0.4%, the slowest pace on record. the bank of england insists the slowdown is temporary. we are looking at the future markets a little lower and let's get to manus cranny for your market open. >> the exchange market there is a word that comes to mind, stoic. they have temporary pause in negotiation and the euro is remarkably resilient. there is the tip with the greek and the dutch. they seem confident in the deal. the french talk about doing something logical with creating a deal. the chief investment officer says that the debt and interest payment that greece has to make is miniscule, relative to where he is.

they say they will extend and the european equities are opening lower for the united kingdom. traders are pulling back and they thought there would not be a rate increase until next year. the have been told to rethink and re-strategize. that is what they have done. they have over a million cars. they saw a rise of 6%. bmw is down and the equity markets are lower. they all saw the sales rise in

january. if you go forward again the group is down to 181. it is getting some gains. caroline will take it to the details. the revenue is up 6%. you can pick up the interview later in the day. 55 is where we are. 11 is the story there. they are saying the earning and depreciation is long-winded. the fourth quarter revenue tops what you are seeing. you have to produce a stellar performance and the market is getting more agitated. the education drop has the

biggest decline her. if you have good numbers, you will get reflection in the markets. equities are under pressure and let's see what the inflation is in the u.k.. back to you. >> thank you very much manus cranny. we are looking at the market lower and the dax is off. there was a big story in the last 12 hours. it collapsed yesterday and the ministers had bailout fatigue. the minister said that europe is indivisible and compromise must be inevitable. >> we have been steadfast from the beginning. we want an honorable settlement

and these principles of the program that have to be respected. it challenges the logic and this is what we see from the beginning. it is the only option you have. it is plan a and there is no plan b. >> there is no plan b. you heard the man. they were ready to sign a document yesterday. there was no longer that document. that was the big question left open yesterday. >> the document was withdrawn. it was presented by the man who represents the european union. the finance ministers saw the documents there and it was authored. they thought it was a fair agreement and it was withdrawn.

separate language said that they knew to apply and extend the current program. they offered to words of concession and they were -- "with some flexibility in the program. it was offering to define the terms and what they meant. the finance ministers and the group is meeting and people are trickling in. they are saying it is up to greece to come up with a plan and formally request the extension of the current bailout program. that is where we stand. reading the body language adding into the meeting everyone is waiting for greece and there is talk that the other side needs to compromise. for the most part, the eyes around greece and neither of the

finance ministers whose tax payers are off the hook seem willing to step away from the program. >> how on earth did they manage to trip anyways. there is no deal in sight. they came pretty close before the meeting started. tell me what happens if they do not reach an agreement at the end of the month. >> they get cut off on financing and it is unlikely that the ecb will use them. >> we lost the connection in brussels. we'll bring you the update only get the connection back. we will be working on that as we speak. we are joined by a fund manager

who manages 4 billion pounds in assets. great to have you. will be the trigger point to get the deal done and make the compromise? >> politics gets them over the line and there is a chance of it coming lower at the moment. rather than simply stepping over they have so many compromises that need to be placed and we are going towards catastrophe here. there is a chance that we go back and there is a chance the greeks and of having to print. that is the real achilles heel for the greeks. let's face it.

they do not need financing. there is no budget deficit. they do not need access to finance. if they go to the creditors and say, you're not having your money back the only real problem in the economy is the ability to keep the banks open. >> only financing in euros. >> the banking system has a risk that the worst-case scenario is a travesty for the greek economy and the nation. it is almost a humanitarian crisis. >> commerzbank raised the possibility to 50%. they see a serious concern here. my question is, what is the trigger point. as a comfort in the bond market?

-- does it come from the bond market? or will the ecb seriously consider cutting off the credit at the end of the month? >> it couple of days ago, they extended it another 5 billion and it suggests to me that another 5 billion will walk out. we are witnessing a slow-motion bank run here at the moment. without that, the banks are lost and do not have enough deposit. that is the real tragedy and they need to finance the greek thanks. >> do you foresee the likelihood of capital control being introduced in greece? >> you have to. in order to slow down the payment, you need to install

capital controls. >> a big question here. is there a trade? >> they go for the 50% chance. if you consider the contagion issues the portuguese on markets have 10-15 basis points and what i would take is that we may look at an exit or a reintroduction and they see how horrible it will be and i do not want to much focus on the hyperbole. >> i do not think anybody can debate that the economy is

stronger and unemployment is running at that any kind. there is hardly any liquidity here. the more significant part is the bloomberg terminal here. we talk about the contagion risk. right now, it is not happening. >> that is the point. there is the risk of contagion. maybe greece issues a test to show the rest of the nation's this. here is what happens when you do not have the troika. >> a lot of people agree it is coming. stay with us. we had to the break. equities are lower. we have stories to talk about.

sharing estimates this morning and the stock is off. a revenues heat despite falling sales of tags. -- bags. 6.7%. 6.2% year on year. up next, straight back to the u.k. no inflation, no problem? that is the question for mark carney. do not call it deflation. we are back after this short break.

>> it is not all about greece this morning. it is the takeaway inflation? it is expected to rise at the lowest pace on record. it is estimated to come at 0.4%. inflation claim central banks and the eurozone. in the u.k. if it just comes down to low energy prices, is it a bad thing? let's put the question to kevin. is it a bad thing? >> it depends on what happens. it is a bad thing if the bank of england decides there is no inflation and we put off raising

rates. we have the u.k. absolutely against this. >> you can see it taking any commodity. >> human up was the industry hundreds of years ago and you said it too low. you have the consequences in the u.k. and a bond market. the asset bubble and property markets needed to be higher and it is too narrow. if you incorporate the asset price inflation, you can see asset price inflation and if you are looking at the current dials and we do not act it will be a problem in the future. >> we have been saying that for nine years. >> there is more asset price

inflation. it is like a sponge. asset prices can act like a sponge. it makes it full or in full or. you see a wave of inflation. >> number one, what is stopping them from raising rates and once you expect the inflation to spread from asset prices to the domino of the bleeding and to general prices? >> when do they need to raise the rates you go back to last summer and we introduced the macro prudential policy. we would not have had to do that if the rates were set. what we are doing is using the current levels of inflation and the nebulous idea as an excuse

to not raise interest rates. all we are doing is increasing the sensitivity in the economy. only need to raise interest rates, it will be 1.5%. >> isn't that the point? the economy has the rates in the corner. there is no real wage growth. there is no wage growth and they are not satisfied with what is happening. they have no choice. we could go back into recession. >> which is why they will not raise interest rates fast enough. that is when you will see the inflation with the entrepreneurs. they will tease the inflation in the real world. look at the construction activity at the moment. why is that? the increase in materials and the cost.

>> the last question is 7 billion pounds of assets and where you put your money. the single biggest thing you have to do is buy real assets. if i go to bonds for argument sake, there is 1.7% and i absolutely guarantee you inflation will be higher. if i buy the asset class, i guarantee the purchasing power and have to buy real assets. >> if you expect asset prices to inflate and rate rises come, wide you want to be in real assets? >> what we have is mark is talking about the rates and it is fantastic if you have a mortgage. there are more people in debt

then who save. the democratic system is setting up the case for people. we are seeing a massive transfer of wealth from borrowers and savers over long periods of time. you have to get on the side of the borrowers and have to be long on real assets. >> thank you very much for joining us. we had to the break and the picture of the markets in the open is a little bit weaker. the losses are building in europe. it is over by 100 points. the stock exchange opens and we will bring you that. a couple of stocks on the move. the revenue growth is where the caring is.

you are seeing the stock down. gucci is a struggle. we will talk more after this.

>> welcome back. we are into the trading session. stocks down.

looking over in france and the beat for luxury. caroline hyde joins us with more. i do not know how much you can read with this. you have the stocks and equities down. the standout performers for these guys. >> you are looking at the reaction and they say there is not much of an impetus to set the stock higher. we are seeing shares down and you are right that 25% increased in sales. lake road that this was the brand in the industry. interestingly, we are seeing a bit of a slowdown in the jewel of the crown and seeing 7% growth. what has come as a massive relief is that they are not fairing any worse.

there is a little bit of lightness in terms of the numbers and it is falling by half of a percent. they are saying there is an improvement notably and it is all about fine tuning. that is what they're worried about. they have weakness in china and it sees a drag in the past few months. overall, 710 pounds. i'm sure you love them. could seems to be a bit. >> you look at the brand's and there is a big concern. is the focus right here right now the correct focus? >> they are focusing on organic growth and getting the concept right. they are focusing on making the key personnel at the top of the company's are the important ones

with the brand. the chief executive moved and they have the creator with the change going on. you have the new ceo and creative director that wants to see a change in the continuity. you have the brands with fresh people and it will be a relaxation and they will not need to much going on anymore. they are focusing on what they have and a bit more time. it is all about the creative director. >> thank you very much. we will have the exclusive interview with the chairman. make sure you tune in for that

conversation. 26 minutes into the session. the yield is higher with basis points.

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>> welcome back. i am jonathan ferro. we are 30 minutes into the trading day in brussels. this is what the market thinks of that. no deal for greece. it is a deadline. depending on which you view you take for the end of the month. it is up by half of 1%. you look at the bond market and it takes it bit of a beating. you see the three-year higher and the yield. the 10 year yield is up 70 basis points. that bond market has been

extremely volatile. if you look at sweden, here is one for you. it is falling year on year and the estimate is said to be worth 3.3%. there was a stronger swedish krona. they cut the rates last week. there is the reaction and a stronger swedish krona. in one hour, will get the inflation figures expected to come at 0.4%. that will be the weakest number since the records began. there are stock stories we need to talk about. >> thank you. i have some big news for you. you are looking at the winner and it is all about your jewels. the danish company is up 15%.

check that out. it is on the back of better-than-expected results. profits are up by a third of 36% and the sales rise. green is flowing into pandora. we will see the insurance industry trading up 10%. the canadian company is swooping in. they want to buy it for $1.8 billion and they are offering 300 and five -- 305 pence. people are feeling the deal is going to go through. i'm looking at the worst performer on the stoxx 600. it is all about logistics with this company. it is down 3% last year.

the net loss is widening. it is a year of transition. there is no upside for the express. back to you. >> caroline hyde is finishing in the low. the athens stock exchange is warming up and a lot of people expected to open lower. brussels and the breakdown in brussels yesterday evening. the stocks collapsed and there is bailout fatigue. seemingly no end in sight. thank you for joining us this morning. as we go towards the end of the month, what you consider the main issue to be after the collapse of talks yesterday. >> the mate issue that everybody

recognizes is that the ball is in greece's court. the hope is that the greece authorities will have the insurance program. the first one has to do with the rhetoric of the greek government and no bail extension is to be accepted. the second issue in question is the main problem for me. it is facing serious time constraints. if no compromise is done this week, by the end of february, there will be a hard problem down the road. greece will face credit issues within march and, by the end of the month, a very much extension

question whether they will want to stay in the euro or not. the commerce increased the chances to 50%. >> i look at the market and the stock exchange opens up lower at -4.5%. the big curb has been the banks on the index. do you really think it will announce any changes to the liquidity funding and the banks in the next couple of weeks? >> that is the question and i believe that the ecb will do anything in its power to present -- prevent this and we have to keep in consideration the fact that the talks have stalled. it is possible that it limits the funding and during the past

few months, the capital controls might pose an increase sooner rather than later. >> it takes thank you for joining us. a look at the stock exchange down by 4.5%. a breakdown in brussels and we hear from the finance minister yesterday. despite it and being in debt talks, he emphasized a point. take a listen. >> europe is indivisible. anybody who gambles and place little games is anti-european and this government is a pro-european government that wants to speak the truth about the crisis that has not been arrested by the program that we are being asked to sign up.

>> strong words from the finance minister. we will continue the conversation and the investment manager director. who is playing games here. >> both sides are. the government in greece is filling in a sandwich between credits and wants to renegotiate a move away from the deal. my since it will leave -- is that it believes the eurozone and it is a question of how it is orchestrated. if it lows up, do we get a lehman type solution? given how far they are apart now , i do not see the alternative to them leaving. >> on the first point, with talk

about that these guys keeping it together the ultimate trump card is leaving in a disorderly way. the damage to the eurozone could be greater than greece. that is actually the trump card in the background. i think the ecb will blink. i think the euro zone finance ministers will link and the candidate will be kicked down the road again. there has to be a structural convergence and there is no clear realistic prospect for that. >> what is the trigger point question mark >> the politics in this. on the economics, they should have gone in 2012. if you look at the lack of progress on structural reforms

and labor costs in the position with the rear exchange rate they should have gone to that three years ago. the difficulty is the threat of makeup and the eurozone will be prepared to keep them in for in another year or two. the central case is in two or three years. it could stagger for a while. there is a disorderly exit earlier than that. the tail risk is it staying home and cleaning up the act. that seems the least likely of the three outcomes. >> let's talk about the most likely. you mentioned the event. where does the contagion come from? >> a bit of both.

particularly through the banking sector. the banking sector and sovereign debt is linked and the rocks have been tied together and all of this because the banks have to hold the bond and the bond is a you list. so, the capital flight could be the trigger event and it depends on how long the ecb is prepared to go on in the target system. no one knows how long it will last and it strikes me they could stagger on for 6-12 months. there is no appetite for reform and the populace is saying, we do not want to go through the austerity and reform required by germany and the other creditors. i cannot see a solution of part from greek exit. >> even if there is no appetite

for reform, there is no appetite to leave the eurozone and a lot of people were thinking about the recession. spain would apply for a bailout and none of those things happen. a lot of the blood and thinking i have seen the movie before and the assets performed well. we have to invest around this. >> the fact that nothing has happened yet greece is distinct from the others and you can argue that greece is only 2% of the eurozone gdp and it does not count. that was misleading. it counts because of the contagion. it is clearly doing the worst with the reform program and the hope for the eurozone is greece leaving and the others continuing to improve

performance and the reform program. the difficulty is containing it. the ecb is clearly helping here and they got there. they should have done that earlier and it is the deflation risks. they will buy more time with the assets and it will have to get bigger. >> i go back to the situation and people think it will be the trigger point to exit the eurozone. why would they do that? the ecb has done so much to keep the eurozone together. without the eurozone, they did not even exist. why did they cut the line after greece? >> it is likely to be something negotiated among politicians and finance ministers with heads of state to organize the exit.

this is critical and there is nothing in the trees allowing the exit. that is how it was set up and how it has to be done. the ecb is having to carry it through emergency funding to keep greece in the system and will go on buying times. there are talks with other banks and it is a red herring to say it is a national level. it hinges on the ecb and i do not think -- will want to be the man for letting the system crash. >> thank you very much. the director of fixed income at swiss and williamson. i hg reported earnings. up by 3.21%.

we bring you that story later. equities in europe are lower. it comes off lower by 3%. the bond market is selling a yield by 200 basis points. we will talk about the asset markets after the break.

>> welcome back. this is on the move.

time for top stories. worst recession since 2009. it intensified. the gdp up 15% on the annual basis. a cease-fire is tested for another day. deaths are reported. european car sales are up year on year and it is the 17th straight month before the longest streak with a manufacturer's association compiling data. the market expanded. the luxury giant had fourth-quarter sales beating estimates and it offset weakness for the brand. the sales group and the analysts estimates were up with growth. carolyn conan will be speaking exclusively to the ceo and that

interview will be on the program tomorrow. you do not want to miss that. another is the one that beat analysts estimates. caroline hyde says the company is sounding upbeat. >> it is. >> they are saying that we are having year and this is a huge company. they have 700,000 countries and intercontinental. the have the hotel and the adjusted earnings. the profit is up and it is america where they get two thirds of the profits. it is excellent. the second-biggest market is unveiling more and more. the profit is up and china is looking strong. they say the company is talking about macroeconomics and it

brings to mind russia and ukraine. this is a company that says that these areas were a priority. the commonwealth and independent states spoke to the chief executive and he said that he is trying to downplay it. >> russia is a top 10 market and we say, where is the growth going to the -- to be. russia is one or was one. the short term clearly been impacted. we run the hotels on the behalf and the effort structure. there are clearly questions for russia and the market will come back. without russia, u.s., and china, we have india thailand germany, the u.k..

there are plenty of markets where we see considerable growth in the future. >> trying to downplay the issues. it is all about the design for the unique holiday experience. the did the biggest deal in the decade last year in the fastest area of the industry. will they start to mix in it? many want to see the brand doing what it does well. >> it was a strong gains. the stock was down. thank you very much. coming up, no plan b and note to the bailout terms. that is the message from the finance minister as the debt talks crumbled. we have the pressure on him yesterday. we will ring what he said.

>> a breakdown in brussels. there is no plan and no room. the international correspondent press the finance minister. >> if you are not playing games here you not playing poker and

laughing. one game are you playing? >> i have never played monopoly with fake money. i play with genuine monopoly money. let me answer your question i have written that i told my students that game theory is based on realistic assumptions. they are all selfish. i do not believe that the motives are fixed and that anybody is selfish. i think they are capable of rising above the narrow perspective and embracing the perspective of europe. on the question of bluff what

does it mean? what we have been saying is that we want a settlement and these principles for the programs and for the government the challenges the logic of the project and find common ground between them. it is not a bluff. it is the only option. there is no plan b. therefore, no games. >> the polls is coming up at the top of the hour and we are joined i guy johnson. it is not a game. there is a since he got. >> there was an exchange of correspondence and the correspondence that up.

the communication was very different and he would not back the latter of the two. i think that people are going to be flexible. in some ways that is not turning out to be the case. every time there is a sense of flexibility, people withdraw back from that and it is more like game theory than he let on. >> i am looking at the headlines from george osborne and he is very detached from what is actually happening. he says that it is crunch time. it was crunch time last week and the week before that. when is the deadline? >> it goes down to what the ecb does later this week. if you look at the observer, you have to assume it is george

osborne. >> that is guy johnson. the polls is next. here is the market. the selloff of europe by 1.5% and the stock exchange taking a bit of a beating. good luck for the rest of the day. .

>> bailout breakdown. talks collapse. yanis varoufakis said the greek government wants an honorable settlement there is no plan b. >> european stocks fall. the banks take a hit. >> day three on the trees. ukrainian conflicts continues. ♪ >> good morning, you are watching "the pulse." i am guy johnson. >> i am francine lacqua. no de