up on this programme: theresa may and jeremy corbyn trade blows over the state of the nhs in england. the governor of the bankengland says brexit is no longer the biggest risk to the uk's financial stability. and ministers are urged to do more to help the victims of modern slavery. it is thought by the police there are probably 10,000 people in a year who are victims, and 30 convictions. but first, at prime minister's questions, theresa may defended the government's handling of england's nhs asjeremy corbyn accused her of being in denial over the pressures facing the health service. nearly a quarter of patients waited longer than four hours in a&e last week, with just one hospital hitting its target. and huge numbers also faced long waits for a bed when a&e staff admitted them into hospital as emergency cases, with more than 18,000 trolley waits of more than four hours or more. the figures come from the document compiled by nhs improvement, one of the regulators in england, and show that this winter is proving to be the most difficult in more than a decade. jeremy corbyn picked up on those figures and recent

the governor of the bank of england, mark carney, spoke last night about what the bank of england mighta rd to terms of interest rates, which is hard to gauge. we will have the inflation numbers out in about 50 minutes. your thoughts? a bit of a mixed bag, the high inflation is you would expect mark carney and the bank of england to tighten rates, then you have the other factor of brexit on the table weakening the pound, that inflation in the uk is 1.296 pound, that inflation in the uk is 1.2% at the latest region, expectations are for slightly higher. factors in play are higher oil prices, a lower pound, that feeds into the british economy. he said the next move could be up or down, i read that and i thought it was not helpful, trying to plan ahead. it is difficult for businesses and consumers? towards the end of the year because of how high inflation might get, when you look at some of what mark carney said, there is a lot of strength in the uk consumer and the consumption numbers are quite strong, people are still buying on the high street, ordering online and that kind of commerce i

the telegraph‘s top story, the admission by the bank of england chief economist that warnings of an economicxit vote were wrong. the times also leads on optimism regarding the british economy and news that theresa may will visit donald trump next month after her two most trusted aides began what it calls a secret mission to build bridges. the express leads on the six—day run of highs of the ftse 100. on the six—day run of highs of the ftse100. we will start with the times, britain has the world top economy after brexit, starting with mystic make, lord digbyjones... laughter you said, brexit is where we should be, it is going to be amazing and wonderful and so far, you may be proven right. i hate to say i told you so. taking you back to early june... you so. taking you back to early june. .. not you so. taking you back to early june... not too you so. taking you back to early june. .. not too far back, because we only have 15 minutes. laughter the day after "brexit", the world was going to end, death of the first—born, all these economist, the bank of england, all of them saying the same thin

what you expect that to do to the bank of england? one, becauseood the bank of england has to do a certain amount, and within the mandate they are given. i don't know whether we can looked the central bank as being mercurial -- and negative real yields are not just u.k. problem, look at them in germany. i don't think you have ever had such a large negative yield in germany. as a function of the elk were moving inflation. consumers and workers in the u.k. and germany are both suffering at the same time. i wouldn't put it down to just a problem of the bank of england or the u.k. guy: you will stay with us. plenty more still to come with stephen major. we'll get back to volatility. also coming up, donald trump slammed the eu and nato. are we in for a major shift in transatlantic relations? we will discuss that. and where is the u.s. heading in terms of its 10 year? we will talk about what that number will be. plus, we will talk about the strengths of the european economy with the bank to france governor. you will join us later in the prog

that is what the chief economist at the bank of england said this week. no names, issued precrisis," there's no hurricane coming, it might be very windy in the sub—prime sector...". the financial crisis was a huge shock to economists, in 2009, 49 countries had year—on—year falls, in economic activity, but as late as september 2008, no major forecasters foresaw that. we failed to appreciate the damage that a relatively sub—prime bass —— mortgage market in the united states, loans to fairly poor people who cannot afford the houses they are trying to buy, would do to our financial sector because we did not realise just how interdependent the whole sector had become. there were views that the financial sector was able to manage risk much more effectively, than all this sort of computerisation and self reporting and it turned out not to be true. the financial crisis was not the only bad weather that the economists missed, ever since then, the british economy has consistently underperformed what the economic consensus has suggested. there is a storm that they pr

our base case, the bank of england will be raising rates. rket is pricing in hardly anything over the next two years. if theves us a chance, bank of england starts to say it will not tolerate continuous rise of inflation, weakness of the pound, other inflation affects. that does give a chance for the rate markets to refine. -- refire. you play both situations, if the uk's situation improve, the bank of and one needs to raise rates. manus: and that is all we have. you potentially -- >> you can see it's deepens over the last three or four months, but compared to where it was in early 2015, it's still fairly flat. manus: potentially -- so that straigh's trade a. trade b? >> this will also do well as they negotiate and more has to be priced in. 10-year gilt will selloff and the yield curve will steepen. anna: michael, thank you very much. michael sneyd stays with us on "bloomberg daybreak." plenty more analysis on the u.k. story from here. michael, thank you. eyes on europe with a raft of elections coming up. we consider the risk for european equ

the chief economist of the banker links —— bank of england says predicting the future is hard? its way, 2a hours before one of the most devastating hurricane to hit the south east and caused millions of devastation. the chief economist of the bank of england has said, we also sometimes get it wrong! the bank forecast that if there was a vote for brexit, which there was a vote for brexit, which there was a vote for brexit, which there was in the uk, that there would be an immediate negative effect on the uk economy. that hasn't appeared in the short term at least, to have happened. consumers are still spending strongly. and the bank of england is saying just like weather forecasters, they have to learn the lesson that that prediction was wrong. economists, they have to use the data better. they have to be aware that economics is a judgment of human behaviour. and that will be difficult. it is a lwa ys and that will be difficult. it is always going to be tricky and imprecise. what they are saying is, we need to be more honest about that. we mentioned about the uk's ambassador to t

the bank of england has a greater job, perhaps the never before. acted in the eye of storm luster. an update from the bank of england. economists will raise 2017, moved on 2018. risks are rising. how optimistic are you in terms of growth should for the u.k. in a. his of two years? probablylation will can't toward 3% in 2017. manus: give me something new. everybody says that. lena: i think that's the expectation although inflation extent revisions to the growth and ncicap projections. historically associated as a hot this message. it will be very much on the press conference if he tries to talk about the fact what happens after brexit. to parisnext we had for more on the socialist party primary and the winning candidate. what his victory on the socialist side means, who that puts him against. ♪ ♪ you're looking at the emperor's palace in tokyo, 14.59.yen rising 114.59. the cover story is about president trump's band. anna: u.s. airports trying to return to calm after a week of chaos on immigration. u.s. corporate speaking out on the suspect. very dir

let's take this seriously, someone like christian forbes at the bank of england says all the uncertaintythe negative forecasts the indicators are flawed and from the indicators are flawed and from the bank of england to the imf inaudible. i have decided you did not answer my question. the maltese prime minister got to the heart of this when he said the uk's deal post brexit must be worth than the terms of its membership. we can see no situation where whatever is negotiated end up being better than the current situation be uk has. you quoted the maltese prime minister andi quoted the maltese prime minister and i will quote... i can quote you francois hollande who has said we will pay. francois hollande will not be prime minister when we do the negotiations. there is a range of different views. from the spanish foreign minister to the chief negotiator who said on the vexed issue of uk financial services he has pointed out that given that britain puts £1 trillion worth of finance into european companies, if we turn around and have a rational being the differential approach to these negotiat

the bank of england governor says parliament treasury -- he admitted policymakers were too pessimisticut the >> it induced slowdown. the central bank board has said it's worried about its reputation and lawmakers announced a review of the effectiveness of policy loosening since the financial crisis. we focus on volkswagen, the carmaker dealing with the u.s. over in missions cheating last night. the settlement would include 4.3 billion dollars in fines, a guilty plea to some criminal charges and the appointment of an independent my actor. executives will review the plan which needs court approval and could force volkswagen to increase its provision for the scandal. we will watch shares at the open of course. if you're wondering where manus cranny is, he is here. he will present the next program, which means he will join me briefly to take us through some interesting market trends in the chart. manus: i will be back just after 7:30 today. have a look at this, these are presidential yields when you presidents come to power, what happens to u.s. treasury yields? trigger point. litmusgoing

a former deputy governor of the bank of england is to be the next chairman of the bbc.he appointment of sir david clementi was announced

the telegraph's top story is the admission by the bank of england's chief economist that its warning the times also beat on optimism regarding the british economy and use the theresa may will visit donald trump after her two most trusted aides began what it calls a secret mission to build bridges. and the six—day run of highs of the ftse 100. bridges. and the six—day run of highs of the ftse100. you are up—to—date on the news and the papers. time for newsnight. it could have been a disaster but downing street sees its quick replacement of our ambassador to the eu as a sign that the brexit negotiations are on track. but is there a bigger problem down the line? as european capitals talk up the danger of this kind of brexit, britain's most senior eu official tells newsnight he has strong doubts about our negotiating strategy. can you buy access to the single market? it's not something that's on sale in that way. i find that rather extraordinary. you're a foreign country outside it and you conclude agreements with the european union if you want to and it wants to. also tonight, jill sawa

but the government of the bank of england has pledged to look into it. we expect to continue that pledge this week. jean: we have seen a little bit of change in the bank of england. post-brexit, we were in full support mood. now we are seeing a bank of england which has a much more balanced attitude with regards to interest rates and monetary policy. the reason is very simple. you are going to have a weaker currency, u.s. exports, to a certain extent making the acids in your country more attractive and helping to finance the current income. a vicious cycle where the currency keeps weakening and by weakening and , why would you invest in a country when you have a currency where you know you are going to make a sure loss? probably even more importantly, and we can learn from the japanese experience a few years ago. if you have a lot of inflation, consumereezing the purchasing power. consumers can be the weakest link going into 2017 for countries facing significant weakening of the currency. that is why i think when you look at the u.k., we have now a much

mark carney defends the bank of england policy moves, saying it helped financial instability. od morning, everyone. this is "bloomberg surveillance ." i am francine lacqua in london. we are getting breaking news, a little bit of data out of germany. one point 9% move in 2016, a touch above analysts' and economists' expectations. we were expecting a 1.8%, and we have a 1.9%. it is pretty much in line with estimates, rising 0.7% month on month. we had estimated 0.2%, so it is coming and above expectations. we have a little bit of china december new yuan loans. it goes back to an economy in china that may be boiling up a little bit, and you china loans increased almost doubled from the period last year. let's quickly check on the markets to see what all of this piece of news means. we had the first news conference, press conference by donald trump yesterday, the first one sense july of last year, certainly the first one since he got elected. maybe because of the lack of policy details, the dollar weakened a little better there was a little disappointment and markets about the pres

the chief economist of the bank of england was atan economist of the bank of england was at an event gures. he admitted the bank of england, maybe last year, before the referendum, was a little too pessimistic, that the figures we have had on the services sector, on construction, on manufacturing, have been more positive since britain voted to leave the european union. but he did signal a note of caution, and sound a note of warning. he said that this year, and next year, could be tougher, because of the fall in the value of sterling, imports of food and fuel are likely to be more expensive. those inflation pressures are pushing into the british economy. what was interesting about today's figures, they said that inflation pressures in the services sector on the high street were at their highest since 2011. so, those pressures will push through to higher prices for consumers. that could mean the economy could stutter in the future. thank you very much. two people have been killed and five wounded in a car bomb explosion in the turkish resort of izmir. the blast took place outside the c

minister's comments was misinterpreted and not on the government's agenda. >>> the governor of the bank of england said brexit is no longer the biggest risk facing the system. mark carney said it was like a game of jenga, first you take pieces out, but a wrong move could have outsized effects. let's talk more about what's taking place in britain. sir charles bean joins us. charles, good morning. >> good morning. let's start with some of the comments from mark carney that brexit is no longer the biggest risk facing britain's financial system. do you agree with this? >> certainly if you go back to the referendum last summer, and the vote, there was genuine concern that if it went in favor of exit that that might lead to turmoil in financial markets. the bank had that at the top of its list of financial stability worries. for that reason took preemptive action, providing lots of access to financial institutions, funds available and also took monetary policy measures. as it turned out, the financial markets and the economy more generally have taken the vote to leave so far in stride. i think it's plau

matt: if this week this continues, how likely is that the bank of england will actually raise rates tod and fight off the coming inflation? englandnk the bank of would be quite happy to get behind the curve on inflation. it's taken such a long time for inflation to take hold at all that they would be willing to see inflation rise quite a bit further before they start to raise interest rates. the pound when get much help again, the thena g bank of england with themselves position, because they can't act too quickly because the market will think they are deliberately raising rates to support the pound, which they probably wouldn't want to do. we can see them to for rate hikes for quite a while, and just let the pound go where the market intends to push it. guy: i'm looking at the five-year, five-year for the u.k., trading 3.6 five years out. that's above target by some considerable margin. at some point, the bank which looks further out than the market does is going to have to react. >> certainly. they can't put it off forever. it could go for the second half of this year, that they real

the upcomingabout decision from the fed, the bank of england, and bank of japan.his is bloomberg. ♪ mark: live from london, i'm mark barton, just about 15 minutes away. vonnie: i am vonnie quinn. is -- it is a big week for central banks. thursday from the bank of england, joining us with what to watch is senior client fully a manager fixed income strategist at oppenheimer funds. is there likely to be too much change between now and the and of the week as to what those three major central banks are doing. >> i think there have been a couple of people who think that maybe we are nearing lift off as we get the fiscal stimulus packages. maybe the fed could go faster. and i think the ecb side could be interesting. -- startrt hitting at hinting at not a continuation, that can also be a big market mover. to the federals reserve, there is a big banner in the sense they have no idea what fiscal policy they are going to get. and it may not even happen until 2018. >> that is the reason why i think the federal reserve is going to air on the side of caution. i do think we will

this is all information based on the bank of england and very, very clear economic forecasts. cine: could he not become a tax haven, like monaco or san marino? idea could, but -- the that being the singapore of the eu is as good as the arrangement we have now, where our trade for the eu forces everything else, that we can freely trade -- it's not just tariff barriers, it's nontariff barriers, in terms of rules and regulations. for our service economy, which is 80% of our economy, which is so important. as offshore singapore may be, it will have to come up with some extraordinary crediting arrangement with the eu to ensure we don't lose those aspects of the single market that have been so important to our prosperity. francine: thank you so much for joining us. roland rudd, the chairman of open britain. i'll handed back to you, and later on we have a great banking panel. will hear the chinese president .thank you very much anna:. that'll do it for daybreak europe. we are weaker across the trading day. the future of finances the talking point coming up shortly in davos. this is bl

figures, says it shows families are struggling to get by on their pay alone, but officials at the bank of englandnam reports. with christmas over, many of us will be poring over our bank statements to check our finances. but it appears that some of us are taking on increasing amounts of unsecured debt, including overd rafts, student loans, credit cards and personal loans. analysis of official data by the tuc shows the average amount of unsecured borrowing per household has doubled since 2000 to £12,899. furthermore, the proportion of unsecured debt in proportion to the personal income has dropped from 21% to almost 28%, leaving a record total of unsecured debt of £3119 billion in britain. we are worried about that because we are expecting to see a slowdown in wages and an increase in inflation next year, meaning households can find it much harder to service those debts and to pay off the debts they owe. but while unsecured debt is rising, secured borrowing, such as home loans, is becoming more affordable. the bank of england says mortgage arrears and defaults have been steadily declining since 20

the governor of the bank of england. the george clooney of central bankers, he is described as.difficult speech to make last night, the night before theresa may's speech. the fact that inflation is going up. the sterling has fallen so much that inevitably, inflation will drop on the back about. it is pushing higher. that puts him in a difficult position because this is the wrong sort of inflation. it is not inflation caused by more money in our pockets. this is inflation caused by the fact that prices are going up but the sterling is weaker. it is the same asa sterling is weaker. it is the same as a tax hike. back in august, carney was indicating he would look at this. that is why interest rates we re at this. that is why interest rates were cut in august. by october, sterling was falling so much, there is only so much inflation that we can look through and now he is signalling that rates could go either way. certainly his comments la st either way. certainly his comments last night suggesting rates could go either way should have stabilised the pound. really, it's a very diffic

here's the chief economist of the bank of england, an organisation that warned before the referendum f you look at how the british consumer performed during the course of last year, it's almost as though the referendum had not taken place. and of course, in terms of many of the real things, like pay and jobs, not very much happened. do you feel more confident now about the uk economy in 2017, given the very positive figures this morning on services, very positive figures on construction, very positive figures on manufacturing, than you and the bank did pre the referendum, if there was a vote to leave the european union? we are still expecting this rather difficult balancing act, with a slowing, not a huge slowing, but nonetheless a material slowing during the course of next year, as the effects of higher prices in the shops begin to chew away a little at the spending power of consumers. andrew haldane welcomed today's good economic news, based as they are on the resilience of the great british shopper. but in those figures today, a note of warning. inflation in the services sector, th

what about the bank of england? draghie ecb, extending stimulus in terms of the timeline, kind of reducing it in terms of the quantity? is it possible we see a turnaround in the central bank policy here in europe? i think we hazard me seen some turnaround in expectations from a market perspective because of the bounce back that pointed to people they should not necessarily be thinking that the ecb will never be -- monetary policy from this setting. one of the interesting sort of conundrums of this year, if we are looking at the inflation data is it looks like germany is finally starting to see inflation amidst a very tight labor market. will that happen in the rest of the eurozone, which is much further behind in terms of unemployment output gap narrowing? inflation will likely pick up their much more slowly. what does that mean for central bank policy? to bully theanaged ecb into tightening monetary policy earlier than the periphery wants. that could create them her chin in terms of monetary policy there, but in ter

while some types of debt might be rising, the bank of england says mortgage arrears and loan defaultseen steadily declining. andy haldane and from the banks of the regulator wasn't worried yet. although the household debt ratio is high by historical comparison, it has come down in a fairly sizeable away, but about 20 percentage points. with interest rates set to remain low, regulators are worried that we may be taking on too many debts, which becomes an issue if the economy weakens in 2017. the queen has recovered from her heavy cold and was well enough to attend church at sandringham this morning — her first public appearance since the beginning of december. 0ur royal correspondent daniela relph was there — her report contains flash photography. it had been a much anticipated arrival. driven in a state bentley, it was the first time the queen was seen in public since arriving on the sandringham estate before christmas. cheered as she emerged from the car, she arrived just before 11 o'clock for the church service accompanied by the duke of edinburgh. she had missed church on christmas

a former member of the bank of england's policy committee. to you following on from that speech, it just finished, but in terms of what he's been saying on the radio today and the notion of some sort of cap on pay, certainly because he wants to make society fairer, we've heard that a lot in the last 30 minutes, but is there any way in which it could potentially work? absolutely not, it is sensible to think about what you might do about inequality, thatis what you might do about inequality, that is obviously an issue and there is the question of fairness surrounding who gets what. but the reality years, there is a market. to put it technically, there is a productivity distribution. that has widened over time. so, the very best are more productive than those in the middle. the reason that incomes have broadened is because people are paid for their performance. obviously, that is part of the story here. clearly, with an economy like the uk's, you would like to reward someone the uk's, you would like to reward someone who invests, let's say, thou

figures, says it shows families are struggling to get by on their pay alone, but officials at the bank of englands more. with christmas is over, many of us will be poring over our bank state m e nts will be poring over our bank statements to check our finances. it appears that some of us are taking on increasing amounts of unsecured debt, including overdrafts, student loa ns, debt, including overdrafts, student loans, credit cards and personal loa ns. loans, credit cards and personal loans. analysis of official data by the tuc shows the average amount of unsecured borrowing per household has doubled since 2000 to £12,819. furthermore, the proportion of unsecured debt in proportion to the personal income has dropped from 21% to almost 28%. weaving a record total of unsecured debt of £319 billion in britain. we are worried about that because we are expecting to see a slowdown in wages and an increase in inflation next year, meaning households can find it much harder to service those debts and to pay off the debt they owe. but while unsecured debt is rising, secured borrowing such as home loans is b

it is more complicated for the bank of england. looks like the hard brexit is coming regardless. onne: thanks, kathleen. plenty of comment on brexit at dev us. -- at davos. >> if you don't already have a , youean subsidiary bank really have to work out whether you will go to dublin or paris or frankfurt, then you have to plan for the worst and hope for the best. i think it is clear that the european relationship will be status quote minus. not as good as it was. i think they can negotiate many things, but it is important for britain to step aside and renegotiate with the rest of the world their relationships on trade and financial services. since the europeans are in an election, almost to the end of the year, it is probably good for britain to do it parallel but focus at the start for the end of the year on foreign relations. >> it with be devastating. -- it would be devastating. this is not about making forecasts that some frightening, this is all based on information bank -- based on the bank of england and very clear economic forecasts. ♪ ♪ >> taking a look at live pictures ou

even theresa may says the bank of england sees inequality. do we mind? >> not especially. t the -- the prime minister and the u.k. or someone important to treasury. this moves to a different level potentially. that is the difference. francine: jason, do you feel there is more and more pressure on central banks. jason: i do. the fed and the central banks influence on the economy has never been as great as it is now. it is notys, surprising that the executive branch of these countries are more skeptical about the limits of what you can achieve with central banks. there may be more of a focus on getting a balance between fiscal revelatory policy on the one hand and monetary policy of the other. tom: i look at what we have been through over the last five years , and it is like a new regime this year. what is your prediction of what the monetary theory is within the international relations we have? regime?in the >> the straightforward division that people think about is when we go back to fiscal expansion and monetary offset. fiscal policy does more. monetary policy needs to do

we know that there is a bit of a diversions between fat and bank of england policy where we have the king like it is very much ready to raise rates even more this year, meanwhile the bank of england is still very much in neutral mode. vonnie: what does that mean for companies planning forward, if the pound will continue to weaken, at some point, it may not be a boost. >> exactly, i think the truth will all come out in the earnings season that we are about to have. it really takes off in february and that is when big exporting companies listed on the ftse will tell us if the pound has really helped their bottom line and if it will help carry forward. there is only so much they can hedge and hopefully they can have -- be able to drop the , the lower pounds be through to higher revenues. mark: what are the signals telling us, traders do not seem to be loading up on options to project against the downside, what are the ruin showing? >> it is quite surprising that we had this tough market, a record, rsi over 70 which means that it should really turn lower but no one is really rushing to bu

banks that might be disappointed by that exit from the single market. we may see a shift of jobs and operations to london. one uncertainty was addressed by the bank of england governor regarding business investment. >> we are in a situation right now where, for understandable reasons, visit this -- business investment has been dampened by because, theret is access to finance that there is uncertainty about ultimately, what our relationship is going to be with our largest trading partner, and that is weighing on business investments. >> he touched on how the bank of england's outlook for 2017 depends on britain's new deal with the eu. we have seen volatility in the u.k. financial markets. the pound briefly dropped belowght below one cup -- 1:20. traders are bracing themselves for what may might deliver today. everybody will be looking forward to that. sophie, thanks for joining us. are talking about global risk on bloomberg television. thomas told us, they are not expecting a clash in europe. actually, the other way around way around.her >> we see growth rebounding in europe, and not only in europe, but in the u.k. confidence has been stronger than what we c

the -- what is your interpretation of how the bank of england acts versus other central banks? y have demonstrated in the past is that they have more of a growth focus than an inflation focus. typically, they do not worry too much about the currency. so the currency goes, inflation will go, they look through that. they will see it is a temporary shock, perhaps a long-lasting temporary shock. tom: where are you on sterling? where is sterling going to go if he lets it go? rob: it is going to fall quite a long way. isncine: inflation -- he looking through it and you are suggesting he is right to do so. but if it hits 3.5%, people will start feeling that here it -- people start -- people will start feeling that. that will affect consumer spending. rob: it is going to affect consumer spending this year anyway. is goingantime, there to be a lot of newspaper articles saying there is a real wage screens -- a real wage squeeze. there is a real standard of living problem. is the political response to all this economic mumbo-jumbo. francine: you try to negotiate to the best of your ability

i met him later and asked him about the bank of england forecast which said growth could slow next yeart delayed? what the figures today show is that the uk economy continues to be resilient and continues to confound the sceptics. of course, we recognise that as we go into this period of negotiation with the eu, and as we absorb the impact of the depreciation of sterling last year, there will be more uncertainty ahead during the course of this year. british—built cars off to the continent today, a mark of optimism, as production reached a 17—year high and exports hit a record. there is still, though, the brexit shadow. we are getting comments from a number of our members saying they are sitting on their hands, waiting to see what the future will hold, and looking for greater certainty about future relationships, especially with europe. the nation of shoppers forges on. britain's growth last year was the highest of any of the major western economies. are we still waiting for the full brexit effect? most of the front pages deal with the speech by theresa may and head of her meeting with d

they call it the michael fish moment: the bank of england heaps scorn on the economists who failed toblamed for what some are calling ‘sexed—up science'? good evening.

the guardian reports the bank of england's chief economist has admitted his profession is in crisis,erfailing to predict the 2008 financial crash and the impact of brexit. andy haldane says criticisms of economist are "a fair cop". it was last year's election, of course. it was! it is 2017, so that was last year. the financial times reports china is flexing its muscles over south korea's decision to deploy a us ballistic missile shield. it says a chinese government official has visited seoul, threatening south korean companies by saying their business in china could suffer. the international new york times writes about how china is investing heavily in the beautiful game. it has the world's biggest football boarding school, boasting 48 fields, and the country's offering multi—million dollar contracts to top players. sushi anyone, or everyone! 7 the japan times has this enormous fish and its flamboyant owner. the sushi restaurant owner nicknamed "tuna king" has paid over $600,000 for this 212 kilogram blue fin tuna. joining us is justin urquhart stewart, director of seven investment m

the guardian reports the bank of england's chief economist has admitted his profession is in crisis, and the impact of brexit.

while some types of debt might be rising, the bank of england says mortgage arrears and loan defaultss high by historical comparison, it has come down in a fairly sizeable away, but about 20 percentage points. what is more, interest rates are still very low. with interest rates set to remain low, regulators are worried that we may be taking on too many debts, which becomes an issue if the economy weakens in 2017. the singer songwriter peter sarstedt, best know for his 1969 hit where do you go to my lovely? has died. the song went to number one in 1a countries and won an ivor novello award. the 75—year—old had retired from performing in 2010 due to ill health. hello. this is sport today, live from the bbc sport centre. coming up on this programme. fourth tier side plymouth force an fa cup replay against premier league giants liverpool some messi magic rescues a late point for barcelona against villarreal. and grigor dimitrov warms up for the australian open by winning the brisbane international. thanks forjoining us. there are 67 places and a gulf in riches between them but fourth tier

richard: sitting in london, i go with the bank of england is number 1 -- but i would say the federal er one. bank of england number two. i think the bank of japan this time around is number three on the list. vonnie: can i jump in and say turkey has been affirmed by s&p. s&p affirms the rating, but has revised the outlook two negative. that is a currency we have seen a lot of movement in. 3.90.ped we know we have a lot of central-bank action eventually, raising rates, for example, was one of the actions. richard: i think turkey has been very volatile. you want to talk about political volatility -- you had a lot of it in 2016 in turkey, which, of course, has driven that. i think there is a little bit of political pressure, or political dialogue between the government and the central bank in turkey. that has been a big mover, and it will continue to be a big mover. it is interesting news on the ratings agency. vonnie: s&p saying monetary policy and its response may prove insufficient and a revised to 2.4% from around 3.2%, so the outlook is a little grimmer there. think there are challe

bank of canada. many say he was responsible for canada avoiding many disruptions others had. the phrase he used that the bank of englandl not hesitate to take action, a quarter of a trillion pounds is available. francine: this is pounds. you can see how it was crushing the financial crisis. i know banks are not systemic and there is a safety blanket from central banks, but you can see the movement and panic of traders analyzing the results at 3:30 a.m. this is chaos. does it feel as bad as 2008? >> it is difficult to understand why a lot of smart money was betting on remain when the result is substantially in favor of brexit. i'm not surprised by the hectic market this morning. francine: we know european leers are in crisis mode after this vote, and they are locking themselves in emergency meetings probably across the region. will this lead to a more fractured europe? >> the exit is worst possible scenario. i believe, honestly, much worse for the u.k. than for the european union. >> is this the beginning of the end of the e.u.? >> there's no doubt, i have been warning about this for many years that the european union i

getting some comments through from one of the members of the bank of england, mr. saunders, talking about it's quite possible that uk unemployment will stay below 5% in 2017, so not a rise as was forecast in november, and equilibrium unemployment rate may be below 5%. labor costs unlikely to give a boost to inflation in 2017, he's talking about how an equilibrium unemployment rate does not loosen monetary policy or mean a rate hike. recent economic growth stronger than expected, a weak sterling means inflation is likely to rise above the 2% target. and if pay gives a clear warning signal in the coming months, then implications for monetary policy are on voice. so these comments just coming from one of the members out there. about how the unemployment rate could stay near the 11-year low instead of picking up quite substantially as they had been forecasting in november. >> we are watching sterling there higher by 0.4%. >>> questions continue to surround the uncertainty over brexit. we've been watching comments now made by britain's home secretary, amber redd at the

that is the front page of the ft which also makes the point, david, about the governor of the bank of englandelings that inflation could get out of hand and he will have to raise interest rates. this is the whole point. the economy has gone, it has gone pretty well since brexit, or at least it has not fallen off a cliff. it is resilient. that is the word. the question is what about the medium—term, let alone the long term? there are elements of the economy, for example levels of debt, notjust personal debt, economy, for example levels of debt, not just personal debt, but government debt, and it is not long ago i seem to remember being told about the deficit and that debt was about the deficit and that debt was a really big problem. i understand that it a really big problem. i understand thatitis a really big problem. i understand that it is now the figures that i have seen seem to be getting worse and it is being parked as an issue. then you come to the exchange rate and at what point, if we have to put up, we and at what point, if we have to put up, we are and at what point, if we have to pu

the bank of england governor says the european union faces a greater threat to financial stability than the u.k. if brexit happens abruptly. mark carney made his strongest warning yet for a smooth transition. his warning echoes douglas flint, who earlier called for the two-year leaving period to be extended. boeing's biggest competitor itself in aommitted run-up to the inauguration. airs has a factory in alabama that employs over 1000 people. >> we have decided four years ago to invest in america not only because it is a big market for us, but this is the biggest place to be regarding aerospace. we create jobs. that, you don't know that we are probably procuring more u.s. equipments they are competitors. -- than our competitors. bloomberg. ♪ as you have been hearing, donald trump making the headlines. pointed words for china and senate confirmation hearings. rex tillerson once a stronger presence in asia, does he not? it seems to be putting it out anyway. >> it is not necessarily happening according to rex tillerson. he says the south china sea flashpoint, and china's moves on what has

thehe chief economist of bank of england has likened the the forecasting wrong. economic predictors were to some degree in crisis after the financial meltdown and brexit vote. a forecast of an economic hurricane as deep a to leave the eu. >> we had foreseen a sharper slowdown of the economy. in common with almost every other mainstream. it is possible there will be something slower. our best guest -- guests will be that will be a likely outcome. -- best guess is that will be a likely outcome. reporter: gdp growth is permitted to grow 7.1%. slowdown since a the first quarter of 2016. analysts say the figures could be even more modest with the impact of the country's cash shortage taken into account. samsung is on track for its best quarterly profit figures in three years. the company expects the operating profit to search thanks to strong sales of microchips and display panels. cost samsungcall more than $5 billion. rival is arch expanding into its home turf. the californian tech giant has confirmed it will open its first ever retail store in south korea. the bigge

surely the bank of england does not want it strengthening rapidly in the short run but one of the keyrguments for the bears in sterling has been the week pound. improving dramatically as a result of the weaker pound and secondly, foreign investors in q1 inc. you three did not prefer u.k. assets. the odds of a recession, and this is for the u.k., the odds of a recession is the blue line has dropped nearly 50%. theof those doom mongers, odds of a recession has dropped like a stone. that runs in parallel with what you just said. stephen: in the u.k., certainly the uncertainty from brexit is weighing on growth potential and some of the uk's longer-term growth potential. but in a way that is more drastic than it was when we had the week productivity picture and not rights it. i am not so sure about that. manus: the tolerance level by the bank of england to look through inflation, what is there proclivity and tolerance level, what is the peak that carney will not grip the edge of the chair and 8 --we will have to raise rates? stephen: behind the scenes, they are ok with letting it run hot b

of the day. let's get back to the central banking conversation. mark carney has launched a new defense of the bank of englandonon is still with us here "bloomberg daybreak: europe." upgrades.t be >> which is great. this will affect the pound. my guess is probably not actually. if you look at today's performance, this is something manus has talked about. over the course of the last 12 months, it's reflected the other comments that mark carney made a couple of months ago on the reliance of the kindness of strangers. manus: the market disagrees with mark carney. he warned that brexit is a danger to the eu transition and agreed the consequences would be great. this,estion of the day is is theresa may a one-woman wrecking ball on the currency? she speaks and it drops like a stone. given everything you know of history, is this building to a hard brexit? the reality is, looking at what is been said by theresa may so far, talking about where the red lines are. suggest remaining in the single market. then you have a waiting toward hard brexit and that's exactly what it is reflecting. if you want to look at the histor

banks will be forced to defend their very gung ho policies of the last few years. we have already seen a lot of pressure, for instance, from theresa may on the central bank of englande also seen donald trump critique to federal reserve. the ecb also coming under a lot of criticism from the germans. all of that, from now on, is going to work to the advantage of gold. gold is going to reflect its increasing political -- politicization and it will help to support the price. stand high onl u.s. interest rates. that's what held it back on the fourth quarter. the expectation of more rate hikes. >> correct. so long as it's a gradual drift up in yields rather than a sharp spike, then yes, gold should be able to make progress in that sort of environment. vonnie: even if we get a new fed chair? even if we get a new fed chair, more reason to buy gold. if we get a new fed chair it's probably a symptom of the increasing politicization of the federal reserve, meaning that the goto asset class will be gold because investors simply won't trust the u.s. dollar if it is being more more closely politicized. mark: chris cycled into town and he told me they only do that when there's a

the it lead the ecb and bank of england trailing? to a ceo in a bloomberg first interview. s: inflation expectations. british businesses see no choice but to hike prices according to a chamber of commerce report. this is bloomberg. ♪ anna: it is 1:49 in the morning in new york. of theflat at the start u.s. equity trading day. the asian market broadly speaking a more positive one. the japanese market set up in underperforming, perhaps the big story overnight what's happening with the yen and the dollar and the chinese currency. 6:49 here in london. let's get to the bloomberg business flash. >> volkswagen has been told it installingines after devices in diesel vehicles used to cheat emission test. a san francisco federal judge rejected a request on claims against the former bw chairman who said investors in the american depository receipts could improve. he knew the of the country's diesel issue. a spokeswoman did not immediately respond to requests for comments on the ruling. deutsche bank is considering an unusual approach to giving relief to subprime mortgage borrowers as p