We are watching the Worlds Largest jewelry maker. The latest trading figures. Welcome to countdown. I am mark barton. I am anna edwards. I am manus cranny. The start of the program and our top story. In an exclusive russias finance minister says the country is heading that way didnt recession if oil stays at around 45 a barrel. The rush is headed into a recession if oil stays at around 45 a barrel in the Current Situation and talking about 45 per barrel and expected activity for all year long and expect that to be for all year long. Is 45 a barrel what youre working on now . Is one of the possible scenarios. A possible scenario that generally that should be a little bit higher. In case it would be the price the decline would be between 4 5 . How long do you see a recession lasting . It is dependent on the global market. [indiscernible] a positive gdp performance. What does the price of oil stays low around 45 beyond this year . Something like 170 billion [indiscernible] now its something around 10 billion rubles. It is 3 trillion. Hopefully, more than budget spending that the oil prices is important for the budget and losing something with the oil price. But we knew in terms of budget. For more, lets cross to Ryan Chilcote, he is standing by. We will be hearing more from that interview later this morning. Give us a sense of how confident government officials are about countrys future. You know, i think they are trying to put on a brave face. You get a sense they do not know how it is going to play out precisely because they do not know what to the price of oil will be. 50 of the russian budget depends on oil. This is an oilbased economy. And we have seen that in the roble after a disastrous year in 2014. We saw a little bit of a correction in the ruble and seeing employment again in 2015. You know, as the head of the largest banks told me, if you know what the Oil Prices Going to be, i will to you where the ruble is going. The same could be said about the economy itself area itself. Is there a sense it could be handled differently . The ministers and action couldve been taken earlier, for example. Absolutely. Interestingly enough, somebody economy minister mentioned in my interview. I said if you change one thing of how the country responded to the crisis and he said we shouldve acted more quickly. We are similar sentiment from the russian president at the end of last year sang the centralbank shouldve acted more quickly in raising rates. The economy minister told me they would not have had to raise the benchmark rate to 17 if the rates had been hiked earlier. Yesterday, we study head of the Monetary Policy, the deputy head of the centralbank relieved of her duties. A new individual will be in charge. She will be first deputy of the centralbank. But it will not be her was at the helm of policy that will be running the show this year. That does reflect a little bit of disappointment though it has not been overtly said by officials or the russian president here in how things were handled at least in the very first days. Ryan chilcote live in moscow for us. Stay with us for more exclusive interview from russia. Well be sticking to the russia businessman, the owner of the Evening Standard. That is that seven 30 a. M. U. K. Time. In less than half an hour, will speak to the ceo of one of russias largest financial groups. That is at 7 30 a. M. U. K. Time. Ok, reporting of numbers. One of the biggest Luxury Brands it is Caroline Hyde has been pouring over the numbers. The headlines, it is a mix. It really begins to tie up to the story from orion in terms of what people are spending. And it ties in with the burglary yesterday. Many burglary yesterday. Many of them burn very and it ties into the burberry yesterday. Originally, regionally, europe is doing very well. People are spending more. A Better Exchange rate. 9 sales growth. America not as strong as expected but surely growth. Up 7 . Many felt it will grow and a doubledigit. Jory doing well. Jewelry doing well. Asia is adorable is brutal down. Th ea the watches fell the most. And distinction between wholesale and retail. [indiscernible] somewhat also go to department stores. Those relationships, single much caution from their wholesale partners. There have not been wanting to act to the lineup. Concerns when it came to watches. It seems overall this is a company that is feeling quite a bit of pain. Watches are down 4 . We are seeing growth in other sections. They have plenty of cash, almost 5 billion euros. To do investing. They give us no outlook. No direction of what they see for the for karmic future. Burberry is in the site with problems in hong kong. How does it compare to earlier this decade when it comes to profitability . What really shocked me when i look back at previous years the beginning of the decade. Back in 2011, they have phenomenal growth. In excess of 82 growth and profitability. Now set to have to percent growth this year. Companies that are having to rearrange where they see growth in emerging markets. And the volatility of exchange rates. Richemont is on reporting any euros. Richemont is reporting in eruos. [indiscernible] i will add a little bit of optimism. They are sort of showing some of the concerns for 2014 is going to 2015. Political instability in hong kong is down and hopefully we think. In russia and thailand weak tourism and that seems to be picking up. They said well start to see improvement in new york potentially in china. Festive outlook when it comes to Foreign Exchange they see outlook what comes to fo reign exchange. Thank you. Some the other stories written some the other stories we are following. [indiscernible] the first reduction since may 2013. A blackberry and samsung denied that are in talks. Blackberry ishares surged. Blackberry cell back after samsung said it was groundless. Quite safe youre wondering what americans have been vying with all of the cash that ms. Satan at the gas pumps if you are wondering what americans have been saving with all of the cash they have saved at the gas pump, restaurants. They have been climbing as the u. S. Total share. More exclusive interviews from Ryan Chilcote in russia. time for todays company news. It is waiting for to show how it will protect its cash holdings. The comments follow a slump in the ruble and thats fueling concern that the biggest brewer will not bid to contain losses. It is the Second LowestInvestment Grade and is not sustainable at the current ruble exchange rates. Jpmorgan has been pressed for more evidence about a data breach that jeopardized millions of customers last year. Thats according to bloomberg area a group of 19 u. S. States are seeking information including any vulnerabilities exploited at a fulltime mine event that led to the discovery of last years reach. It affected 76 million customers and small businesses. Carlos love has, the biggest investor in the New York Times. After exercising options thats according to a statement from the company. Skl\\ slim bought the shares boosting his statement to 16. 8 of the companys class a shares. To russia. They face a deep recession and prices that are fortified dollars a barrel. Economy minister said if the oil slides so does the ruble. Emergency failures emergency measures failed to contain it. You say by now that the domestic crisis should not have a major impact on core europe, why is that . Russia has written all hopefully by at least german. Last year, when russian lashed out and invaded or annexed crimea, that had a big impact on german Business Confidence not so much because of the exports but because russia was only the left of the biggest export market. More because many German Companies are investing their and inspecting good return and with the sanctions and everything coming forward, they were afraid it would not happen. By now, many businesses do not expect to do really Good Business in russia anymore. What happens inside is written off. Anything that what happened outside russia, if it lashes out into deeper in ukraine, that would have a big impact. That is the risk to watch. We had that interview with the economy minister talking about a detraction. And really sort of saying he has to keep an eye on the price of oil. Ruble has been tanking. Im seen reports of 7580 is the real value. What is your take . Is there more mileage in terms of the currency and supporting that currency . The key question is, where does oil go . We ask that in the Short Term Oil might follow. Over the rest of the year, we expect it will stay low. Maybe even quite a bit if the Global Economy picks up speed. Maybe investment in the west will boost demand and the oil price and recover and stabilize the schulz ruble. When you say recovery recovery to where . Really a moving target. When we last publish our forecast last week, will forecast in average oil price of 70. That sounds right now pretty optimistic. However, if what we are seeing at the moment turns out to be an exaggeration of the underlying it could be quite large and this may not be optimistic. For the time being it is a moving target. Your take is a loyal Lower Oil Prices some people are suggesting that in the short term we will see a reduction in investment levels out of the precaution. That could be at risk. In the short term it seems to be doing around equities and could have an impact. Are we in danger of the railing . Derailing . Is true it is almost at the transition risk. We are now with a Lower Oil Prices and inevitably going to be adjustments to the risk. These risks are limited to small the highprofile groups. Those who produce oils and those who relate to the producers to the banks. They make the headlines and that is what is driving market sentiment. The benefits too many, many people around the world, almost small companies, they do not make the headlines, but they will. Sentiment will turn over this year and get more and more positive. Ultimately, spend less at the petrol station as spend more and other things. The fear is low inflation from Lower Oil Prices will become entrenched. What is to tell us that low inflation will not become entrenched in the economy . In economies like the u. S. A u. K. Where unemployment is falling, no real risk that inflation will drop dramatically because of the oil price and inflation expectations. There will be a oneyear hit the next year. In the eurozone, i normally would not say the same but with expectations already so low and talk about deflation, the risk is bigger. Thats why the ecb has to react firmly to this. Even for the euro, this is clearly a positive. We want to talk more about what the ecb should do when they meet on the 22nd. Christian schulz stays with us. Still with us is christian schulz. Will we ever have to mention the three letters ever again . In 46 months, we will have the final verdict. If it follows what the general said yesterday in the opinion i think it is relatively unlikely that it will ever be used. Whether the greek elections are passed on the 25th and it is all about containing risk potentially, it might be waive at the marketsd once again depending on what happens on other issues and the ecb versus qe. What kind of greenlighted do we have for qe . What are the conditions that could be applied that we learned yesterday . Qe was not in court. It is about buying sovereign bonds as well. The german court wanted to set the decision on to the European Court and said we should be under three conditions. The bond purchases would be legal. And one of them is an antilimit of how much could be bought. That could be qe as well. Another room was the seniority. The ecb would not participate in debt restructuring. They could be applied to qe. The application will rejected both of these which mean that would not apply to qe either. It leaves the ecb more room and more flexibility in design is program. For instance, when the discussion comes around about what to buy investmentgrade and not to buy, there is much more room now for the ecb to design the program than there was before. A broader argument, mark carney touchingly yesterday the uks in a different position every is trying to the bond markets and the u. S. No hike this year. What is your view . Can anybody move . India cut rates. Can anybody raise rates in 20 in 2015 . And yes. We think the u. S. In particular will raise rates and unemployment is falling. Still Wage Inflation is the missing link. When unemployment as low as it is now and Participation Rate showing no signs of rising and no sign of millions of people who have not been in the job market completely locked up returning them pushing down wages, we didnt Wage Inflation will kick off. Christian schulz. After the break, an exclusive interview on countdown, we will be lliv live in moscow with the head of russias secondlargest bank. You are watching countdown. You have sterling at a six year high and the euro at a six year low against this currency. A clear message of convergence is what was presented by mark carney yesterday. We are in an environment where we expect rates to rise. Europe is it a different spot in case you had not noticed reinstalling those for the sixth day or the euro declined for the sixth day. I love what neil jones said about the sterling trade. It is the peers perform of convergence and with that in mind he had a new target area and we are trading at. 7726. If your in any doubt you are in any doubt about what is coming up in the u k, there is a spike in the readership. Volatility in sterling isnt a fiveyear high . This is sixmonth volatility. The fx market is in sterling. The euro starting in focus. We had a conversation with [indiscernible] lets have a look at th Indian Central Bank hade an unscheduledrupee dollar. The review of the economy. They rate cut their rates. They are concerned with inflation. Neither saying disinflation processes [indiscernible] the rupee strengthened. The dollar has declined byhas. 6 of 1 . Lets return to the top story. We have been speaking to Ryan Chilcote. Talking about the extent of the recession that russia will experience if we see oil prices staying around where they are. Ryan joins us from moscow. Lots of uncertainty in the russian capital. Russian officials across the board saying they do not know what will happen with the russian economy. The ruble and many other things because they do not know what will happen with the price of oil. Yesterday i sat down with the countrys economy minister and asked if things start stay the way they are what does that mean in terms of gdp . Have a listen. The Current SituationSomething Like 45 per barrel. Expect that to be all the yearlong. The real depreciation should somewhere be somewhere between 4 and 5 . This is one of the possible scenarios. That is the worst possible scenario. The belief that generally it will be higher than now. In case it will be at 45, the decline will be between 4 and 5 of gdp. How much long do you see the recession lasting . It depends on Global Markets but we think [indiscernible] it will have a positive gdp. What if it the price of oil stays low, around 45 beyond this year . So we have Something Like 170 billion. It is around 10 trillion rubles. The fiscal gap if the prices will be around 45 is 3 trillion. That the ruble price is for budget and we are missing something with oil prices but [indiscernible] in terms of budget. There are limits to what a flexible policy can get you. As the ruble devalues inflation is running in the double digits in this country. Part of the reason is so many goods in russia are imported. The suppliers, importers have to pay more for those same goods. That is an issue because 2015, 1 of the things we heard from the economy minister as well is the first year that russians will see their disposable incomes decline in more than a decade has incomes are not going to rise in sync with inflation. How confident is the leadership in russia that they can deal with the risks that they face. There is the great unknown and that keeps coming up in these conversations and that is the oil price. I think theyre reasonably confident but i do think that there is concern about how they handled the crisis this far. One of the things that the economy minister told me yesterday when i asked him what he would change if there is one thing he could change about how they dealt with this my he said we should have responded more quickly. Specifically he singled out the central bank for failing to raise rates were quickly. They raced the benchmark to 17 . The last hike with a full 650 basis points, he said if they had done it sooner and this is when we saw the ruble spike and saw a run on the banks here on december 16, he said we could have gotten by with raising the benchmark rates to as little as 13 or 14 . Interestingly, we saw the deputy in charge of Monetary Policy at the central bank replaced. There will be a new individual at the central bank who will be in charge of Monetary Policy. She is not going to be in charge of determining things like rates and looking after inflation and the ruble. That will be done by someone else and that is in part recognition of the criticism we heard from the economy minister who is public in criticizing the central bank but also the red russian president saying while he fully supports what the central bank is doing he does think they could have moved more quickly. Back to you. Thank you very much. Plenty more from him as we go through the morning. Blackberries stock has surged in then fallen back on talk of a deal with samsung. What a day. A story that is not a story. We have been looking at this. Reuters put out the story saying that samsung was eyeing of library. Suddenly we see this in a resurgent blackberries stock. We said up 30 saw it up 30 on the offer and we had straight denials coming from samsung and black area. Blackberry. The fact that there were any