Wages are getting squeezed, that is a problem, but we do have an upside inflation issue and that will be something we need to dig into. Im trying to look at the details who it was. Less thane only have normal membership of the bank of england mpc. Voting already effectively for a hike, now it looks like others will vote that way as well. Is an upside story, rather than a downside story. Christian Ian Mccafferty has been there before. Saunders to the mpc, relatively new compared to the rest of the mpc. Talk about three voting members running their hand up for an Interest Rate hike, when the politics have become even murkier. Those hawks as well, they are independent members, which is another fact you have to think about, as well. That is a factor, too. The governor of the bank of england will be speaking this evening, across the road from his usual venue and of course we have the chancellor coming through. There is extreme clinical uncertainty in the u. K. Right now, we are uncertain of a brexit. We dont have a clear course on a number of different areas, and of course this is where these people say it is time to raise rates. More fromng economists in london saying the next move is down, not up. Jonathan also the prospect of more qe. May push higher, not by a significant amount, up about. 1 on the day, but you see the sharp move on the charts. Woodt want to turn to rob and bring him into the conversation, for me and many others, it wasnt about the bank of england decision, it was about the speech a little later. Talk about house surprised you may how surprised you may or may not be by the decision. Looks ankly, i think it bit bizarre. One of them did vote for a hike before, the other two are on the hottest end. Hawkish end. Look atst spoke retail sales this morning or yesterday wage growth fell below consensus expectations. It looks a bit odd given the data news to my mind, it is surprising to me. 1 vote. Xpecting a 7 Kristin Forbes will not continue , but nonetheless, i think what we have learned from the past is tende who vote for hikes to do so meeting after meeting ajonathan we have had theory three days in a row, upside surprise to inflation, downside surprise to retail sales, the hawks at the mpc are looking at the labor market. They say the crash has decreased, but the demand is still strong. You have to think about whether those hawks gain any traction, or if all they do right now is put the prospect but the brakes on a prospect of more easing. Rob i think it is difficult to try and figure out which course were going to be looking at. I think it does make more easing harder. If you look at distribution of outcomes, probably that does make the easing element a little harder to achieve. Whether it makes the timing of Monetary Policy more plausible, i would think that we do have to say that it does, only because youve got this momentum that it is coming. The commentary from the bank this morning is maybe it feels a slowdown in the consumer is unclear how persistent that will be. Datably a little more dependent on watching how the consumer response from here. The other factor to mention, as thendicated, i wonder who ninth person will be and how critical that vote could be as well. Jonathan it was supposed to be just a runofthemill egg of england decision. I thought most people thought it would be a Decision Just on hold, boring, three votes for a rate hike. Mpchought the bulk of the would reach for the playbook on the mervyn king. Focus on supporting output, the core of the bank of england is still there, it seems. What do you make of the dissent . I wouldnt say it is significant, but the u. K. Finds itself in a tough position, there is huge political uncertainty. There is a stagnation shock, and that always creates problems for Central Banks. All three of these are the external members of the mpc, not the core members of the group. My expectation is they can hold the group together, they will be inclined to look through this, but it does illustrate the can beations stagflation for central bank. David doesnt have any affect on the majority, though, not in terms of moving right now, but how quickly they may feel they need to move . Hasnt in the past had a direct effect on the internal members. Remember in the past has voted to keep rates on hold. Clearly it does raise barriers. O any easing in the future i think probably one thing to look at here is obviously for these three members, they are focusing on the inflation number, which is above consensus this week and also on the Unemployment Rate itself. Faith that thehe phillips curve exists, that unemployment will eventually turn into wage growth. Skeptical, we have been running that story for years. It hasnt come about yet. My perspective, it seems like an odd assumption to make. David it is not just in the u. K. We have seen this, we see it in the United States, the labor market is tightening, but the wages dont go up. You refer to stagflation. If you move on the inflation part, what is the risk youre going to go further and stagnating the economy . Richard exactly. It is hard to thread that needle in practice. In the 70s it was common, but you are right. We are at a point that given unemployment is low, we would expect wages to increase. Part of it is a low productivity. I wouldnt read too much into it today. To me centralte banks are nervous, and appropriately so, about their independence. A lot of the interpretation of the bank of england is their policies have been hijacked by brexit. They are saying wed like to move away from the hijacking and get the economy back to where it should be. Jonathan as guy forbes and others point out, three becomes to, we will have that change as well. And it rob, ill post another question to you, whether the margin may be decided the brexit negotiations have gotten clearer. Interview one of those individual mpc policy makers at this point, i wonder if they would Say Something along those lines . Rob who knows. They have been quiet, rightly so. There assumption in their forecast is that brexit negotiations will be very smooth. I am not sure we have learned anything over the past few days that suggests that brexit negotiations will be smooth. Equally, the lack of majority in parliament, there is reason to assume we would end up with a worse outcome. They probably have personal views, who knows what it would be if you interview them. I think the assumptions are pretty optimistic, that we are going to go through a. Period of smooth negotiations. Bearing in mind that since the bank of america changed the climate of its policy meetings, have brought them further for award, there has been this feeling that they seem to maybe not react to the most recent data before a policy meeting. This feels like one of those, where just before the policy meeting we have had some downside news on wages, which should make you think the search last less likely for. We talked about the politics of westminster, we now have to talk about the policy you see the reaction on the fx markets, sterling up now. Guilt yield about nine basis points. Where the sterling goes, you see the ftse go in the other direction. About other politics on westminster, whether Governor Carney can keep the ship together. As we go into a storm for a couple of years, potentially. I think it depends on what happens with the u. K. Economy. Of lateioned the data has been softening. We will wait and see next time we get a count. We will see what the new membership looks like as well. There are a bunch of factors here, but i have to say the prise is white strong quite strong. I am scratching my head trying to figure out what is going on. Some of that is replicated around to be city of london. We will see. The data of the moment showing signs that the british economy is slowing up. If yound that spent time in the u. K. , you will todaya lot about, talking about a sharp shirt for. It is sharp shortfall. Much. Nk you so great to catch up with you. Rob wood of the bank of america, rich cleared up of Pimco Richard Clarida of pimco will be sticking around. Three people voted for a rate hike. You see the Market Reaction clearly. Up nine basis points, and. Omfortably back we approach one 28th of 12781. This is bloomberg tv. This is bloomberg. This is bloomberg. I am david westin. Inflation numbers may be softening, but said yesterday the bed should stick to its course. These price declines will, as restrainof arithmetic, the twelvemonth inflation figures until the extraordinary low marchraordinarily reading drops out of calculation. However with the labor market continuing to strengthen, the committee expects inflation to around 2 d establish over the next couple of years in line with our objective. Nonetheless, in light of the recent readings, the committee is monitoring inflation developments closely. Richardtill with us is clarida. Are picking and choosing their data here, do we believe them . That is an interesting question. Who knew that phillips would newme the most famous zealander ever. You saw it at the bank of england today, and it definitely the bible from which janet yellen and her colleagues are reading. Unemployment falls as far as it has, inflation is supposed to rise. But as you can see, it is rolling over. That is not supposed to happen. That is why the markets are not credit into the inflation path. They will be forced to raise rates faster in further in the future. You are in esteemed economist, at what point do you have to think about changing your paradigm, changing your model . That is an interesting question, the phillips curve is so embedded in thinking, that it doesnt seem that it will be something that people discard. At whatbe a question of level does it again, rather than does it take in at all. Unemployment rate to fall lower than had before, janet yellen seems to be experimenting in the same way. Jonathan is this no longer a ase of accommodation, is this matter of timing . Right now the funds raised around 1 , the real Interest Rate is still negative, so they think they are removing accommodation and not tightening. If you look at conditions, theit level, stocks, rates, is really easier right now. I think they saw an open door to give the get the Balance Sheet analysis in. I think Going Forward they really will be looking closely at inflation. The last year, they had a forecast of rate hikes, didnt deliver them. This year they set a forecast of rate hikes, the data moves, they stay steady. It is about a policy mistake, you do not think it is a policy mistake . No. Ard i think the data has been softening, but i do think the policy is still accommodating. I do think, however, we are going to have a handoff from the yellen fed into the next fed. Camp. Ot in the mistake jonathan coming up, we will be. Ive at the beave viva paris you are watching bloomberg tv. Jonathan from new york, this is bloomberg. I am jonathan pharaoh. Crew trading lowest in the last several months. I want to discuss this with julian lee joins us from london. Cuts aree about this, declining. This storywasnt that opec was trying to sell to anybody. Gasoline inventory up for the second week running demand down for the second week running. If you look at gasoline demand for the whole of this year so far, it is down by last years level by about 3 . Oil is the trouble is not being taken out of the system quickly enough by people consuming it. We are not seeing, yet, any big decline by the volume of oil moving from the persian gulf countries to the u. S. , which is still by far the most visible market. This is where we need to see things happening. The Saudi Oil Minister said at the meeting last month that saudi arabia was going to start making measurable cuts in its exports to the u. S. Those will take a while to filter through, but the problem is our tanker tracking is showing while saudi shipments may be falling, iraq shipments are going in the opposite direction. Jonathan talk to me about the policy of opec. Everyone is a member of the saudi ipo the our team pr team. Will they not be pushed beyond the ipo we expect to get next year . Julian i think that is one of the big uncertainties. And i think that is one of the reasons the market was not impressed by opecs may meeting. Guidance asto be no a what to do when they come to the end of this current accord. People remember what happened when they abandon outlets and supplies surged. Come the end of this deal, the same thing will happen again. Wont, we saying it are committed to market management, but that management of what happened in november 2014 is still very much at the front of peoples minds. And there are real questions about how opec will manage this Going Forward, particularly when we see capacity rising in a number of countries. Julian lee, thank you. Coming up, we will talk about how we have achieved gender parity in the workforce. From new york, this is bloomberg. Futures are softer on the dow and s p 500, down koin 6 on the s p, about. 4 on the dow. Percentagey one full point, the why is on the board. Byng higher i almost. 2 . Split decision over it at the thatof england, five vote the rates unchanged, one becomes three, voting for a rate hike. I can get you the gilt picture for you, there is a spike by nine basis points, comfortably. 1 after a oneday move over last year. Up. Much coming i want to get you to headlines outside the business world. Emma they give. The special counsel investigating russian interference in the election, according to Robert Mueller, he will also investigate whether donald trump tried to obstruct justice. He will try to find out whether the fbiident asked director to back off investigation of michael flynn. There was a shooting at the congressional baseball practice. President trump visited state eolice and hospital stev calise and hospital last night. Shooter was a man from illinois who posted antirepublican messages on social media. More than a day after a blaze started, at least 17 people were missing,any more Authorities Say they dont expect to find any more survivors in the london fire. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Im emma chandra. We are going to have a return of the reports out of washington that Robert Mueller may be looking into whether President Trump sought to intervene in the investigation director. Mer fbi what do we know about this and also the white house reaction to it . Kevin last night the white house pushing back after the Washington Post report that the investigation will now include looking into the president s. Bstruction the president denied he said that, but this is the report that will only fuel the fire to democrats and those looking to continue looking into the questions surrounding the russia probe. It is worth noting that republicans do not feel that there is enough evidence to bring charges now against the president for obstruction of justice, but this type of report suggests that mr. Muellers investigation is continuing and expanding. David you are right to remind us, it is early going. Thank you so much to kevin cirilli. Whenever we hear the words residence and of section of justice, it is serious business. We are now going to be joined by barbara mccabe, a former attorney for the Eastern District of michigan, she is on the telephone now. Thank you for being with us. Barbara thank you for having me. My first question is, given what we have heard, is it surprising that a special counsel would be asking questions of other officials in the government about the circumstances surrounding mr. Flynn . I think it is actually a logical step assuming the reports are true. Testimonysed on the of james comey alone, that would be enough or Robert Mueller to want to investigate this. One of the things that is extraordinary, if the reports are true, there are other officials of him trump asked the same thing. David we heard from a former u. S. Attorney, like yourself, who said based on what he heard, there was too little to conclude either that there was obstruction of justice or was not, but there was enough to investigate the question, do you share that view . Barbara i do. I agree with that. Hes done what we heard from the comey testimony, there are elements there that would suggest there was obstruction of justice. Mueller, youbert want to see if you can probe other evidence to corroborate the story, or find evidence to refute the story. Sounds like the interviews of the cia director, the director of national intelligence, the nsa director, is an effort to try to see if the story stands up. Based on the reporting, it sounds like President Trump may have asked others to intervene just like he did with james comey. David one of the things that Business People are concerned about is the timing of this thed markets do respond to news of this investigation into obstruction of justice yesterday. Can you give us an idea of how long this can take . Barbara they can take a very long time. No doubt, Robert Mueller wants to be extremely thorough. Whenever you interview a few people, they may tell you a few more people that it is worthwhile to interview. He will want to leave no stone emails. , asked for the good news is Robert Mueller has a reputation for bringing urgency to his work. So much for you being with us, that is professor Barbara Mcquade of michigan. We will turn to a different subject, but very important, as well. We spent a good deal of time talking about the level of employment in the country, and increasingly important issue is to what extent corporate leadership takes advantage of all the available talent. Brian moynihan discussed this with bloomberg. Brian the real question is are you going to draw from 100 of the population in an industry, in a country, completely dependent on the talent. We have a very talented people, and we have a machines they operate. We do not make things. And so, if you dont get from 100 of the population, you are in trouble. Asid Valerie Jarrett served Senior Advisor to president obama in the white house. One of her roles was female leadership in corporate ameri