We begin with the highly anticipated results of the Airport Commission study. Among the plans chosen from more than 50 proposals is the contentious idea of expanding heathrow. Caroline hyde has been following this story. Walk us through the key proposals, what is in and what is out. Listat is not on the short is Birmingham Airport and the thames estuary. Lets look at the three proposals. What howard davis said is needed is one runway by 2013 and potentially 2 additional runways by 2015. Theyre looking at one option with Gatwick Airport to build a new runway to the south of the easiest thing runway. The other two surround heathrow, our biggest hub and the most busy airport in all of europe. One new runway in the northwest and could be an extension of the existing runway. They have not listed thames estuary, saying it is too uncertain. They might look at it again in the first half of next year. Boris johnson coming out today saying, it is not dead. They are not being considered. Businesses are certainly trying to campaign for boosted airport capacity overall. They really have been raising their voices. It is a cacophony of noise altogether. They put forward this pro expansion campaign. There are about 100 signatories on. Much the retailers. Universities are being represented. Solicitors. Even daniel leavy, chairman of spur saying we need airport capacity. Exports 40 of british are delivered by aircraft. Notably, the aviation sector reduces about 3. 8 to the gdp. They are saying the Business Case is there today. Version coming out and saying virgin saying we need heathrow to remain a hub. British airways and iberia saying we need consensus. On the business leaders, we tried to book these guys to bang the drum and make the case. I have to say, very hard. I am wondering whether a higher level of commitment would be useful. Thats talk about the politics. Yeti of this commission was to make no decision. Post2015decision election. Howard making it very clear that he feels heathrow needs to be expanded. In this last week or so, we had taken to the airwaves the transport secretary, trying to say, look, after 2015, this could be back on the table. He could see heathrow being analyzed for an extra one right. An extra runway. We could be analyzing that again. Goldsmith is from the conservative party, saying it would be an off the scale betrayal if the Prime Minister backs heathrow expansion. Certainly, there will be real political dangling. Not to make a is decision until after 2015. I think this will be front and center of the next debate. I areseems to be proand runway and conservatives are said to be against. N extra runway and the conservatives are said to be against. Howard davies joins us at the top of the next hour. And we will get his reaction to the report. New car sales in europe rose for a third consecutive month in november. At is the longest period of gains in four years. How much of this has to do with spains cash for Clunkers Program . Hans nichols joins us from berlin with the latest. What we have is a slight increase. It is just a slight increase, when nine percent for the month for the month. 9 of november. It does mean three straight months of growth and could mean that things have finally bottomed out in europe. You look at the last four months and these are numbers that are slightly different. August,it was down in five percent. Again, and up, up then we have this month strong increase. Driven in part by spain. The cash for Clunkers Program was extended another month in october. We also see declines in italy, germany, and france. It is not all good news. Look at individual companies. Holds lagging, the clear winner. Renault up 8. 9 . More bad news for peugeot. Bad news for gm. Down some 5. 8 . Overall, you see middling numbers. Folks are taking these numbers and saying it might mean that the worst is over. It is also really hard to extrapolate a trend from november. Not exactly a hot month for selling cars. Year on year, it does look like 2013 will be the worst in at least the last six. There are questions about how long spain is going to be able to maintain its program. You wonder whether or not we could see a situation in which these numbers turn around fairly dramatically. Can you run us through the details of you have run us through the details of who is up and who is down. Will the whole market is down one spain backs off . When spain take their foot off the accelerator, you would not be surprised if you see an overall decline. All of this is driven by spain. You have seen declines in germany, which is supposed to be growing, italy, which is not. The question is, can the strong growth in the u. K. Offset some of the weaker growth elsewhere and it spain pulls back, we will have to dig more into the numbers. It does look like, at first glance, that if spain ends its program and nothing fundamentally changes, we could see declines. This is not a healthy industry. There is no question about that. The question is, is it at the bottom . Compare and contrast to the United States, you saw what gm had to say yesterday. Aint you very much. Hans nichols joining us from berlin. Reported the first profit in six years earlier this morning. Manus cranny has the latest. What did we learn from the numbers . They are doing pretty well. The stock is up 83 . It was the leader at the open. As with all good stories, somebody out there in the Market Making land has decided to take this stock lower, i think on the margins. It is number one here in the u. K. And number two around europe. Focus on the u. K. , sales up nine percent. Where they ares focusing as well. Like for like sales up, but nowhere near as impressive. Falling, but they are making headway. You look at the product range and he has got everything in their from tablets, a fantastic christmas in the marketplace. It is about the experience. I have been in one of these for challengey technological advances like myself, using the hardware and the software, getting lessons and finding out about services. It is not just about show how, it is about know how. The stock being marked down ever so slightly. Margins seem to be where the Market Makers are focusing today. It is a good run. I do not think it is that dramatic to see the drop we have seen today. It is about experience. I can buy some of this online. Why do i need to go to a store . What has Sebastian James done to make me come in to one of his stores . Customer service. You walk into one of their stores and i was in one near my own home. I can go in not only to purchase a product, but to get help with other product that i have. Geographically, it is a focus. It is a transformation. Comment went out of business went out ofomet business. A lot of retailers would say, we are fine. We do not need to do anything. They have grasped the retail nettle by the head and they have gone with it. The analysts that i caught up with yesterday said he is still going to close down more stores, probably from 500 down to 400. Profitability is rising and he has rid himself of some of the worst parts of the business. To likerancine is going this one. What do you like doing . I know you like cooking. Ironing. She is a big fan of ironing. The only thing i do is the other thing i do is eating. We are all baking crazy. Thank god for mary berry. She is an icon in this country. Ceo, thank god, i have just religious sized it. They are selling more ipads and samsung galaxies as well as the old surface tablet. Guy johnson is actually quite a good baker. Occasionally. Have one of those machines. I cannot remember where i bought it from. Maybe it was dixons. Thank you. Here is what else is on our radar. Amazon workers in germany companyelegation to the headquarters to reinforce their strike for higher pay and better eu toldditions read the a german newspaper that regulators may strike during a german holiday. Tech regulators are headed to the white house today. Byy are those invited president obama. The meeting is being held at the nsa. Speaking of the nsa, a u. S. Judge have ruled that the collection of domestic phone records is probably illegal. That allows a lawsuit to go forward. The first time a District Court judge has ruled on the nsa program, which leaguer Edward Snowden brought to life. Coming up, Angela Merkel locks in her dominance of germany. The chancellor prepares to be sworn in for a third term. We will head to berlin to see how much of her agenda for europe she can realistically achieve. Good morning, everybody. Welcome back. You are watching the pulse. We are streaming on bloomberg. Com, your tablet, your phone, and any windows own as well. Angela merkel has been confirmed as the next german chancellor. Votess elected by 452 ing. 9 abstain this is in the lower house of germany. David tweed is on the other side of the Brandenburg Gate and walk us through what is happening this morning. And what happens next, i guess. No surprise to see that Angela Merkel has been formally elected as germanys chancellor for a third term. Overwhelming support. This is a woman at the absolute height of her political powers. Germanys most popular politician. 68 approval rating. You can see pictures of her right now. She has just been formally elected in the last two minutes or so. She has said a few words and now she is going to head over to the germant president , who will give her her papers to become the next chancellor. There will be a swearingin ceremony here in berlin at 11 00 Central European time. Tomorrow, she is going to go to paris and meet with resident Francois Hollande for a pre european summit meeting, something that she used to do with president nicolas sarkozy. Of course, at the end of the week, it is back to brussels, european summit, number one on the agenda, european Banking Union. Mario draghi not pulling his punches on that very issue yesterday, saying effectively you guys are making a mess of this. It is too complicated. And it is massively underfunded. Is really concerned about is also the way it is being set up. You have these resolution mechanisms, which will be created under existing european law, but it will be managed by an executive represented by various governments from around europe. At the same time, you are going to have the resolution fund. That will be a whole lot of different compartments and national funds. Is saying that it is just too complicated. Responsibilities for supervision and resolution need to be aligned at the european level. Councilurge you and the to strictly set up a robust single resolution mechanism for which three elements are essential in practice. A single system, a single authority, and a single fund. Is, if youis saying have a bank that is going to be wound up, it needs to happen almost instantaneously. You cannot have hundreds of people running around, consulting each other about whether a bank is viable. That is his message. That is how europe makes decisions, isnt it . Thank you very much indeed. President isian trying to secure bailout loans. For more on the latest out of ukraine, it is ryan chilcote. Thentially, what do ukrainians want from the russians . They want to borrow as much as 15 billion. That is right, they want cash. They also want cheaper gas. They get about 60 of their energy right now from russia. They are going to spend about 11 billion on that this year. We understand they may get a discount of is much as of as much as 25 . That does not mean they would pay less for gas, but what they would do in return is agreed to buy more russian gas, albeit at a lower price. This is basically the ukraine cozying up to the russians. How does that go down with the crowds in kiev. Everybody likes cheaper money, but probably not very well. Their concern is that russia would do this with strings attached, even if those strings were not necessarily announced. The people on the streets in square arece where convinced this is part of russias plan to increase its clout in ukraine. They want just the opposite. Thank you so much for that. We will come back to ryan shortly. He will have more on ukraine. Campaign for of a egypts new draft constitution has gotten off to a bad start. Organizers misspell the word egyptian in arabic amongst other problems. Elliott gotkine is following the story. Walk us through the blunders that these guys are making. They were manyfold. You mentioned the most conspicuous, which i imagine anyone would have spotted immediately, except the organizers of the draft constitution campaign. You look at the poster that was hanging radical rather largely behind them launching this campaign, some eagle eyed saw there was no beards or no avail. Who are these people . A simple Google Search for businesswoman, the first picture on Google Images is that lady, who appeared on an irish recruitment website. The doctor previously appeared on ehow to get rid of stretch marks. Com. Syndrome man with down the first one of pictures for down syndrome. The egyptian information and says itlogizes was a Civil Society organization promoting the draft constitution campaign, which made the unintended heirs. It is quite spectacular, the amount of the level of mess made by these people. This is actually quite a serious story. The egyptians are having a vote on the constitution and they have to do this next month. The interim rulers hope it will have three effects. They hope it will lend of theacy to their rule democratically elected president. They have to strip the long aspects of the constitution that was overseen by mohamed morsi. A new constitution is necessary to pave the way for new president ial and parliamentary elections. A new constitution, new elections will help calm things. Of course, the runup to that vote in january, we could see tensions increasing rather than decreasing. Thank you very much indeed. Our middle east editor in egypt covering the story from tel aviv. A reminder, as we had to break, you can follow us both on twitter. Taking a short break and we will be back in a couple of minutes. Lets check the pulse of the markets now. Manus cranny at the touchscreen with your asset check. The biggest rally in europe in almost two months. Dropping. What does that have to do with . It is possibly more to do with the discussion about tapering as we move into the next 24 hours. We wait on u. K. Inflation in the next few minutes. Could be a bit of a lifesaver for mark carney. Waiting for confidence numbers to come out from germany. Later on today, we get inflation data in the United States. Guy takes it away for the next two hours, which is the swedes cut rates by 25 basis points. The view from the market seems to be that there could be more on the way. Innorwegian krone rallying the Swedish Krona to getting to fall. Volatility is rising all across the map. Thank you very much indeed. Gatwick ceo weighs in on the controversial findings of the Airport Commission report. We are also getting new runways at heathrow, by the looks of things. What will he make of that . Welcome back to the pulse. I am francine lacqua. And i am guy johnson. The u. K. Inflation rate has just crossed the tape before the last month. The media forecast 2. 2 . We are getting very close to the is anment targets, which sensibly set for the bank of england as close to two percent. As we get closer to that, some would argue it is making mark carneys life a lot easier. Lets have a look at the pound. It is probably one of the things that mark carney will be looking out for over the next couple of quarters. Fairlyas gone up drastically. A depreciation of sterling will certainly work in favor of the u. K. Economy. Mark carney, the suggestion is that he will have to raise rates sooner than he anticipated. A lower than anticipated inflation rate will probably drive that a little bit. Lets get back to our big focus as we gear up for the busiest time of the year. We are debating how to accommodate overcapacity at londons airports. Toy will take forward proposals for new runways at gatwick and heathrow. Joining us is the chief executive of Gatwick Airport, which lies to the south of london. The morning. It seems that todays news is good news for gatwick. We will talk about heathrow in just a minute. Stance that is no longer on the short list. You guys are still on longer on the shortlist. You guys are still on the short list. Sire welcome the fact that howard has narrowed it down to a two horse race. You look at the proposal that gatwick has put forward. Essentially, the runway will be aster and cheaper and have significantly smaller Environmental Impact than the alternatives on the table at heathrow. Gatwick can use its mix of legacy carriers to reach out to the emerging economies and also acrossope and europe to offer affordable fares. Talk about some of those issues in a moment. First, you have indicated that you probably have a lower budget if heathrow were to expand significantly. Todays news looks like very good news for heathrow. It looks like heathrow will be expanding significantly. What is your reaction to that . Is not a deliverable solution. In the last five years, they have tried and failed. It is just in the wrong place. It is to the west of the city, meaning it pollutes more people. For us, we look forward to foreting with each other the location of the next runway. We really do not think it will be delivered at heathrow. When do you think we will get a formal decision on this . We are expecting a final decision to come through for the davis commission. If we push ahead with a second runway at gatwick, it would be somewhere around 5 billion pounds. That would result in a runway s,ning in the mid2020 probably five years faster than any alternatives at heathrow. We offer flexibility. Lowcost models for the next generation. What will be achieved on affordable fares and Environmental Impact. Restrict only the legacy carrier fares and that means it will be higher how much of this will actually be a political decision . Im sorry . How much of this will be due to politics . Will be looking at politics . Well, i think if we look at political issues associated with expansion, it brings you back to the locations of the airports. I think the reason that heathrow is politically toxic is because it is to t