>> we ask the russian president questions in our exclusive interview. negative rates, nothing about easing it is the table. qe ecb's draghi nearing his this week. today's services and the u.k.. manufacturing the rebound from brexit, we bring you the data. ♪ >> welcome to the polls.

bloombergs european headquarters in london. out of the eurozone. looks like the economy lost some momentum in august. a geisha of private sector growth falling to the lowest evel since 20 -- from 53.2.tion below an earlier estimate of 53.3 according to ihs markets, largely due to a weaker rate of expansion in germany, the region's largest economy. the report coming days ahead of the ecb holding its first policy meeting after summer break. let's check in on markets. no trading today in u.s. or canada because of the labor day holiday. stocks rising. getting a boost from the jobs

report on friday which came in below expert nations. september rate hike. the pound index, bloomberg pound index rose last week for the third consecutive week. may.winning stretch since down by a basis point, basis point range for the last seven weeks. that was the last time draghi spoke. crude oil up. will we get a deal this month? we asked of saudi arabia and russia? that is the big question. let's get the bloomberg first word news. >> angela merkel's party has populist -- it highlights the strength of the backlash against her open border policy.

of the voteok 19% while empty had 22%. the european commission vice president warned britain it cannot take and choose the conditions it once. he spoke to bloomberg at the forum. been verymission has clear that for moments with the internal market are a package in that cannot be cherry-picking like free moment capital. meanwhile, british prime minister theresa may said the public as rejected the idea of the free movement of labor from the europe to the u.k. she spoke with us. >> it enables us to say, the british people are clear about they do not want the movement to continue the way it has done in the past. they want to see control coming

in from the european union and the people also want to see the economic opportunities so getting trade and services is also important for us. >> the recall of millions of cheap.ones will not eat the south korean company may spend as much as a billion dollars after deciding to replace all of the note seven phones. they said the amount was heartbroken. more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. >> is stocks rallying today. keeping a lid on speculation the fed will raise rates later this month. markets recommend a less than one in three chance of a hike at the next meeting, a six and 10 chance by the end of the year.

82% in bloomberg surveys action will be taken at one of druggies next to meetings. mark carney goes before lawmakers to justify his post eu referendum. a busy week for the big central banks around the globe. let's bring in together our central bank theme to get some comments out of theresa may. a global strategy. generalities say the point space immigration system does not work. coming to brexit later. right, ecb. time to extend the program from march. let's start with that. >> yeah. i think if you do not extend you have to talk about tapering. i think at that point it gets more difficult. given net nothing has improved

to the point that mario draghi would like to stop the program or commit the program in march, he is giving himself leeway to do it now before the euro headlines. by70% of economist surveyed bloomberg thinks mario draghi will reach that by the time he steps down in 2019. that number less month of 85%. will he get inflation just below 2% by then? >> along the way he will be helped by basis a little bit. but i think that would be in the minority just about simply because the economy trundles along. the global economy is growing at a rate below trend, below capacity and i can't see where we get rid of the excess that would sustain higher inflation.

i do not think he can get his currency down fast enough, far enough, consistently enough to help him out. so extend qe what? six months? asked to avoid having eight of conversation at christmas. qe doesonths extending he purge the purchasing role? is it a necessity this time? >> you could delay, but we are all going to think about it from now until whenever we think about it will stop it is not that complicated. he is going to run out of some things he can buy if he keeps wanting to stick. >> what is the best way of doing net? can we buy bonds below the capital rate? to you for with the key? what is the least disruptive way to do it in the council?

kit: my view would be it is going to come down to practicalities more than theology. said inflated this week. after the jobs report, september around one and three jobs pretty much the same as it was? it: yes, we have been able to see for long enough now that the bar heightened -- but it is very low. growth,not got so much so much inflation, so much anything that rush. that was always an argument that said september was more likely. >> about 60%? kit: yeah. whether it is giving up carbs or alcohol or something will stop give up something for a time.

by the time you get to december, you have got to lay off the booze before business. there was a point where you did not want to give up the whole year without taxing but it does not take much to put them off. and global strategist. stay with us, plenty coming up. easing. the words of governor kuroda as he keeps his opportunity for japanese growth and to be boj. on theresa may casts doubt some of the misses made by brexit campaigners. eu talks. key economic data as it breaks. les, we'll visited. in run for another term? intimate interview with the russian president. this is bloomberg. ♪

♪ mark, barclays is close to runng jp morgan's tim to the corporate and international division including overseeing the investment bank. that is according to people with knowledge. that would add him to the top management team. the group thaty

it did not already own. the 2.4 billion euros deal is seen as a bid to own his global cable and television company. that comes after an expedition binge. this was in a statement on --day, the offer at about representing a 2.6 premium to closing price writing. 24.090 in paris. telefonica could fold and ipo in its unit this year. raising funds to pay off debt according to chairman. also said selling a stake in the still an option. telefonica was counting on proceeds from the sale to c.k. hutchinson to reduce debt before the eu in may blocked.

k actions and reduce debt before the eu in may block the deal on competition concerns. that is the bloomberg this is flash. >> the g-20 summit. chinese officials clashing with white house staffers on the tarmac shortly after landing. extremely productive talks with .hina's >> i am not surprised. security has been so tight not only for media but for official delegations here. i have heard people call it the north korea with money given how -- everything is. so the president and president obama did meet and produce some results including both leaders climate agreement.

today the focus is on the bilateral summit between prime minister she and prime minister of japan will stop their relations have been tense due to territorial disputes in the east china sea. after all this, president xi will give a wrapup statement in about an hour or so concluding the summit as the chair of the draft of the g-20 that bloomberg obtained said financialll mention a volatility, the opponents of fiscal strategy, and as well as the still global glut. againstulist backlash trade threatening the global recovery. >> it definitely. policy are using the g-20 summit to voice concerns of anti-trade

measures rising across the world. i spoke to the head who warned about the negative impact of protectionism in a some of the misinformation about trade. take a listen. >> a lot of people say trade brings about unemployment, particularly in the developed into more mature in economies. that is wrong. trade accounts for a small percentage of the unemployment and those countries. most of the unemployment, more the end 80% comes from innovation. comes from increased productivity. nobody is against innovation, nobody is against productivity. that is the reality. director general also telling me that the trade outlook for this year and next is not too bright. for leaders, the challenge will be to pay attention to these

populist sentiments to its eye-trade sentiment at the same time preferring economic growth. mark? usgs thank you for joining -- >> thank you for joining us. continuing this sort of populism that is sweeping the world. could affect trade. could affect growth. anything the global leaders can do to drop it? >> not easily. paying attention to their domestic population which is struggling with income growth that is weak, that puts pressure on them. the real problem is the global trade has been stagnant for a wild now. it is part of the crisis. instead of fighting populist concerns about trade we're supposed to be pushing the other way and saying, what can we do? to revive the capital spending the cycle, reviving productivity growth.

providing or suspending. this is a distraction going the other way but it is true. global trade has a problem. >> as they said in china, assuring everyone takes part and not just the rich, select few. kit: the people with most at stake here, the countries were biggerobal trade is a part has seen faster growth as a result of the growth of trade being more part of the global economy so if you are pessimistic on global trade it is hard not to be pessimistic about asian economic growth. mark: a couple of the biggest trade deals that affect this could unravel the tpp and the tp therom a specific deal in u.s.. a new deal. it is still unclear as to whether they are going to go

ahead in the u.s. presidential cycle. it is huge if you listen to some of the eu trade negotiators. kit: which tells you what we have at the moment is not free global trade that trade groupings in europe, united states, and china. in a broad sense, big trade groups where they want trade within them but they struggle to boost trade between them to the level they need. ahead of g-20, up next, apple room and governor kuroda keeping his options open. we will talk to him next. this is bloomberg. ♪

♪ >> let's talk japan. take a listen to governor kuroda. the currentin framework, there is ample room for further monetary easing in either of three dimensions. quantity, quality, and the interest rate. other new ideas should not be up the table. we should bear in mind when conducting monetary policy is not its limit but a comparison between its benefits and cost as is the case with any public policy. there is no free lunch for any

policy. >> kid, what are the limits? are we at, approaching, when it comes to the boj? kit: apparently not. a psychological and game is -- governmentd spending. >> he says it is against the law. but he has said that and many things before. a spot betweenis that and the hard line. we are learning the imagination of the central bankers, you don't want to guess what precise little things. i can buy more assets, a wider range of assets, or i can put in an 48 negative. -- for a negative. the more they virtue have from negative rates or from more negative rates. more negative rates,

compensation to the banks, increased lending to people, covering it in terms of deposit rates help banks from the hit they take. that is not impossible but they should look at it saying, you can do more. muchit really make difference to the japanese economy or to the level in economy at a time when it is patently clear fiscal policy should be doing 90% of the work of trying to get growth rates up . >> but it is doing more, isn't it? kit: a little bit more, they hope. we want to see that come true but now is the time for something more the end words about it. mark: do the japanese bond markets have the yields coming off the record negative lows? how significant is that? is that just telling us we are done with the boj? there's not much they can do?

can't: i think that tells us we have lower in waves. the bank of japan by some, settles down. the market is not quite that negative after a while. : we have the comprehensive. monetary policy later this month. maybe mario draghi will do something, maybe he won't. how does it affect the dollar yen? kit: the dollar-yen is the dollar against the yen. the closest correlation is at the moment. provided those have adam out to ian and in this painfully slow trajectory,n upward it will go higher. if dollar-yen those slow, goes 162 1.2%, probably the yen will break 100 and then some if the u.s. euro goes to 2% next,

to dollar-yen would go up 200 20. i suspect the marginally higher. the yen is marginally high. mark: that is nothing in the market, is it? kit: absolutely. in that sense, the big move from 120 back down to 100, that is over. that mirrors the following u.s. yields in japan. ,e have room for stability yeah. a few shocks and bumps. monday's the and not between now and christmas i expect to be one figure higher. mark: global strategist. theext, doubt about some of promises made by brexit campaigners. we will analyze the deal the u.k. will seek.

pmiring you the key august services number. this is a bloomberg. music don't -- ♪

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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. mark: welcome back to this is bloomberg. ♪, -- mark: welcome back to "the pulse ." i'm smiling because my production has been proven with kit. it is a blockbuster number appeared we have gone from 47.4 to 52.4. he said 51.9, which is still bullish. 47.6, so really chuck

in the manufacturing pmi, but of course we had on thursday, which is the biggest rise ever. you have this gauge of u.k. services, kit, rising the most on record as well. resilient u.k. economy, barton the forecaster. [laughter] kit: i just do not know if i have learned anything at all. the scale, the size of the fall that we saw starting in june, immediately after the referendum vote, followed by a bigger bounce now -- where does that leave me? that tells me the effects of the referendum will come through as a result of an extremely long period of uncertainty while we try to hash out a deal. expect anything to happen the first three or four months to tell us anything about anything. mark: does this tell us mark carney is in for a tricky ride when he testifies before the treasury parliamentarians on

wednesday, some who are brexiteers, and some might say -- was it necessary, or the stimulus you pumped into the economy in august? kit: if he does -- he does not want any advice for me -- mark: give him advice. kit: i would just run run as a, turn around and say, "well, you would not know what would've happened if i had not done that." mark: is that it, then? is suggest and was in august we do take breakdown of little bit further. it will not happen until november -- does that mean we can just sit and wait for a bit longer? kit: the case for sitting and waiting and seeing what happens and saying look, we bought ourselves insurance, do we need to buy ourselves even more insurance given how the first three months since the vote have panned out? if you have the meeting today,

you would not have more than you do now. keep some back and see how things go next year. mark: should we tweak our forecast for the current quarter? economyg suggests the will contract .1% in the third quarter and he pretty much flat in the fourth quarter. given what we have seen in the last week on services, manufacturing, construction, retail sales, consumer confidence -- is it time to put there?or put a plus in kit: it does not feel like the economy will be hitting in the fourth quarter into negative territory on what we have seen. we just have to get away from the month-to-month volatility. what we're learning more about the pmi survey -- it tells you something about direction, but the magnitude of the moving pmi does not correlate so well with the magnitude and the economy. kit, back in a sect.

uk prime minister tweeting about a point-based immigration system and leaving the single market. let's get more with robert hutton, traveling with the g-20. robert, it is interesting, theresa may releasing this statement that the point-based immigration system will not work , and she is slapping down her foreign secretary, boris johnson, here. she certainly is, yes. we had a very interesting chat with the prime minister on the plane. we are just starting to get the edges of the picture of what , or wemight look like are learning what it will not look like. of promises series made in that referendum campaign, if you remember, and one was that we would have a point-based immigration system. "no it won't," says theresa may.

money theoretically saved from sending to the eu, theresa may is not committing herself on bills. fuel what we leave the market, which was a key brexit promise? she is not sure. it seems she wants to stay in. that is what she gave us on the plane. mark: this is what is confusing, rob, she wants control and how many eu citizens can settle in britain. that is her only stated negotiation system. at the same time, she wants to have some sort of measure, some sort of position of staying in the single market. those two ones are not compatible, are they? well, that is what we said to her, and she said, "don't judge things by the existing models. " we are not norway, we're not canada. she thinks she can get a u.k.

deal. can she? i don't know. but she is arguing that we should not now start ruling things out. the oneight, though, thing she is absolutely clear about is there will be controls on immigration. even there, we do not quite know what that means. mark: rob, what do we know what it comes to trade deals? obama has pretty much said we are at the back of the queue, but at the good news, we are the at the front of the queue for australia. robert: that is right, yes your we asked obama yesterday about his back of the queue remark and did he stand by it. he said it was not a threat, it was really just a statement of threat. and he names the stuff of the top of the list, the transpacific partnership, and he said that britain needs to sort out what the relationship with the eu is before you can go to america and talk about how its relationship with america will fit in with that. prime other hand,

minister malcolm turnbull of australia was very gung ho and said he wants to be at the front of the queue for a trade deal, and he is willing to share expertise on the go shooting trade deals with britain because britain has not negotiated a trade deal for 40 years. rob, thanks for joining us . final thoughts from kit juckes, global strategist. unfogging, as rob suggested. we have heard saying this point-based immigration system will not work. rob, howt heard with is it going to happen? she seems to believe we can have our own deal. yes? kit: the only way we will get one is through a really, really long protracted period of negotiation because the negotiations have to pass, and in the first front of

negotiations, that is no way that that will be an offer from europe. end point, the one thing i am absolutely sure of is we will have month by month and years of uncertainty to that hallowed land of control. mark: how much certainty would you say will ultimately show up in the data, unlike it has done today? kit: it can show up in people's phoning decisions on investments, on putting money, making decisions aware to hire people. it will show up on hiring graduates. this year's graduate round, next year's more likely. that kind of thing is where it will show up. mark: has sterling bounced? the dollar.t the lowest since 1985. how low do we go? kit: i think somewhere between $1.30 and $1.35.

i have no clue. i think we will eventually get to a low, comparably about $1.20 . kit: perfect. that's mark: perfect. ," -- "the pulse thanks for joining us on this monday morning edition o "the pulse." nejra: highlighting the strength of the backlash against her open ,order refugee policy, merkel the democrat, took just 19% of the vote. viceean commission president has warned britain it cannot pick and choose conditions it wants for a brexit. he spoke to bloomberg. mr. dombrovskis: decommission has been very clear that for moments within the eu internal

market, there cannot be cherry picking like free moment of capital but not free moment of labor. nejra: meanwhile, british prime minister theresa may has ruled out a went-based immigration -- a points-based immigration system for the u.k. she also said the details of controls on eu nationals have not yet been decided. earlier, speaking to the bbc's britisharks, she said rejects free labor from europe to the u.k.. pm may: was leaving the european ,nion does enable us to do which is they do not want free movement to continue in a way it has done in the past. they do want to control moving in from the european union. people also want to see job opportunities, to see the economic opportunities, to get a good deal and trading goods and services is also a big importance for us.

nejra: samson's recall of millions of big screen smartphones is not going to be cheap. the south korean company may spend as much as $1 billion after deciding to replace all of the 2.5 million note 7 phones, according to estimates compiled by bloomberg. samsung would only say the amount was "heartbreaking." global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am nejra cehic. this is bloomberg. mark? mark: thank you. the russian president on who should succeed and the backlash against merkel. and the dollar holds as the fed rate hike on the dollar slowdown. that is coming up on "surveillance." this is bloomberg. ♪

rk: as russia's presidential election in 2018 looms, we asked th russian president whether he will stand against another six-year term. reporter: the future, have you decided if you will run again in 2018? putin: we are on the brink of parliamentary elections, and

we need to hold these to see the results. it is far too early to speak about this. in the modern, rapidly changing , we to work to make sure that plans and tasks we set ourselves are completed. raise the quality of people's lives, developed the economy, social skills, an increase the country's financial abilities. depending on the solutions to these tasks, then we can see how to organize the presidential election campaign in 2018 and who can take part. i have not yet made the decision for myself. reporter: do you think russia is getting easier to run or harder? pres. putin: imagine a terrible time, nicholas the second. time, hasn'tyour

gotten? i think it is more complicated because despite all the difficulties, we are developing. -- and itlections will leave its mark. there is a practical dimension. we now see the leading political force of a united russia, and many people are asking -- what is going on? what has happened? the large number taking part in the election process, they are reading in the media and the newspapers. and what do they have to offer?

they meanwhile do not say how to make things better. views that areow sometimes totally unfeasible. but they look great on the television. they are ready to take response ability for the unpopular but necessary decisions. say the chinese have to go through these elections? pres. putin: there is a different local system in china. i do not think you would like to see 1.5 billion people with disorder in their country and their government. -- if china the right to let's give china the right to decide how they run their country. russia is a different country.

we have different processes, different development levels. it is a different quality. thes about the quality of political system. but it is growing. fact, it makes me happy, and i would like for the system to become stronger so that we have a balance in our legal system that will allow us to always be an effective state aimed at progress. mark: lilit gevorgyan, cis senior economist at ihs markit, joins us now. lilit: in the unlikely case he decides to not run, i am sure whoever comes after putin will have his approval. mark: is it too early to speculate about who the next person could be? lilit: probably it is because it

is most likely that putin himself will be running. mark: in the meantime, the economy continuing to contract in the first half of the year. the pace is slow because of the the rebound inof oil prices. the long-term concerns remain, whether it is diversity, corruption, modernization. do those concerns still a hangover putin and the economy? lilit: i think they well. i have to emphasize that the current troubles, of course they were aggravated by 2014, the followed over ukraine and then crashing crude oil prices. i have to indecisive these troubles were already showing their ugly faced in 2013 because we invested, we were becoming more wary. russia were to follow through the promises, corruption, modernizing is in fact not happening. i do not think it will happen,

especially now when the confidence in the business community is so low, where the gross or recovery, rebound will be quite slow. again because of the slow recovery of crude oil prices and because of the low business confidence. mark: the stronger ruble acts as a this inflationary force. does that mean there's more room for the central bank to embark on more rate cuts? lilit: they have indicated that they will see whether there is any room, and i'm sure if there is, they will perhaps go for it. but again, it all depends how the ruble will perform and how the economy will perform. mark: in the meantime, we are hearing there might be some announcement between russia and the audi arabia imminently -- and saudi arabia imminently at the g-20. freezeld push toward the

in the opec meeting for her depends on saudi arabia, doesn't it? last year, dependent on iran. do you think some deal will come about or not? lilit: i think the fact that oil prices have started incrementally rising has released that immediate pressure of cutting. obviously, russia would like to see some sort of freeze in production in other oil-producing countries to make sure that the economic rebound a suchger, however, it lacks power over the other oil-producing countries. so at this stage, i think it would be more about discussing the potential cooperation, but i do not think that anything tangible will come out of this. mark: thank you for joining us. lilit gevorgyan, cis senior economist at ihs markit. , and that'sn is in

vladimir putin is in conversation with john mikel putin is inimir conversation with us tonight. do not miss that. the european parliament member from the chancellor's cdu party. this is bloomberg. ♪

mark: angela merkel's party has been beaten by the populace attorney in germany for the first time in a state economy.

we are joined by elmer brock from germany. us.brock, inks for joining is this evidence that angela merkel's days are numbered? elmar: no, we cannot say that. 1.3 millionith voters, the socialist, the communist, leftist party has 15%, so you cannot just put this on the shoulders on the democrats. we are aware that the aationalist party -- we have t serious threat. there are always nationalists in that parliament, and especially when itation problem comes to the opinions of the were, and it is a state

note migrants live, but people are not afraid of migrants. mark: do you think merkel will run for a fourth term? if so, when will she announced her intentions? procedures, normal we have a party congress for reelection in december. before that, i think she will do so. there is no reason for doing so. so the plans are not before december anyway, and this is not the moment to do that. no chancellor has done that before, and therefore we should not wait for that. i have not the impression that she wants to give up. she is full of plans of how to survive this crisis. brok, thank you,

speaking from germany. stay with us. "surveillance" next. a real treat. the u.s. and canadian markets closed for labor day. tom keene has the day off. this is bloomberg. ♪

>> who will succeed vladimir putin? we asked the russian president that question in an exclusive interview. g-20mic leaders warned the that the rising tide of protectionism is threatening the global economy. room for further easing? conducts a comprehensive review of its policies and their effectiveness. this is "bloomberg surveillance" along with