>> would i rather have the majority of rich people thinking rates are likely to go up next year? yes i would. reasonable even the progress this economy is making. 2 ready for -- rise.ready for a rate mark carney says britain should prepare for liftoff. john's day usa. will today's figures strengthen the case for a december move by the fed? and as insurance and bond giant elian's reports, we speak to the company's cfo.

warm welcome to "countdown." i'm anna edwards. let's -- we've got some breaking news in europe. we also have that interview from mark carney. before that, let's think about in thet that it jobs day united states and jobs day everywhere in global markets it seems. let's bring up a chart that shows you what's happening in treasury yields. you see the pickup at the end of that chart. u.s. treasury yields increasing. their highest in around four months. that is handwrite of that jobs report. 185,000, that's the number to look for. it seems the markets are adjusting their expectations, building in some kind of expectation around a december rate increase from the fed. news get to the breaking

we've got coming from allianz, the german financial giant. they say they are on track for their full-year targets, one of the better things they are saying this morning. nine-month operating profit stable. third-quarter operating profit has come in at 2.4 billion euros, broadly in line with where the estimate was. the net income number, 1.3 6 billion euros. 1.5 billionw the euros that had been anticipated by analysts. giving us a bit more detail on some of the metrics around their property and casualty business, they are saying demand has risen. interesting to speak to the management here. we are going to speak to the cfo later. the company has a strategy update do in november. what can we get handwrite of that strategy update?

let's link these stories together. how the right environment is affecting their business. this is a big bond manager. plenty to answer about that. we are getting earnings from the luxury goods maker, richemont. let's get the caroline hyde. caroline: good morning. a bit of a miss coming from richemont. this is a real refraction of the luxury market. you are seeing sales up 15%. operating profit of 6%. this is below where analysts had been forecasting. say we saw sales up 3%. that seems to be just shy of analyst estimates. they are raising a red flag when it comes to asia-pacific. they are saying the mixed wholesale outlook and current performance in asia-pacific overall, some challenging situations and a volatile environment.

in october, they say sales fell 6% for october. clearly a forward-looking outlook not looking very strong either. this company is very dependent on asia. we will be digging into the numbers in just a few minutes. --: let's get details of 2 let's get details on our solar without, cutting their forecast to 5.2 -- $5.4 billion. that is the new range for their forecast around that number. they are raining that back in. that won't come as a big surprise to some people in the market. according to ubs, many were expecting a reduction in the company's 2015 forecast. we are looking for any insight into 2016. let's look at what they said about existing numbers on the

books. third-quarter revenue below the estimate of 16.2. they see positive free cash flow generation in 2015. they are talking about their south african business writing off 568 million rand worth of cost. they are saying they see actions and developments that will by $1 billion.6 south africa market conditions remain tough. we are getting an update on the global business. the overall headline is that they are cutting that forecast for 2015. let's get to our exclusive interview with the bank of england governor. needsarney said the u.k. record low interest rates for a while longer because of the slowdown in china. mark carney added that a hike is on the cards and advised that it would be prudent to prepare for it. he spoke exclusively to bloomberg's editor in chief.

guidance wasorward about early stages of recovery and the minimum conditions required before we think of raising interest rates. if you look at the historic reaction of the bank of england, given the strength of the recovery into 2014, the strength of the purchasing managers indices and the growth, historically, the bank of england would have raised rates three times during that the long. -- during that period. towas partly in the hands say, let's see what the retraction in recovery is. that was a sensible thing to do. i think it is give people confidence. subsequent to that, we have ofen guidance about the path interest rates, limited and gradual. .t is so boring it is part of the furniture now. that is a good thing, because

that was a call we made in december of 2013. two years ago we made that call. now that is accepted. and it has been consistent. recently, the challenge we've been facing is what's the right timing of starting the process of limited gradual rate increases. this economy has been making in the judgment of the committee, including myself. it hasn't yet made enough progress. at some point, that will be there. would i rather have the majority of the british people thinking rates are likely to go up in the next year? yes i would. because that is reasonably prudent behavior given the progress this economy is making. to think,want them when rates go up, it is not going to be the all great cycle?

yes, i would like to think that as well. at some point, rates are going to move. not today, unfortunately. this isn't going to top your news. anna: that was the governor of the bank of england speaking to bloomberg after the inflation report from the central bank. a lot of news out of the central bank. bloomberg intelligence's chief with all theomist news flow out of the bank of england yesterday. jamie murray joins us in the studio. preparing for liftoff in 2016, one of the key messages coming out of that interview with mark carney. does that tie-in with what markets, economists, what you were expecting? >> i think most people are surprised at the dovishness of the report.

i think that is the right thing to thing. markets had priced in the first when the forecast was closed. at isteresting to look the inflation forecast. there's still a relatively significant overshoot of inflation. that tells you the overall path of market rates was to zulus. loose.too anna: when in 2016? is this a point of contention for everybody, economists, investors? so, becauseightly it depends on what happens to the u.k. economy. i think most people now feel less confident about taking any particular quarter. we still think may is quite likely. see a weaker recovery and some see it in august-november.

i think all those months are in play. february is probably far too soon. anna: what are the core numbers telling us? you did say it is important to focus on those core numbers, core inflation, because these forces coming from elsewhere in the world, beyond the control of many central banks, he was stressing that it was important that when we see those dissipate, we are not in a situation where inflation is overshooting. what do the core numbers tell us? >> the thing to note is that too is unaffected by oil prices in some sense. you don't have the direct effect, but you have the indirect effect. what our bank has said is that 80% of the undershoot of inflation can be explained by commodity prices, exchange rates , temporary influences. fade, you start to

will see inflation returning to target. we see inflation just a little below 1% at the beginning of next year. let's hear a little more from the governor of the bank of england. there are links between this conversation and the u.s. decision around interest rates. expert --g in another another excerpt from that conversation. mr. carney: it is performing reasonably well. forecast,ourse of our that is material for demand for the u.k. it is one of the reasons we see our economy continuing to progress. i'm confident they will make the right decision at the right time. anna: he says he's confident, jamie, they will do the right thing. market expectations have shifted a lot around the fed. we are looking ahead to this jobs report today.

>> i think it's really important. market expectations are 50-50 on whether december is in play. anna: i think 56% is the chance. >> oversight, but yes. anna: we will call that 50. >> what happened over the past few months is that analysts have over expected on the nfb, and i think most economists have reined in expectations a little bit. our u.s. economist tells me he thinks it will come in below. anna: it would be too simplistic to say if this number disappoints, we won't get a rate rise in december. the fed doesn't necessarily have the same expectations around this number. the fed is looking back over the years. >> it's a really volatile number. it would be on to make your policy decisions just on that.

the fact that the u.s. had a bit of a soft patch, i think that is going to fade when things pick up in q4. it is just whether it happens in time for december or not. anna: jamie murray, chief european economist for bloomberg intelligence. you can watch the rest of bloomberg's interview with mark carney tonight at 7:00 london time. use's what else is ahead for on this friday. german industrial production figures out at 7:00 u.k. time this morning, then industrial manufacturing data from the u.k. , and trade data i think as well. the main event is 1:30 p.m. u.k. time, the u.s. nonfarm payrolls number. find out how many jobs were created in the u.s. in the month of october. that is going to be crucial to the fed conversation. we will continue to dissect that number. later, we will be speaking to

the bce chairman. don't miss that conversation. he's going to stay with us a little while and give us his thoughts on a range of suspects -- of subjects. up next, opportunity or liability? there's no time like the present to expand into china. richemont feels the sting. those stories coming up next. ♪

anna: welcome back. you are watching "countdown." here are the stories you need to know. the governor of the bank of england has said the u.k. needs record low interest rates for a while longer because of the slowdown in china. mark carney also set a hike is on the cards next year. what i rather have the majority of british people thinking rates are likely to go up in the next year? yes i would.

that is reasonably prudent behavior, given the likely path of rights. today's u.s. payrolls data will be watched around the world. suffered jobs engine in august and september of it financial market turmoil and concerns about china. economists predict u.s. employers adding 185,000 markers in october. lufthansa is facing its longest ever strike as flight attendants reject the airline's latest offer. cabin crew are set to hotfoot this afternoon. the labor union has warned that the protest will continue through to next friday. goldman sachs says it's going to promote young bankers faster in an attempt to head off defections. analysts toomote associates after two years and let them switch to different

teams in their third year. top workers will be able to advance to vice president in 3.5 years. it is just coming onto 19 minutes past 6:00. let's talk about china. asset manager julius baer is looking east. the company says it would consider strategic partnerships or investments directly into china. the ceo sees the opportunity and says there's no time like the present. >> the moment is now. what i gathered from my last few months in china is, with the valuation of the renminbi, local investors are looking for financial investment opportunities. with the growth rates looking down, they are looking at maybe diversification. we will be looking at a different model. swiss based luxury giant

richemont is feeling the sting of the slowdown. the company reported first-half operating profit that missed estimates. caroline hyde has been pouring over the details. the luxury sector is struggling a little. caroline: exactly. your buyers in asia seem to be running away. digging into these richemont numbers, the maker of jewelry, fine watches, sales up 15%, but looking at a constant currency basis, sales up just 3%. you also saw operating profit miss analyst estimates. it seems to be jewelry which is outperforming, but leather goods, clothing, not so much. watches, they say they are seeing lower demand. look at the regional breakdown. asia-pacific, sales down 17%. hong kong, macau, this is why

it's so important. it is almost half of richemont's overall revenue. seeing thewe are region contributing about one third of their sales for the first half of the year. interestingly, we saw some stronger retail sales, they say. when looking at a regional basis, currencies are determining what sells. europe, one third of their sales, continuing to the very strong because of tourism. people are attracted to europe because the euro is so much weaker than the dollar compared to previous years. flow tois seeing the where they can buy. theseand how much are results reflective of the broader luxury market?

caroline: i think we've got to see it as a bellwether. you will see the share volatility was so significant back in august. we saw sales plunge in august, but we saw the rout in china, the selloff in that market, really highlighting the effects that could be felt by the luxury market. this is a company that was hurt, particularly with watch sales. swiss exports were down for the month of september. they were significantly down for the third quarter. down 18% in hong kong. pretty poor in the united states. germany, u.k., managing to see positive growth. the euro helping germany and tourism helping the united kingdom. this has got to be seen as a bellwether. luxury has been finding it hard in china. they say october sales were down 6% overall.

this environment remains challenging. anna: thank you very much. let's bring in our guest, james foley. good to see you. conversationa nice about the global growth story. when is your concern around china at the moment? is it around debt levels, manufacturing, where is your concern? jane: i think there are many concerns. a lot of the concerns we had are still valid. the market seemed to be less concerned about china. i think it won't be that long before they do. i think many people have been having difficulty. we've got the rapid rise in debt. we've got this massive overinvestment in infrastructure and housing. that has to be absorbed into the chinese economy.

and we have this rebalancing. we know the country needs to rebalance away from its external sector, its consumer sector, and it's very difficult to understand how they can do that without seeing gross levels drop. anna: how far do you think growth levels have dropped? i read a pessimistic report, really painting a gloomy picture , that growth has slowed to about 3% of the year. the problem is that we just don't know. we see the official data. we saw a report earlier from the chinese news agency saying the president is still talking about 7% growth. anna: we keep hearing this number being floated. 6.5%. some sort of minimum growth requirement for the next five years.

that almost seems to the where the chinese government are going to land on this one. that would raise questions for you. jane: it would. can they manage that? china is having huge domestic expansion. anna: the second-biggest already. jane: so naturally, you will see growth levels coming. but when the economy is starting from a bigger base, it is natural that you will see some pushing and still accommodate huge amounts of employment, which is what china needs to do. talking about 6.5%, -- anna: the chinese government has said the changes they made to the yuan, that was structural, cyclical, wasn't trying to boost exports. the same report saying the government will have to devalue the currency by another 25%. jane: perhaps.

we could see a very aggressive devaluation. there is risk that we will see another devaluation. china, what about we have is slowing growth, very weak cpi and tbi data. if you consider that in the context of japan or the eurozone, they've allowed their currencies to slip. guy: anna: jane, thank you very much for that. coming up on "countdown," -- mr. carney: would i rather have the majority of people thinking rates are likely to go up next year? yes i would. that is reasonably prudent behavior, given the likely path of rates. anna: more on that exclusive interview with mark carney as he warns britain to prepare for a

rate hike. stay with us. mark carney speaking to bloomberg's editor in chief. that interview took place after the inflation report was released yesterday. more from that interview coming up. ♪ we live in a pick and choose world.

love or like? naughty or nice? calm or bright? but at bedtime ...why settle for this? enter sleep number. don't miss the semiannual sale going on now! sleepiq technology tells you how you slept and what adjustments you can make. she likes the bed soft. he's more hardcore. so your sleep goes from good to great to wow! gift the best sleep only at a sleep number store. save $500 on the veteran's day special edition mattress with sleepiq technology, plus 36- month special financing. hurry, ends wednesday! know better sleep with sleep number.

anna: welcome back. you are watching "countdown." here are the stories you need to know. today's u.s. payrolls data will be watched around the world for its influence on the fed's rate decision. america's jobs engines busted in august and september on it market turmoil. economists surveyed by bloomberg predict u.s. employers adding 185,000 workers in october. lufthansa is facing its longest ever strike after flight attendants rejected the airline's latest offer. cabin crew are set to halt work

this afternoon. o. labor union has warned that the protest will continue. exploring options. france's biggest company by market value aims to cut cost by 1.5 billion euros to help sustain earnings growth. in an exclusive bloomberg interview, but bank of england governor has said the u.k. needs record low interest rates for a while longer. mark carney says a hike is on the cards next year. on the question of whether the fed will raise rates in december, carney says he's confident his u.s. counterpart will do the right thing. we see them growing in the high twos. is material for demand for the u.k. and one of the reasons

we see our economy continuing to progress. i'm confident they will make the right decision at the right time. anna: breaking news for you coming through from the spanish telecoms business, telefonica. shortened, that has come in at 3.69 billion euros, in line with estimates. earnings in line with the 2015 goal according to the business. operating profit also completely in line with estimates. on the net number, there is caution. that was against an estimate of more than that. they say they are in line with their 2015 goals. there was a lot of focus on stabilization and possible weakness going into these numbers. spanish revenues do seem pretty stable. let's return to our conversation around central banks. we just heard from mark carney.

our guest says she expects the fed to hike interest rates. let's get more from jane foley. the markets increasingly coming around to this idea that december is back on the table. we sort of lost faith in that concept through september, and now we are back on track. jane: it depends who you ask. it -- anna: economists never wavered. jane: economists remained of the view that they would go. at money market is looking the data, particularly octobers data. it was disappointingly weak. tonomists were more likely listen to what the bankers were actually saying. in october, around eight of the fomc guys were still on the cards. is that the vast

majority, including yellen, were suggesting that. anna: do you think too much was made of that dissent? those dovish comments. did you think too much was made of that? jane: if eight of them are saying they could go, it is a numbers game. are good arguments. if you look at inflation in the u.s., it is still very moderate. i think in today's data, we have to look at the earnings number. there is supposed to be a moderate uptake in the earnings data. look at the year on year. significantly lower than it was before the financial crisis. data so this is the wage we are going to get. demand, order to create we need people to have extra

money in their pockets. we need wage inflation. that is still moderate. when you think about the monetary tightening, the dollar, still the best-performing developed world currency in the last year. from that point of view, i think what we might have is a rate hike. yellen suggesting a rate hike in december is likely. we might have a very dovish commentary. perhaps like carney. feature of the bank of england conversation yesterday was china. fed --cently, the [indiscernible] do you think -- how much

emphasis does the fed put on those international factors? jane: it does put emphasis on it. the market reacted not very nicely a month ago to its statement. we had the market pulling back significantly. generally speaking, when the fed has said there are dovish factors out here, we may not go, risk appetite increases. they were concerned about global events. , and i thinkthat perhaps that's lie. i think they do of course look at the implications coming from china, from emerging markets, from the eurozone, and clearly, if they didn't look at that, the currency itself could knock their policy projections off course. anna: you mentioned the impact of the wage number, wage data

today in the payrolls report. linkr was defending this between wages, when they go higher, that will put upward pressure on inflation. lots of people have been questioning whether these links still exist. in terms of wage inflation and demand, yes. in the u.k., this is quite interesting. we've seen a lot of wage inflation. we don't know if it is going to taper or accelerate. that is going to be crucial to when the bank of england goes. in the u.s., there isn't that much wage inflation. we can still conclude that when we do get it, there will be more demand driven inflation. fisher suggested that we weren't that far off from the fed hitting its inflation target. many economists would argue a little bit with that. it does seem that many of the fed officials did have that view. if they had that view, they are

more likely to hike. anna: what is guiding euro-dollar? is it what the fed is saying or what mario draghi is saying? jane: i think it is both. we've got draghi suggesting they could ease again in december. the fed suggesting they could hike in december. we are seeing euro-dollar pressured as a result of that. the interesting thing is to what extent the fed could hike interest rates. i think they could do one. if that is the case, perhaps the dollar will lose a little bit of momentum. interest rate have been very key in the currencies. i think the fact that the ecb could cut again in december is in the back of carney's mind as well. anna: all watching each other it seems. jane foley stays with us on the program. 6:38 in london. refugee centers will be set up in germany to help stem the flow

of migrants. let's get to our international correspondent in frankfurt, who has been watching developments around the story. what did they specifically agree to? why was it so hard to come to a compromise? : the german press is puzzled as well, why we had to wait until thursday. what they have is reception centers. they are not calling them transition zones. we have 3-5 of them. two of them would be in bavaria. it is supposed to accelerate processing time, especially for those who have little chance of winning asylum. why couldn't they reach this on sunday night? it is still going to be a difficult decision in germany. how are you going to care for all these people? angela merkel said it was

important they really work on long-term integration. merkel: our main point and integration to stay in germany. within the integration process, we want to bring closer our values and legal systems and show them germany is an open country with a constitution we are proud of and a good reputation in the world. csu, the president of the he's been talking about an upper limit finally having some sort of total tally on the number of refugees germany can accept. he did not win that. merkel was clear that there is no upper limit. has merkel's party been hit by the way it's responded to the refugee crisis? there's been plenty of speculation as to what this is going to do to her legacy. week, welier in the

spoke with one of her coalition partners. he said the coalition wouldn't collapse over this. you clearly see a softening of support from merkel's coalition. they are down 3% since the last survey. it has been a steady progression of merkel's support. her personal popularity is falling as well. , we don'tee the spd see them moving up. we seem to be stuck right around 24%. you see collapse in merkel's support but not much upside for the spd. anna: hans nichols with the latest on the refugee crisis in europe. we will take a short break. up next, allianz slides. asrd-quarter net income fell pricing pressure and low interest rates spike. we speak to the company's cfo. that is coming up next. ♪

anna: welcome back. you are watching "countdown." here are the stories you need to know this morning. the governor of the bank of england has said the u.k. needs record low interest rates for a while longer. mark carney also said a hike is on the cards next year. havearney: would i rather the majority of the british people thinking rates are likely to go up in the next year, yes i would. that reasonably prudent behavior given the progress this economy is making, given the likely path of rates. anna: today's u.s. payrolls data will be watched around the world. america's jobs engine suffered in august and september. there was financial market turmoil and concerns about a hard landing in china. the u.s.s estimate

economy added 185,000 workers in china. disney has posted earning that beat analyst estimates. parks saw a 7% increase in profit. cable networks, the source of so much investor worry, boosted profit by 30%, led by espn. espn.feel bullish about we like the environment because we think long-term, it gives us more opportunities. i should add that espn has been at the forefront of using technology to create more compelling product for its consumers and to the present on more platforms. anna: allianz said third-quarter profit dropped 15% in the third quarter. europe's biggest insurer saw a net income declined by 1.36 billion euros, missing analyst estimates. back to the earnings reports now. just getting others through. let's bring those to you.

the business does shipping. the ceo saying they are keeping the full-year outlook for the business. sales coming in just shy of estimates. the estimate was 10.2. they talk about how they see no change in their full-year underlying profit compared to previously. full-year underlying profit $1.6 billion is their expectation. in terms of other numbers, the ebit number coming in broadly in line with estimates. they do say their oil business still sees full-year profit significantly down versus 2014. this is a business we already heard from quite recently. they announced they are going to cut 12% of its workforce in its oil unit as part of a plan to reduce cost by 20%. clearly a business that's very much in transition.

let's get back to those numbers that we had through from allianz , europe's biggest insurer. allianz own earnings posted earlier on. joining us from unit is the ceo of allianz, dieter wemmer. thanks for joining us. let's talk about these numbers. could you explain in more detail what it was about the assets management that led to a 15% drop in profits? give us some insight into the driver behind that, if you could. dieter: we are actually very proud, because the main impact of the numbers comes from the volatility in the financial markets in q3, which should not surprise anybody. our full-year results are still on track for our outlook. , which wemanagement are dropping for quite some time, here, we see also the

first green shoots. pimco's outflows have reduced substantially pimco's cost income ratio improves. we have very good performance in the third quarter. for october, we can report the first net inflow month in quite some time for pimco as well as our asset manager. it also continues to show strong inflows. pimco is successful. in all continents, we had already in q3 a lot of inflows. u.s. starts to go in the right direction as well. anna: would you say that following the turmoil created in the pimco business that your business is now putting that behind you? you've turned a corner on that story? dieter: i think that is

absolutely correct. i think we are turning and it is going in the right direction. anna: there is a lawsuit pending , bill gross has launched a lawsuit against pimco. do you have concern about compensation practices at pimco? do you think part of the impact of this lawsuit is going to the further analysis of how compensation is paid? acquiredhen allianz pimco, we bought 70% of the profit stream. 30% stayed at original partnership. that is the history of it. -- ink that is what we are with the departure of bill gross, i think this is moving to the next generation solution.

anna: let's talk about the interest rate environment. when do you see the fed putting interest rates up? do you buy into the december argument? i think i'm buying into the december argument, but depending on how the global economy is showing the latest. then we will see in which direction the december decision will go. you have just shown the mark carney statement pointing in the same direction. we have built our life business very strongly on a low yield environment and we make ourselves independent of this decision. that will drive the success of allianz in the next years. anna: do you think that when we start to see interest rates go up in the u.s., it will have a markets,t on the bond

perhaps even triggering a bear market? are we looking at that kind of change of fortunes for the bond market? movementsthink the will be so low and so slow that i do not see a major change for bond investment. i think, for me, bond investment offers a lot of upside. can i just ask you, you've got a strategy day coming up, or a capital markets day, any insight you can offer either ahead of that as to where the strategy is heading, any changes to look ahead to? about our will talk new ceo, new agenda. we talk about simplicity, how to become more digital, how to build more organic growth, and how to create a better

collaboration within the company. anna: thank you very much for joining us, dieter wemmer, chief financial officer at allianz. jane foley is still with us. we were talking about the divergence in monetary policy. dieter wemmer suggesting it is not as material and impact on his business as many thought it would be. we are looking at the divergent situation. could we be in the situation where in the same month, we see the fed move and the ecb do more qe? looks as if that's exactly what we're going to see. because of the potential implications that could have on the dollar, and the further dollar appreciation acting as monetary tightening in the u.s., we've seen a lot of company profits worried about dollar strength. suspectat, that's why i we might have some dovish

commentary from the fed even though it looks as if they are going to hike interest rates. similarly, with respect to carney, i think he's very mindful of what the ecb could do. the ecb could push down the level of the euro. if that triggers further appreciation in sterling, there's monetary tightening already. carney was mindful of the ecb. i think the ecb would very much welcome a weaker euro. anna: amazing how many central banks around the world are loosening policy. list some of them in your notes. the ones that are moving or could be. ecb, boj, riksbank, r.b.i., amazing that we have this conversation. everybody, apart from the

bank of england and the fed, have lifted in some way this year. a vast majority of those are likely to loosen again. this, i think, makes the likes of carney and perhaps the fed very wary. if we look at the back gave your of the u.k., the exchange rate in the last few weeks, when draghi came out with a very dovish call, the u.k. exchange rate immediately went higher. just because draghi was dovish, the u.k. got monetary tightening through the exchange rate. that is i think my carney is extremely cautious right now. anna: what do you make of the latest data out of germany? again, it has been gloomy data and perhaps some of the survey data has not been as bad as people thought.

we do have a better overall climate in the eurozone, certainly, but given all the loosening, it is still disappointing that we have these low levels of growth. mindful ofthink very the headwinds blowing across the eurozone from the emerging markets in china, etc. easing, we see further what form will that take? jane: more quantitative easing. it does seem that a rate cut could come too. us a jane foley stays with little longer on the program. we are speaking exclusively to the chairman who says the biggest risk facing u.k. business is brexit. that conversation up next. we will also get his thoughts on the u.k. economy, the global economy. he will chime in on what we heard from the governor of the bank of england as well around

interest rates in the u.k. a wide-ranging conversation. michael rake joins us after this short break. here's a live picture of london. ♪

>> what i rather have the majority of the british people thinking rates could go up next year? yes i would, because that is reasonably proven behavior given a likely path of the economy. anna: ready for a rate rise? in an exclusive interview, mark carney says britain should prepare an 2016. usa, will jobs figures and strengthen the need for moves by the feds? ast metal cuts its estimates third-quarter profit fell.

♪ welcome to the program, you are watching "countdown." it is just got 8:00 and germany, and let's get to some data coming out of germany. live industry output falling by 1.1%, the estimate here was for an increase. let's turn briefly to jane foley back in the studio. it seems like yesterday we got some numbers from the german economy that was declining. jane: this will feed those expectation that we could see further easing from the ecb. anna: does a weaker germany have more sway than from other parts? the largest economy, so from that point, yes. anna: let's talk about some corporate news we have had in the drug space, caroline, what

have you got? the acquired a new pharmacy for $19 a share. a best in be adding class treatment currently undergoing regulatory review. the acquisition is expected to country beach to product sales in 2016. ica'sis part of astrazen return to growth strategy. we will see how much that is an aggregate value. and how much they will be charging for zs pharma. they're trying to buy out new areas of growth, this is all about trying to have a future pipeline for drugs. runninge old patents out, and they're seeing more

competition. so now they are really trying to add to their future pipeline. this is what they are saying they are getting, the board on this acquisition had unanimously approved the terms. now we see how the shares react. anna: that does some i quite a preview. like quite asound preview. let's get some more breaking news from uk's telecom business. they have been investigating the hack that took place on their data. it seems that over the last week or so that has been the picture coming out of this business from the initial estimates that happen on a wide scale it is far-reaching. gradually have increased expectations, isolating exactly what it was that happen. they said that the access information of 4% was passed any personal data.

the scale of the attack was much more limited, saying that talktalk led to financial loss. to figure out just how penetrating this hack was, and their scaling back that damage. caroline: the owner of british airways is announcing some changes to their management. they are getting a new cfo, this is a british airways overall. they also having an executive chairman of british airways. the current executive chairman will be retiring. they are saying the return of income will be about 15% from 2016 until 2020. they're commenting on their overall view of planning goals for 2016 until 2020 and increasing cash flow.

this is a capital market announcing some changes at the top. anna: caroline, thank you very much. let's get back to the macro story, in an exclusive interview with bloomberg, the bank of england said the u.k. need to record low interest rates for a while longer because of the slowdown in china. added that aney hike is on the horizon next year. he spoke exclusively to bloomberg's editor in chief. carney: recently, the challenge we have been facing is what is the time to start that process of gradual rate increases? this economy has been making , in the judgment of the committee, it is not made enough progress to start the process. at some point, that will be there. what i rather have the majority

of the british people thinking that rates are likely to go up in the next year? yes i would, because that is reasonably prudent behavior giving the progress this economy is making. do i also want businesses to itnk that when rates go up is not going to be the old rate cycle of very sharp increases? yes, i been like them to think that as well so they can plan accordingly. at some point, rates are going to move. if not today, -- it is not today, unfortunately. anna: he also said they are working on the possibility of britain leaving the european union. dok carney: we do not to contingency planning for extreme risk. we are on public record saying we are doing contingency planning for this. we never disclose our plans in advance, and we always disclose our agency plans once the issue plans onceingency

the issue has passed. > i think that is a realistic question for both those that want to stay in, or get out. which should they try to cover? the issues: look, around our relationship with the european union we detailed not just in a speech, but in an associated report. i think there is a general point, from a macroeconomic perspective, that the u.k. runs a very large account deficit that is natural given that this economy is growing more rapidly. that deficits needs to be , there should be largely long-term lows. it is important this economy continues to be an attractive destination for foreign capital. that is a product of many

things, our contribution to that is monetary and financial stability. that was the governor of the bank of england, mark carney, talking to bloomberg's editor in chief. that took place after the inflation report was released yesterday. now on the program by the bc chairman, amongst other jobs that he holds down. it is great to have you on the program. let's start our conversation talking about europe, jane foley is also still with us on set as well. in your view, is the u.k. staying in europe? mark carney putting a lot of emphasis on the current the deficit saying we need to have that continue to be financed by long-term investment. does that sound to you as if he wants to stay in europe? >> i think the governor has been always clear that from a

stability point of view it is important that we stay in the european union. we would be much stronger and much more likely to attract investment, and that much bigger interest markets. -- of those would indicate just the fact that you referred to a contingency plan as extreme risk shows that. of anyour co-treasurer organization that wants britain to stay within europe. we're going to give from david cameron next week, he will publish a letter to the eu president. what needs to be in their? mark: i think we're very clear about this, we always said we need reforms from a business perspective. we want to those to be really included, and expanded. obviously, we want to see what is already happening and a halt to unnecessary regulation.

they can only do think of a european level that is really necessary. similarly, we completely agree with the prime minister that we need clarity about the eurozone position versus the non-eurozone countries. most business across europe wants that. on that basis, we are very sensible if we stay constructively engaged on improved competitiveness which will lead to more investment. anna: i know you begin many businesses, are they looking for reform from the labor market policy? of these details, and rules around labor markets, some british employers don't like that. they want cameron to address those? mike: we have seen how flexibility has led the market. recentlyhat has happened, we have a million jobs created in the private sector,

jobs in the state sector, and the avenue seen some places in flexible and that leads to very high levels of unemployment. a number of countries already trying to make the reforms necessary to bring the young people back to work. anna: conceptually, does it seem difficult to craft one set of rules for the euro zone countries? what are the barriers to getting some official recognition of their being two types of eu membership? there are some particular it cannotfortunately, create the master rules which has led to some of this problem. they need to be completely clear themselves about how they maintain the strength of the euro, that is really good for us. we need a strong euro. at the same time, we need to make sure that the voting patterns does not lead to london being disadvantaged. i think that is the question, we

need clarity around how the euro zone will operate. anna: i know that you are in favor of staying in europe. others have a different view, this could be more divided than britain as a whole. can you talk about being subject to a common tariff if they left the european union, many think that would not actually happen because it would be in germany and europe's interest to sign a quick trade deal. there are counter arguments, aren't there? mike: i think the reality is that the city of london is very clear that it is good to stay in the european union. i think we have to be very realistic about what would happen if we left. exports of ours are 45%, depending on how you measure it,

to the european union. gdp.her, that is 16% of the u.s. it only this week that they're not interested in deals with the u.k. on its own they wanted as part of the european union. anna: but they also said in terms of trade deal that is not about the size of your economy, it can be as important to have clarity of mission. if you're just the u.k., you don't have to worry about what all the other 27 members think. that was possible before the last referendum, i do not think that would happen today. the vast majority want the u.k. in the european union to be a pragmatic country with an open economy. i think it would be taken very that would beft, damaging to the european union and could lead to other countries thinking av this is a way to not have to obey the rules. i just don't think that what happened. we would be required to obey the

same rules. do you think there is something conceptually standing in the way? one set of rules for those with the euro, and one without? jane: we can take a study like countries like norway, many believe that norwegian fisheries are disadvantaged because they do not have the same capabilities as the country within. they don't have anyone at the table. at the same time, i have had people from norway say directly to me that unfortunately, for them, they are disadvantaged. that the rest of europe would be very willing to try & a trade agreement with us. we don't actually know that. they could penalize us. we will return to this in just a moment.

it is very difficult to say what policy britain would impose, and the rest of europe should any brexit happen. thank you both very much. mike will stay with us. to give you a brief word, if you have any travel plans there is a strike taking place at the german airline. on a specialng timetable and regret the decision by the union on the strike. they say other airlines are not affected. they will be publishing a special timetable in due course this morning. keep an eye on that if you have any plans. we are being warned by the cabin crew -- or by the unions, this could have an impact up until next friday. let's check now in the asian market session. update.t there for an good morning, everyone.

let's start with airlines, singapore airlines one of the stocks where following. it was a local story, you see the stock did not start trading until the mid day because it was halted this morning. it was an offer to buy out part of the company, and make it private. tiger weres of factored into the overall result. that budget union -- unit is directing traffic. the mainline carrier is facing intense competition from asian rivals, and from the middle eastern carriers. that is what we're seeing in the airlines, it will finish the day down by 0.8%. look today, down some of

the session. you see the hong kong market down by just about 1%. we're watching brokerages, that is the focus on the mainland as well as in hong kong. upside, you saw a nice move for some of the tech posting continue to gain. galaxy entertainment showing some rotation on the macau casino ship. we did see energy-related shares under pressure. standard -- it is hong kong listed chair and falling precipitously today after they took a hard view in the company's outlook given the latest results. they were downgraded standard .hartere the shares fell as much as 7% here in the hong kong session.

that is one of the stocks you want to continue to watch. that is the market today, and was send it back to you. anna: summon to watch, thank you -- something to watch. up onn london is coming 18 minutes past 7:00. in an exclusive interview, the governor of the bank of england said the u.k. needs record low interest rates for a little while longer because of the slowdown in china. mark carney said a rate hike is also in the cards for next year. what i rather have the majority of the british people thinking that rates are likely to go up? yes i would, because that is reasonably prudent behavior given the progress this economy is making any likely path it will take in the future. anna: today, u.s. payroll data will be watched around the world . inrica's jobs suffered

august and september amid turmoil and concerns about a hard landing in china. --y predict u.s. employers german industrial projects in -- production unexpectedly slipped in september. that compares with a median estimate of a gain in the bloomberg survey of economists. astrazeneca will make a purchase of zs pharma. they say it will have an aggregate value of about two $7 billion. the bank of england governor as were -- warned that the slowdown could cause some concerns in economy such as the u.k.. a rise in to see

china's nonperforming lows as the world's second-largest economy rebounds. anytime you had a sharp increase in credit growth as you have in china, and more broadly in japan and asia, one can expect that there will be an uptick. we have not yet seen that. the increase in private credit and the increase in aggregate credit has doubled to more than two times gdp. as the economy slows, particularly as nominal growth slows, to put a figure on that chinese nominal growth was about 20% in the immediate aftermath of the crisis. it has slowed to just about 6%. the debt dynamics get more difficult, and one would expect it would be an increase in nonperforming loans, and banks would have to adjust. that they have to actually started not performing before you measure them.

it is more perspective, then actual. i would underscore that they have a strong capital position. i think chinese authorities are aware of these risks. there is a process of adjustment. that process through the financial sector is one of the reasons why we think the growth of their will slow. people alwaysny look at the rebalancing of the chinese economy is a move towards consumers in a way -- and away from this export model. it is not seem to be a good thing, necessarily. ark carney: i think it is good thing. i think it is positive. we are seeing a pickup in services. there is -- that is one reason why we are seeing a breakdown in commodity prices in chinese growth. it is a positive thing. we are seeing financial reform, even this month or last month the deposit is positive.

some of the funds ability is positive. rebalancing, and in the median term a more sustainable rate of growth. it is the second biggest economy in the world, these processes are never perceived smoothly. we all have to deal with the bumping this that comes -- bump iness that comes with that. anna: that is mark carney speaking with bloomberg senior editor. let's bring back in michael rake who is still in the studio. let's talk about the china growth story. are you surprised at the extent to which they have to evaluate the u.k.? really, you have to take into account we're in a new dynamic. i think the china story could surprise people in little bit.

that is a healthy thing, we need -- i think there is an effect into emerging markets. we saw a collapse in oil prices. the set pack -- a setback in people's confidence is that we would have less of growth, and that has concerned the market. we had a number of employment figures have been not quite as good. that is probably on balance, the theory is we must keep a close eye on that and make sure we don't, and anyway, inhibit the recovery we have in the u.k.. anna: how much does it matter to you at the chinese growth engine is not quite as powerful as it once was? officialng the figures, they are not what they once were, it is hard to keep growing. mike: i think that is the point. their growth at 6.5% now it's

equivalent of 10% a few years ago. it will bensumption, healthy a we will see manufacturing moving to other areas of the emerging markets. some of that will be to the united states, and europe. i think this is part of a cycle that we need as the economy matures. think there is still the potential in global trade as there once was? taking a look of the global picture, we talked in the past inut bringing down barriers africa, or between large developed economies. does it still have the potential to deliver upticks in gdp that it once did? : i think we will continue to see growth, one of the things we discussed that it is critical that we get trade treaties, the regional trade treaties, done. clear that that does create jobs, it does create growth.

other concerns have lifted people out of poverty. that is critical, and combined with that is the answer to technology. anytime you get a relief and technology, you get to growth in the economy. adjusting to that is critical. watch as different countries emerge at different times and mature at different times. anna: what is going to delay delivering the benefits of that for global trade? will it be concerned about diluting worker rights? for example, around the transatlantic trade deal? mike: exactly that. toshould be critical actually investment in jobs and could add 3% or 4% to gdp. if it is about jobs, about investment, the small and medium companies will benefit equally if not more than bigger companies. we have not done a good job of

explaining that, because it is critical that we have not had a wto treaty for a long time. we have to try to build it back to that, and to that, and make the point this is the way you could create investment in jobs. anna: where's the argument falling down? mike: i think it is understandable that we've had seven or eight years and downturn in recession lasted a very long time. the incomeom end of scale, they felt that they have suffered, and they have a. have.as create -- they that has created an environment of mistrust. we have to try to reestablish that trust. anna: thank you very much. mike will stay with us a little longer on the program. you can watch the rest of that interview with the bank of england governor mark carney tonight at 7:00 london time. next on the program, deutsche

land disappoints, more negative data out of germany. we had low estimates yesterday on the german economy, more this morning. he does next. -- details next. ♪ anna: welcome back, you're

watching "countdown" this friday morning. with exclusive interview bloomberg, the governor of the bank of england to the u.k. needs low interest rates for little while longer because of the slowdown in china. they also said a hike is on the cusp of next year. havecarney: but i rather the majority of the british people taking rates are more likely to go up? yes i would, because that is reasonably prudent giving the progress that the economy is making. today's u.s. payroll data

will be watched around the world. it could have an influence on the fed to december rate decision. -- fed's december rate decision. they're also watching for a heartland in china. zeneca sales have exceeded expectations as a seven-year revenue decline and its spanish -- that came to an end. german production dropped unexpectedly in december. that, compared to the median estimates in a bloomberg survey of economists. let's go straight to our international correspondent cols. nichols -- hans ni what exactly is happening given the german economy? it is betrayed and that is

concerning. it was revised upward, we also had a negative reading this month. yesterday, we had those factory orders that showed three months of a negative, a lot of that is china. outside of the euro zone where the decline is. today, we had another negative number. last month we had a similar now we can confirm the trend. that was you it exports decreasing. right now, this month is replaying, to negative numbers so far. much.thank you for it hour untilhalf an the opening of the final equity session of the week here in europe. let's get a look at what we're being told. at the start of the trade, this is what we're told as caroline

suzanne, you see that the european equity markets expected to see a slight bias in the downside. we might be in a bit of a holding pattern as we wait for that jobs data. 185,000 is the number to look for with that u.s. jobs data. in another voice, jonathan bell, joins us. ake is still with us on set, as well. we were having a conversation earlier based on what came out of that interview with mark carney about the path of interest rates. are you concerned, or interested in the fact that we see emergent paths emerging? many other parts of the g 10

looking at taking action to stimulate their economies, or cutting interest rates. i think it has a huge impact on markets, actually. we have already seen moves in the last few months about concerns with the u.s. interest rate. in the u k, we will be behind the u.s. when we first move. it may be in 12 months time, or so, who knows. the euro zone is well behind that. they have further qe to comment. you have divergent managing policies. the u.n. cabinets is december is the month for the fed to hike interest rates. the market is increasingly building that in. i think so. september was a mistake, there was surprised about what it meant, did they know some in the market did not?

i think coming into december, against -- unless there is really catastrophic news, they will raise rates. anna: do you think the conversation around the bank of england is linked to the fed? they are the only ones talking about a rate hike. mike: absolutely. sometimes the markets phil schizophrenic because you think at september holding level would support the markets, because they are now worried that there was something we don't know. then, are we losing the tools we will need if everything is a downturn in terms of interest rates? i think this whole question of is exactly right. watch in the currency's move in relation to that is going to be -- in the markets as well, part of what we will have to watch. anna: do you think it is a show of strength, perhaps, to the fed? it's needs to show that they can

do this, it is been so long. is what itloyment should become a more or less. where itation is should be, gdp is where it should be, so you should at interest rates at a more normalized rate. it would take some a given negative to say we can't raise than this time. that is why i think you have a rate rise coming in december. anna: we have seen treasury yields adjusting to this ,xpectation around december sometimes pushing a little higher in expectation of what the fed might do. do you think they'll carry on into 2016? jonathan: we will not have a big arise, it will not be much. with that, you will have bond market weakness in the u.s.. it is a minimal weakness, if you look at the long bond market, it is just yields being slightly less than inflation consistently

over time. anna: is that what we're looking at? jonathan: i think that is what we're looking at. look what happened before the 35 year bond bill market, that only takes a little off each year. : i completely agree with that. no one expected the length of this. of the bond market low interest rates below -- with a low interest rate. talk for the quarterly earnings season. jonathan, you have been pouring over the details of the earnings growth story. hasn't disappointed you -- has its disappointed you? they have beaten analysts expectations, those were pretty low. if you look at the u.s., earnings are down 3%, slightly better than analysts expectations, but even if you strip out energy you only have an increase of 3% which could

mean that for the full year you get a 0.5% rise in earnings. we have the support from military policy, but we have not had sufficient support this year from our earnings. in europe, it has still to come through. fromu look at the results the last few days, they tell you everything that you know already. anyone exposed to commodities is suffering, anyone exposed to asia and the industrial outboard -- outputs numbers, you are struggling. anna: jonathan, thank you very much. mike, let's carry on the conversations about the companies you are involved in. lbt, you had some good news in the form of the cma approving the deal with ee. any idea of a time frame? mike: it is provisional

approval, so we are very happy about that nonetheless. british a very strong company could increase competition. it will take until january 16th when people can continue to make inputs based on the provisional findings. yes, so far, so good. anna: if you look at the pound-european consolidation -- we are able to offer superfast broadband, which is essential to our competitiveness. potentially to see further consolidation of european telecoms. americans are very large, and we need to understand that. anna: how will the craft their path through that? mike: the big stage is finishing

that acquisition in creating a future for the company. it will create competition, it will have a large market cap that feel as opportunities to do things in the future. anna: we heard from talktalk this morning the scale of the seems to bescale smaller than first feared. when i spoke to someone itsntly, it is reviewing practices. what has come out, what is the sector learned? all, we're an arms race, and none of us can be complacent. export -- expert hackers. we need to really understand that the perimeter has to be fully protected.

you have to look at this very closely, and continue to sort of avoid being leapfrogged into a problem. it is a huge issue. it is bad for the industry, but if there is something to talk about, it makes everyone look at their systems, their controls -- speaking,rally there's the u.k. have a problem when you have hackers in their teens being able to cause this kind of damage to the big british business? mike: put it like this, there is a shortage of people in the cyber security area. you have to enforce those, part of it is ensuring we do. i think they are really beginning to get this up there, i think that are different ways to do this. it is important we have a technology subcommittee. challengetest and what we're doing but it continues to be alert to what is

going on there. that let's step away from and talk about other businesses you are involved with. ys, there is been talk your going to leave the board, can you update us on that? mike: look, i have been very on nineat i will be years next year, and we were keen to make sure we had a new chief executive. , and i extremely helpful think at that time hopefully i will leave at the right moment. anna: we will watch out for that. he wants to reposition the investment banking business, how will the reposition it in a way that others could not? ine: i think his experience fund management and banking in the whole area of banking, he

has had a lot of global experience. i think you can really build -- i think he can really build on that. i think it will be much more focused on new york, and london. we have a lot of non-core assets that we have to introduce. we need to continue to accelerate that. in a lote will bring of knowledge, and confidence in the investment bank. we should end up with a very good, repeatable invest -- reputable investment bank. anna: thank you for spending the time with us. up next, we are a few minutes away from the start of european trading. we tell you which stocks you need to keep an eye on. neca is one of many on the list. ♪

anna: welcome back, you're watching "countdown." an exclusive interview, the governor of the bank of england to the record low interest rates could be there a while longer, but mark carney also said a rise is in the cards next year. mark carney: put a rather have the majority of the british people thinking rate will go up next year? yes i would, because that is reasonably prudent behavior given the progress this economy is making any likely path of rates. anna: u.s. payroll data will be watched around the world, and its impact on the fed's december rates decision. aboutcould be concerned the hard landing in china. economists predict u.s. employers added 185,000 workers.

pharma,eca will by zs they said the transaction will have an aggregate value of $2.7 billion. the our record chinese exports, the world's largest fuel maker also says profits fell 29%. just a few minutes away from the start of the european equity trading day, caroline had of the companies you need to keep an eye on. caroline: a lot of corporate stories, let's focus in on the one that is a hell whether for the in -- bellweather for the entire luxury industry. have seen some cause for it to fall as much as 4% this morning. some of the luxury jewelry you

know, watches, they are really highlighting that things are getting tougher. they saw a challenging first half, profits missed analysts estimates. the asia-pacific area was particularly week in hong kong, macau. uarters will 2 q remain challenging as well. they give us a sense that an october sales were down 6%. no and insight in terms of that pain. meanwhile, asia-pacific is really painful. a flurry this morning, we're getting -- these are reports that we could see more consolidation within the chemicals area. they just saw the chief executive leave.

now the swiss agrochemical company is potentially buying up dupont, the u.s. chemical company that is maybe restructuring or breaking itself up. tough one aso be a many are reporting in the press that dow chemicals could be eyeing dupont as well, but syngenta could become a competitor, rather than prey. astrazeneca, meanwhile, splashing the cash buying zs pharma. this is a big premium, this is foret new drug treatments high potassium level illnesses that can cause chronic kidney disease. these drugs could be best in class being produced by zs pharma. anna: caroline, thank you.

in the world of data, there was only one thing we are watching today -- the u.s. jobs report. let's bring in jamie murray, welcome back. only numberthat the that matters? jamie: it is one of the key data points. payrolls are extremely volatile, it would be kind of foolish to set policy based only on a volatile indicator. i think the fed is looking at broader indicators, they probably have an eye on participation rate. it is not just that, but if you get a week number -- weak number . anna: how weak would it have to be to make december unlikely?

actually, they fed is not hanging on every single month, what they are looking at is the broad picture, month to month of job creation. is it really possible that this number could be so weak that it be rails that decision -- derails that decision? : you could, it could be big enough to see something that is happening in the economy. be gdp growth, they will worried if momentum will be sustained going into 2016. that's will tell you it is not being sustained as much as they hoped. all this job creation, there is not been quite the momentum around wages some are hoping for. jamie: it is the same in the u.k. there is a question, is it the lag effect, would this take time to feed through, or has

something changed? also asthe u.s. questions over participation being really low in the u.s. economy. is that dragging on wages as well? anna: janet yellen previously said she was happy to run the economy a little bit hot in those terms. what about on employment rate? there is estimation it could come down to 5%. jamie: there is always a tendency to pick a low number. is, and the u.s. and the u.k. we have seen long-term unemployment at the structural then you dot 5%, feel that pressure is there to lift rates. anna: thank you. everyone, no doubt, knows a man very interested. he is about to join us on the , i'm surethan ferro

you are all about the jobs today. jonathan: that is a good gas. it is the penultimate jobs report before the final federal reserve meeting. does it need to be good enough to give janet yellen the conviction to rise rates, or bad enough to stop her? we also have more on the exclusive interview with mark carney. when he is flying so low, that is a different person from the press conference mark carney. we will discuss that, and the german industrial data. brilliant guests to talk with. bonds, bonds, bonds, what more do we need? anna: thank you, very much. jonathan will be back at the top

of the hour with the "on the move" team. that will do it for "countdown." flattenxpecting to see at the start of trade. you can see where it says eurostoxx. nothing to get too excited about, but remember that it is jobs day in the u.s.. that means we will be looking at that jobs report, how many jobs were created? that is coming up just after lunch time here in the u.k. keep an eye on that, all of these companies. i will see you monday, everybody. ♪

jonathan: good morning. happy friday and welcome to "on the move." moments away from the start of european trading. jobs day. labor market report of 2015. will today strengthen the case for a federal reserve rate increase. prepare for a hike. art of england governor carney says britain should get ready for liftoff next year. china bifurcated german industrial production declines. a slowdown abroad. stories and many more in the next hour. ftse futures in the green.

across europe, marginally lower. withuture market open caroline high caroline: caution ahead of that labor day. in excess of 56%. traders think we could see a rate hike for the united states. we are seeing -- asia was very mixed. there seeing caution in equity markets ahead of that number. we'll be seeing 185,000 jobs added. see $185,000 -- 185,000 jobs added? .1%.ie up we'll wait and see how the dax opens. percentected a half point increase. we are seeing the eur a