Rate cut to near zero by the end of the year so keep an eye on the Quarterly Report that comes in november. The bank of england votes 90 to cut rates, no dissent on rates but dissent on qe and the Corporate Bond buying program. The bank of england cut rates to. 25 , they intend to buy Corporate Bonds as well. The majority of the mpc expect a rate cut to zero by the end of 90year, and they voted four the rate. Majority of mpc expects a rate cut to near zero by the end of the year. I do say that their Bond Buying Program could increase by 170 billion pounds as well. To sort of put a number on the Corporate Bond buying program, it is 10 billion pounds over the next 10 months. Byathan guilt 10 year down the cable rate dropping off as well. Upside risk to inflation, Downside Risk to growth, that is what you see in the forecast. The 27 thet 2017 forecast, downgrading the most ever on a single inflationary report. Side, they seen inlation at 1. 9 on at q3 2017 versus 1. 5 , and sees inflation at 2. 4 at a twoyear or threeyear horizon. It is an overshoot of the 2 inflation target. To 2. 5 , a new record low for bank rate and the bank of england. The Asset Purchase Program has been increased to 435 pounds from 385 billion pounds previously. Bank of england Monetary Policy meeting advisor, you have an idea of what the bank of england has done and a bit of a split on the Asset Purchase Program. If you were on the mpc, what would you have done . Surprised we heard no dissenters because we heard some dissenting voices before this decision. I am not very impressed because i think the mpc is trying to do something that goes beyond the is of Monetary Policy remus of Monetary Policy. It is not clear they are following their own inflation target. Monastery Monetary Policy is not designed to offset big political shocks. That has to be sorted out in the political system. Unfortunately mark carney jumped the gun and hinted in this direction. The mpc has sort of been backed into a corner on this. I do not think it is necessarily the right decision. Jonathan it appears the split was on rates and not on rates that the qa program. The bank of england downgraded to the most ever. We have this policy dilemma. You have unread upside risk to inflation, Downside Risk to growth. Is it the wrong thing to focus on output . Andrew we do not know that the Inflation Impact will be transitory because the shock of leaving the eu is the shock on the supply side potentially reducing investment. That is something that really needs to be factored into these forecasts. I think the main point i would make is that we are reaching the limits of what Monetary Policy can do. At some point, central bankers need to turn around and say, we have done enough. We are not the fire brigade, we do not put out all the fires. If i was on the mpc i would have been arguing to wait for the autumn to see how the government responded, with the autumn statement, and other policy initiatives in order to set out the strategy for what our future negotiation is going to be with europe because that is ultimately the thing that is driving this loss of confidence, and the issue that needs to be addressed. Alix the boe is starting its Term Funding Scheme to impact lower rates, to get cheap loans out there to help households get money to spend. That is in some ways more important than getting businesses to spend because of brexit. What are some steps they can be taking to help facilitate household lending . Record lowhave had Mortgage Rates and Interest Rates and the u. K. For quite a period of time so they are johnng on a string as maynard keynes talked about. When Interest Rates get low you cannot really do much. I think there needs to be a degree of realism in the political system and the economic policymaking system about what Monetary Policy can do. The closer you get to this zero bounds of Interest Rates the more you get negative impacts on savers. In europe, and of Interest Rates have not created a very positive impact for their economy. I think the mpc is perhaps going a bit too far. Jonathan on the dissent specifically, kristin forbes, martin will propose the plan to expand the Asset Purchase Program. Talk to me what they are trying to achieve by corporate debt in the u. K. Kind of impact is that going to have on the market . Andrew i think those mpc members were right to oppose quantitative easing, or additional quantitative easing is that was effective when Financial Markets were very depressed in 2009. We have seen the stock market has recovered, bond yields are extremely low. Qa really only has an impact of pushing down bond yields, creating problems for Pension Funds and longterm savers. I guess those thoughts are in the minds of those mpc members, on Corporate Bonds i think the evidence is not there that we need to intervene in the Corporate Bond market. That is probably what is influencing Christian Forbes view. Sentance,andrew senior economic adviser to pwc, thank you very much. An increase in court in qa qe. The cable rate dropping by over one full percentage point, the biggest drop in about two weeks. Gilt, you see the yields come in. 131. 67, downe at 1. 2 . Alix a huge spike in the ftse 100 as well. We will have coverage from start to finish of mark carneys News Conference starting at 7 30 a. M. Eastern. David we want to welcome worldwide for a special interview with Brian Moynihan, bank of America Merrill lynch chairman. Thank you for being here. How does this affect bank of america in its business in europe . Aian in europe we have business that deals with Large Companies and investors so there will be a lot of activity today. If you go to the heart of it you have an economy which is bigger. Han california that needs help Governor Carney and the Monetary Committee is trying to help it continue to grow with a surprise from brexit causing concern. Us to brexittakes really because that is what Governor Carney is responding to. For england and europe, what do you say right now through your dealings with clients, your affect of brexit . Brian it was a surprise that it went that way so people are still adjusting to that. Adjustments range from personal disappointment to, now we have got to figure out what is going to happen. We all have plans that got us through the initial thing and volumes went through the roof, all handled well by the industry. Now you are into what are the plans and how do you conduct business . No one knows what the rules will be so we are trying to keep everybody calm down because there are real people involved, Real Companies involved, but no one knows the rules because this is a bit unprecedented. All you can do say right is say right now, let me try to plan. Are you seeing clients pullback from deals they would be making or converse, are they making more . Brian not really. Clients will adjust their oriness plans but like us any client, you can adjust your Business Plan when you know what you are adjusting it against but not against an unknown. At thell be looking hard resolution when it gets passed, the time frames, the outlines. O not expect a lot of activity the uncertainty could cause people to think twice about something that right now you are not seeing that much. Alix the uncertainty and volatility seemed to help big banks trading revenue. Is that kind of boost sustainable if you take out some kind of exogenous event like brexit . Brian the volumes come up one day, one day it is Something Else. Over a period of three or four days over the context of 60 odd trading days, it does not drive the earnings much. The issuance market opened back up and you have to remember what it was like march april. That stability is what drives it. There are markets all over the world and something going on every day. Jonathan we will talk about record low bond yields and speculate what that means for banks. Back to this bank of england low acrossilt yields the curve. What does this mean, record low yields and a flat curve as well . Brian the issue and the contents of banking, we take deposits from customers and make loans. The problem is the value, when you have a floor that deposits are at zero, it becomes less valuable. That has become the problem with bank earnings. It does not mean we are not hitting the returns we are supposed to hit that it would be easier if rates were higher. Pay nothing to the customer other than provide Great Service and we pay nothing if the rates are higher. Pointss go up 100 basis our country make this Company Makes about seven and a half billion dollars more. We do not sit around and wait for that. Jonathan a lot of people are sitting around and waiting, some of the investment banks doing a fantastic job of getting deposits, getting households on board. When do you expected to pay off . Brian it pays off every day. Think of deposits and loans being removed but those are real people. We has 60 billion more than people put with us to transact business. We get deposits because that is the Business Model and that drives our size and scale and scope. We are 13 of deposits in the s away very disaggregated market, plenty of opportunity to grow. We have the best franchise there is an we keep driving that growth. David we are talking with Brian Moynihan, ceo and chairman of bank of america. Lets talk about banks because they have been in the news recently. How bad is the situation for european banks and how does it affect bank of america . Brian if you think about two different types of activity, the domestic activity, we do not compete in that business. The Capital Markets, as european banks continue to address the post crisis change, market share comes up and you can see that the banks who have made those changes are far into the new style with limited risk and clients are getting some share. The reality is, the thing people need to remember about europe is it is much more difficult to manage. In the u. S. It was tough because of multiple regulators but what we do not have is multiple jurisdictions and multiple regulators. Issue, they do not have the Capital Markets in europe so there is no place for these loans and securities on the books to go. In the u. S. If we could get this off the Capital Markets we could rebalance the Balance Sheet. 800 trillion of shrinkage went on, nobody knew it. That is harder to do in europe. Multiple jurisdictions, multiple banks. It at a paceing to that is more slow and people can be critical, but it is hard. David we look at stress tests, we have them here, they have them there. What did we learn about the state of the european Banking System from the stress tests . Brian i think it showed that companies had the capital for a reasonably difficult recession to get through. It showed on a relative basis the u. S. Stress scenario is much more severe and the capital bases come out about the same. We are a more mature place in this recovery and some ways in terms of Banking Structure and they will get their. Bringing at stress tests, that puts the focus on italian banks and their nonperforming loans. What should have been done and what should be done now to help capitalize, recapitalize the italian banks . Brian they are doing it now. We are helping and we have helped over time in others. You have got to balance the real economy, the effect on the real economy and effect on the Banking System and stability. If you think about the late 1980s and early 1990s real estate crisis, they pushed the asset so far that you kept driving the economy deeper and deeper. Have to make a choice and the policy have made a choice to go slower to make sure that the real economy can be supported. They have to get those assets in the hands of people and repriced out. Alix and you are going to continue to help . Brian that is what we do. Whether it is a bank or a company in the u. S. David back to the United States, there has been a lot of change in your business over the last eight years since the crisis. Where do you think u. S. Banks stand with respect to washington and the public at large . Look if you go back and at various things, our brand scores are the highest they have ever been, our brand is growing. There is a dialogue about the system that will go on and probably go on forever. People think of glasssteagall and all this debate. There was a debate at that time about the structure of the Banking System. We are healthier, have more capital and liquidity. We go through the stress test and it shows we can survive a terrible recession without any prior warning and have more capital than we started the last crisis with. On top of that, the activities are different so the system is in good shape. The question is, have you set the boundaries and barriers the right way to continue to drive the real economy . Our job is to facilitate the economy and we need to set the balance right. David if things are going so well, why are you soap unpopular as a group so unpopular as a group . What accounts for that . Brian part of it is their big. Part of it is people are worried, could these banks create the same distress . When people think of glasssteagall, people have different views of what it means. Some it is size, some activity, some risky training. When you think about the regulatory and what people around the companies have done from capital, multiples of it. Liquidity, multiples of it. We make money trading every day last quarter. Billion 40 million of hours. At the time of the crisis we were probably around 400 million. The revenues that one away our revenues that should have should not have been done and are gone for good. Risk is down, capital is up, liquidity is up. It is a much safer system. Now the question goes, is it too big . At the end of the day, we are the sixth or seventh largest Capital Market in the world. Our companies are big and market cap and size because our economy is big. We only have 13 market share on Consumer Banking and 1 trillion in deposits because our economy is big. People forget the reason we have big banks is to support Big Companies and a big economy. Jonathan live on Bloomberg Television and on Bloomberg Radio worldwide, you mentioned a couple of times about how much you do to finance companies and help consumers. David began with the question on whether the rhetoric would continue. Has mentioned before that the attacks on the central bank harmed the transition of Monetary Policy into the real economy. Does the political rhetoric and wall street hashing harm your ability to finance the u. S. Economy . Brian let me give you an example. Yesterday i was in grand rapids, michigan. Did 18 more Small Business loans year to date this year versus last year and we are investing in our community and growing our Small Business loans. If you go from city to city and town to town, that is what we do so our mortgage production is up, deposits are up, car loans are up, Business Loans are up 12 year over year. It is very competitive. The most competitive segment of our business is a middlemarket loan. It is unbelievable how competitive that is between ourselves and the smaller and mediumsized banks. Jonathan the wall street bashing coming from d. C. Does not harm the way you operate in any way . Brian we are operating in a responsible way. We have to grow and when we are growing, it is good because we are reflecting that our customers grow. David you are talking about growing it responsibly. Theyre warning about u. S. Banks lending on commercial real estate and that it is escalating quickly. To some extent, more risk is being taken. If your book on commercial real estate growing fast . Brian not really. Was 80a book that billion around the crisis and we brought it down to about 60 billion, but what is in that book is carefully crafted. We are fairly conservative. The way you think about Risk Management around commercial real estate, how much of your loans we have in a segment and what types of risk we will take in that segment. We do it in a very disciplined way. I think the controller and others are concerned because loans that typically get a bank and trouble our commercial real estate loans as they are very tied to local economies. What can happen in Real Estate Development off the backs of the om miracle, real estate is very locally tied and yet the easiest loans to do. There is always demand for it. We look at it very carefully