Good morning. Welcome. You are watching the polls. I am guy johnson. Francine is off today. Lets talk about the radar. Ruledmbay high court has this year. The sentiments are waiting for the Prime Minister and his efforts to attract Foreign Investment into turning india into a Foreign Investment hub. Next 35 years, bloomberg spoke to the firms ceo. We have been hiring a lot of senior help and you see that in singapore or australia. And it hascoming been good about the position. Waiting for a better time. Russia is a big issue. It adds more risk to the deflation of europe because of the Energy Prices depending on the supplies from russia. It does not help in the scenario or help the situation. We are not exposed to russian Financial Investment. Is a potentially big market for Financial Services marketis not an open these days. Lets turn to the top story. Of an import eve and election here. Collect a new mp. It is being seen as a litmus test. Joining us for more is the government reporter. Why do we care about the election . Election that gives the u. K. Independence party the second member of parliament. They will because former ministers of parliament who defected from the conservative party because they do not think he has gone far enough on europe. It increases the pressure on chairman to do what many of his party wants. Britain out of the European Union. What classifies as a big win . That is a good question. Polls moment, we have suggesting a u. K. Lead. It depends on a lot of people who have not voted for the u. K. And did not stand in the seats for the last election or turned out for the u. K. I think anything into double conservativeave ministers of parliament who are sympathetic. They are thinking that it is time to make the jump. There are a lot of names. There are a lot of names. They will all deny it. They denied it the day before he announced it. It is friday morning. You have a big win. What does David Cameron say to the Parliamentary Party when they gather and meet to discuss what happened . What is the message he has to deliver and how big of the meeting is its . . Is it i am offering you a serious negotiation. He will get one or two and say he had a triumph. He is saying that he will do something about immigration. Think that what he had to do was reassure them that he is really serious. He has been saying that for months. More than a year. It does not seem to work. There is a section of the party that does not trust him. Moon, aat the vociferous reaction to what is happening. Can we equate the two . First, they would say no. There is a lot of what people say. In the point of view of the voter who wants to hit David Cameron, you can hit david t theon and you can hi leader of the opposition. Is a lot of taking free hits. It is about electing the government rather than punching the government. Said, there are a significant portion of people who have been saying that they will vote for the u. K. Independence party in the next election. Them at theirf of , it is more unstable than the 1970s. Maybe we go back to when we were having a elections every couple of years. Tomorrow is going to be a big moment when we write the history of this. We talk about the labour party being affected by this and we understood this. They were not just drawing voters away from the conservative. They were taking the political dynamic. Ed miliband has a lot of issues to deal with. What happens tomorrow that affects the labour party. Tomorrow is good for the labour party because the at onrvative loses their seed europe, which is principally a problem. By labor untilld 2010. Labor gets it back tomorrow and they have a candidate. It suggests they are nowhere near and ed miliband can see it. Party withopposition the unpopular government and not winning back the seat it held . That is the big question and goes to the heart of the problem. They are not turn into labor. You have the headline and the thing that drives voters to it is immigration. And we have the European Union. On immigration, labor is uncomfortable. To say the least. They do not quite know how to deal with it temperamentally. The party is in favor of immigration. In the heartland seats, they are not. You are starting to see it make moves to say that they would stop people from claiming benefits and that sort of thing. The thing that drives people and immigrants is work. They come here for jobs. Theyre coming here because there is a growing economy. , talking of business and jobs business came late to the debate surrounding scotlands. It made a meaningful impact. Where would you put business right now, in terms of engagement with the process . This feels very original. Very regional. It is not. Britishhis will affect business and have a major impact. Still not getting that. Business was very afraid of the debate and they try to stay until the vote looked like it would go yes. Europe, the cbi has been involved. We had the conference and an interesting moment. The one who looked the most uncomfortable was David Cameron. By somebodyduced who said immigration was good and the European Union. Cameron adjusted addressed that and looked like he would rather not eat talking about it. We will see business engaged. There is another outlook on britain that says that the cbi does not speak for business. Small business is less proeu. Most people have not heard of them. Where they have heard of john lewis, they have heard of british telecom. You get the interventions and people will notice the ones on companies. Multinationals. Most are international in outlook and like being able to move people around. So, so, people would expect them to weigh in to europe. We will be back later. Thank you very much. The government reporter will have more on all of this later on in the show. We will talk about the throw European Union camp and get all of that later on. Whyill go to breakfast and we should be doing that. If you want to join the debate, feel free. This is the business story. What is the Business Case for staying or leaving the European Union . This is where you can join the conversation. We will talk about all of these characters for the next couple of hours. We will take a break. We will see you in a couple of minutes. Good morning. Welcome back. You are watching the polls the pulse. Lets get back to the big focus. Spotlight is voters going to the polls. Is a litmus test. There are votes on implications eons english shores. Votes with implications beyond english shores. No sugar coating, Political Parties have fallen out of favor. The tories are at 23 . The u. K. Is at 32 and labor as at 12 . Poll exit er echoes official forecast. The u. K. Independence party surge has turned into a Major Political fight in a town not unfamiliar with epic battles. This one was triggered. We need to form our political system. Conservatives have banked on the economy. And, their findings support with the electorate that is disillusioned with the establishment. It could take the u. K. Independence party closer to being a power broker in the election. That is the scenario that many business laters Business Leaders say would be a disaster for the economy and the European Union. They hope the recent love melts away by may of 2015. The u. K. The poll. You can see the list of candidates by election on screen now. Take your pick. Be aesults tomorrow could window on where they stand. Scared foraders are the referendum. , he is me now is daniel a proponent of the renegotiated terms. They may be looking for the exit. Casere talking about your and his point was that big businesses have named check recognition and people may listen to them a little more and it is easier. When the boss stands up, he will know what it is. You represent small and mediumsize companies. Have thousands of signatures. It is important and it shows the extent of our support. It is worth saying that, in a felt that they wanted a referendum. I take your point about the business. View from big business. And, of course the future of the es. Try is in sm the interesting thing here is are focused ons immigration, that is the debate that seems to be capturing the political mood right now. Businesses are trying to talk about something else, which is regulation and the onerous issues of how to deal with the financial sector, etc. They feel that is coming at a brussels. Different stories seem to be coming together. But i think they are in the election. Immigration is a difficult issue. The country is a country which is has had immigration for 2000 years. The Current Issue is the rate of immigration and the regulation of immigration. That is why people are concerned. Keep the issue in the newspapers. Have red tape and regulation. They want to see less costs across lines. See a stagnant european that is, of course, the way the exporters are changing. Regulation is one of the cause. Regulationsm impose. Many multinationals see the terms of our relationship with europe change radically. Immigration tends to be positive for business. Most tend to pay taxes and work. Business. Pull is for are you in danger of shooting yourself in the foot if you campaign on the side of a that immigration should be halted . If regulation was applied, you would still have that. That is my straight answer to the question. Ok. Is immigration good for British Business . It can and has been, historically, over 2000 years. What we have is a bit of a watershed and people are concerned, daytoday, about immigration and the way it is being regulated. Policy, ismainstream against the idea and the importance of allowing people to have the contribution to the economy. Where is the line in effective renegotiation for you. I think the many issues here are, the first, getting rid of red tape and reducing red tape from brussels. It is also one of the things we have to look at in Financial Services, interest. The way we are able to block measures we do not like that we consider to be damaging. For instance, we did an analysis of Financial Service regulation and it showed that, over the last 15 years, most of the ones put in for date the eurozone crisis. Most of the others we would not have done ourselves. We had no it is stopping that under the current process. Thank you very much for making the case. Daniel joined us from business britain. We will be back. Join the conversation. Is there a Business Case . Join the conversation. Take a break. We will see you in a couple of minutes. Let me show you the yen and the pound ahead of the bank of england. In threeing up ahead minutes time. Welcome back. Youre watching the pulse live from our headquarters in london. Im guy johnson. Francine lacqua has the day off today. 9 0 on the q. E. Bond purchases. The b. O. E. Majority have a material rangor views when it comes to outcomes. I think what were looking at is a pretty fat tale when it comes to whether or not we will see a significantly delayed rate hike or a rate hike that could come earlier. You can see the bid now gaining a little bit of traction as we start to work our way through the day jegs of this. 1. 5626 is where were trading. Our next guest said the rate hike is likely to be in the Third Quarter of next year. He is a chief economist in the u. K. Good morning. Good morning. It was pretty much what everybody was anticipating. No real change. The communication was done last week around inflation. If anything well look into the minutes but if anything we should expect the minutes to be on average a bit more doggish as well. Two members stuck to their position of seeing Inflationary Pressures in the midterm and the rest of the n. P. C. Becoming more cover thish and focused on inflation data. Basically last week carney and other m. P. C. Members said the market was right in expecting a rate hike in the second half of next year. Some of the statements that have been coming in, part and parcel of the release. Housing activity has slowed. Outlook for u. K. Export demand has weakened. Risk of growth might soften further. The bank of england saying there is a small chance of drifting lower as well. Labor market pressures, signs of slack being absorbed rapidly and mainly due to sterling and the commodity effect. Again, any Material Change in any of those kind of statements . , as far as i can see, no. Months ago, we said we were in the position where pressure would eventually force the bank of england to hike rates. Thats why we had quite an aggressive call on rates. Our understandingor last month m. P. C. Is ation by that the bank of england will focus on data. We also understand when we talk about data, we will be focusing on inflation, wages or labor costs. So far those variables have been growing around 1 . As well to wait for those variables to catch up quite a bit before the bank of england considers any change. What we also understood from several statements is that the bank of england was attaching a different rate to the risk of hike to go soon opposed to hiking too early. Definitely they will go for the later choice if they have one rather than the sooner choice. Lets talk about that mix. You have got back end of 2015 in for when you think the first hike comes. That is the biggest battle. Is the risk to the 2016 side of that and how does the rate ath look to you in terms of a, the gap between first and second hike and where you think rates actually are and how long it is going to take to get to them . End of 2014 will be an interesting time for the u. K. We expect it to slow down. We should expect growth at the end of next year to be lower than what we experience now. At the same time we will have elections, new government. News on fiscal policy. We expects austerity to resume. That the government should announce austerity . S around 1 of g. D. P. Every year for the next four years, so it is not nothing. Well be in a situation where we should expect Monetary Policy to become more restrictive. The fiscal policy as well. In this environment, either you are very confident on growth and you have moved from unsustainable Growth Drivers to more Sustainable Growth drives would be a recovery in productivity. Gaining market shares again, etc. Or youre in this difficult position where nothing happens and youre not in a position to hike rates because youre expecting the economy to slow down further. It will be interesting. If you ask about the balance of risk, there is a risk that it can happen later. Or as two members of the m. P. C. Think, there is a risk that it might happen much sooner as Inflationary Pressure builds up. Around that average scenario, there are clearly more risks that it happens sooner rather than later. If you to choose given the statements by the bank of england, it might happen later rather than sooner. Thank you very much indeed. Senior european economist at barclays. Maybe the minutes are i think it is a marginal call. Maybe slightly more hawkish than commentary we have had over the last week or two. Seen a little bit of a move in sterling but nothing major. Lets take a look at our other top stories. Improving the construction to have keystone xl popline has failed to pass the u. S. Senate. It came up one vote short of the 60 votes needed to bar a president ial veto. The bank of japan has voted to maintain record easing after news of recession. Changing a little bit, that piece of mathematics as the yen continues to depreciate. E b. O. J. Plus there is an election coming up. Frances National Financial prosecutor has opened a probe into possible Insider Trading at b. N. P. Paribas, the countrys biggest bank. A spokesperson for the Prosecutors Office said by phone yesterday he is declined to provide further details. Prosecutors could drop the probe if they find no wrongdoing. As we head into break, lets get a beer check. Brewers big time today as the u. K. Apartment votes to let pubs buy beer from any supplier. Previously it was tied to who owned the lease on their buildings. Well take a break and see you in a couple of minutes. Ok. Lets talk about italys largest ininsurer, generali. It has already reached most of its 2015 target. We the leader the capital measures. That was of course because generali is supposed to be the capital. It was for a long time. We reduced debt. Reimproved the leverage ratio. We will restore this stability in the company. At the time token we have been working to improve the profitability. Our target there is to achieve a return on equity in excess of 13 . This is where were just this close to it and hopefully by year end we will be able to report on that. So what happens next . Are you going to change your target . On hope that we can report achievement of target. Once we do that actually we will move on and start working on new plans. We are already there thinking about the future. Were going to have a new investment day here in london on may 27 where we plan to present and unveil the future of the company and what is going to be the next journey that we will engage on. Did you also change your dividend policy . Yes, because as a benefit of the early achievement of our capital target, we announced and will confirm in a few hours that the dividend, 40 the out ratio is being relieved and now were not forced to maintain this 40 . Actually at the end of this year, im sure they will approve t. I know you want to give yourself a couple of months. Can you give us you sold off a lot of noncore assets. Re there companies you want to invest in heavily . Were looking at an organic development of our business. There is a lot more to do at generali. Generali is a huge organization. Hasnt been performing well for a number of years. N these two years we activated it. There is a lot more that we can do. Before we get into acquisition mode, we want to continue doing best we can for generali. That is something we ha