Interest rates do remain unchanged. The vote on that. The gilt purchase is 80. The bank of england keeps key Interest Rate unchanged. The vote was 71. The vote on Interest Rate, 71. Thathan the idea is growth hasnt turned lower in the way that they anticipated and inflation continues to grind higher. It is starting to become more open to the argument that she has put forth . Guy i think you can deduce that from the line talking about tighter policies. The markets, because it has an assessment that the bank will look through this inflation because it is transitory and linked to the currency, maybe it doesnt hold water . Maybe if they are concerned about the secondround effects . That it will have an impact on the wage story . And it could have an impact elsewhere because of that. So the implication seems to be that yes, the argument does seem to hold some water at the moment. The bank has not decided to step onto the other side of the debate. It is interesting at this point but clearly, there has been a discussion about the fact that the inflationary restory is something that does need to be paid attention to. Appear to bed does softening and you do feel that in the ip data. The bank is paying attention to cannot behat it viewed as a transitory effect and it does need to be priced in. A 62an does it become in the market . We are down by. 4 . We are soft on the session anyway. I do want to cross over to nejra cehic. Going into the News Conference in 27 minutes, the questions for Governor Carney, will they be political given the fact that we have a big election coming up . Thats right. When we do here mark carney speak under 30 minutes time, it will be the first time we have heard from an mpc member since prior to may 3. It will be interesting to see how the balance is the market and what approach he takes. When we have seen as the market is expecting one dissension from tristan force. That dissension was about the rates. And again, the common on how the markets are raising the rate markets in the future. So we have seen mark carney stick with that centrist view. It will be interesting to see whether he tries to prepare the market for more rate increases further out while keeping be dovish tone in the near term. Because we had expected the cut to the Growth Outlook for 2017 but they did raise their inflation forecast. As you know, we have seen a stronger sterling so far this year even if it is a little bit off today. Jonathan great work. Nejra cehic, looking for to hearing from you later. Guy johnson, thank you very much. For more, we bring in karen olney and david allen. Your first initial takeaway . David owen no real surprise. That has been the focus. Theink this may come out in press conference, unrelated to that and so forth. It really took off. And that is something that they will act on, going forward. So that will be seen as tying into Interest Rates. A rate rise at this point isnt going to happen. And as i said before, there has been a loss of momentum so wages has slightly rolled over. So they are very much on hold. Inhink the next will be november after the german elections. At that point, we will see that. Jonathan we talked a lot of time about kristen for today. Lets talk about the decision with the squeeze on real income. Inflation pushes higher. Is that the best case for the bank . Any bank that says, we will continue to sit there . David owen look at the gdp data. They will revise down for the outlook for this year. It is related to the consumer. Obviously, real wages are getting squeezed. Around 2 . Cpi is printing higher. We do have this with pressure. Consumer credit, the borrowing is slowing as well. Ratehan what is the policy actually doing right now other than keeping a lid on the pound . Which, if you look at the trade data is not doing a lot of good . It is important with the earnings. A weaker sterling does increase that, once you translate that back into sterling. The position does need to improve further. Remove we wanted to stay in we wanted to stay relatively soft. Karen olney, you deal with the european stocks. What is the picture of the u. K. Economy that we are getting . How does this affect the stock market in europe . Karen it is interesting. If you take a long run view, the u. K. Has been the safe haven trade. At this point in time, you have Savings Rates in the u. K. At a lifetime low. Household cash flow is beginning to roll. If you look at the ftse 100, you have a fall in the trade weighted sterling. 2016, it has come up a little bit. That the u. K. Is no longer the antieuro area trade and it has its own problems. David when it comes to the pound, can we expected to remain supportive . It did go down but it has come back a little bit now. It stopped its freefall. You expect that to continue . Karen our view is a little bit weaker from here. I am not a strategist but i do think we did have the big fall and it did used earnings. It helped that the ftse 100 was 75 of sales leading the u. K. So we have played that game and now we are starting to worry more about domestic u. K. The exciting ftse 100 trade was last years news. He will have a lot of hard work ahead of us to get good equity gains in the u. K. Market. Jonathan lets look at the forecast out of the bank of england. To 2. 7 . P the gdp forecast in the short term revised lower to 1. 9 . How do you provide projections for absolutely anything . Strategisted an fx where sterling will go, they give me two outcomes. We could push 1. 50 if brexit goes well. We could push 1. 10 if it goes badly. What kind of pitch of salt should we be taking with the forecast . David owen absolutely huge. The bank is looking at the developments with extreme uncertainty. The brexit discussions will be hard. When theresa may called the snap election, the obvious call was for the sterling to go up because it reduces the extremely hard brexit. It reduces the risk of negotiations breaking down. We assumed there is a larger majority to play with. At the same time, brexit will be difficult. In that environment, you expect the bank of england to be cautious and they want sterling to remain competitive and not rise. Olney, almostn exclusively through last year, as you pointed out, the big long equity trade was a short sterling trade through another form. Going forward, can we get a u. K. Equity market that is moving away from looking at the movement in the fx market . The twof you look at biggest sectors in the u. K. That have suffered a lot, financials and energy. The Energy Crisis is supported. It doesnt follow a lot from here. Have a better go of it than i think you could do an energy and bank play on the u. K. Because the earnings are depressed. Versus history. The classic trade, the safer trade, it it is behind us. We have to do bottomup work to decide what to buy. David thank you so much to david owen and karen only. We want to break news. Verizon have confirmed they will pay the 3. 1 billion for Straight Path communication. This is what they were in a fight with at t about. The 3. 1h billion for a company that had nine employees. A total of nine employees. Jonathan not a bad business to be in. The bank of england is keeping the rates on hold. Opec is raising the supply growth by 64 . That story is coming from opec this morning. We dig into that later. Crude on the session with a marginal bid up by over 1. 4 . Coming up, we go back to london with mark carney holding a News Conference after the Central Bank Policy decision. We will bring that to you live at 7 30 eastern. 12 30 in london. Plus, it danny blanchflower. From new york with our eyes on london, this is bloomberg. Emma this is your Bloomberg Business flash. Of snapchate parent are plunging. They added fewer users than projected. It was the companys first report since going public. Facebookbeen hurt by which has copycat did virtually every feature on snapchat. Boeing has temporarily suspended test flights of the new macs jetliner. The problem is a potential manufacturing flaw in the engine made by general electric. The first debut is set for later this month. David overhanging the bank of england Monetary Policy and the projections for growth is the impending departure of the United Kingdom from the European Union. Jes schatzker sat down with staley earlier today and he asked him whether he was optimistic or pessimistic about brexit. I am just addressing what i think. I dont the get his optimism or pessimism, it is just what i think. You know, we have a Bank Subsidiary in ireland. That is part of the European Union. Employees today in Continental Europe from milan to paris to frank for to madrid. You know, there will be having been in the financial industry as long as i have, it is amazing how creative we can be. Now we just have to make sure we do it in the safe and sound way. Us is david with owen and karen only. Lets talk about how creative you can be. He says they can be quite creative. What do we know today that we didnt know last june about what the real effect of these banks will be on brexit . David owen the u. K. Position will be they will pay for the access to Financial Services. We do want to be in a situation where Financial Services to get access to the eu market. But the bank of england cant control regulation because it will be set out a friend for it. That would not fly for the bank of england, given the size of the Financial Sector in the u. K. , they will want regulation for the u. K. So, it is still going to be messy. For ann no with interest extremely hard brexit. Nobody at this pointthe u. K. Will pay for selective access. It will be difficult. Jonathan is there an argument for the money that comes to the city of london and get lent out to various Companies Across europe that there is a financial debility risk in moving . And that europeans could see higher borrowing costs . David owen absolutely right. The euro clearing argument is just one example. The euthe clearing into away from london but you want all of the clearing to be done on a single platform globally and you wanted to be large sterling andar dollars on the same platform. The argument there is that if europe pushes too much for the euro to move, a demand of moving to new york, that is when argument that is doing the rounds in london. Yes, there are issues. It does increase costs. David karen olney, there is uncertainty about what will happen with a naturals. How much of an overhang is the uncertainty on equities of the Financial Systems based in england . Karen it is interesting because we talked to the sector analyst and they are very good and experienced and they talk to management and the level of uncertainty is so significantly high. How Many Companies have a passport arrangement and how many thousands of passports are within a company . So i think a lot of them are still faced with a lot of uncertainty. The key thing for the european banks is that you keep the euro , the u. K. Ct together can exist outside of that and we dont end up in a financial war, as david talked about. Extra equity risk premium but there is a lot of uncertainty and we cannot make up answers for you. David what about the notion of that jes staley talked about . Is there a chance or likelihood that they will have to move around think legally and have subsidiaries and do things that are formal . Or is a practical matter that the operations will not be affected . Karen i just dont know. I think probably, london does remain a core center but david is probably better to ask than me. I am not in these deep discussions. Coming from north america, london is a safe place to do business. I came from canada. So there is an issue that you lose an influx of people if they are not connected to europe so it to make sure it isnt too messy. As the refined details, i dont think even the ceos of many of the banks have a clue about what will happen. We dont how to reason they will react. Hard, soft, in between . What does macron mean . What will happen in germany . Uncertaintiesany that could impact the u. K. David let third over to you, karen says you know better than she does. The uncertainty, ceos deal with uncertainties and they provide for a range of opportunities they provide for a range of indignities. Ceos deal with uncertainty all the time. Brexit is just another thing. They have to work their way around it. Complex large banks they probably think they have to move bits of the operations now. The issue is that it is down to the regulator. They would have to move that bit of the business if it is economically viable. Compliance, risk, legal this could be costly. But karen is right. At the moment, we dont know what will happen. Hopefully we have a better idea later in october. October 19 or october 20. The other thing i need to highlight is that we need transitional arrangements. Ecb willghi and the want this bridge to be built between the u. K. Leaving the eu and him leaving the ecb. David the wanted we know for sure is that the lawyers will be just fine. That is the one constant in the world. Many thanks to karen only. David owen will be staying with us as we count down to mark carneys News Conference a few minutes from right now. The man whoter, wrote the biography of steve jobs. He wrote the back of the of steve jobs and he will be with us to talk about apple and the tech sector. Later today we talked to peter szag. This is bloomberg. Jonathan the bank of england maintained the key Interest Rates and that they may need to raise enters rates faster than the market suggests. Assuming the brexit negotiations go well. We are minutes away from mark carney and the News Conference coming at the bottom of the hour. Me into thatake room. The questions that he will come up against. They going to be political . The kinds of questions he cant answer . David owen yes. If he says it is a softer brexit, the suggestion is they could potentially raise rates. He really doesnt know. The uncertainty at this point is still barry high. Jonathan he took an absolute beating from the media and politicians about his position and his view of what would happen postbrexit. Has he been conditioned by that, too any extent . David owen to be awfully fair to him, you had a policy vacuum. And we didnt know we lost george oswalt. And he called everyone into the courtroom. Bloomberg, ourselves, he called everyone in and he basically said, we will support the u. K. Economy and the bank of england. And that is what happened. Sterling immediately price lower and the economy carried on growing and that is exactly what should have happened. Jonathan i was in the room with you. The last man standing. The only man standing. The rate cuts after, was that a mistake . David owen no. They have completed 10 million of the corporate buying. And we know that they could potentially do more corporate buying in the future, if needed. But the u. K. Is now in the transitional place where exit discussions will kick off and we will see what happens with the economy. I wonder who is having a tougher time. Presented with a solar powered to lip. To lip. Who has the toughest job right now . David owen mario draghi. Absolutely. They cant keep supporting the eurozone. They need the euro bond, the fiscal union, nobody within the eu really wants that. But mario draghi needs it. Got numbers out of the eu saying that inflation is down and growth is up. Does that make his job harder . David owen they live in a world of small numbers. The inflation issue here is core inflation. And Wage Inflation, not picking up. They say they will not raise the rate until they finish doing qe. In a tight space. Jonathan david owen. Thank you very much. Coming up next, the governor of the bank of england. Mark carney and his News Conference. This is bloomberg. Jonathan from new york city and our viewers worldwide, the bank of england News Conference is coming up shortly. This is how the markets are set up ahead of that. In the equity market, things are softer in the United States. Down. 1 . Or 12x is up by 11 points. We switch of the board, here is the situation elsewhere. In the fx market, the cable rate is south of 1. 30. Down. 4 . The euro is unchanged. The governors News Conference, talk to me about the pushback that Governor Carney will get from having rates were they are and whether we get the shift from the mpc . David owen there is uncertainty going into the discussions. The fact that Wage Inflation is will be david owen sticking with us. Coming up is the News Conference with governor mark carney. For carney the outlook u. K. Growth and inflation will be influenced by the response of households, companies and Financial Markets to the prospect of the u. K. Departure from the European Union. The mpcregard, projection continues to be conditioned on a smooth transition to the average of possible outcomes for the u. K. Postbrexit trading arrangement. For some time, Financial Markets have hadholds different responses to the u. K. Decision to leave the eu. Those responses have diverged. Projections, the tension between consumer strength and market pessimism would be reduced over the course of this year. That process has now begun. Growth moderating and inflation picking up, Household Spending and gdp growth have slowed. In contrast, sterling has depreciated, following Market Expectations of the orderly Brexit Process. On balance. Faner in the near term previously anticipated. Real incomes pick up. In the mpc central forecast, quarterly growth is affected to stabilize around the current rate. In 2017. 1. 9 1. 75 in each of the next