live from bloomberg's european headquarters in london. i'm francine lacqua. manus: and i'm manus cranny. janet yellen has indicated that 2015 could be the liftoff. we were about to talk about the fed. francine: we have the decision of the norwegian central bank. it has kept its rate unchanged. -- talking with the central bank governors later on. manus: 2015, is it liftoff, is it not? the federal reserve chair has said that the december rate hike is a possibility. ms. yellen: what the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labor market and return inflation toward our 2% target over the medium-term. informationncoming supports that expectation, then our statement indicates that december would be a live possibility. importantly, it would make no decision about it. francine: investors bet on a december rate hike, more than 20% higher than they were a month ago. this despite one u.s. lawmaker's tweed. god's plan is-- not for things to rise in the autumn. that is why we call it fall. nor is it god's plan for things to rise in the winter through the snow. god's plan is that things rise in the spring. so if you want to be good with the almighty, you might want to delay until may. manus: brad sherman channeling god when it comes to u.s. interest rate. i love this. god also has a view on u.k. rates. hopefully we will find out a little bit later. manus: i think when you look at the whole trio of fed speakers did night, it really ratchet up the game. the bond market around the world, a real move. bonds tumbled around the world. francine: what a day. what a difference a day makes. manus: let's get on with the rest of the day. god is invoked. has he got a plan for mark carney? it is super thursday, which brings us to the bank of england, the rate decision, the minutes, and the quarterly inflation report. for more, let's get to mark barton. it is bonfire night in the united kingdom. could the sparks get lit behind you? mark: good morning, manus, francine. if we are talking fireworks, let's talk about the division within the mpc. so far, only one member has voted for a rate hike in the last three months. will we see further dissent today? that's what hsbc told me earlier. forbesells said kristin could join mr. mccafferty. we could see a 7-2 divide. the other thing to watch out for today is the rate expectation. marketectations from the is for a rate hike in november. economists are going for a rate hike in the second quarter of next year. how does the bank of england move expectations? one way is through its inflation forecast. it could downgrade its forecast for this year and next year. that would tell economists and the market that maybe february is off next year and we are back in two made. what is interesting is what it does to inflation over the medium-term. in august, it said inflation would hit 3% in two years and 2.14% in three years. if it keeps those projections unchanged, that could be telling the market, you guys are too dovish and you need to bring forward your expectations. it's all about reading the runes today. manus: mark, thank you. let's see what the runes have to say. francine: let's talk about those economic forecasts that will be on the mind of the ratesetting committee. with us, jennifer ryan and robert wood. thank you so much for joining us. jen, let's kick off with you. what people want to know is the expectation on inflation. the vote, whether it is 7-2 or even more than 8-1. you've also been looking at charts. jennifer: i have been looking at charts. for the bank of england, inflation is the main thing, but there's all the other things. inflation is now below zero. what mark carney's got to do is trend that balance of guiding markets back in because they are quite far out, but at the same time recognizing that the pound is an enormous fiscal squeeze. manus: let's talk about great expectations. this is what i find fascinating. the market has moved itself. that's, all the way back now to the summer of next year. what is driving that they shift? robert: two things. one, the fed. everyone is looking at the bank of england as the fed plus six months. also fears about what's happening in china and the emerging markets, the fallout of the u.k. and the u.s. there's a sense of that failing over the past few weeks and a sense that the bank of england is going to say, hold on. we are not going to wait until 2017. the inflation forecast that we see today. i think there's also a realization that they are likely to be on the hawkish side. manus: -- francine: what are you expecting? q2? a bigger split in the vote? robert: i think historically when the bank of england has shifted from being on hold to a rate hike cycle, the voters tend to move en masse. what i'm looking for are the inflation forecasts. my forecast is that three years ahead, they will be at 2.2%. the bank of england is conditioning these forecasts on the market curve of last wednesday. saying that's too far away, i think in that case, why not? wages. this is where it ties back. we've had fairly benign inflation, negative inflation t wages areut rat rising. is this part of what plays into your scenario, as well as oil prices? robert: three things really. one is oil prices. as long as oil prices don't fall sharply, we are going to get a big increase in inflation. food prices as well. they have started to behave more normally. third, wages. we are above 3% and have been for a wild. all of that, i think, points to inflation rising back to target. francine: jen, what is the biggest risk for the bank of england right now? robert: -- jennifer: i think it's not moving soon enough. you've got to get moving soon so you can make it around those hairpin turns. one point you made about your inflation forecast, if you see it above 2% in two years time, that is above the bank of england's target. as in that mean they should be moving now? robert: those above target inflation forecasts are based on interest rates not rising until 2017. they could bring it back to target by hiking in q2. think that's what they would be trying to signal here. they're not going to wait until 2017. it will probably be in the summer of next year. 2%, wee: anything above haven't had many of those callbacks. robert: the three-year forecast has been above 2%. manus: well plate and well defended. robert wood and jen ryan joining us this morning. francine: here's a look at what else is on our radar this super thursday morning. u.s. and u.k. officials are focused on the idea of a bomb that brought down a jetliner in egypt, possibly with the help of an insider. hasbritish government suspended indefinitely all flights to the state. manus: facebook has posted quarter of estimate-beating revenues after stepping up mobile advertising. the world's biggest social network reported third-quarter sales of $4.5 million. shares hit a new record high in extended trading. francine: profits at french banks have risen. the bank says thousands of jobs would go as part of a restructuring. the first that of our transformation program is job cuts. [indiscernible] manus: next up on "the pulse," central-bank misguidance. we look at why 2015 has been such a rough year for the analysts and economists as they attempt to predict the rate moves. ♪ francine: welcome back to "the pulse." we are live on bloomberg tv and radio. let's call it central-bank misguidance. it's been a rough year for analysts and economists as they try to forecast interest rate decisions. 28 major central banks around the world. experts have missed the mark on 20 of them. wood, chief u.k. economist at bank of america merrill lynch, is still with us. thank you for sticking around. why have we gotten what central banks will do so wrong? is it the lack of inflation or deflation? robert: it sort of the ares by the central bank. across the world, they are worried about china and emerging markets this year. one thing that rose in importance over the summer is the outlook for central banks changed over that period. we also had a big fall in oil prices as well. it really just delays action, rather than preventing it. also, probably forced people to cut rates as well. the other thing you've got is some of the major economies, the u.s., the action, rather than preventing it. u.k., wage growth didn't pick up as fast, in fact still hasn't picked up in the u.s. as fast as most people expected. the unemployment rate is pretty close to precrisis norms. that is really quite a surprise. in the eurozone, we've got continued worries about inflation expectations, that the recovery is an fast enough. francine: one of the things we were talking about was whether this was communication from the central banks. manus: the fed guided us all the way to the precipice of september, than circumstances. ahead of the fed. the world really rocked in the third quarter. here we are again, the trio who drive the fed, again taking us to the edge of this clip. this is about credibility for the fed as we run towards christmas. robert: it is about credibility. we have had missed guidance over the past couple years. mark carney is one example people would point to. the speech signal rate hikes coming. the fed tapering before as well. signalingw they are december relatively strongly. you can see why the market is reacting. their credibility is now on the line. it is important. particularly when you try to hold down expectations of how fast rates will rise. manus: then everybody would say this is the most dovish tightening. what mystifies me is, how constant can they be? is it all based on energy prices? is it all based on low inflation? across the world, there's been this long decline in interest rates. there's a bunch of reasons why that should be the case. nowhere around the world is really growing gangbusters just now despite interest rates being at record lows, despite qe being ramped up potentially in the eurozone. i think that tells you that rates are not as stimulatory as they would have been 10 years ago. rob, overall, are you more confident that we will get it right, what central banks will do next? if the fed does not hike in december, are we back to square one? robert: not square one. the economy has come a long way. the employment averages close to precrisis levels. i think it is a question of when, not if, rate hikes come. you can get that black swan in emerging markets that can delay things. really harda landing, it can push it out a long way. manus: i like this one line you said, the ecb slows the fed exit. to eases recent promise further is a warning to the fed. where does that theory come from? robert: the ecb seem to have an implicit target in mind for the euro. 1.15,er it gets close to someone speaks to push it back down again. it is about the policy divergence. when that stop the fed hiking? some people think, sure, if the dollar goes up, that stops them. if the ecb is doing everything it can to make the eurozone grow, that is good for world growth. francine: we will have to see how it pans out. economistchief u.k. at bank of america merrill lynch. manus: facebook shares hit a new record high after another quarter of consensus beating expectations. we look at what's behind the big beat. ♪ manus: welcome back. this is "the pulse." we are live on bloomberg television and radio. helpedk, the earnings send the company's stock price to a record in after-hours trading. the world's biggest social media company posted better-than-expected sales figures. caroline hyde is in dublin. talk us through these numbers. it's all about the mobile advertising revenue. caroline: it really is. we are seeing 41% growth in sales, profit rising, but the number that stands out to me, 1.5 5 billion. that is how many users they have accessing their profile every month. that is 20% of the world population. 40% of the world population clicks on their facebook every single day. they are doing it largely through mobile. this is why they are able to charge that much more, with videos and created content going onto instagram as well. it just means they are able to the that much more lucrative. they have such global reach. any interesting geographical trends? caroline: i thought this was interesting. be and i, fran, you would making facebook about three dollars on average per quarter. in the u.s. and canada, far more. the average is about $10. in asia, it's a lot less. differences in how much they can charge per advert depending on geography. china, they are blocked in china. the government dislikes facebook, but businesses like facebook. big businesses that export to other countries are trying to target non-mainland chinese via this book. manus: caroline, great work in the dublin scene. caroline hyde in dublin on facebook. francine: ids scores in the third quarter and is bullish on the rest of the year. the company raised its outlook this morning, thanks in part to better sales in china and europe. hans nichols has more from frankfurt. if you break down the numbers, it seems we are not doing too badly in europe. hans: and the china numbers surprised on the upside. they are selling a lot of shoes there. of estimate was just north 300. liddy that's pretty clear beat on that front. this company seeing its strategy pay off. they had a bad 2014. here's what the ceo said in a statement releasing the earnings. we are reaching the goal line much faster than we anticipated. that is from the ceo. he is in a bit of a struggle. they are looking potentially for a new ceo. they had this problem with tailor-made, their golf division. manus let you and discussed whether or not we should call them boots, cleats, or shoes. you know what my preference is. manus: they are boots. this is a big place. it is called europe and i am from ireland. we don't quite know what is going on. we do know it is the third month of decline. factory orders showed the decline by 1.7% came from within the eurozone. this could mean we have a little softer slowdown within the eurozone. tomorrow, we will get industrial production and see whether this trend continues. francine: hans, thank you so much. manus: coming up next, we speak exclusively to anil agarwal ahead of the indian prime minister's trip to the united kingdom. francine: just a reminder, you can follow us on twitter. if you have anything to say, not only about super thursday, about when we are expecting a rate hike, but also if you want to talk mr. modi's visit to the u.k., tweet us. we are back in a couple of minutes. ♪ welcome back to "the pulse." i'm francine lacqua. manus: and i'm manus cranny. here are our top stories. u.s. and u.k. officials are increasingly focused on the idea that a bomb brought down the russian jetliner that crashed in egypt, possibly with the help of an insider. the british government has suspended all flights from britain to sharm el sheikh. phil hammond says there's a significant possibility that crash was caused by an explosive device. francine: it is also super thursday today. the central bank is due to announce the latest decision on interest rates and qe. governor mark carney will also present his final quarterly inflation report of the year. manus: janet yellen has reiterated that a 2015 rate hike remains a possibility. in a testimony before the house financial representatives committee in washington, the federal reserve chair said a december lift remains a live possibility. ms. yellen: what the committee has been expecting is that the economy will continue to grow at a pace that's sufficient to generate further improvement in the labor market and return inflation to our 2% target over the medium-term. and if the incoming information supports that expectation, then our statement indicates that december would be a live possibility. but importantly, we've made no decision about it. francine: how will fed action affect markets? i know i will wall joins us -- anil agarwal joins us ahead of prime minister modi's visit to the u.k. next week. it will be the first trip to the u.k. by any indian prime minister in nearly a decade. thank you for joining us. first of all, how important is mr. modi's visit? it is the first visit by an indian prime minister in a decade. what are we expecting to hear from him? there was so much hope that he would bring reforms. has he delivered? anil: this visit is historic. britain goes hand-in-hand for long, long, long time. excited about the government. as for what he has done, he has done a lot. power fort come into a half year. he got the absolute majority. he's moving forward and looking at growth of 5% to 6% for sure. in 2020, the growth can be 4%. he's going to build a new india. 1.5 billion people. manus: modi has just been to the united states. a phenomenal welcome there. what do you think the biggest india-u.k.es are for business relations? you are the chair of a major corporation. you are very aware of how the best things can be made. where do you see the biggest opportunities? anil: i see in education. educated ando get the best help is britain. i see in health care. improvey can do to health care in india. i look at manufacturing. hubs and howring they can calibrate. britain can be the biggest partner. four, i look at defense. lot.in and india can do a these are the things i'm looking forward to move. francine: you are of course one of the most famous u.k. indian businessmen in london. you are also an executive chairman. if china's slowing down and will continue to slowdown, when will india be strong enough to take that demand that the world needs when we are producing commodities? anil: perfect example. last 10 years, the british company invested $30 billion in win-win fort is a everybody. whether you talk about the debt, the equity, stakeholder, equipment supplier, everybody, it is a perfect example. where --s a place [indiscernible] if you say, i want to invest in india, people have the comfort to put in that money. that is what we have done. many more to follow. our convention is less than a similar population in china, less than 10%. francine: let me ask you this. there is a special relationship between india and the u.k. if this country votes to leave the eu, what that relationship be in jeopardy? are you concerned that that will hurt the relations in india? in many ways, india is looking at the u.k. as a gateway to the rest of europe. well, i don't think it will hurt india. india is a huge, huge country. 1.5 billion people. space to fill big up. manus: you talk about 1.5 billion people. that is a very tantalizing proposition for many global corporations. but there are historic issues, major tax disputes between english companies and india. there is progress being made. how important is it for india to put these issues to that with the likes of vodafone to make india a destination that mj aor global players can participate in? anil: very important. about --ing [indiscernible] [indiscernible] the government is fully aware. the one thing which comes is a sense of urgency to do things faster. this is a phenomenal destination. a democratic country. english speaking people. these things will help. francine: i believe you until you said the beautiful weather. on commodities, how is it adjusting to the new normal of commodity prices? anil: i'm a premium company. locationgeographic where there is a big market. i produce and i send in my same country. we have double-digit growth. [indiscernible] francine: you had to scrap the dividend. do you think you will restore it? forward.are looking [indiscernible] that prudence, the words you use there, is something that many chairman and ceo's are using, not just in the mining themess, but we are seeing digging and gushing everything they can out of the ground. is this a big folly of oil and commodity producers, continuing , drivingegardless lower-cost producers out? i look at -- there's not enough resource. there's no new mines. there no new oil coming. if you see -- 1.5 billion in china, 1.5 billion in india, 1.5 billion in africa, what is left? countries, where do the ideas come from, where does the money come from? [indiscernible] francine: thank you so much for joining us. a real pleasure to have you here. you have to come back soon. coursenext, we will of discuss the latest on the breaking headlines in regards to the egyptian plane crash as the u.s. and u.k. authorities suspect a bomb might be responsible for that crash. ♪ manus: welcome back to "the pulse." we are live on bloomberg division. u.s. and u.k. officials are increasingly focused on the idea that a bomb brought down the jetliner that crashed in egypt, possibly with the help of an insider. the british government has suspended all flights to britain from sharma shake. hammond says a significant possibility that the crash was caused by an explosive device on board the aircraft. let's get more with our european transportation reporter. chris, this intervention by the interventionnd of before any report from egypt or russia? >> we haven't had any evidence formally from the black boxes at all. philip hammond has said this morning that britain was acting not just on information in the appropriate realm, but what he called sensitive intelligence as well, which does seem to point to something inside, and will inevitably ramp-up pressure on other countries to follow suit. chris, what airlines are going to the affected? >> initially, five airlines that fly to sharm el sheikh. easyjet is most exposed. they say that there are 4500 passengers in sinai at the moment. the plan is to get them out as undertakingible, extra checks before bringing those people back. but they likely have to stay in the hotel over there for some days yet. francine: thank you so much, chris jasper. we will keep a very close eye on it. the crude price plunges. the oil services provider slumped the most in 13 years after it cut its dividend by half. we are joined by the company's cfo. thank you for joining us on the program. we were just speaking to the chairman of delta, who had to postpone their dividend. out whatust to figure the best way forward is? >> good morning. clearly, we're operating in difficult markets, with oil pricing where it is. markets are tough and our view is there's no end insight to that toughness. are taking the decision today to have our dividend. we've taken it to a level at half what it was, to a level where we believe it is strongly underpinned by our earnings prospects in this difficult market. will it come back in the future? that is the plan and the intention. the only way i think markets recover, and we are not in a position to determine that clearly. manus: that is a fairly grim outlook in terms of the marketplace. has beenhe dividend taken hard by the equity investors. let's talk about the debt side of your balance sheet. how much debt have you got to refinance? is there anything you can tell us in terms of the structure of your debt load at the moment? $1.5 billion. the first tranche of the repayments are not until 2017, 18 months or so from now. we are very comfortably inside. nonetheless, we will be taking steps within the next six months, while we've still got plenty of time to refinance the borrowings, both looking at the bank market and debt capital markets. we will look to diversify and refinance in good time when we've got the capability. that's the plan. said that you you can't see a foreseeable future where things are better, is this going to take 3, 4 years? how much of the debt are you refinancing? >> i'd love to sit and tell you i think the oil price is going to bounce back next year, and i see some commentators predicting that. hope is not a, basis of a plan or strategy. we are cutting our corporate crock -- our corporate clock, if you like, according to an assumption the market stays soft. let's call it three years. viewnk we are taking a that they are expecting pricing to remain weak for longer, whatever that means. in terms of our debt and how much we refinance, that will depend on appetite in the marketplace and the pricing. pricing. it is only a minor part that has to be refinanced in 2017. we may choose to refinance more depending on the terms available. manus: looking at your order book had say the order 6.5 billion pounds at the end of september. how secure is that number if the company is so limited? give me a sense of -- how close to contraction? is that a real order book? how much of that do i need to look at and go, 100% secure? >> first of all, we will only write context into our order book if they have been awarded to us and they've been given the go-ahead by the client to proceed. the chances of things getting canceled our low. -- we have very little out of the order book. 6.5 or something closer to 7 by december. we look at our pipeline by contrast. that pipeline remains good. we are a diverse business, not just in oil and gas. if we look at clean energy, solar, wind, nuclear, we see good tailwind and we are predicting an increase in the order book. secure that is a prediction. manus: thank you very much. next, will the bank of england lift rates? we will look at how the u.k. economy is performing and what governor carney will tell us when he speaks today. ♪ called super thursday. all about the bank of england and mark barton is outside it. ross walker joins me now to discuss super thursday. what is going to be super about this thursday? confusingight be thursday rather than super thursday. a lot of information. this might be a more hawkish inflation report. i think they will be raising their cpi forecast. outside chance of another dissenting vote. the initial move might seem hawkish, but i think the real message will be more nuanced. you are still going for the second half of the year. economists say february or may. you are august. why are you more dovish than your fraternity? ross: this economy risks going through a soft patch. i think we are already seeing it. we have some other headwinds, the global trade picture. later next year we will probably have a brexit risk. hiring decisions. and i think as inflation rises, some of the real measures of growth, consumption and so on, will soften. we are still struggling. mark: the fed, the ecb, let's start with the fed. if the fed goes, does the bank followed quickly? if the fed doesn't go, does the bank not go at all? ross: if the fed does not raise in december, probably you will see u.k. rate expectations getting pushed back towards the end of next year. if they do move in december, february is certainly live for the boe. mark: the ecb, if the ecb as further stimulus as many are hoping are expecting, not many focusing too much on that, they are more on the fed, aren't they? ross: probably for the u.k. market, there is too little late being put on the ecb. and too much on the fed. mark: what would shock you today? ross: a big shock would be a 6-3 vote. bring februaryly into play. mark: but very unlikely. ross walker, senior u.k. economist at rbs. rbs, august. hsbc, february. we've got a whole year covered. francine: mark, we have a lot to get through. for those listening on bloomberg radio, the first word is next. for our viewers, it is "surveillance." you can also follow us on twitter. ♪ ♪ >> december is alive, the fed's most powerful trio has spoken. around thes tumble world. it is super thursday and think of england investors look to governor carney for a rate hike. good morning, this is bloomberg "surveillance." i am francine lacqua in london with tom keene in new york. announcementtant

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