we know mark carney has called the u.k.banker to europe and he has experience in dealing with that fallout in the u.k.. that is one of the focuses next year as well. this balance we have between boosting growth or maintaining growth but also controlling inflation, that gets even more tricky when article 50 is triggered. francine: thank you so much. mayor cage at the bank of england. does mark carney have to look through inflation? steven: absolutely. two points. the bank of england has a clear history of doing this. 2011d cpi 5% in 2009 and and that then governor was happy to produce on a monthly basis to explain why inflation was high but there was no response. this is the case at the moment now. we know why inflation is high, fallout from the pound, growth is falling. he will look through the high inflation levels, keep policy where it is -- i don't did he needs to do much. francine: what happens? let's say impatient is much stickier. i don't know if it is trade towards -- trade wars are tariffs, if it becomes a different

matt: do you think mark carney inspires confidence?ed he was the only central banker in history talking down his own economy, now he has signed on to stay a little longer and his tone has turned more positive on the u.k., the possibility of u.k. growth. is he inspiring confidence in markets? jean: he has a difficult job to perform right now. obviously, if you want something where you don't have -- managing the brexit is truly a difficult task to perform. for markets, what is even more important is what is going to happen with the economy and not just with the central banks. his responsibility is, in my to give a sense that central banks are not going to overreact to a short-term fact. -- factor. ,he danger for central banks with regards to inflation him a -- inflation, would be to make looklicy mistake and not through the temporary impact of some elements such as currency depreciation oil price rising. guy: sidebar question. what are you hearing in paris? you expect to be joined i a lot of bankers over the next few years? what are peop

he was joined by the government governor mark carney unit exclusive interview with francine lacqua. -rview -- in an exclusive interview with francine lacqua. mark: the g-20 nations have asked for the solution. the excitation is voluntary adoption, and went into the member, you had 3 million u.s. private capital at the montreal protocol sign-up say they want this type of thing. you have the u.s. endorsing this recommendation of private capital. it is that demand -- this is the report that is feeling the demand to make a market work much better. mayor bloomberg: capitalism will make this work because the customers, employees of companies want to know what they are doing from an environmental perspective. want social investing, impact investing, whatever you care about, if they are going to make that's, they have to have information. it would be difficult for companies to say i am not going to contribute. the implication is what are you hiding. : the election of donald trump means there is a less sympathetic view to this guidance. does it impact the way businesses react? mayor bloomberg:

this is what mark carney is pointing to. >> a nice impartial man.rancine: do you think dave cameron regrets calling the referendum ? >> i think some close to him regret it. i think he this it is something you have to deal with and i have some sympathy with that. >> they are set to leave the e.u. following a vote on the membership june 23 next week. which number shouldn't we believe and which numbers shouldn't we? >> it seems pretty clear the numbers have moved toward leaving. we are now looking in the internet polls around 48.5 to remain and 51.5 for leave. so not a large movement but clearly there. francine: the u.k. is still digesting the news of the labor m.p. jo cox. both sides of the brexit debate have suspeed a second day.much e campaign will resume? >> at the moment we don't know. both campaigns have taken to the sidelines today. the imf has delayed the report on brexit until tonight. a couple of polls due today are pushed into tomorrow. francine: the pound surges and campaigning resumes as we enter the final days ahead of the referendum. >>

we also heard from mark carney, saying that the transition would eat desirable.d not seem to be the same point of view for michel barnier, who said that can only happen once a permanent deal is reached. if they cannot cherry pick, what can they do? to softenion would be the u.k.'s tune on u.k. -- immigration restrictions. the second would be to take advantage of political problems to negotiate a deal. however, the e.u. could see the election years coming ahead as an opportunity to add pressure on the u.k. we could also try a sort of gray , which as we call it would be the u.k. first leaving the single market. then after that, negotiate some kind of trade deal. that would mean losing some business in the meantime. we asked the u.k. chancellor here in brussels whether the u.k. government would consider paying into the e.u. budget in order to keep access to the single market. here is the reply. >> we want to keep all options open. we are going into a negotiation. we are prepared to discuss any structure with our european partners. in the end, we will only do a deal

we know mark carney was working on some transitional agreement.t be the most helpful thing for banks? >> when you think of the regulatory reforms we have been through, when the reforms are finalized, there is two years of implementation so people can collect information and present it, so it is difficult to think that something as significant as changing the relationship with europe that you can say on day zero we are moving from that system, and on day one you can accommodate everything that has changed within your system and so on, so there has to be some period of transition, and again, in terms of the planning, if there isn't a belief that there will be some transition, you have to plan for the fact that there might be none. ♪ >> you are watching "bloomberg best". donald trump put forward donald trump put forward several key cabinet nominations this week. he is building a team with considerable expertise in business, but not in government. let's look back at some of the choices he made this week, and the vigorous debate. >> trump's cabinet is

mark carney made that clear about the financial stability report, showing some of the risks that, asesult of that uncertainty. how can the boe helped steady the ship little bit? it looks like they are struggling with it because they don't know what to expect. bob: the doe has sort of stabilized the ship in the sense that they have eased monetary policy. if you look at the monetary and fiscal mix in the u k, you could actually argue that our policy here in the u k is the easiest of any developed economy at the moment. it is not surprising that so far, we have avoided recession, however, the pressure point on the uncertainty of the brexit is not consumption. exports should improve with a weaker pound. imports substitution should take place, but the pressure point is investment spending and investment intentions. it is very clear they are trending down. anna: there is a tussle over the channel over financial services now. mario draghi saying which and is going to feel most of the pain from the brexit process. mark carney making the point interday that it is not european corporate intere

we know mark carney was working on some transitional agreement. the most helpful thing for banks? >> we will see if that is in the planning. we think it needs to be. in the sense that when you think of regulatory reforms, it is when the reforms are, finalizing it through the two-year years -- two-year implementation so , people can collect information and presented, so it is difficult to think that something as significant as changing the relationship with europe that you can sort of say on day zero we are moving from that system. and on day you can accommodate one, everything that has changed within your system and so on. so i think there has to be some time of transition and again, in terms of the planning, if there is not a belief that there will be some time of transition, you have to plan for the fact that there might be none, and that accelerates the decision. ♪ ♪ vonnie: you are watching "bloomberg best." i'm vonnie quinn. donald trump moved forward with several key cabinet nominations this week. he is building a team with considerable expe

what will governor mark carney and his colleagues conclude on the path ahead?eet,t, the eu leaders hoping to put her turbulent 2016 behind them. with more trouble ahead next year, how can they prepare? were going live to brussels. this is bloomberg. ♪ anna: welcome back, everybody. tokyo in the afternoon for you, the dollar against the yen. yen weakness helping the japanese equity market, one of the only areas of positivity in the asian equity session generally, because the dollar was one of the big beneficiaries as result of what we had from the fed. and the mood for rates next year. a new edition of daybreak is available on the bloomberg and your mobile. let's look at some of the top stories today. the cover story is in connection with that at going be story and the road ahead for the fed. beconnection with the fo him fomb story. ther janet yellen called move of confidence in the economy, citing rising inflation and a stronger labor market. more central-bank action or possibly in action. possibly inaction. the particular focus will be on the bank of england m

mark carney has been working on some kind of buffer or transitional agreement.ould that be the most helpful thing for banks? it would be helpful to know if that is in the planning. we think it needs to be. in the sense when you think of the regulatory reforms we have them through, implementation so people can collect the beingation and present it required. it's difficult to think about something as significant as changing the relationship with europe, you can hardly say day zero, we're move from the system and day one, you can accommodate everything that has changed within your system, so i think there has to be some period of transition. and again, in terms of the planning, if there's not a belief that there will be some sort of transition, you have to plan for the fact that there might be none, and that accelerates decisions. francine: and you have not got any assurances from the bank of england or london in expectation that they have a transitionary phase they are planning for? mr. flint: nobody has clarified that, but at the same time, everybody recognizes t

michael: mark carney has written himself out of the play in the third act.ome with that? how much has the bank of england thought of mark carney as we think of the federal reserve as alan greenspan or bernanke? because of the mandate it doesn't really matter who will be in charge? john: he is undoubtably the figurehead. the markets perceive he has done a very important and successful job since the outcome of the referendum in trying to keep conditions as calm as possible while politics have the turbulent. he was previously leaving in 2018. he has extended that by a year provides some comfort. as we move towards that time, assuming the process of leaving the european union unfolds as we expect it to, there is a lot happening at the time the you cable leave the european union in the first quarter of 2019 and almost immediately after the governor will leave. huge amount of events in the u.k. for the next couple of years. michael: john wraith on bloomberg radio. we will speak with cumberland advisors. 1:30 p.m. in london. this is bloomberg. ♪ francine: the itali

mark carney, the governor of the bank of england, said three weeks ago at a lecture in liverpool, despitere facing heightened uncertainty. rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities. the uncertainty of our world, of our feelings, inequalities. the uncertainty of our world, of ourfeelings, tells inequalities. the uncertainty of our world, of our feelings, tells us that our values or in the wrong place. archbishop justin welby speaking a little earlier. tens of thousands of people have gathered at the vatican to hear the pope deliver his christmas message. pope francis, the head of the catholic church, called for new efforts to bring peace between israelis and palestinians. the pontiff also urged an end to the fighting in syria, and offered his thoughts to the victims of last week's truck attack at a christmas market in berlin which killed 12 people, in a sermon last night that the true meaning of christmas was being drowned out by materialism. he also denounced the continued suffering of ch

it is looking more and more like this is about timing and the government is doing better than mark carneywake of brexit. now it is about whether the legislation in the readings in both houses push the deadline passed the end of march 2017. mark: you have done a fantastic job. patrick live from the supreme court. much of the markets ahead. this is bloomberg. ♪ ♪ mark: live from london, i am mark barton and you are watching "the european close." bloomberg world headquarters in new york, img julie hyman. starting with national grid that agreed to sell a majority of their business through the buyers -- 39%onal grid will retain a stake in a new holding company for the business. german regulators may be opening a new front in the volkswagen's emission cheating scandal. they are now investigating whether porsche -- porsche said the cars complied with emission laws in place at the time. that is the latest business flash. getting a quick check of what is going on in u.s. markets. we hit records for the major averages for the russell 2000 as .ell as small caps the nasdaq doing the best of the three

theresa may's office had to call mark carney to apologize. lassic example of a line that was inserted at the and thef the aide treasury was not consulted and that is how mistakes happen. mark: let's not beat around the bush. and shean enormous task has gotten very little time to play with before she will trickle -- trigger article 50. that is an amount some a -- amount of pressure. svenja: she's got three months and even some of her closest colleagues do not even know what her position on brexit is and what the plan will be. you have cabinet colleagues such as the chancellor and the ministers of brexit who are talking to each other a lot, but even they are being kept slightly in the dark and three months to go, the clock is ticking, they have to have a position. the other issue is this is from top-down, so the people who do the negotiations and do the fine print, they are the civil servants, they are the more junior ministers, and they are completely isolated. this is really far from an ideal state of affairs. ofk: great story, iron grip there

watch out for more interviews with the former ecb president and bank of england governor mark carney.omberg will have special coverage on wednesday on the fed decision beginning at 1:00 p.m. in new york and 2:00 a.m. in hong kong. if you are staying up for that. host: and you might. [laughter] pretty exciting markets. coming up, investing markets, or emergent ones? this is bloomberg. ♪ betty: this is "bloomberg daybreak: asia." >> confidence among hong kong manufacturers has improved the first since june last year. our next guest says his expectations remain weak, opened towards more fiscal stimulus. he joins us live from singapore. really great to have you. we were speaking on the survey earlier this morning from tankan. he had a red flag when it came to the yen. he said the u.s. registration and donald trump will realize this might not be a good idea for the economy. what was your take on the overall? feel about the business sentiment that we see in japan? it seems to remain the same, despite the manufacturer balance. >> i did listen to your conversation. you are right, the tankkan

mark carney was working on some transitional agreement. with that be helpful for banks?think of regulatory reforms we have been through, when the reforms are finalize, there is two years of implementation so people can collect information and presented, so it is difficult to think that something as significant as changing the relationship with europe that you can say on day zero we are moving from that system, and on day one you can accommodate everything that has changed within your system and so on, so there has to be some transition, and again, in terms of the planning, if there isn't a belief that there will be some transition, you have to plan for the fact that there might be none. ♪ >> you are watching "bloomberg best". donald trump put fort key cap meant nominations this week. he is building a team with considerable expertise in business, but not in government. let's look back at some of the choices he made this week, and the vigorous debate. trump's cabinet is starting to look more like a board room than. rex tillerson is a likely secretary of state nomination. w

moving on, mark carney warned that european economies could be heard by freezing out the city of london after britain leaves the eu. speaking after delivering the bank of england's stability report yesterday, he called europe's investment banker and argued an orderly brexit transition is is in the interest of the eu. >> additional risk to the euro area could emerge as a consequence of the uk's withdrawal from the european union. banks located in the uk supply over half the debt and equity issuance by continental firms and account for three-quarters of foreign exchange and derivatives activity in the eu. if these uk-based firms have to just their activities in a short time frame, there could be greater risk of disruption to services provide to the european real economy, some of which could spill back to the uk through trade and financial linkages. >> donald trump says he is separating himself from his businesses. the president-elect announced via twitter he is taking steps to hand over management of his companies to his children in order to fully focus on running the country. trump gave

banks, i sure you were following very closely mark carney's press conference yesterday with the financiallity report. one thing he was hinting at was the risks to overall economic stability. and the banking sector. is that the way to look at it as an investor? or is it more to do with individual banks themselves? view.depends on your specifice looking at banks, a lot of them are facing the same challenges as each other, but they each have individual elements to that. is still majority-owned by the taxpayer. it still hasn't returned to paying a dividend. things on a number of its plate including a doj settlement that eventually has to get done. they have one-off issues. credit suisse has its own. they are laying out the next update for their strategy next week. there are individual elements here. on the whole, it is a question of profitability. it is a question of interest rates. it is a question of how much capital is enough. >> thank you so much for breaking down the latest news in the banking sector for us. , vonnie battles abigail doolittle. can vonnie's bond chart take the win? this i

mark, let me ask you what you think carney is going to do.e of guests carney may end up cutting sometime in 2017, that is obviously not consensus. >> i said there is no chance of a cut next year. i think one of the main things carney is dealing with is a complete lack of clarity. we don't even know whether it will be soft brexit, hard brexit. and the economy continues to look more positive than people expected only even a few months ago. depths of pessimism around july, but all of these surveys have risen in positivity since then. guy: so what is he doing? how do you do about one? tothe brexit czar starts change, maybe the pound starts to rise. that is self-correcting, isn't it? mark: absolutely. it is a deflationary impulse so let their reason to worry about rising inflation. part of the pound is rising is because the expectation there will be a hike on a positive growth outlook. carney had to keep his options open and be adaptable. that is the message he will communicate that we are flexible. guy: think you're a much. stay with us. up next,

. >>> bank of england governor mark carney has rejected the idea that monetary policy has increased fears over globalization. in a speech in liverpool he defended the role of the central bank saying lower interest rates benefit lower earnings. >>> if the trump administration goes ahead with its planned fiscal stimulus plan, it could prompt the fed to raise interest rates faster than anticipated. that's what new york fed president william dudley told cnbc. in an exclusive interview wisquk on the street, he characterized the election result as broadly appropriate. >> i don't think i would make a judgment about where the stock market should be precisely. i've always been more concerned about where the bond market was when bond yields even a few weeks ago were extraordinarily low relative to the likely path of monetary policy in the years ahead. the correction in the bond market probably a bit more overdue. >>> james bullard echoed dudley's sentiment on the bond market in a speech in phoenix yesterday. he said he was not worried about recent bond yield moves. let's get some final thoughts wit

. >> mark carney in a speech yesterday said 15 15,000 uk jobs could go to robotics. >>> if it's happeningthe world, chances are it has a hashtag on twitter. it's like the time person of the year. rio2016 had the highest number of tweets followed by election 2016 and pokemon go was third. >> you know what was fourth? >> no. >> "worldwide exchange." >> that was our first year. we're coming up on our one-year anniversary. >> >> 4th of january or 5th of january. we didn't make it into the top ten. >> no. >> next year will be the one. >>> millions of viewers tuned in to watch the victoria secret fashion show last night. it took place in paris for the first time. the show cost nearly $20 million, likely the most expensive in its 2 1-year history. the weekend, bruno mars and lady gaga sharing the stages with models to perform several songs. lady gaga sporting a kis tom made $1 million hat made of crystals. >> a million dollar hat. did you stay up to watch? >> i did not. >> shocked. >> didn't know it was taking place. >> otherwise you would have. >>> when we come back, today's must read stories.

we are expecting mark carney to speak later on today. let's look at how u.s. markets are set to open. the big story of the day is the fed, prarly when it comes to janet yellen's press conference a bit later on. you can see the s&p 500 called just slightly higher by 1.7 points. the dow jones in the other direction, implied open of lower than 1.2. the nasdaq called just slightly higher. similar pattern to europe, investors are in wait and see mode. it was yet another record day for all three major indices on wall street. we will a good run on europe as well. just seeing some gains pare back across the board. let's give you a shot of the ftse 100, just off 0.2%. the xetra dax, a bit in the red. the french cac 40, down about 0.35%. and the ftse mib slightly in the positive direction. it would be a huge shock if the fed did not raise rates by 25 basis points. but the focus today will be on guidance. you can see pretty much flat across the board here. the euro relatively unchanged against the green back. the dollar, similar story against the yen. sterling pushing ju

the guy who has mark carney on speed dial. people is man, this trump team starting to look like goldman. on the transition team, anthony scaramucci and few years out from the financial crisis. >> all of these guys, big finance guys. multimillionaires, billionaires. >> goldman sachs because so many people like a hank paul went into government, john used to be president of goldman and this is a big move, assuming gary takes the position, he would and doesn't know a ton about banking. >> his name is gary kone. >> and when you leave goldman and take a job like this sell your goldman stock. and thank you so much. >> a rally to donald trump up votes for senate john kennedy. taking place tomorrow between kennedy and democratic candidate foster campbell, the democrat's last hope of flipping a senate seat in their favor as a result. he has seen a late surge in donations from across the country. north of a million dollars we're told. nbc's chris jansing in baton rouge for us this morning. good morning to you. >> reporter: good morning.

does mark carney care about what chair yellen says today? me problem -- y: i think i have exactly the same problem. mark carney does not know exactly how to store brexit. they have to stick with what they do know and make policy on that basis. politics is the driver of foreign exchange and economics into the new year. right now, to first word news with taylor riggs. cease-fire in the embattled syrian city of aleppo was supposed to start today, but activists say warplanes have resumed the bombing. that syrianports forces are firing rockets. all of this threatens an rebels and if civilians are stuck in aleppo. vehicles that were supposed to carry civilians away have left with no passengers. the saudi led coalition is fighting iranian-based rebels in yemen, and there are concerns that the saudis could target hospitals and houses and schools, leading to civilian deaths. a third of the workers in the u.k. believe brexit will hurt their career prospects. workersdown with that started looking for a new job because of the u.k.'s decision to leave the

prince charles will tour the bank and meet governor mark carney today. since 2002rst visit and it comes after a year of skirmishes between the boe and some politicians over brexit, as of being toocism political. global news 24 hours a day, powered by 2600 journalists and analysts and more than 120 countries. find more stories on your bloomberg. angie, thank you very much. we're getting some comments coming through from the deputy saying there's no need to take action with yields around 0%, but saying it's possible to control rates and we know they're trying to control the yield curve in japan. manus: we will talk more about the ecb. let's go to juliet who is standing by. 1.5 trillion added over the past 30 days. what did you contribute? [laughter] >> not much, i haven't been doing much at all to lift the economy, but we been seeing some great buying coming through in equity markets in asia. focusing on the fact that the bond program could be pushed out past the march deadline and the strong likelihood of a december 14 rate hike. you seen a lot of buying

speaking in liverpool, mark carney sets out a manifesto for central bankers and governments to boost growth and make the world economy more people. carney: real earnings have grown at the slowest rate since the mid-19th century. growthhis week income that has focused attention on its distribution. inequalities that might have been tolerated during generalized prosperity are now felt more acutely. powered by more than 2600 journalists and analysts in more than 120 countries, i am sebastian salek, and this is bloomberg. mark: let's look at equity markets today. other asset classes, starting 600, whichx -- stoxx initially fell on the referendum results, finished today roughly half a percent higher. that is the euro stoxx 50. 0.2% againstp by the dollar. it was down by 1.5% yesterday. big swings yesterday. it finished the day higher. rising today as well. tight trading range today. there is the italian 10 year. yesterday at one juncture, up by 16 basis points. down by three basis points. the market reaction seems to have been felt yesterday. there is the price of crude today, down by 0.9

mark carney sent out a manifesto for central bankers and government growth and make the world economy more equal. decade realpast earnings have grown at the slowest rate since the mid-19th century. this weaker income growth that focused attention on its distribution. any qualities that might have been tolerated during generalized prosperity are now felt more keenly. angie: al gore has met donald trump to discuss an issue close to his heart, global warming. the president-elect has rejected the existence of climate change. gore said their truck -- talks were a sincere search for common ground. mr. gore: the bulk of the time was with the president-elect. i found it an extremely interesting conversation. and to be continued. i will leave it at that. thank you. angie: singapore and australia are introducing collateral rules for over-the-counter derivatives. will be required to have systems ready to exchange collateral known as variation margin which covers daily market swings. the guidelines which will prove -- apply to very admit -- variation margins are part of an initiative to make tran

he knows kristine lagarde, angela merkel, mark carney very well.hen you take a step look and look, it's controversial. another goldman sachs name donald trump is surrounding himself with and the secretary of interior is a new name he's putting out there today. >> reporter: that's right. well, first to your point about him being from goldman saks, it comes from the heels of steve mnuchin being tapped. of course, this is a president-elect who ran on a platform of draining the swamp. is he draining the swamp? that's what critics are asking today or is he putting more billionaires or people inside of wall street in these top positions. i got reaction from his supporters about that as well. two sisters, 75 years old, drove about 3 hours to be here. they say, look, he is putting people who are successful into these very important positions. on the other hand, you do have some of his supporters who say we'd really like to see a bigger change, a more robust change in some of these picks that he is making. you talked about interior secretary. he hasn't appo

did mark carney misstep by going to 0.25%? is the crunch point for carney, in terms of inflation? >> you mean, where does inflation have to go? clearly, we are in a reflationary environment around the world. no, i don't think he made a misstep when he lowered rates a quarter of a point. back then, nobody knew what would happen after brexit and that was logical. now we see relflation in the u.s., eurozone, and china. commodity prices are up. i think that will keep the u .k. .k. ok. anna: we might get more inflation because of the weakness in the pound. this is mapping global trade flows. this takes the u.k. and takes the total trade within various parts of the world. the u.s., already key to the u.k. trade story. two countries that britain has to appeal now and get further up the queue, in terms of trade negotiations. how muchxperience, difference can that kind of trade deal make for the u.k. trade story? >> i think it could be pretty good. the obama administration said the u.k. my have to go to the back of the queue. have to g

mark carney is saying the bank of england will tolerate a. of above target cpi. most of the is 2% target is that it should be according to consensus 2.5% and may go higher than that. he says their tolerance for above target cbi is limited. he will probably have to raise interest rates if they get to 2.5% that could take three years at 100 basis point of moves first of you can expect the bank of england to be looking at raising interest rates going forward. will slownsumption because inflation is going to squeeze income. that could take up to 1% for u.k. gdp over the next three years. the story is that the economy itself is not feared that badly. have market activity can you can see that growing at the fastest pace in 10 months in the months of november. what does that say but the health of the economy specifically in the u.k.? holding the economy is up. it is a longer-term issue with what deals with brexit. so far the uncertainty that would cut growth hasn't really happened. but that could come. inflation is the one measure what we are seeing some evidence that i

plus, watch out for our interviews with former ecb president and bank of england governor mark carneyerg will have special coverage wednesday on the fed decision beginning at 1:00 p.m. in new york. still ahead this hour, a research firm releases its latest survey on the most expensive cities for ex-pats. we will preview that. the yen next, may weaken to 118 by year's end, says one trader. ♪ rishaad: we are back with a quick check of the business flash headlines. chinese oil production rebounding after prices rallied on global moves to curb output. production in november advancing 3.4%, the highest level since july. that was not enough to overcome the industry's longer-term slump , china's output still 9% down during the same month last year. state ownedchina oil company may consider an ipo that could raise $10 billion. sinopec has asked banks to submit proposals for a potential hong kong listing. the biggest refiner agreed to sell a stake for more than $15 billion. sinopec has yet to comment. rishaad: let's have a look at shares on the way down for a second day in tokyo, agreeing to b

mark carney could decide to look through that. richard: we won't look through it.huge pressure on wages. richard: that's right. high probably a little bit , but it is going to be heading in that direction. inflation with weaker consumption power. real incomes are decreasing. that is something that is going to end up leaving a mark on u.k. gdp and consumption. it is hard for me to see it as a positive. francine: is brexit and this lack of growth distracting us from having a common policy in the middle east? sony: absolutely. if you just look at the degree of attention that needs to be paid by all sorts of government bodies to issues that are essentially problems created by ourselves, if you look at for the next 10 years, the single biggest priority of the u.k. government is going to be brexit and brexit-related issues, there is very little scope left to address more important issues. the uk's long productivity declines. not just foreign policy, but domestic policy. tom: let's continue. we have so much to talk about through the morning. seth masters will join us. lat

this is significant, as every piece of news is poured over to understand what mark carney will do andrexit means for the u.k. economy. we have manufacturing u.k. pmi for the month of november. it is one of the freshest data sorry,ming in at 43 -- 53.4. economists we had spoken to were expecting 54.4. it is below what economists expected. pound pretty much unchanged. donaldes brexit and trump mean for foreign policy around the world? will 2017 be the year of a total reset? with me now is john fryer and george magnus from oxford university. george, we keep saying it is a reset, the end of the world. we had the greek crisis. we had what happened in the middle east. how significant is what we're seeing? are we jumping at shadows when you look at the italian referendum or can you say we are being taken over by populism? george: i think it leans in that direction. i think the significance of what happened this year -- and this may be only the hors d'oeuvre for things that lie ahead -- is unpredictability. the kind of world where we can actually -- where people make risk assessments, particu

mark carney has been modeling a buffer or transition agreement.at be the most hopeful thing for banks? douglas: it would be helpful to know if that is in the planning. in thek it needs to be, sense that when you think of the regulatory reforms we have been through, when the reforms are finalized, there has been usually a two-year period of implementation so people can collect the information and presented it in the way that is now required. it is difficult to think that something as significant as changing the relationship with europe, that you can say on day zero, we are moving from that system, and on day one, you can accommodate everything that has changed within your system, and importing, and so on. i think there has to be some period of transition. in terms of the planning, if there is not a belief that there will be some period position, you have to think there might be non-and accelerate decisions. francine: have you not gotten any assurances from the bank of england or the government that it is the case that have a transition area phase t

francine: how does brexit affect mark carney's thinking and the appetite for your companies in the u.kg to issue more corporate bonds? still a relatively small market compared to the u.s.. clearly, people will try to take money out in this market. we talk about the third runway at heathrow, you will see people coming out in sterling market. but that remains a niche market. talking about central-bank policy, he has said he is going to try and accommodate the system and make sure it runs right. he will do whatever it takes. francine: thank you for joining us, isabel. you are seeing live pictures from mumbai. the news conference following the rate decision earlier on. six were expecting the governor not to change rates. he has left rates unchanged. this is two days before the fed. we are hearing from main players in the r.b.i.. one of the things they said in the last half-hour in the news conference was that they did not an change rates because of fed policy. that is something we will keep a close eye on. we will keep on top of that news conference and bring any breaking news when we get

that will complicate decision-making for mark carney going forward. dollary, the strong leads to deflation and they will get inflation. david: tell us about the dilemma mr. carney is facing here. just to mike's point about the currency and how it's going to try to contain inflation, the dollar and u.k. are not like germany and switzerland. i think carney will look past it. that are some corners for -- right now, making sure demand does not fall off the cliff. the headlines coming from saying they expect monthly volatility will continue, but that recent gang mike was talking about does imply a smaller consumer price index overshoot. that's that recent gain mike was talking about. geoffrey: you are facing two very different cycles. the fed trying to prevent the economy from overheating on a gross basis where the boe is more about uncertainty. you think about the management that can drive inflation lower -- if people don't spend anything come it you get some internal disinflation. does not want to tighten financial conditions co. alix: now off by .8%. wh

it means that mark carney, who said he would look through this, his right to do so.ays been big fans of this approach. if you are in the midst of a major depreciation of the currency and have major uncertainty as to where the economy will land after the brexit negotiations, your monetary policy should be on the dovish side. it has been a little bit more open and that it is more symmetric and could move anyway -- either way, but maintaining this dovish tone makes sense. tom: what do you presume for the productivity of europe? it is a great mystery in the united states, and i understand it is a mystery to capital dynamics, labor dynamics, total factor productivity. in europe get its act together? out the i.t.u take producing sector, which is a big chunk of manufacturing in the u.s., there is not a major difference in productivity growth in germany and the u.s. it is down to one big sector. obviously the u.s. was right to invest that much. jump inxpect quite a 2017? reforms have stalled. tom: we are out of time, thank you so much. when we continue in our next hour, on t

we know mark carney has been working on a buffer transition agreement.ld that be the most helpful for banks? mr. flynt: it would be helpful to know if it is in the plan and in the sense if youink about the regulatory forms we have been through. aen reforms are finalized, two-year period of limitations so people can collect information and presented in a way that is required. that asfficult to think an the as changing the relations say on day, you can zero we are moving from that system a you can accommodate everything within your system. there has to be some of period of transition and again, in terms of the planning, if there a not a belief that will be transition, you have to plan for the fact it may not be. francine: and europe not had assurances from the bank of that theyat the case have a transition refacing they are planning for? has clarifiedody that the everybody recognizes the importance there are arrangements on both sides of the equation are as possible. not so much about the financial system but a reflection of our customers. if our customers

the sooner we can get to some -- ent of clarity francine: we know mark carney has been working on some offer or transitional agreement. would that be helpful for banks? douglas: when you think of the regulatory forms -- reforms we have been through, there's usually two years of implementation some people can collect the information presented in a way that is being required, so it's difficult to asnk that something significant as changing the relationship with europe that moving fromwe are that system and on day one, you can accommodate everything that has changed. there has to be a time of transition and again, in terms of lanning, if there is not a belief that there will be some position, you have to plan for the fact that there might be none. francine: and you haven't got any assurances either from the bank of england or the government that they have a transition area phase they are planning for? clarifiedobody has that but everyone recognizes the importance of making sure the arrangement on both sides of the equation are as smooth for customers as possible. are a reflection of what'

cbi, mark is the carney at the bank of england, even david davis the brexit minister, is now moving in of that arrangement. i think what everybody fears is a situation whereby we trigger article 50 by march. that is that two-year time of negotiation. at the end of two years, let's just assume, and this is the worst case scenario, that the negotiations fail. unionhe 27 european nations have the right to kick out the u.k. from the european union. so it's not a hard brexit it's an ejection exit and that could have a very negative effect on the u.k. economy. everybody is starting to focus on starting to try to achieve a positive outcome which mena transitional union. staying in the economic area. a maintenance-free trade agreement but i think everybody is becoming very worried about this injection scenario. if you like, that is hard. manus: ballpark at of credits lease stays with us. plenty coming up. harker of credit squeeze stays with us. plenty more coming up. state with us will stop ♪ ♪ manus: just after 3:30 in the afternoon. believe thedo you yen is really strengthening or do you bel

carney put. there is a lot of puts out there that have been applied. the don't bank on that going forward as we move to tight spots. markchris jeffery, strategist at lgim. stay with us. you are watching bloomberg. ♪ mark: this is "bloomberg markets ." i am mark barton in london. julie: i'm julie hyman in new york. what is going on over there? mark: a little lower today. all about the banks. we focused big-time on the banks' view the last 25 minutes. spanish banks may have to give back billions of euros to mortgage customers after a ruling by the eu's top corporate a look at currencies today. the euro against the dollar yesterday was lower since the beginning of 2003. and have a look at the bond markets today, as we approach the european equity close. this is bloomberg. ♪ bloomberg world headquarters in new york and london, i am mark barton. julie, let's get over to you. you are watching crude inventories, any second now. julie: in advance of that we have seen oil fluctuate. it was higher but now flirting with the unchanged level at the moment. libyand pull between getting its oil fields back online and these weekly inve