Models, designers and powerbrokers turnout for the British Fashion awards. Welcome to countdown. It is 6 00 here in london on Tuesday Morning and a very good morning to you all. The man who could be the chancellor has been drawing up his economic battle lines. The u. K. Opposition finance spokesman told Francine Lacqua a referendum on britains membership of the eu would be a risk and that britain needs to stay in the European Union. That our economy is growing in a strong and Sustainable Way and to do that we need to stay a member of the European Union and europe has to reform. The walk away from the largest Single Market would be a disaster for british jobs and investments but we also have to win the argument of the public in europe and in open Trading Company can deliver for their company budgets. Moment have at the seen that our economy is not working for open people. What are the chances of the u. K. Leaving the eu . It is a real risk, if you have a conservative government in 2015 when there is little or no prospect of reform at a time when the eurozone is in a sluggish state that is a dangerous thing to be doing. Withnt to win the argument the public that being in europe is good for jobs and investment. We need reform to make that happen. That David Cameron proposal has spoken more to his weakness and division than anything to do with the British National interest and i think business and labor here are on the same side saying that would be really dangerous for britains future as an economy what do they say, the guests we have on here seem to say this is a huge risk and why would you put yourself through this . Our partners in europe want to stay and i think they have their own problems to deal with at the moment but they have also shown that they want to find solutions which work for all of europe including britain. They know we and they need reform. And i am hugely frustrated because it always looks to our European Partners that the current government is making only shortterm reddish politics and when David Cameron stormed out at the stability tax summit a couple years ago he did to the net Margaret Thatcher, tony blair and john major had never done, to walk away. That blackmail politics is not something we want to be part of, we need to reset our relationship and show we can be a firm partner and a good partner. We will say no when we need to and put our interests first but in a constructive way. Way that one would argue to keep the u. K. Within it to grow. R when will that happen . Not as fast as any of us once. We have moved from the crisis plays to a long and drawn out chronic phase. The man that ed bowles once wants toe ed balls replace is who he will be speaking to tomorrow. Corporation tax could be divulged to Northern Island according to the financial times. Such a move would be politically significant and hand the province a chance to compete with low business sectors in the republic of ireland. s rocky ride and we are seen another slide in the past toy four hours. Comfort fortle russia from the head of the International Monetary fund. She says the drop in oil prices will provide a net used to the Global Economy while posing risks for Energy Producing nations including russia and that it it is the latest sign that the economic ties are beginning to fray and moscow has scrapped a National Gas Pipeline project. The 45 billion project has been dropped with russia opting to ship more fuel to turkey instead. Bitging directions a little weve heard some of the preelection positioning from the u. K. This morning lets move on to the election on the way in japan. Abe launched his campaign for Prime Minister with a focus on the economy. He is been on the streets of tokyo and japan goes to the polls december 14 despite the fact that japanese economy is in recession. The ratings has cut the companys Credit Rating and obvious has said his economic wallace sees are on the right path. The labor market is improving and wages are rising. This is our chance to rid japan of deflation and im convinced that the path we are on is the right one and im determined to move ahead at full speed. Is a big deal that has broken overnight blackstone has agreed to sell its u. S. Unit in Core Properties to the wealth fund for a . 1 billion. They own and operate a portfolio of Industrial Properties throughout the united states. Night the stars in fashion turned out on the red carpet in london. There in the red carpet she joins us now with all of the details. No bags under the eyes . A little, we were there till late i was pretty starstruck at times. Not only the loads of fashion talent we have that the amount of celebrities we managed to woo over. There was the great and the good. The british power couple that are Victoria Beckham and david beckham. I think this teaming of celebrity with fashion is a way that people are trying to show off their ran at the moment but i asked each and everyone of them what does reddish style mean to you and one of the key greats has come forward with rita orin, lets have a listen. Where do we start . I love this. That is still here today and the people are here as well. [inaudible] absolutely maybe more impressive. British style is really influencing all. Music think whats amazing is how close with come together this morning and working together. Very close. Theres never been an experience with Amazing Things to do. Sure what shete was saying about it being so free to have a tom for dress because for everyone else it is not free but an interesting conversation going on. You call her the queen of the u. K. Fashion pack . Victoria beckham was there. She does an iconic brand. And against many naysayers, many thought she could not do fashion but she proved all of them wrong and she was incredibly humble, she won rand of the year and was incrediblys excited excited. Cute future is to try to incentive i incentivize those who are young. And because what you just said mark 26 billion pounds of value to the u. K. And in fact for a 6 billion pounds worth what you include the supply chain and all the money splurged on the stresses so Victoria Beckham was pretty excited about this. We should be supporting young talent and encouraging young people to fulfill their dreams if they have a passion and focus and do it and i think giving that support is very important and i love to go to universities and talk to the students and say if i can do this you can do this. Jobs is who0,000 the fashion industry supports the United Kingdom see have to keep going out to all those potential people and universities for studying at the moment. Obviously womens fashion is the dominant theme but men still has a big areas of growth, it is not just about commercial there are loads of british designers. People like you can go out and support. But youre right jw addison is one of the new kids on the block and he had the first year designed for men and one best new designer of the year but whenever you dig into the fashion designers like burberry , menswear is where it is at particularly in china and i have to say my moment of absolute joy was when i saw tony pepper and i asked him about british style and he was rocking it and this is what he had to say. Feel wereng i definitely in my opinion we seen victoria style and [inaudible] still my beating heart. The dribble coming out of her mouth bloomberg. Com dribble coming out of her mouth. Away is there shouting think i could do this paparazzi thing. You have a whole next career ahead of you. If you want to know what Caroline Hyde had to say at the red carpet join us on twitter. You can join the rest of us on twitter. mannuscranny. annaedwards. A blow the day before campaigning begins and what is japans downgrade mean for the worlds Third Economy as well as are nextprospects guest from the bank of tokyo is in the building. Time for todays company news. That led to the 787 dream meyer last year was caused by inadequate design and testing. That is the verdict of the International Transportation and safety board. Boeing said the overheating and one cell of the battery could not spread to others and in the thert the ntsb blamed kumbaya for not anticipating the ways it might fail. Company gaveiggest most of it back by the end of trading but the slump rippled through the tech stocks in the retreat comes a week after the market value goes against above 700 billion. Apples share of the pie more than doubled in the past three years. Lewis will take direct responsibility for the u. K. Business. Tesco trying to recover from a fallout on its overstated earnings estimate after which the chairman said he would step down. The accounting problem that took probe of the company by the u. K. Series. Internationalain raised its Company Hours before the deadline. International races club med bid. The offer stands at 23. 5 euros per share and fosun is a planning to expand club meds reach into china. Japans Prime Minister abe has begun his campaign for reelection. With the country in recession the economy is in the Center Ground of the political battle. So how many seats does he need to win to stay in power. Abe said last month he would step down if they failed to win a simple majority of 238 states and the ldp and its partner agreed target of 270 seats which would provide a full safety margin over the absolute stable majority of 266. A would need a super majority of three heads of 317 to override the upper house. Derek a very good morning to you. Simple majority 238, stable majority 266. To be the target is there a risk he will not reach the seats . There is a small risk, i think the hurdle has been set pretty low so it would be a disastrous result if he did not reach that. He will definitely lose seats but the hurdle should be achievable. We see downgrades to japans debt. Are these ahead of the stories are reflecting what we are ready no know. I think reflecting what we already know. Deficit have by 2015 and then to surface by 2020. And where we stand today youre talking about concerns of achieving those targets so i think it is more a reflection it does not really change the dynamic in terms of the demand for jgbs foreign investor flow to japan with sin seen 6. 5 trillion over the last four months and the largest foreign investor purchase of medium term jgb debt is 2004 and it is a story really of global yields falling and making jgb yields relatively attractive. Just this morning we saw the note yield down to a record low. Jgbs, the 10 year bond spread is at its lowest level since 1980 so i am sure that dynamic in terms of the policies of the other Global Center banks is drawing criticism. Liquidity. Part of your notes say any dip or drop in dollaryen has been a fairly capital movements of the ucs and opportunity to buy. With those moves into jgb assets, how does that square for the currency . First of all in terms of the flows that are going into japan and giving the outlook on Monetary Policy a lot of the foreign investor inflows are being hedged by a very large degree perhaps, obviously for an Equity Investor if you look at inflowbased or on hedged into japan you would have made nothing through most of the. After the initial rally. You really need that hedged to make a return. The story is about what happens from japan into Global Markets. Flowu mentioned the gpi f is some thing that will become more important to the bankers are probably already underway. This is the big shift in foreign bonds and foreign stocks and reweighting. Just getting to the new target levels. There is about 15 trillion in the end of outflows that are ahead of us and there is our event evidence of foreign equity but there isestors more to follow. The real question is, not the gpif to a degree but whether the Retail Sector buys into this. For 15 had deflation years in japan, that will not change overnight. If that mindset duster to change we will see the Retail Sector gpif and going to foreign markets and thats where well see a potential for we will see the biggest decline on the closing basis since 2009 yesterday, derek will talk about the ruble. Derek calpine the european head of Global Market research. You are welcome back to countdown. Derek calpine ahead of Global Markets research, i will not do what mark did with george yesterday. We will start with russia. Belt,the top of the news the ruble dropped by over 9 yesterday. The lowest level since 1919 . I think it was the biggest oneday drop since 1919 but the close was the biggest oneday move. Where do they intervene because it is an free float . 5052, there is talk that could be the new equilibrium level based on the oil prices at the moment. Dynamic started where you saw crude stabilize, like yesterday but dollar ruble theinually to march higher vast dynamic would continue for a couple of days. And ite in a free float is an oil dominated economy so when oil is falling to the floor there is not a lot they can do about it. In that sense intervention is foolish and that is the most important policy shift which makes an awful lot of sense to be blowing away your reserves like they did after the collapse but still seeing the ruble fall sharply. That was a mistake and they have stepped away from that. Good to get your thoughts. The european head of Global Markets research at the bank of tokyo mitsubishi. Chancellor is set to speak on her latest Energy Policy plans. Welcome back to countdown. Lets to the foreignexchange markets as we run toward that take number. This is the bloomberg dollar index over the past week and i can tell you on the day basis it is trading high, we are on form probably one of the strongest years since 2008 in the reason i show you the fiveday chart is because after payroll numbers the dollar has taken a breather and is actually come back. We will have ubs with their look ahead. Blackrock staying strong against the yen in 2015 and we had a conversation with mitsubishi u. S. J with Derek Calpine he Oil Continues under pressure. The was a bit of a reprieve yesterday for the ruble and last week we are down on the ruble, the worst in the emerging market space. Possibility that dollarruble continues lower. Ruble down by another 10 in economistsirst, 23 have assigned that positive and oil at 70 bucks gives you a 1. 05. D dollar. 05 have a spike might that intervenes. These are the Bloomberg Top headlines. The u. K. Shadow chancellor says the written should stay in the European Union and a referendum would present a risk. Speaking to Francine Lacqua ed balls said it would be key to the labour party if he were elected next may. We need big investment in our country if you ticket twentyyear view where ive it investment is needed in our economy it will be in the Energy Sector and we change the way that energy works and with Nuclear Power running down i want that investment to work in a way that gives us a lead in terms of technology for the future. Is no doubt that we performed the market to make it butmpetitive but hit it has not yet started working well. We will sort it out but i want britain to be a leader in alternative energy. European banks may be facing a black hole blackhole. They say the europe slate is the stress test for flaws and lenders including Deutsche Bank and it may not be sufficient. Hedge funds are shutting at the fastest pace since the financial crisis because of financial performance. Plug onk it hold the the commodity sums. The hedge fund on average has returned just two cents this year that is their worst performance 2011. The India Central Bank has left Interest Rates unchanged in the fight against inflation. They pushed the policymakers to Lower Borrowing costs. It was the same story in australia at a record low to an half percent and stevens says the most prudent course is likely to be a. Of stability. Period of stability. She will lay out her strategy today in berlin. Our International Correspondent hans nichols is there, what is merkels goals . Its pretty clear, Angela Merkel wants to bring the energy to the autobahn. She wants to potentially introduce a 50 tax rebate for the purchase of electric cars by companies. You look at many fleets in germany and some years it has been almost a third of german so itales. By companies is an ambitious goal and lets take a look. 6 million electric cars on the road by 2020, 10 million carbon cuts in the transport sector in here is the irony. Germany has a ways to go, they have not embrace the purchasing of electric or hybrid or plugin automobiles. France is up there at 14000 and the netherlands up there, 19,000 vehicles. Norway has the highest per capita and germany one of the lowest. What were seeing among the industry here in germany all the Auto Companies are investing heavily