>> a massive manhunt underway in paris. french authorities continue to search for the two main suspects in yesterday's shooting. prime minister manuel valls says preventing another attack is the main concern. another shooting this morning, two police officers said to have been shot in southern paris. the authorities are refusing to link the two incidents. in corporate news tesco has been taking action. the troubled grocery store names a new boss and says it won't pay a final dividend this year. this takes a more aggressive line on pricing.

9:00, good morning. you are watching "the pulse." i'm guy johnson. francine lacqua is not here today. she will be back tomorrow. this morning, we began in paris. the deadly attack yesterday left 12 dead. this morning, we have had another shooting in paris. it is to the southwest of paris. caroline connan, my colleague, has just arrived at the site and joins us now on the phone. what can you tell us? >> i've just arrived at the site a few minutes ago. you have ambulances and police cars everywhere. we have to be very careful at the moment because we cannot link what is happening here in chatillon in the south of paris with the attacks yesterday.

what we know from different reports this morning is that one suspect has been arrested on the subwaytw. o -- on the subway. two people have been injured. one is a woman, the other is someone walking on the road. what police have been saying this morning is that there was an accident earlier in this area near chatillon between two cars and that is when police came on the screen. according to french radio this actually had been stolen earlier and the driver of the car came out and started shooting, firing at these policemen.

obviously all this is very in early information. the interior minister was in an emergency meeting. after the attack yesterday, left this emergency meeting. he just spoke a few minutes ago here. he reminded the media and the people here that they need to be responsible and measured in their comments in the face of this threat. >> can you give us any more details? any details about the kind of weapons that were used? can you give us details about what this area of southern paris is like give us a sense of the environment in which you are standing right now? >> this area is not the most prosperous neighborhood of paris. you have a lot of immigrants in this neighborhood, but you also have some big companies with

their headquarters here. for example, -- [indiscernible] has their headquarters not very far from the site. people here are shocked and horrified. the road going around paris has been closed. i just saw that the policemen were closing the exits of the ring road. according to a 24 hours news channel here, it was an automatic weapon and the shooter was wearing a bullet-proof vest. there is, however, something we do not have confirmed quite yet whether the suspect who has been arrested is actually the one who was the shooter. we don't know that yet. >> caroline, thank you very much indeed. we will continue to keep you appraised of the situation.

let's get back to the site of the shooting yesterday. hans nichols is there. a fast-moving story and clearly developments taking place almost on a minute by minute basis. take a step back for us. talk about the reaction in france and how the political establishment is reacting. >> from marine le pen we have that comment on twitter calling for the reintroduction of the death penalty here in france. that is one of the main political questions being asked this morning, what is next? how does france unwrap this and come out of this situation? even while the manhunt is still very much on, there's some sirens in the background i don't think those are related to what we are reporting on here. have a little patience with me. the manhunt continues.

this morning, there is the cabinet meeting presided over by president hollande. at the same time, the prime minister mr. valls says there is a very real fear of additional attacks. we know that potentially seven suspects were taken into custody overnight. we are waiting for more confirmation. crucially, waiting to find out if there is a nexus between the shooting in paris that caroline was reporting on, and the shooting that happened just behind me in central paris. guy, francine? >> let's talk a little bit about le pen in more detail. we understand that sarkozy will be meeting with mr. hollande later. he is now the head effectively of the opposition party. what is being said about le pen this morning? what is being said about her view of this story? the tweets this morning are

fairly incendiary talking about a reintroduction of the death penalty. >> they are still digesting it. what is important to note is that these conversations are proceeding in parallel. you have a conversation between hollande and sarkozy. there will also be a moment of silence. you have a parallel conversation on the streets, on twitter. really, it is starting to take on a life of its own. we still don't know what direction that is going to go in. meanwhile, the police are out in force. this is a city not in search only for answers, but in search of suspects. that is nationwide. >> hans, one final question. in terms of the media response, there was a line from valls this morning talking about the fact that maybe the media and its

reporting, maybe not the most useful at the moment from the authorities' point of view. any sense that the media is overstepping the mark, pushing too hard on this one? are the authorities pushing back? >> i've encountered no pushback. aside from that comment you mentioned, that is only the notion -- the only notion i have on that. it seems the media here is proceeding with great caution on what they are reporting. they are being sort of drafted into this movement. the pictures of those suspects have been broadcast pretty much nonstop in france for the last eight hours. it seems like mr. valls does have his criticisms, but in a lot of ways the media is playing a role in trying to disseminate information. >> let me just bring you some breaking news that is crossing as we speak. an explosion near a mosque in

eastern france. officials are saying -- we understand that no casualties are being reported. this is according to officials. this is being reported by afp. we will get more on that as it develops. clearly this is a situation that is going to move fairly quickly. are people still focused on the scene behind you? are people beginning to move away? is there a sense the story is developing and the site outside the magazine is maybe not the epicenter anymore? >> people are still coming by here, paying their respects. all morning, we've had people come by. someone set up a christmas tree, a flag. all through paris, there are minor vigils. there is a corner where several dozen bouquets have been thrown. there was a big rally last night

in support of the magazine. to what extent the conversation moves away from this site and more towards police headquarters, that will be determined by just what the police have to say if and when they have new information. guy, francine? >> hans thank you very much indeed. hans nichols joining us from the scene of yesterday's shooting in paris. let's continue the conversation try to get more perspective on what we are seeing in france and its implications. we are joined by jonathan, the author of the book "france on the brink." good morning to you. we clearly have a story developing minute by minute in france. we will continue to watch that. as we look at how this is going to change the political story, what is your assessment? >> i would guess that it is going to help le pen on the international front. she took a slightly more

moderate line last night saying, we mustn't blame all muslims. she certainly rounded the angles of the national front which was very raucous under her father. she has made big inroads not just on the old conventional right, but also in traditionally left-wing areas. she is set to gain additional support from this. she is already according to some polls the politician who would finish first in the first round of a presidential election. and then we have sarkozy, who has always been identified with hard law and order policies. in a sense, the danger is we may have a rivalry on the right and

the far right who can be tougher than who. >> if you were to take the law and order to its extreme, you would have the tweet that marine le pen did this morning. >> restoring the death penalty has always been a national front policy. i think she will push this. we will see what support there is for that. i think the comment you mentioned from the prime minister that the media wasn't being very helpful in this, is because he can see a polarization taking place. when you have someone saying it is war, that is not really what the government wants. it has got quite a massive security problem. >> is there the possibility of an opposite reaction that we get a sense of, we need to integrate, we need to do more

we have made mistakes in the past and going to extremes may not be the solution? >> i would hope that. that was the feeling at the demonstrations last night in paris. the difficulty is, this is obviously very explosive. a continuing, evolving situation in which people who want to get political capital by striking a hardline, they think this is an opportunity. >> how does hollande react? >> he will try to stay above the fray. we had yesterday his preaching republican values. we all got to be united. that's always been the kind of late motif of his presidency. whether he can hold things together given his popularity under 20% is very much open to question. >> jonathan, stay with us. we need to continue the conversation. we will be joined by philip from

respond look. we will also be talking about tesco, making moves this morning. the company naming a new head of you guided kingdom operations. we will get a debrief later in the program. let's take a quick look at the shares, which have rallied this morning. i think everybody was expecting them to bolster the balance sheet. the new boss has been more aggressive than maybe some anticipated. that is the story in terms of the share price reaction. we will continue to talk about the evolving story in paris. ♪

>> i know that this house and this country stands united with the french people in our opposition to all forms of terrorism. we stand for free speech and democracy. >> we have to see the kind of cowardly evil attacks that happened today, reinforces why it is so important to stand with solidarity. >> let us unite behind this challenge and we will win because we have the capacity to believe in our destiny. long live the republic and long-lived france. >> the french president with his reaction. leaders from around the world have been making their views very clear over the last few hours. you are looking at live pictures

from southwest france. this is the area this morning where we have seen a double shooting. we still don't have details on whether the shooting is linked to the shooting that took place yesterday. we will continue to update you on that event. we have caroline connan on site. there are reports that automatic weapons were used. we have reports that maybe the gunman was wearing body armor. none of this is confirmed at the moment. the french police are clear that they will not link the two events. as soon as we have more details on that, we will bring them to you. let's consider the broader political conversation. we are joined by jonathan fenby the author of the book, "france on the brink." we are also joined by philip blond. gentleman. before the break, we were talking about how we are likely to see the right and the

center-right maybe sharpening their story when it comes to law and order. sarkozy will certainly be using this. we've already heard from marine le pen. that reaction is maybe the one that people predicted. how far does that take us, do you think? how does that change the story going into 2017? >> it further polarizes a quite polarized society. it will have further ramifications across europe. europe is having terrible difficulty integrating its roughly 30 million muslim population. it hasn't created the conditions for the type of cohesion or integration. in some ways, britain is one of the better stories. in france, i think it is particularly bad. i think it will serve to strengthen the right in france.

t i think it will tend to do is push the millions of happily fully integrated french muslims into the camp where they feel increasingly non-welcome. the real danger is the response will radicalize ordinary people ordinary muslims who have nothing to do with fundamentalism. in some sense, the reaction will only lead a further breakdown of french society. that will only aid the extremists. >> will that push france over the brink? >> france has stayed on the brink for so long without tipping over. what philip said is absolutely right. polls taken last year show that a very large number of voters and supporters thought there

were too many immigrants. the french asked how many immigrants there are in france. the average response is three times the actual number. there is this malaise, undoubtedly. on the other side, the non-integration of second-generation immigrants those living in the suburbs, is a problem which french governments have failed to deal with. >> you've got a situation where these communities, the more isolated they are from the french mainstream geographically, socially economically, the more mainstream french society offers nothing to them. the police will go in with an even harder hand. this will create a society that doesn't look like it is going to be able to continue. >> you talk about the economic angle. how much is economics and unemployment and idle hands to do with this?

>> i think it is a chicken and egg situation. i tend to think we've had years and years of analysis that says we just integrate people, all will be well. we've never had the analysis of why these communities don't integrate. often, they don't integrate because of cultural reasons. we have forgotten how to create a cultural -- a culture where politics can integrate. france is in a particular difficulty because it has such a strong secular line. if you are religious, you feel you have no place to stand in france. by privatizing religion, you open this up to extremism. in britain, and indeed in america we allow religion to be public. it can be engaged with. the extremist element can be pushed out. france and europe in general faces a terrible problem with

the very high rates of muslim immigration. in france the majority of new migrant arrivals from the maghreb tunisia, algeria morocco, 200,000 a year. france is not integrating that. >> how does the rest of europe deal with this? we've seen the demonstrations the merkel reaction. how will this affect politics around europe? >> i think this can only fuel the hard right. that means more fragmentation of the political system the rise of extremes and more political instability. back to the economic impact, the last 10, 15 years has been important because of the high levels of youth unemployment in immigrant areas. this adds to the feeling of cultural separation and distance.

added to that is unemployment poverty, and the feeling of being not part of the republic. >> we have to be there there. thank you very much indeed. we are going to continue this conversation throughout the next few hours. plenty more still to come. we need to update you on the latest events. we are seeing pictures coming through. ♪

>> good morning. 9:30 and london, 10:30 in paris. let me bring you up to speed with what we are seeing across europe today. a reaction to the events of yesterday and an ongoing story in and around paris. we have seen a double shooting. we still don't have details on exactly whether that shooting was related to yesterday's events at the magazine. these are live pictures from southwest france. just south of the peripheral region. we are watching carefully to see

how police are responding to this and whether there are further details on what appears to have been a man using an automatic weapon and severely wounding two possibly one policewoman. in the last few minutes, we've had reports of grenades being thrown at a mosque. no people have been wounded in that event but at least one of those grenades did explode. this is a story that is evolving fairly quickly. nicolas sarkozy has been speaking. we've had tweets this morning from marine le pen, talking about maybe a referendum to reinstitute the death penalty. the hardline on justice and law and order already beginning to manifest in the french political circles. we will bring you the headlines as they come in. let me bring you the other headlines we are watching as

well. standard charter is said to be closing its individual equities business and will eliminate over 200 jobs. the bank aims to cut a further 2000 jobs as it looks for cost cuts of around $400 million this year. operations in equities, equity research, will come to an end. standard chartered shares had a rough 2014, falling the most in years. minutes from december's federal reserve open market committee meeting have revealed agreements amongst the committee that the u.s. economy will continue to grow and add jobs. some members have concerns that inflation could be consistently below their 2% target. the minutes confirmed janet yellen's statement that interest rate increases are unlikely before the april meeting. fbi director james komi has revealed that investigators are able to trace the hacking of

sony pictures to north korea's intelligence agency because the attackers "got sloppy." speaking in new york, comey said the hackers sent e-mails to sony employees and posted the information online using internet addresses used by the north korean government. the director of national security, james clapper, called the attack the most serious digital assault ever on america. let me bring you some other news. let's talk about tesco. the british supermarket is planning to close its head office and 43 unprofitable stores. the company tries to recover from an accounting scam. caroline hyde joins us for more. plenty of changes announced. let's tackle what it looked like over christmas. >> because at last, good cheer

festive good cheer for dave lewis. he needed some after a horrid 2014. some of the changes that dave lewis put in place before christmas getting 6000 customer-facing staff in the stores extra, really did boost sales. sales are down ever so slightly but not as bad as had been expected, just dropping 0.3% over the christmas period. like for like sales actually improved in europe. asia, still a challenge. the u.k. was much better than had been expected. tesco was able to hold onto its full-year target. pretty optimistic in that front. >> this was more than a trading statement. what did we learn? >> many expected dave lewis, nicknamed drastic dave in his previous role at unilever, he

was drastic. perhaps not as drastic as he could have been, but he made major changes that are being announced today. he had three priorities. one of them was to boost competitiveness. behind me, signs are going up that they promise to reduce branded goods. they've taken about 25% off prices on average of 400 branded products. coca-cola and the like. they are tackling the price issue. here comes that price war in the u.k. also on the competitiveness front, they've announced a new u.k. ceo. the market likes the name, matt davies. he is going to be a safe pair of hands to join in june. that is another positive in terms of competitiveness. 43 nonprofitable stores will be shot. their headquarters that will no longer be the headquarters as of

2016. they are moving that and they are going to be closing other stores. just simplifying management both in stores and also in management, in the central offices. that will save some quarter of a billion per year, they promise. then you move on to a second key priority, that is all about the balance sheet. many have started to worry about the debt load at tesco. they were being warned by standard & poor's that they could be cut to junk. they are taking some key actions. they are going to be not giving a final dividend. that is a pretty major move. they are also selling assets. they are also going to be analyzing, getting experts to see whether they are going to be selling a club card. many already speculating that

wpp and other key companies could be interested in that. they are not selling the asia business. many hypothesized they could be up for grabs. not as much as they could have sold, but assets are being sold, notably revising their store building program. they are not expanding in the extent they were going to. also a big move, the pension scheme. they are going to be analyzing initial -- they are going to be analyzing. initial consultation is opening to close the pension scheme. one billion pounds in terms of expenditure is going down. the next key task, rebuilding trust. investors are starting to get there. back to you. >> thank you very much indeed. airline hide watching -- caroline hyde watching those new posters going up behind her in

tesco. a senior analyst joins us now. let's get his reaction. what are your thoughts on what was announced over christmas. let's talk about how retail was delivered over that period. >> christmas was remarkably good. if you look at the headline number, like for like, it is 2% better than last year. inflation has gone down by 3%. i think it is better than anything anybody had expected. it is probably the first time that we got a press release from tesco full of encouraging news. >> the new management haven't been sitting on their hands. they haven't been sitting up in their ivory towers thinking about ideas. they have been putting this to work. >> going back 5, 6 weeks, the accounting scandal, tesco wasn't going to have any christmas. clearly, that is not the case.

they took some targeted action over christmas. they were leading the market. very strong investment, putting more hours in the stores. you also have to see this from another point of view. while the discounts are good, it is not true that we all wish to shop at aldi and little. clearly, tesco got its act much better together this christmas and got rewarded for it. >> the balance sheet is critical in all this. you need to have a position of strength. that's not the case at the moment. the remedial action being taken at the moment is to generate cost savings. >> correct. there's more cost savings, more priced goods coming in my view. on the balance sheet, taking your capex program down another

2 billion, these are sizable numbers already. the pension scheme is starting to change. they clearly hinted that this is not the end of the balance sheet simplification. it is enough for now to show the rating agencies, we are doing the right thing. expect one or two major transaction to come in the next six or so months. >> none of this happens in isolation. this is a moving story and others respond. how does that change the strategy? do you think he will play his cards closer to his chest? how'd he you think the opposition will respond? >> it is not that straightforward. it is not that tesco has got price cuts across the board. what they are doing is saying customers still come to our stores. by focusing on the top-selling

branded goods, they say, i know kellogg's corn flakes was cheaper at littles. it is giving people no reason to keep shopping elsewhere. >> how do others respond to that? we get targeted skirmishes in key areas. how does the rest of the industry deal with this? >> it is different for the value retailers. they are seeing profits right now. they are going to get some of that back. ultimately, i think there's a limit to how much they can respond. there's a place for tesco in the u.k. tesco doesn't need to slow down. aldi and little slowing down is sufficient for tesco to stabilize. you don't need to expect tesco to grab market share back.

>> stock is up this morning, but down 40% on the year. what is your rating? >> outperform. we are not saying yet that tesco will be a major value recovery story. we are saying there was excessive pessimism in the stock. everybody thought dave lewis would do nothing. look at all these balance sheet -- excessive pessimism wasn't warranted. i think we have to wait another six to 12 months before we get a proper recovery. >> thank you so much, bruno monteyne. coming up, as ukraine's prime minister talks in germany, we will tell you why george soros thinks the west should be doing more to counter the russian threat. ♪

>> welcome back. you are watching "the pulse." the billionaire financier george soros says western leaders are underestimating the threat russia poses to ukraine and their mishandling of the situation poses a threat to disintegration of the euro zone economy. strong words. let's bring in ryan chilcote for some analysis. >> he is saying that the crisis

the conflict between russia and ukraine, is more damaging to the eu than greece. he says that europeans should wake up to the fact that effectively russia is attacking it through ukraine. i think some of the things that he saying about ukraine itself -- we always look at this conflict through the prism of russia -- are very interesting. he had high marks for the sanctions against russia, but the follow-up, he says there needs to be this financial support for ukraine. ukraine did get $17 billion from the imf last year, but george soros says ukraine needs $50 billion in financial aid just in the first three months to keep the country afloat. it just so happens the ukrainians are in berlin today. the prime minister is there, the

finance minister is there, and we sat down and asked her, what do you need? have a listen. >> we are indeed in a critical financial situation. from an external payments perspective, but also balance of payments situation in our national bank reserves. there are many different estimates. we will be talking to the imf in the coming weeks. we are looking to all of our international partners, from the imf to the world bank, the eu the united states, canada, japan and others to support us during this difficult time. >> note the american accent. she is born and bred in chicago. and americans that came to ukraine working for the government. she ran a private equity fund there and was reputed -- recruited by the ukrainian president. she is part of a new team of technocrats that have been brought in.

most of them are young, independently wealthy. they are going to need a lot of financial assistance. they are probably going to need a miracle. >> let's talk about the miracle. the miracle is not being priced into the bond market. the bond market is getting very close to the less than magical d word. >> if you look at the bond market the bonds are trading at $.60 on the dollar. that makes ukrainian bonds the second worst bonds in the world after venezuela. if ukraine doesn't get financial assistance in serious numbers this year from the west, it will default on its debt. that won't be its only problem. they have the world's worst-performing currency last year, even worse than the ruble. they got a banking system that doesn't work. because of the trouble with the national currency, they've got an economic -- basically, people

in ukraine have no purchasing power. an extraordinary set of problems to deal with but no one seems to be paying attention in the west. >> ryan, thank you very much indeed. ryan chilcote talking about the ukrainian situation. we are granting breaking news. this relates to the shooting in paris earlier today. the policewoman who was involved in that has died as a result of the gunshot wounds she received earlier today. this is being reported by france info at the moment. we don't have any further verification of that. you are looking at live pictures from this area. this is in the southwest corner, just outside the periphery. it is sort of 7:00, it :00, just outside the periphery. early on, we had reports of a double shooting. we understand that an automatic weapon was used.

we had understood that a policewoman had been shot. it looks like it is being reported from france info that the policewoman who was involved in the incident and that was shot has now died. a second day of tragedy in paris. we will have more on this story when we come back. we will take a short break. ♪

>> good morning. welcome back. you are watching "the pulse." i just want to check in on some of the key markets we've been talking about a lot. let me just show you the markets. brent crude trading north of 50. we are down by around 0.22% down by around $.10. nymex, wti contracts, a little bit firmer this morning. people are talking about stabilization in the oil market at the moment. the result of that stabilization has been a firmer equity story. the dax, the cac, and the ftse 100 all trading north of 1% to

the upside. tesco, one of the standout stock stories we are watching in the united kingdom. better christmas numbers and an update on what this company is going to do to fix its problems. what we have been seeing is weakness in the currency. we have broken through the 1.18 level. we'd are down by around 0.5%. i want to take you back to what is happening in france this morning. you are looking at live pictures from southwest paris. this is where a shooting took place earlier on today. within the last couple minutes, the french police have been giving us more details about that shooting. the french police are saying there is no link established yet between today's shooting and yesterday's shooting in central paris. too early to say if there is a link. let me just add this to the next. today's assailant had a pistol

and was armed with an automatic weapon. the latter of those to make it a significantly more serious event. there have been some reports that the police who was involved in that shooting has subsequently died from the gunshot wounds received. french police are at the moment saying that there is no established link -- it is too early to establish that link, to yesterday's shooting. we will continue to monitor the situation. we have a series of political developments taking place as well. nicolas sarkozy has been speaking this morning. he was talking about the need to focus attention on law and order, to upgrade the security story in france. he is well known for taking a strong line on law and order. he said he did so during his presidency and i think he is pushing that line very strongly. we also between -- we have also

seen a tweet from marine le pen, the leader of the far right political party in france talking about maybe a need for a referendum to reinstate the death penalty. that has been the story. the fact that she has restated that this morning, i think significant. let me show it to you on screen. we have an ongoing manhunt. two of the assailants from yesterday still being very actively sought. the political story already developing at breakneck pace as well. as soon as we get more information on these shootings, the live pictures you can see in southwest france, we will bring those to you as well. ok, we are going to take a break. we will have more analysis. we will continue the discussion surrounding what is happening in and around the french capital this morning. for our viewers, it is a second hour of "the pulse."

remember as well, we have a bank of england monetary policy decision as well. i'll see you in a moment. ♪

>> good morning. you're watching bloomberg television. this is paying -- "the pulse." the policewoman shot this morning in paris unfortunately has died. we understand some details surrounding this event. we understand that the man was armed with an automatic weapon and a pistol. the french police are not prepared to link yesterday's events and today's events.

that may change over the next few minutes. you are looking at live pictures with some very heavily armed french police officers and we are watching the situation develop. our reporter is on the ground in southwest paris. >> there seems to be a lot of confusion around the scene. the police are moving the security perimeter further out. they have moved it twice in the past couple of minutes. i can see the heavily armed police officers you were just talking about. [indiscernible] they suspect maybe someone is hiding in the building. there is a lot of confusion on

what is happening right here. the intervention team is on site and the police are moving the security perimeter further out. >> could you talk us through the incident earlier on? a policewoman was shot dead. what do we know? >> it was initially a traffic accident. a white car. there was a traffic accident. that is why the police officer came on-site. then the driver of that stolen car came out and started firing. we don't know all the details. [indiscernible]

sorry. initially, they suspected that the young man had a gun in the subway. later, it was reported that maybe he was not on the subway and he may have been hiding in a building nearby. we do not know yet. there is obviously a lot happening at the moment. >> we are watching the live pictures carolyine. stay with us. we will be back in a few minutes time. in the meantime, let me bring in my colleague hans nichols. he is at the scene of yesterday shooting. -- yesterday plus shooting --

yesterday's shooting. >> there has not been a direct connection between this morning shooting -- morning's shooting and what happened right around this time yesterday in central paris. they don't know whether or not they are connected. the french government is on high alert. they have posted an additional 800 police officers at media organizations. what we see here is an average french street. the details are rather shocking and sobering. the hunt continues for the two brothers. the two of them are still at large and the focus is on them right now.

there was a french cabinet ministers meeting. the interior minister had to leave the meeting early so he could monitor the situation in the south of france. there is a real fear that there could be additional attacks in paris, in france. there are reports in the eastern part of the country of a grenade being lobbed in, around, or near a kebab shop. no one has been injured in that attack as far as we know. >> an escalation of the violence and violent response from other elements. is there a sense that the politicians may feed this story? the tweet this morning talking about a reinstatement of the death penalty -- that is a

fairly sharp response to the story we have seen. >> clearly, le pen wants to get in front of the story. she made that call on twitter calling for the reinstatement of the death penalty in france. that will likely be an incendiary comment that will inflame the debate. it is somewhat remarkable at the speed with which there is a real conversation on social media, in the morning newspapers, and on the streets of paris about what the appropriate response should be to this incident and at large for a society as it works to integrate its minority populations. a clear picture isn't merging of at least the younger brother. he was arrested -- is emerging

of at least the younger brother. he was arrested in 2005 four helping funnel jihadists to iraq . how their transformation happened and whether or not the received training overseas are crucial questions as france questions itself as much as police are hunting for the suspects. >> let's pick up the issue of france blaming itself. is there a sense of remorse that france may not have been as good as others at integrating its muslim population? >> i suspect we will get to that part of the conversation later on in the week or later on in the day. there is a great deal of respect for the professionalism of the

police force and questioning. if he was known to authorities, cherif, why wasn't he placed on additional watch? there are 1000 potential french citizens who have gone to iraq and syria to participate in the conflict. there are seven people in custody and the manhunt continues. >> this was the only story the french papers were going to cover this morning. is anybody talking about the long-term sense of how the media narrative develops? whether or not there is a sense of self-censorship that creeps into the conversation? that maybe this is a defining moment for the french media?

is it creeping into the editorials, the op-ed's, the narratives? >> it is creeping in every bit you would imagine and also into social media and also into the streets. we see je suis charlie everywhere. "i am charlie." they want to be open and forthright about the conversation and the conversation that may need to be had. >> hans nichols, our international correspondent joining us from paris. thank you very much indeed. we have a developing situation in the southwest of paris this morning to the southwest of the periphery. we will continue to watch the

situation and bring you the headlines. it has been confirmed by french prosecutors that a policewoman who was involved in a shooting in the area this morning has died. also coming up, we will continue to watch a corporate story in the u.k. tesco making a number of moves today. it is not going to pay final dividends. we will get the details on what they have announced. shares are up at least 10%. ♪

>> welcome back. i want to take you to live pictures of southwest poorest. -- paris. there has many shooting this morning. a policewoman involved has died. we understand that the man involved was armed with an automatic weapon and a pistol. we are waiting to see whether a group of heavily armed police officers are going to be taking action shortly. we will continue to monitor events and watch what is happening. this is happening as we see reports of attacks throughout the rest of france.

there has been talk of an attack on a mosque, an attack on a kebab shop. we see police in france not drawing a link between the event you see here and the event yesterday. please continue to seek the two main suspects from yesterday's attack -- please continue to seek the two main suspects from yesterday's attack. we will continue to update you and make sure we know what is happening. marine le pen has been tweeting. we understand that she will be meeting with francois hollande tomorrow. nicolas sarkozy will be meeting with him a little bit later on today. as we get more details, we will bring them to you.

we need to talk about what else is happening. we have an economic story that you may be able to draw a line between the two. the economic story in the eurozone remains that 1 -- one that we in london, the bank of england will announce its latest rate decision today. philip rush is sitting next to me. good morning. no expectation of rates to change today. my sense is been that we are taking a step back from an assessment of an earlier rate hike coming through the bank. where do you see the first rate hike? >> in the second half of this year. that is clearly a long way away from the markets have drifted to over the past several weeks in particular.

it is a reflection of oil prices falling very swiftly and that being passed through into expectations. that is just a worn off shock. it is the sort of thing that they should look through. we do think they will be able to use it as an excuse to stay on hold longer than they should do. we don't think they're going to sound hawkish this side of the general election. following the election into the second half of the year, the fed continuing on its path, the bank of england should feel comfortable to follow suit. >> politics are going to play a big factor.

as we head into the election, as we look at indications, it looks close. how big of a drug is the political story going to be on economic development? >> the fe economy takes after the general election is quite bimodal. -- the path the economy takes after the general election is quite bimodal.

we might need to see a coalition that spans more than just two parties leading to more than -- complex coalition negotiations. you mentioned a referendum on eu membership. if you get labor, that may be territory when they might need to concede.

we have had a strong recovery in the u.k. the economies have not shown signs of re-coupling. >> that kind of -- that kind of drag from such a near and significant trade partner is a discouragement for the bank of england to follow through with interest rate hikes. it is something that makes politicians quite wary. i don't believe david cameron wants to hold the u.k. to leave the eu.

with the eu in such a poor state why would they want to be a member of that club? >> thank you for that analysis. we are back in a couple of minutes. see you then. ♪

>> welcome back. let's talk cyber security. let's go to tel aviv and talk to elliott got can -- gotkin.e. we got an exclusive with a new cyber security company. great to have you with us. you are a cyber security. you don't provide software in the way of the companies do. >> we give the ceo and board of managers the tools, the integration tools, that can give them the knowledge about the threats and assets and what

measures they need to protect the organizations. when i speak about intelligence we speak about thousands of techs every minute in the world. we do it automatically. we are connected to that information. we calculate we analyze, we give a suspect for -- specific route to the organization on their dashboard -- listen, be careful, there are attacks that concern your company. >> if sony pitchers had you on board, how would you have helped them anticipate the attack that was so devastating? >> if i may say, i think that a big problem in companies nowadays some of the board of directors and ceo are not involved in the decision-making

because cyber sounds too technical and they want to give it to the technical people. but that is not right. the one who knows which of the assets what are the priorities how much money to invest, that is the decision of the ceo. he must be involved. when you see an attack like the one in sony or target it does not concern only the security men. it goes up to the ceo and the board of directors. now, what we do -- and that is why i like my company -- we assist the ceo and decision-makers, to give them the tools that they can use by integration and to see the whole picture. so they can see, these are the priorities, these are the risks. >> cyber security become simple enough that even a ceo can handle it.

what do you make a prime minister netanyahu's diplomacy? >> i think that we need to continue with a peace negotiation. we need to fight terrorism. there is no political process. we cannot continue with the current situation. we need to get rid of the occupied terrorist organizations is soonest possible. >> thank you for joining us. it is launched a four -- launch day for cytegic.

we will be back in two minutes after the break. ♪

>> welcome back. we are getting reports from france that the two suspects that were involved in yesterday's shooting have been located in the aisne region. this is in the north of france. we don't have any further details. we will get more details and bring them to you. further developments in the shooting yesterday.

which at the moment has no connection to the shooting scene and southwest paris today. let's find out about the markets with jonathan ferro. >> the map is green. we have a nice little pop. and nice little day of gains developing. here in london, we are higher by 1%. we are starting to get some gains. i want to take you inside the index. it is a story of u.k. retailers. tesco is 9% higher. cutting dividend, cutting spending, closing 43 stores. the ceo is starting to move things around. marks & spencer's is on the other side of the story. big miss for sales for them. on the fx market, euro-dollar

dropping through 1.18. a december 2005 low. greek unemployment, 25%. that is not a pretty picture ahead of elections. let's be clear, the big drop-off -- it has been a dollar move. king dollar getting stronger. you look at this move up by 14%. federal reserve minutes out last night. they cannot batten the way concerns about the stronger dollar. they did not even really mention it. when you read through the minutes and you talk about the strength of the dollar and the effect on inflation core inflation, even as low as it is right now the federal reserve says they could hike with inflation where it is that right now.

-- it is that right now >>. that is an amazing chart. jonathan ferro is on the markets. 25 minutes until "surveillance" is on the air. tom keene joins us from new york. we have a fast-moving story in france. what are you watching? >> we are going to be looking at the events going on north of paris on the belgian border with those two suspects. we will also be following the ever weaker euro breaching through 1.18. we will look at market reaction. liz and saunders will join us. all of america focused on what is going on in paris for the entire 6:00 hour, richard haass will join us. he has blown up is scheduled to

be with us this morning. hans nichols will be joining us from paris. >> looking forward to it. the continuation of the coverage number is generated on this fast-moving story. tom keene and the "surveillance" team up next. tesco has just cleared 11% higher on the day in trading. the supermarket chain is naming a new head of its u.k. branches. plenty of changes announced. let's find out what is going on. caroline hyde joins us with details. >> quite phenomenal. this is reason for cheer for dave lewis. festive good cheer for dave

lewis because sales are much better than had been expected in the christmas period. 6000 more -- prices cut on key festive goods. that drew in shoppers. sales are much better than we have seen over at sainsbury's. we are to see a turnaround in tesco improving. overall, tesco is able to say we are sticking by our four-year profit forecast after slashing it three times last year. >> this is more than just a trading update. there is the bigger story that is driving the stock higher. >> you are exactly right. dave lewis is taking drastic

action. some of the moves are key for his three priorities. how do you restore competitiveness? they are slashing prices, 25% on average, for hundreds of products. already, the posters have gone up in the shops behind me. also, a new ceo in charge of the u.k. business. the name is liked by the market. matt davies. he is seen as a good pair of hands. they are taking key action on unprofitable stores. they are even closing the head office. it is all about trying to be more streamlined trying to get focused when it comes to the management and the stores

overall. the second key priority was the balance sheet. the debt was a problem at tesco. the prophet was in a downhill spiral -- profit was in a downhill spiral. we are seeing the likes of assets being sold and they are still analyzing whether they are going to sell the club cards -- that could be worth 3 billion. speculation that the could be interest in that asset. other key moves are being made. they are reviving the store rollout plans. they are looking at changing the pension structure. the could be closing a pension scheme and that could be a big move -- one billion pounds in

capital expenditure is going to cut -- become cut for the next fiscal year. next is about rebuilding trust. so far, analysts are starting to get their trust up. back to you. >> caroline hyde, thank you very much indeed. joining us from outside the tesco store. we are going to take a break. plugging security holes. my next guest -- how do companies protect their employees? we will hear from a former british military specialist. we want to update you on news that is coming out of france. the two banks aspects in yesterday's shooting have now been found. they are localized in ainse.

we will have specific details surrounding that -- we will get them. we are getting confirmation from french to tutors that there has been an attack on the le mans mosque this morning. a number of grenades had been thrown at the mosque. we will get more details on that when we return. ♪

>> these individuals were most likely being tracked. we are all touched, shaken, thinking of the victims. >> the french prime minister speaking at rtl radio earlier this morning. the rize shooting earlier this morning -- there was a shooting earlier this morning in southwest of paris that involved an assailant with an automatic weapon.

we are getting updates on the church for -- search for the two suspects in the charlie hebdo shooting from yesterday morning. i'm going to start in southwest paris -- actually -- yes, i am going to start in southwest paris. a little confusion. caroline is there. hans nichols, let me start with you -- caroline, let me start with you first of all. what has been happening at your site? >> not much apart from the security perimeter that has been moved closer to the road -- about 150 meters away from the original location. you still have the special intervention unit on-site. the heavily armed officers have

moved down the street. we cannot see that they have come inside a building. the gunman is still on the loose around this area. his car has been found in a nearby town. he may be hiding somewhere in the building. we don't have any more specific information. the interior minister came to the scene earlier this morning and was reminding the media that we need to be very cautious with the information about what happened and not make any connection yet with what happened at charlie hebdo yesterday. >> yes.

let's take you to the location of the shooting at charlie hebdo . hans nichols joins us. bring us up to speed with the search. >> what we know from local reports is that there are two suspects surrounded in a town of by the belgian border. we don't know if those suspects are the two brothers. what has emerged is the intensity with which police are trying to track them down and the precautions they are taking in paris and elsewhere to prevent other additional attacks. there are some 800 additional police officers stationed around media outlets in paris what we heard is that there is a legitimate fear for legitimate attacks.

we still don't have a confirmation that there is a nexus between this morning's shooting and the shooting that took place just about this time 24 hours ago. in just a few moments, there is going to be a moment of silence all across france and maybe across the eu as the eu president is calling for. we will observe that moment of silence and we will be following and get a sense of what is happening up there in that town and who these suspects are and whether or not they are close to being apprehended. >> thank you very much indeed. now in the wave of these attacks , should companies think of more innovative ways to improve their security? joining me now is sterling athens specialist george -- this

was an attack on a business a business that had faced similar attacks in the past. if you are a ceo or security specialist for a company in the eu at the moment, how would you be reading the events in looking at the events in trying to incorporate those into your planning? >> the first priority for any company is to identify the level of threat that they face. the individuals involved in the attack yesterday demonstrated competence that they had some training.

there seems to be some military experience. the issue for european companies now is that we have seen in recent years and number of attacks involving radicalized individuals that have not been able to achieve that much. the real danger is that we have thousands of european passport holders who have experience and training and when they start to return they will present a very real danger like what we saw yesterday. >> the boundary between somebody's desk and the streets is often a plate glass window. that is not a particularly reassuring barrier that exists. we operate in an open society.

we are all huddled together in metropolitan areas. >> it presents an immense challenge. a lot of companies are doing huge amounts to protect employees you see large flower plantings outside many buildings. that is part of lower-level security. they are putting on blast film on many windows exposed to streets. we want to identify the nature of the threats that businesses specifically face. charlie hebdo faced a specific threat. they had been firebombed in the past. they had a particular profile in jihadist circles that they understood but other companies do not realize that they have. certain sectors are targeted more by jihadists than others. >> that is an intelligence

gathering story. >> we have been following jihadists in the middle east for over 10 years as a company and we have an understanding internally of their logic, of their tactics. if you understand the way in which they go about planning attacks the way in which they think about targeting their attacks that all has specific insights. >> do you tend to see up have been inquiries after events like this? >> we work closely with many of our clients all the time. >> quite rightly it should make them nervous. how would you rate the security of most companies? there will be people watching this sitting in offices

watching events unfold and trying to understand whether or not there is a realistic threat. in terms of the need for improvement is there significant need for improvement? are we doing as much as we can? >> it really depends on a company by company basis. some are doing huge amounts some have a way to go. the real goal is to identify the nature of the threat that you face. if you have operations in the middle east, there are trends developing their that people need to evaluate. some bigger companies have immense security departments, it is really dependent. we work with a wide range of companies. we are trying to help them understand the threat that they

face. >> george, thank you very much. george readings. we will have more on the breaking stories coming out of paris. we will bring you details on what to watch as the situation continues to unfold. ♪

>> watching the pictures, we do seem to be seeing the police taking their equipment off. we see the fire engine department. this is from an earlier shooting . the policeman who arrived first on the scene has been shot and killed. let's bring you more details about the other aspects. this may be unrelated to the shooting at charlie hebdo. let's go to hans nichols. what are we expecting? hans nichols -- technical problems, as you can see. a little bit of a freeze frame. we will get back to him in a moment. let's take you back to these live pictures.

we are waiting for the moment of silence that will begin in four minutes time. the shooting earlier today involved in individual armed with an automatic weapon and a pistol. there was a crash earlier ron which involved a stolen car, which may have been the catalyst for the start of this event. there has been a sighting of the two suspects in yesterday's shooting in the northeast. -- of france. we will take a short break and then tom keene and his "surveillance" team will be back.

france and the world will observe a moment of silence for those that lost their lives yesterday in the shooting in the center of paris. see you tomorrow. ♪

>> good morning, everyone and good afternoon in paris. a moment of silence here that we will have been a few seconds.

in front of notre dame, this is for all of france with the events of yesterday. notre dame was created in 1345 and built at the beginning of the 12th century. it is the epicenter of a motion for the republic of france.