doing so well. come on. >> penalized for doing well. >> germany is getting a rebate. >> he's got people on his side fight he was left standing isolated. >> more traction in this country. these kinds of headlines will do that.

mark is not going to be watching football on sunday. he'll be watching the stress tests. >> they are midday. versus chelsea. >> asset quality review, stress test. >> the irish fracas got a little bit of a big tip. >> i remember, you were there. on a street corner -- "taking stock > >> dexia faced bankruptcy a couple of months later. have raisedanks leverage. i'm not saying it is perfect but it has got a little bit better. thequestino is th -- question is the quality rather than the quantity. jon is "on the move" next. >> follow us on twitter. >> tweet, tweet. --manus as ever is at

>> yay! stay with jon ferro. >> mark barton. he does great pictures. >> "on the move" is next with young jon ferro. ♪

>> welcome to "on the move." minutes away from the start of european trading. this is what we're focused on for the next 60 minutes. ebola scare. a new city doctor test positive after returning from work in west africa. equity markets in europe could open a little bit lower this morning it should investors be concerned at all? is this the price of success? we look ahead to u.k. gdp as david cameron arrives in brussels. mar --of western questions there. this sunday, investors will

learn which of the eurozone's short inst banks fell the year-long examination. we have done this twice before. showtests failed to problems. credibilitye ecb's is on the line. what does it mean for the open this friday morning? the dax down by 40 points. 0.44%. big week. big, big week. >> it is. you will see equity markets pare back the best week. issues in new york is something that will unsettle not just markets but also the general news bells in the united states of america. when that takes hold, we'll see how it transpires. eu leaders are meeting in brussels. david cameron has been handed a