tom: today to me is the first day we are really into the vote. it has changed dramatically, the tone, the desperation in the newspapers. francine: it is getting personal. you have the queen on the front cover and then it gets really personal with david cameron saying, look into his eyes and do not vote to stay tomorrow. we'll have plenty more later on. also looking at the daily telegraph. let's get to the bloomberg first word news. day ofthe final campaigning before british voters decide whether the country should stay in the european union. different polls put each side ahead. there was one final debate last night on the bbc. >> more than 60% of the world's leading country does companies have their european headquarters here in german dust in london. -- in london. >> i think we have heard an amazing amount of running down of hours that he. >> we are proud of our city. the astonishing thing is that the remains side continually underestimate our ability to do better deals if we are left to do it on our own. bookmakers in currency markets are suggesting that the remain camp is in a strong position. the pound is at its highest level against the dollar since january. north korea has launched more ballistic missiles. they are capable of hitting u.s. bases in japan and guam, and the indications -- japan called the launches a violation of the u.k. -- un security council. paul ryan has revealed a republican plan to repeal and replace obama care, erasing most of the affordable care act but keeping its most popular parts. americans could buy insurance no matter of how sick they are. donald trump's campaign is asking some of wall street's biggest donors for help. he held a dinner at a posh manhattan restaurant trying to kickstart his fundraising effort. up, carlse who showed icahn. in may he joined -- he earned only $3 million, about what hillary clinton earns per day. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. cehic.jra tom: let's do a data check. today very much on the pending go tomorrow across the united kingdom, the polls opening at 7:00 a.m. futures are churning. euro, 1.1 tods, 66. oil a little bit higher. showing hr and after the big remain day we saw two days ago. 1.4661. is down to oil, $51 a barrel on brent crude. francine: the vix as you say pretty much flat. the world indices were gaining a little bit more, actually a lot more about an hour and a half ago. the ftse pretty much flat, the pound also flat. it just goes back to the fact that people are still undecided. the markets are saying one thing and the polls are saying another. tom: a little less charts today, a little more newspaper for the tone of the united kingdom. the thermometer we have been using, this is euro-sterling. here is the number of sterling per euro, and basically the move down on the right side is a stronger sterling, that is the remain push over the last three or four days after the tragic murder of the member of parliament, with a little bit ever so slightly of a weaker sterling. crossingat blue line -- i rarely do it but just to show where we were. francine: i have gotten chart roque. we should probably get a banner made for that. what i am looking at is the number of newspaper stories, newspaper agencies worldwide and by typing the nt function. there are 3000 stories mentioning the word exit in the last three months. this is basically the correlation with how many are it.word "lies" are in tom: this is a lot of brexit, those lying you know what's. francine: and this is where we had that horrific murder. you can see the tone shifting a little bit and i would say actually that today it is getting lower again. tom: it is back a little bit in the last couple of days. francine: it gives you some of the nuances we are seeing in the u.k. let's talk about brexit and the town with philip blond. great to have you on the program as always. first of all, what is the legacy of this campaign? philip: as a polarizing campaign. i think what we have actually achieved with this referendum campaign is enormous division in the country. it is a division really about how britain achieves its future. ultimately i would argue that both sides of the campaign are talking about making britain great, keeping britain great. if you look at those who argue for leaving, daniel hannan talks about distant, or opulent shores. aboutcameron talking remain for world british influence. everyone agrees with the outcome but they differ so extremely on how we get there. america,ust within huge levels of polarization, we are now seeing this in the united kingdom. francine: another 1214 hrs to go until this campaign is over because when we see the polls -- hours to goo 14 until this campaign is over. it is difficult to win the votes by saying this will be a rubbish move if you do this. at the end of the day tomorrow i'm still unsure what people are voting for? is it immigration/sovereignty versus economics? phillip: those who are voting to leave, i think their primary concern is migration. whohave a sense of those are voting have lost out from globalization. their relative loss of jobs, loss of income, and economic stability, to them the proxy is migrant. migrants are taking their jobs. older voters, often rural to fear of -- feel culturally concerned that britain is no longer recognizable. those who argue for see migration as hugely positive, see the economic and affect. britain isthat now the leading economic growth engine of europe. those who were in our for economics, those who were out before migration. the real concern in my view that nobody has addressed is what makes britain great? i want to dovetail in here today, a lot of the newspapers and the tone in the united kingdom which has been on steroids over the last 48 hours, and even as an acceleration into tomorrow's vote, here is the daily telegraph with no mincing of words. francine, tell me about it. he is pro-brexit, right? ofncine: we have had a lot confusion. there is a lot of history, where would churchill stand? tom: back with the heritage of europe. francine: that is why it feels ugly at times. tom: philip, your firm is record for inventing -- representing certain -- that may be a monition moment but can britain affect a better military presence in europe by remaining or by leaving? phillip: i would argue is that we have issued a manifesto for british leadership. where the campaigns have been failing on the remain side, they have not shown britain leaving your. -- leaving europe. we have already got an effective reliance with the french and europe cannot defend itself without britain. the russians could probably reach paris without encountering much resistance, that is how week many of our central european countries are. tom: what does cameron need to do? phillip: he needs to create a leadership person -- position. we also argued we should make mandatory european law, the 2% nato defense target for all eu members. francine: there is another layer, inside fighting with the tory campaign. more on that a little bit later. hour, we later this also speak with nicola sturgeon and the u.k. energy margin -- minister. ♪ francine: i am francine lacqua in london with tom keene as we ramp up our coverage ahead of the all-important referendum tomorrow. let's get to the bloomberg business flash. nejra: get ready for a showdown at the volkswagen shareholder meeting. investors will take the stage the first time since the omissions cheating scandal erupted last year and they are expected to challenge management over the way the crisis has been handled. vw has more than $18 billion to pay in repairs and finds. h&m got hurt by a cold and rainy spring in europe, falling to the weakest sales growth in four years. they marked down merchandise that was not selling due to the weather. a merger of the two largest banks in other dobby could set a record -- i would dobby -- abu dhabi could set a record. that is the bloomberg business flash. are stillthe polls too close to call ahead of the brexit vote. with less than 24 hours to go campaigners have been out this morning. edwardsquarters -- anna spoke with ian duncanson. i am absolutely certain that when the second largest economy in the european union votes to leave, it will send a shockwave through the european union but i think that will be a good thing because i think it is going in the wrong direction. italy has not ground for 10 years, high levels of unemployment, youth unemployment at 40% or 50%. greece is stagnant. europe is not working and it needs to change. francine: anna joins us from westman stir. you had some great interviews yesterday into today. he is probably one of the best-known brexiteers campaigners. what else did he have to say? anna: he was spelling out the question voters will be answering, whether we should remain or leave, and he said it is about taking it back control. we have heard that debate at wembley last night. they are going to be very critical about the bank of england's involvement. he has notr has said been giving personal views. what is the level of desperation today? i hear it in the voice but i am not smart enough to know the nuance. desperationlevel of of the prime minister, boris johnson, and the rest. high context of rhetoric. things have gotten fairly frantic once again. both sides are going to be on tour today and they are not actually here. boris johnson is touring the country, apparently flying all over. the remain camp is holding a rally in birmingham and they are both sort of trying to rally the troops. we have been begin to business leaders and politicians on both sides, and away from the desperation in the final days, they both want a message to be sent to brussels. to be donent things differently after this is all over. tom: anna edwards is hanging out am.h that come -- beckh they are pulling out every celebrity. francine: celebrities are weighing in and you have the queen, we understand she is neutral but the sun tried to put her on the front page. tom: can they do that without being punished? francine: i am sure their lawyers are talking to her lawyers. we have not talked about the political fallout for the tory party. , how thisuch acrimony party can come together again. big, open is a question. the official line from the leave campaign is that there would be no change. saying he believes in the party being united after this, and both sides will say that they want to see that. others point out that we could see a leadership challenge. how quickly that would calm would be a big open question. houston could another election be called? term parliament of course in the u.k. tom: anna edwards, thank you so much. a little bit of the flavor we have in london and across the united kingdom. in our next hour, andrew sentance will join us. always controversial, very opinionated. and then a conversation john browne on the emotion of remain. ♪ francine: tom keene and francine lacqua in london as we look ahead to that brexit referendum vote tomorrow. time for our morning must-read from the sun. on the first page they have the queen and on the second page they base lycee just basically say do not trust david cameron. they say look into his eyes and vote leave. this feels very personal. let's get erik nielsen. philipll with us is lond. how does the u.k. recover from this? are you concerned about political turmoil and less there is a very strong remain camp vote? erik: a close vote one way or another will be a mass and it will probably be a bigger mess if it is a brexit vote i think, because cameron would have to leave and get a new government. if it is a vote to remain, my guess would be that politicians do what they often do which is sort of kiss and makeup. francine: is that right? phillip: i think normally you would say so but the level of high that has been so actually i think what you will see is the formation of a party within a party. because the government jordy is so small, -- majority is so small, it only takes a small number of people to act together and stop the government from passing legislation. i think what we could easily see is enormous instability and if you have that and the inability to pass legislation, what it will do is increase the opportunities for the opposition. they have a really, one might argue, no chance of winning an election. justill have people are iods ofare -- per warfare. if the government loses i think cameron will go and will be replaced by a leading brexiteers. tom: let's go to the prime minister in bristol. this is a new casual prime minister. there is former prime minister john lord major as well. erik nielsen, you have a heritage of denmark and unicredit. tell me why the united kingdom can't be more like norway, canada, and denmark. what is holding the united kingdom back? erik: they could. they could definitely vote themselves out and choose to become like norway, which means that if you do everything, you pay the bills but you are not at the table when changes are made. , their biggestlo concern that they are never consulted and they just get a letter saying please do. switzerlandagine where you negotiate back and forth, and in some ways you hear that switzerland could be the biggest loser because the eu is already tired of this one-on-one, deal after deal. back andsist we come talk about pound strength being the biggest surprise. we could go all day here. francine: we are. we are just getting started. we speak with nicola sturgeon next. ♪ you guy's be good. i'll see you later [ bark ] [ bark ] bye. see ya pal. ever wonder what your pets do when you leave home? [ laughing ] aw you cutie pie. aw. aw. aw. aw. [ barking ] [ washing machine running ] party's on! know what your pets are up to with xfinity home. xfinity. the future of awesome. see the secret life of pets, in theaters july 8th. tom: good morning, everyone. from london, bloomberg "surveillance." tomorrow the vote in the united kingdom. francine lacqua tom keene, contrary to rumors we are still on speaking terms. coming up, a conversation with the first woman of scotland, nicola sturgeon will join us. really looking forward to speaking with the first minister. to our first word news. nejra: police in paris have banned a planned march against reforms, and they are concerned it could result in violence. the dispute has led to strikes and public transport and garbage collection. the government of iraq may have declared victory prematurely in the battle of falluja. only one third of falluja has been cleared of islamic state forces. iraqi forces pushed into the center of the city last friday, leaving the government to claim victory. on capitol hill, senate republican supporters of a compromised gun-control measure say they are gaining momentum. there is a major roadblock. the nra has come out against the plan calling it and can't to shall. -- calling it unconstitutional. it is not certain if a bill can when puerto july 1 rico has to make a $2 billion bond payment. they are trying to restructure their $70 billion debt. pulling out of the rio de olympics, due to the risk of zika. murray kilroy is pulling out. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. this is bloomberg. tom: thank you so much. this is the back story for the next couple of weeks, rio. between the russian banning and track and field and selected individuals walking away, it bears a little bit of watching. francine: it goes back to i guess the reputation of a country which can impact investors. tom: you really wonder when we move on firm remain accident. -- from remain brexit. francine: let's look at the pound is a good benchmark, what it has been doing. tom: erik nielsen with us of unicredit. indexs a wonderful new from bloomberg. thanks to arch campbell, erik nielsen, this is a dx why equivalent. this is major trading partners of the united kingdom with a massive plunge in the crisis. like banks in the united kingdom, sterling really has not come back and it is an outright depreciation and leveling out. could the surprise of leave be a strong sterling? i do not hear anybody predicting that. erik: i would bet my money against that. the u.k. runs the biggest deficit of any ocd country and the biggest on record of the u.k. there are huge takers of other people's money and finance inc. and the uncertainty that comes with brexit must slow down the inflows. tom: how do we move from switzerland over to the united kingdom as you discussed earlier? erik: this discussion was about what model britain would try to adopt in a brexit scenario. i doubt that they would even try to do as switzerland. that is everything boris johnson and companies say they do not want so for him to turn around and be an important part of the government, and go out and do it seems very difficult for me to imagine. francine: when you talk about switzerland, there is also an underling -- an undertone of anti-immigrant switzerland. is itou look at pound, going to go down a matter what the outcome of the referendum is? that if itld guess is a vote to remain, you see a big rally in pound. the moment that the tragic death confirmed, people said it would lead this way and it would buy the pound. said, the underlying economy in this country is not that great. they have some serious imbalances in the budget. tom: to me in america, it is all about jobs. bring up the chart of unemployment differences between europe. i did not really understand this. the united kingdom versus the entire eu, this is a major job gap. is that the ultimate fear of people away from immigration and the emotion that i see, is about people having jobs? they do that in the united kingdom and they do not do that in europe. that is the perception. erik: that is the perception that it is not quite true. if you take the european number and adjusted further participation ratio which has gone up significantly, the unemployment rate goes below the u.k.'s. what you have seen and the last five or six years is an enormous increase in participation. tom: so this is critical what erik nielsen just said, it is about the ratio of people. francine: it is important also because there has been a lot of argument of having captured the nuances that an economist can. we will get back to erik nielsen very shortly. we will speak to andrea leadsom up next. ♪ francine: i am francine lacqua in london with tom keene as we wrap up our coverage ahead of the all-important referendum tomorrow. tom: look at a lot of different things that we are talking about , and part of it is an emotion. this is something we have heard from a number of people over the years. john browne will be with us later on "surveillance," lord browne with british petroleum. he is perhaps the most emotional. here is john browne on why he will remain. "i come from a mother who survived auschwitz and a father who fought a war in europe. i think it is important to say we do not want that again, and people who are together, however difficult the discussion tend to do better than when they are apart and shout at each other." we look at what was an archery field in tudor times, three bombs fell outside our window in the 1940's. francine: a lot of people have been trying to go back to the historical ties, reminding the british people this was a european project to ensure peas after the second warm or -- second world war. some are saying safety and security is in the hands of nato and others are saying we need a more economic union. tom: i have had the privilege of talking with many people about this that are hugely on the same page and deeply emotional. forget about what is in this this morning, all of this collected a motion, and focus on going back decades. path of theee the european union forward to now? runningthink we are into a degree of problems but as an economist i would argue that it is very difficult to draw the line of integration and say, it has been in official and then no more. i am very much in the camp who would like to see a continuous integration but right now we are treading water a bit. francine: would that not be easier if brexit were to happen? you could see a single united kingdom led by london that would be more like a zurich and the rest of europe integrating? erik: i think there is little doubt that europe without the u.k. in it would have an easier path to do what is needed to get the eurozone to work properly, but there are other eu countries that are not members. do -- whatt they they need to do is institutionalize the speed of your. francine: does the eu need to be reformed? there are probably more eurosceptics in italy and france than the u.k. does this just make up -- make us wake up and say, we need to hear from brussels? erik: i did not see that statistical paul. ofaw one that set about 60% people thought the distribution of power in brussels and the capital were appropriate where they wanted more central power, and 40% the other way. i think the picture is quite split and we're in the same place as america. we blame everything on brussels as they blame everything on washington. francine: the u.k. energy minister some is joining us. -- andrea leadsom is joining us. how can the tory party get back together after so much acrimony? andrea: when you are inside parliament, when you are in the members' tea room people are still friends. after the debate last night we do sort of get back together and i get congratulations from colleagues who are on the other side of the argument. i think a lot of the hype that is in the news is people having an honest, intellectual disagreement. it does not mean we all hate each other's guts. francine: i am looking at the front page of the telegraph, talking about the not see jibe. as the campaign -- the nazi jibe. who runs our country goes to the heart of everything that so many people believe in. there are those who believe we should take back control, it should be for our government to run our country and our people to elect us and kick us out if they do not like what we are doing. and there are those who think the pooling of sovereignty is absolutely perfect for us. they really -- it is a really fundamental debate. minister, i congratulate you on the lightness of your rhetoric. you do mention that europe is growing modestly slow, held back only by the growth of antarctica. are you suggesting antarctica is growing a little bit slowly -- more slowly than europe? what would they do with a brexit vote? andrea: honestly, i have had 25 years running financial services businesses. i was on the treasury committee and i was sitting minister for a year. i absolutely believe that if we vote leave we will have a fantastic economic future ahead of us. let's be clear, the eu which has the sole right to negotiate free-trade, has been a disaster for the whole european union. and 53 years they have negotiated free-trade were $70 million in other countries. britain on our own will be able to negotiate free-trade. as even the commission themselves have said, their failure to agree to free-trade deals has cost us in the u.k. up to 300,000 jobs. there is no doubt in my mind once we can trade freely with the rest of the world, and by the way, the average time it takes for free trade outside the eu to negotiate is about two years, not the 10 the european union has been taking. francine: it is extremely difficult to look at the different numbers because both sides cannot agree on anything. that's have a question from erik nielsen. erik: the thing i wonder most about, i am an economist working for a bank, what strikes me is that i have never in my life seen such a consensus among major respected institutions across the world and in britain about the economic negative effect of leaving, short-term because of uncertainty but also longer-term. i do not really understand why it is a matter of not being oppressed. do you see where the growth will come from? how do we survive or get through the two years of uncertainty when so many respected institutions think the opposite? andrea: let's be very clear here. you knowe an economist as well as i do there was enormous consensus that if the u.k. did not join the euro, that our economy would tank, we would have mass unemployment, financial services would move. that is what the last bit of consensus was about. i bet you everything you like that everybody who peddled that is ashamed of themselves. let's talk about another piece of consensus, the failure of any economist to forecast the biggest depression since the 1930's. do not talk to me about international consensus. economic forecasting is an honorable profession but it is only as good as the assumptions put in in, and when you the ludicrous forecast that we will fail to negotiate any free-trade other than a modernist agreement with europe -- a modest agreement with europe, and therefore our productivity will drop, inevitably you get miserable forecast. there is another important point here. the institutional bigwigs who do not have to compete for a place in a good school, who do not have to queue for a doctors appointment, they have no skin in the game. it is people in this country whose lives are being affected. erik: minister, i think it is a bit unfair to come up with an example of where the profession has maybe been wrong before. it is not true that there was consensus about the disaster of not joining the eurozone. that is just not accurate because i can tell you many places including the imf questioning the risk of the eurozone. this was a very divided issue, but there is complete consensus among respected institutions and obviously, economists get it wrong sometimes. it is not a good argument in my opinion. tom: i'm going to chime in and say many economists saw 2007 coming, because i interviewed them. francine: let's just move on to investments. from an energy perspective, what would happen to that specific project if the u.k. were to leave the eu? andrea: it will not make any difference. you have to look at business decisions as being separate from political discourse. it is bizarre. people say the world is going to end. look at business decisions. the french finance minister, when he came on tv he did not mention this referendum as having a bearing on a business decision. i have been down to somerset to look at the site and they are going full same ahead. this is a very serious investment decision. look at the deutsche boss looking to merge with the london stock exchange. they are talking about basing themselves in london. you have to not look at what people say, look at what they do. follow the money. francine: the energy minister of the u.k., andrea let's. -- andrea leadsom. ♪ tom: good morning, everyone, bloomberg "surveillance." francine the tom keene in london. there is no equivalent to the tightness of this race. everybody understands how close this is. francine: it is interesting to get your perspective because i thought it was almost as ugly as the u.s. presidential election. it seems that at some times both camps are not talking about anything. tom: and the debate, particularly the remain debate is up north of london trying to get marginal voters away from the youth vote that is very much for remain. we have a wonderful set of guests this morning. we are thrilled that nicola sturgeon will join us, lord de sai, andrew sentance will join us. right now erik nielsen is with us. it is not just erik nielsen economist with unicredit. it is erik nielsen with his perspective of denmark and having a great optimism on europe. you have been so right about the economic recovery of europe but their policy -- politics seemed to stumble along. moment get brussels' act together? erik: no, i am not so sure. it is a messy situation and i worried about politics in europe these days. chances are of course it will, down a bit after the brexit vote one way or another, and because the recovery is bringing people back to work. all of these political sentiments have a structural element in a cyclical one, and the cyclical is a repairing of growth. the italian prime minister is also facing an important vote and he is saying to stay in the u.k.. who do you believe in the polls? remainkets are saying but the polls are a lot more split. do you just hedge because you do not want to take a position? erik: there has been an enormous increase in particular in the fx hedging. if you are a speculator you have your own policy but fundamental businesses, you cannot guess this one and you hit what you can and pray for the best. friday, wee look at are going to have the polls closed and we will know at 1:00 a.m. new york times. francine: we hope to know 6:00 a.m. local time. tom: what would you expect for the to do list into next week? erik: for the market, i think if it is a clear vote to remain, in equities a rally and other risky assets, and the pound. tom: erik nielsen with unicredit, thank you so much. nicola sturgeon will join us, first minister of scotland. another hour of bloomberg "surveillance." ♪ get ready for the rio olympic games by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. okawhoa!ady? [ explosion ] nothing should get in the way of the things you love. ♪ get america's fastest internet. only from xfinity. tom: one day before, it is a nation divided. 49-48. 48-49, maybe there is a desperation on the part of boris johnson and the foreign minister. a bit weaker on cable this morning. in this hour, a conversation with the first minister of scotland, nicholas will be with us in a moment. after the vote in edinburgh. we will see how they will choose. good morning, everyone. this is "bloomberg surveillance." live from our world headquarters in new york, it is wednesday, june 22. i said new york but we are in london. francine: he knows we are in london. tom: we are going to put up those code newspapers to capture for you, particularly those in the united states, a headline i do not think we will ever see in the united states. francine: in two seconds, the remaining camp led by david cameron. tom: and what a mess that is. francine: first of all, the queen says she needs to remain neutral, is being dragged into the brexit debate, and this is getting personal. it is a picture of david cameron , and the son who is very pro-brexit. saying "look into his eyes." tom: here is nejra cehic. nejra: is is the final day of campaigning before the vote on whether written should stay in the european union. >> i speak to companies around so many have their headquarters in london. don't you change your mind? we are proud of our city. >> the astonishing thing, i think, is that they underestimate our ability to better -- to do better deals, to do it on our own. bookmakers and currency markets are suggesting the remaining camp is in a strong position. north korea has launched more ballistic missiles. kim jong-un's range -- regime has tested a missile that could hit guam or japan. the first failed while in flight. japan called the launches a violation of united nations security council resolutions. donald trump beats hillary clinton when it comes to confidence. more voters with a stake in the stock market say trump would be better as president for their portfolio. -- 50%-30, 50 percent 3%. global news 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world, -- and more than 120 countries, i am nejra cehic. tom? happens oner thursday, on friday her life will be different. she is the first minister of scotland. it is a scotland that is part of the united kingdom, going back to i believe 1703. all that may change on friday. first minister nicola sturgeon, good morning. what do you need from david cameron? sturgeon: i will spend the across thening hard u.k. for people to vote within -- to vote to stay within the european union. it is right for our economy, for jobs. we are part of the world's biggest single market as part of the eu. our freedom of movement and travel here, right now at edinburgh airport, the capital city of scotland, people can get on a plane and travel anywhere in the european union freely. we need to make sure we do not give up that right. we should protect our reputation as an outward looking country that cooperates with other countries across europe. i am a scottish nationalists, but i also believe independent countries in today's world must work together to tackle challenges like climate change and international terrorism then than one country can tackle alone. francine: how confident will you see a room -- how confident are you that you will see remain vote in scotland? ms. sturgeon: i'm confident we will see a remain vote in scotland. anybody's vote for granted. that is why i am trying to make a positive case for staying in the european union. i hope people tomorrow in scotland and across the u.k. will get out to the polling station to protect our place in europe, to protect jobs, the freedom of movement that comes with it. protecting our playing a part in a bigger world. francine: what kind of reaction will we see if the scots vote remain and england votes to leave? first of all, i very much hope that does not happen. i hope people in england, wales, northern ireland, and scotland vote to remain. but scotland faces the prospect of being taken out of europe effectively against their will, having voted to remain. they have the right to pose a referendum. i hope all of the u.k. chooses to stay within the european union, because i believe it is the best option for people, regardless of where in the u.k. they live. tom: i thought your march quote was very important. here it is, the first minister speaking a few months ago before the heat was turned up on this debate. i thinkook at this, and of the idea of leaving sterling and using the euro. that is a bold move. do you need to begin that debate on friday if leave wins? ms. sturgeon: no. no. it is not my policy to want to see scotland use the euro now or anytime in the future. i gave it as recently as scotland to want continue to use the pound now as we do. all of these debates about what happened in the event of leaving the european union are debates that happened after the model if we find ourselves in that situation. i do not want to be in that situation, which is why for the remainder of this campaign i have tried to persuade as many to vote toossible keep our place in europe. francine: what will this campaign be remembered for? ms. sturgeon: well, i hope it will be remembered for a positive result, a result to remain an outward-looking and work withcountry to other countries. i hope it is not remembered for the distasteful aspects of it immigration and people's fears of immigration. that being a positive result to remain will cement their reputation as scotland seeing itself is a big part to play in the world. tom: meghnad desai of the london school of economics will join us here in a bit, and he has a wonderful phrase -- "the social astronomy." how will the social astronomy of your united kingdom be on friday, six months from now, or for that matter, six years from now? there is an interesting social and cultural moment here. what will change in the astronomy of this nation? ms. sturgeon: i hope if there is a vote to remain -- and i agree with you, that it is not just a big economic moment, it is also a cultural moment. i hope we see as a -- i hope we are seen as a country that wants to cooperate that believe countries should be independent. i also think independent countries should cooperate, and we should see ourselves as being welcoming to people from other countries as well as protecting our ability to travel overseas and enrich all of our cultures. i hope that is what we want to protect tomorrow. the alternative to that is to send a message to a country turning in on itself. that would be a big mistake. francine: given that, what is your message for donald trump? he arrives in scotland, i believe, tomorrow afternoon. ms. sturgeon: donald trump will , at a golf course. it is a matter for the people of the united states. i do not think i will be telling anybody anything that would come as any surprise. prepared to see hillary clinton is donald trump. it is not a matter for me. dodgedrst minister, you that question with wonderful grace. there is our breaking news. thank you so much, nicola sturgeon joining us, the first minister of scotland. coming up, a conversation with meghnad desai of the london school of economics. i should point out he has my book of the year. and andrew sentance joins us as well. from london all this week, "bloomberg surveillance." ♪ francine: welcome back. these are live pictures of big ben. big ben is actually the bell inside. with some history lessons, tom keene has been pulling out some old speeches to the bloomberg business flash. nejra: the volkswagen ceo is toing to quell and invest -- quell an uprising over the image and scandal. -- over the emissions scandal. 10 employees have left the company since the scandal began. that the secport is preparing a civil case against merrill lynch over an investment that lost up to 95% of its value. according to "the wall street journal congo one of its own financial -- according to "the wall street journal," one of the -- merrill lynch is owned by bank of america. the firm has no comment. swedish retailer h&m got hurt i a cold, rainy spring in europe. h&m markdown merchandise that was not selling in europe due to the weather. that is a bloomberg business flash. tom? tom: thank you so much. what an interesting conversation with the first minister of scotland. to give us perspective is the emeritus professor of the london school of economics, meghnad desai he has been a fan of "that -- he hasn a friend been a friend of "surveillance" for a little more than a decade. also joining us, a gentleman who has done his fair share of , andrew sentance. former bank of england policy maker and a man with strong intent. lastad desai come in the chapter of his book, says "the search for an answer." what is the answer the united kingdom is searching for right now? i think what is happening in the u.k. is quite a divided opinion, but it is not -- andrew: i think what is happening in the u.k. is quite a divided opinion. there is discontent causing people to vote for the leave camp. eu ismind, staying in the very powerful, very strong. if you look at surveys of business people, 70% to 80% think that we should stay. francine: i want to bring to the viewers' attention, because nigel farage is speaking in london. he has been a critical of this cap. -- of this camp. tom: we expect the turnout to be extraordinary tomorrow, right? francine: certainly in terms of what the electorate commission says, it is the highest since .he elections desai, wonderful to have you here. you talk about the short century. how are we doing in this new century in the united kingdom? of delusion,t let's put it this way. years of debate in which the people who want to leave believe in trade, believe in liberal, open trade. eu they really want to quit but trade eu more. the people who want to remain, we know that immigration is a problem. so there is more in common. i think that the stress is because since the great recession, the u.k. has not done as well as people thought it should have done, and they are blaming it on -- tom: how do the elites speak to this part of the united kingdom that is aggressively anti-elite? we have the same issue in the united states. andrew: i do not believe this idea of the elites. i think it is a creative construct. grandfather's life, he was a worker, a laboring man. i think that construct has been created for political reasons. i know it has been talked about society isthe u.k. quite mobile, and people rise up the spectrum and some people do not do so well. he is absolutely right, that the financial crisis has played a big part in this debate. the notion that people are not doing as well as they feel they should do, they are looking around for a scapegoat or that scapegoat in the last few months has become the eu. objectively, that argument will not prevail, but i think that is the big undercurrent of what is actually happening. francine: why are the polls so close? sometimes it seems the campaigns are not talking to each other, they are screaming to each other, and i am not sure what point they are trying to put across. immigration versus the economy. andrew: the polls are closed because we have not had a really good campaign. the big issues have not come out properly. i would have expected in the campaign, the economic arguments to be more prevalent, but -- meghnad: during the referendum, yes or no, in or out, polarizes. we funded and oil commission to look at the problems cost. immigration is all right during the boom, it is no longer all right. trade outside the eu is not all that good. amebody would have come to more balanced package. to say in and out, it polarizes, and people are making exaggerated claims on both sides. will continue this conversation with andrew sentance and lord desai as well. coming up, john browne will join browne, brown -- lord speaking about his very strong feelings that the united kingdom should remain in the sphere of the eu. "bloomberg surveillance." ♪ tom: morning, everyone. tom keene and francine lacqua from london. when they get to the "morning must-read," with a "surveillance" disclosure. mr. dyson, sir james pushing against remaining germanic way. tom: sir james dyson, blistering in asking for brexit. andrew sentance is with us, and lord desai. what did sir james get wrong? meghnad: i remember when we had control of our own affairs before 1973. we did not do a great job of it. whether we succeed or not, it is not a matter of control, it is a matter of how the economy is doing. tom: what would margaret thatcher do? andrew: she would stay. meghnad: she would remain. she did push a single market, and then she pushed for enlargement because she did not want a strong federation. weake wanted this kind of confederation, with a lot of trade, goods and services, but she did one control over the u.k. is right now i think that that situation. it is a weak consideration, and we will give more -- we will get more of a common trait agreement. that is all there is. how will they do with brexit friday morning if brexit were to prevail? they will be short on management issues making sure there is enough liquidity in the financial system. fall in thea big pound, i am not sure they will intervene, but they could make some stabilizing moves. i think, however, it is not so much what happens on friday that the bank of england needs to worry about, it is over the succeeding courses. for a long period, uncertainty and lack of confidence is very bad. meghnad: once the decision is .nown, uncertainty ends --ple will find that brexit we will have a lot of time to adjust. i do not believe it will be as drastic. we do not know. if it happens, i do not want it, but if it happens, let's do with it. tom: thank you so much. his book is "hubris." coming up, erik schatzker in a conversation with morgan stanley's: keller. "bloomberg surveillance." ♪ tom: good morning, everyone. it is westminster. it is a point of tension and will be friday morning as results come in from the referendum tomorrow. the leadership is in the middle of england. bristol, manchester? francine: north. tom: they are north, looking at marginal voters. francine: i was really interested in britain -- i was really interested in andrew sentance pushing back in the debate. wordlet's go to our first news this morning with nejra cehic. nejra: police in paris have banned tomorrow's planned march against proposed labor law reforms. authorities are concerned that it would result in violence like the one last week did. there have been strikes in public transport and garbage collection. american bombers dating back to the vietnam war are pounding islamic state targets at a faster pace mark welch tells almost 140hat missions have been phone since april. they are based in qatar. the u.s. senate plans to debate legislation of puerto rico's debt next week, but it is not certain if the bill can be passed by july 1 when the u.s. territory has to make a $2 billion bond payment. the legislation would establish an oversight board that would restructure puerto rico's $70 billion in debt. almost half of bernie sanders' supporters say they will not support likely democratic presidential nominee hillary clinton, according to a new bloomberg politics national poll. 22% of sanders' supporters say they will vote for donald trump. 18% favor libertarian gary johnson. global news 24 hours a day, powered by our 2400 journalists and analysts in more than 120 countries around the world, i am nejra cehic. francine: our next guest says if the you greg -- if the u.k. leaves the eu, other countries will follow suit. andrew, thank you so much for being on the program. the polls are saying one thing, 50/50, still way too early to call. who do you believe? >> i believe friday morning we will still be in the european union. i do not agree with it, but i have come to accept it. francine: what does it mean for asset managers at the moment? savvas: there will be a bounce in sterling. there is a potential for a brexit. otherwise, you think about the pound going up, hardly helps exporters or domestic cyclicals. in many ways, i think currency will be the biggest mechanism for seeing a relief rally. tom: you taught studies at the london school of economics. you co-authored with christopher pissarides, the nobel laureate who was with us the other day. what is your confidence interval? intervalour confidence that the united kingdom can move on with a successful brexit? to -- ii was going spent 27 years in commercial finance on the front line. i have seen shocks, most notably the 1992 -- we get over these things. tom: the market clears and you move on. in 1992 the pound fell shortly. -- fell sharply. it was the catalyst for recovery. in many ways, i have lived through one exit from a european superstructure. was an errantt it to build -- to leave. i do not believe what the imf tells me now, or the world bank or the treasury. tom: how will educated elites who desire to come to london -- how with their belief structure change? savvas: we think about it from a healthy consumer base. europe is unhealthy. it will get unhealthier. that with mr. james dyson. francine: i was to ask andrew sentance to step in. we had the chief economist at unicredit in earlier. shouldng that the u.k. be really in the eu. is that being muddled? i and not sure what letters we are looking at. andrew: there are problems in some european economies, but those problems are really geared around the national pulses of those countries for example, france and italy are growing very slowly. they have not reformed their labor markets. they have very big public sectors, highly regulated businesses. economics tells you if that is the state of your economy, you will not do very well. you have economies like germany and the u.k. that are also part of the eu who are more in business friendly economies and are doing quite well. i think there is a bit of confusion here between what is actually happening to individual european economies and what the influence of the eu is. the you is creating a better climate for all of european economies, but some national policies are dragging their economies back. tom: the election turnout, i am fascinated what you think about what has been common knowledge in the united kingdom. for those of you in america, this is an important chart. the massive differential between young and old, the prime minister campaigning today -- what is the turnout going to be? what do you see happening in the next 24 hours? demographic, regional differences of the north, scotland, wales, london -- it goes back to andrew sentance's point about the u.k. doing quite well. the u.k. has done exceptionally well -- the scottish referendum, the general election -- and in recent weeks we have been recording historically high employment levels. all the metrics that measure when an economy is strong in the very strong,uite but strong. at the time the ecb is pumping liquidity into economies at an unprecedented rate. thank you, savvas savouri and andrew sentance. coming up, we will speak with lord browne, former bp ceo. he made an emotional appeal early on. that exclusive interview, next. ♪ francine: welcome back. this is "bloomberg surveillance." today we get straight to the bloomberg business flash. the two merger of biggest banks in abu dhabi could set a record as the biggest m&a deal ever in the middle east here it -- in the middle east. abu dhabi and first gulf bank say they are in talks. is forecastingrs its first loss in eight years. the japanese carmaker said it is likely to lose $1.4 billion in the year ending march 31. mitsubishi is running up costs after admitting it rigged fuel efficiency ratings and falsified test data. proposed calls the marriage between -- shares of the electric carmaker fell as much as 14% after musk opposed the tesla takeover of solarcity. that is the bloomberg business flash. this is the big uproar on social media last night as i is elonsla -- maybe it buys elon. tesla company news -- maybe you 197, 198.ce here of call it almost gossip on tesla. good morning. francine: good morning, tom. it is nice to have you in london. come onant to point to tesla, that you can choose your relatives, and they talk about the awkward family reunion which is solarcity and tesla. do you like this? tom: it is very good. why don't you bring in our next guest? francine: let's talk about brexit. tomorrow is the all-important referendum day. let's talk about death let's talk with the former bp ceo, -- former bp abou with the ceo, lord browne. side, peace in europe? i had a very different family after the war, my mother having survived auschwitz. it is exactly the sort of union we need in europe -- not political totally, but enough to make sure that unnecessary nationalism is dampened. damaging nationalism is dampened throughout europe. tom: has prime minister cameron capture the emotion and the tone that you feel? pretty soon i am going to start invoking sir winston. minister capturing what john browne feels? i think he is doing some of it. the primary axis has been economic. what is the uncertainty? that has been the question. my own view is that more of the emotion needs to be put in. pocketbooks matter. that is what is being focused on. i would like to feel that this is more emotional. it is about the future, and i think some of the young people, many of the in people, while they have not experienced the war -- many of the young people, while they have not experienced the war, feel that the future is about inclusion, and that is in itself an emotion. francine: one of the pushback arguments against what you're saying is that nato is here to provide peace, that the u.k. would not even want a european army, and nato has secured our borders and ensure that we have not had any war. john: nato has done part of that, but you need much more than that. you need behavior, a set of inclusive behaviors to make sure that you do not actually use the weapons then nato can provide. francine: you are talking about something that is a lot more nuanced, which is the place that the u.k. should have all the world stage. what if we have a very close vote? john: my view is that whatever the vote is, the people have spoken, so that is definitive. whether it is out or in, it is very clear. it seems to me the decision is made on the majority. tom: you are probably expert to speak about this. i have been thinking about royal dutch shell, daniel yergin focusing on that in his book "the prize." how do multinationals change their behavior if we do get leave? john: it is not clear. many multinationals are headquartered in the u.k. but have a minority of their activity in the u.k. the u.k. is the center for intellectual activity, social development, planning, these sorts of things. that can move around. will be thinking very carefully, what is the best place to attract the best people and have the best working environment to get things done? tom: the best backdrop is deutsche bank. their headquarters are here. if we look at deutsche bank as one example of a financial system under stress, because of this referendum, how do they adapt? how does european banking adapt to remain or leave? john: again, this is the big point about if i think reallyy knows what happens next. rate legal uncertainty. listen to the evidence given to parliament on this. great behavioral uncertainty. no one is quite sure there will definitely be an economic loss because of the uncertainty. the rules have to be made up, and again, people must make very complex decisions. if we leave. francine: andrew, is that right that london will lose its place? many banking ceos say london is expensive from my bank and other corporations, that people want to live here. so you attract people because of the cultural richness and everything else that attracts them. if brexit were to happen, might they migrate somewhere else? andrew: london will not lose its place because it is one of the top two financial situate -- cities, along with new york. says,d browne correctly should they really be headquartered within the core of the eu, or should they keep and keepdquarters their operations in the u.k.? yearse benefited over 40 through being a significant international trading economy and having london, and being part of the eu, so that is going to be torn asunder if we actually leave the eu. tom: go back to the quote from lord browne. we show this in the last hour. let's show it again here. you have good friends who flat-out disagree with you on this. they strongly -- some strongly agree with you. how do you come together on friday, whatever the outcome? john: because after a debate, ,hich is a democratic debate there is a fundamental of decision-making, and we cannot violated. i be leave -- i believe people will come along with that decision. browne probably saw the son this morning. -- saw "the sun" this morning. francine: in the prime minister -- can the prime minister survive this? john: i think he can. i have people i respect who disagree with me who have very strong arguments. we have to align behind a clear decision by vote. that is very important. it is not by fiat, it is not by cronies. andrew: i think that is an angle to this that people have not focused on enough. if we do have a vote to leave, there is going to be a major political crisis in this country because the government has put a lot of weight behind the decision to stay, and it is effectively the public saying we disagree with the majority of mps. 70% of mps want to remain. the public is saying the opposite thing. that will create a political crisis. we do not know how that will resolve. francine: what is the percentage david cameron needs to remain as promised or? 52% remain? doesn't need to be higher? john: it is a decision based on a vote. tom: it must be a big vote. we get to talk with lord browne about the price of a barrel of oil. we are going to continue with andrew sentance and lord browne. radio, asn bloomberg they vote in the united kingdom, a conversation with mohamed el-erian. on "bloomberg view" earlier this week was absolutely brilliant. i am tom keene with francine lacqua on "bloomberg surveillance." ♪ tom: it is the litmus paper of the system, certainly the litmus paper of remain and leave with the united kingdom. 1.4679.ow sterling, churningxchange today with sterling. i will call that churning as well. up on bloomberg , it is david westin and jonathan ferro. , you will talk about brexit and also with a big banker. jon: it is the calm potentially before the storm. we are spending ahead to fed chair janet yellen. francine: thank you so much, jonathan ferro. now, the big question come friday morning, the day after the referendum, what happens to the u.k., what happens to the eu? us still is former bp ceo lord browne, and policymaker andrew sentance. planbrow do we have a , do we have a plan b? the answer is we do not know. we do not fully know yet. tom: excuse me. can europe be pro-business? in america we get headlines they do not like google, microsoft, maybe they do not like british petroleum. can brussels become more anglo-saxon and more pro-business? john: i very much hope so. if we stay in europe, we should be having more officials in europe. we had a disproportionately low number, and i think they can bring a more businesslike attitude to brussels. tom: andrew -- francine: andrew, you believe the u.k. belongs in the you. andrew: it is still a massive market for us. it puts us in a more difficult position because we will not be able to influence that market. but i think we would still have to be very closely aligned economically with the rest of europe. tom: in 20 seconds, there is remain, there is leave. no one cares. they just want to know what you think of oil. what is the terminal value of oil? john: quite strong. the point about oil, this is always affected by political disruption, and there is a lot of it around the world. we never factor that in, and as we have seen over the last few months, there is plenty of it and quite a lot more to come. brexit,minutes on leave, remain, and that. finally something on oil as well. andrew sentance, thank you so much. good morning. ♪ . . ?c+sv >> 24 hours away from the historic referendum and financial markets at odds about the outcome. >> yellen leads to retreat, it a dovish been on the outlook, the fed chair return to capitol hill for round two today. clinton-drop, that's more voters with a stake in the market said donald trump will be better for their portfolios. ♪ >> a warm welcome, 24 hours away from a historic decision in the united kingdom, the future of the european union at stake. i am from london and new york, this is bloomberg go, 24 hours away. hours over the next three , we will cover every possible outcome and market reaction. calm before the storm, we have great guess today