This is bloomberg surveillance. Im Francine Lacqua in london. Another busy day. Five months on from the brexit. Chancellor were outlined measures to help workingclass families. The statement is the new governments first chance to shape fiscal policy since the decision to leave the e. U. We bring you the latest from westminster. How are the 19 economies of the euro area doing . We will bring in novembers pmi numbers. In fact, we are just getting them now. November manufacturing pmi rising a touch above forecast of 53. 7. And Services Also rising a little bit better than expected. Plus, donald trump and the fed. Sources saysam that the president elect plans to reshape the central bank filling vacancies within three m onths. 100,000 people are facing travel disruption with cancel flights after flailing to block a strike failing to block a strike on airlines. Well make sure we keep you uptodate with all the latest data. Lets get straight to first word news. Sebastian opec talks didnt resolve whether iraq and iran will join any production cuts. Meet next wednesday. Containing questions around the two countries productions do not make a deal and possible next week, but the lack of agreement leaves open the possibility that the group will fail to implement the cuts outlined in september. 900 flights were canceled. After a bid to block a two day pilot strike over pay was dismissed. Services such as beijing to frankfurt and los angeles to munich are whitiped out. Billionaire brothers charles and david koch are poised to keep 2 billion. U. S. Bankruptcy judge ruled that the cash is out of reach of the trustee recovery money. The prophet was beyond u. S. Jurisdiction because it had been transferred to foreign banks in the years before madoffs arrest. Will seek to raise 6 billion from International Bond sales. The first issue may be delayed due to market volatility after the election of donald trump. Were planning to do it by end of november, but there has been volatility since the election in the United States, because maybe of the change in the philosophy of how the economy would run and the plan of president elect. So there has been volatility in the markets. Were really waiting until the markets stabilize. Sebastian global news 24 hours a day powered by journalists in 120 countries. Francine lets get on to the data check. Weve seen quite a big rally in asia in global stocks. This is as theres more and more optimism that growth is Strong Enough to withstand higher Interest Rates. We dont look at them e malaysia ringit very often. Interestal bank left rates unchanged but look out for any outflow for that economy as donald trump suggests that he will considerly reflate the u. S. Economy. This is a picture for the yen. Remember, of course, it is labor thanksgiving in asia. Britain voted to leave the european union. Five my son, todays statement is the u. K. Governments first opportunity to shape fiscal policy five months on. Well introduce our guest, elizabeth martin, senior economist at hsbc. Thank you both for joining us. Lets start with you. How much can he actually do without changing . He does not necessarily need to take that opinion but theyll give them their opinion in a sense of how far is brexit going to impact on growth. We expect them to revise down growth forecast for next year significantly. That will have an automatic impact from borrowing that will come through in the form of higher unemployment benefit and so on and so forth. So, they will take that view on his part. And it is up to him how far he wants to respond. He told us immediately after the vote that there would be a fiscal reset. We heard from various members of a surplusnment that was no longer a priority. Now, you know, since then, he said five months have gone past and the economy has held up much better francine we have had some great data. We will see how he navigates it. Again, if he says we need to borrow more, how much of it will be down to brexit . First of all, as we just heard on the automatic stabilize, that is a very important point. The bank of englands latest forecast is a good reference in terms of setting expectations on the forecast we can expect. So, probably something around the 1. 5 mark for the coming years as what we would be looking for. Thats one dimension. And that you can say is perhaps the direct brexit affect. Then there is some of the policy choices that will be made. As elizabeth was saying, the economy has held up reasonably well. In terms of a fiscal boost, it will be fairly modest. Maybe some efforts on infrastructure, some efforts on lower income families but rarely modest. I think he will give us a strong signal that he will be keeping his ammunition dry and make room if necessary if the Brexit Impact does become more negative two step to step in for more stimulus. Francine under George Osborne, it was very clear in terms of austerity and how you deal with it. Are we going to find out more about the thinking of this new chancellor today . By telling us in advance that they are no longer going to be targeting a surplus they have told us that that monday is going to be replaced. That mandate is going to be replaced. There is an indication that perhaps the new mandate will be on the primary budget, stripping out the effects of interest payments. Up, it will not affect the underlying deficit consolidation. I think, yeah, uncertainty is much higher. And also, i think if you look back at the mandates over the years, they have a very mixed record of success. Yourself down as george had, you are restraining what you can do. I as George Osborne had. Francine it is a catch22. It is Uncertain Times but you do not see it playing out in numbers. Does the trump win change anything, will it spur this chancellor to increase Government Spending . I do not think the donald trump win has a direct effect on the fiscal spend, but i do think the brexit is the significant effect of a for example, one of the things the u. K. Can think about is having a target in terms of a cyclically adjusted gives deficit, and that you a lot of flexibility for any downside surprises to manage that. So, that is very much in line with what you are saying. And i think that is the sort of thing we should be looking for and expecting to see. Francine in 20 seconds, your killer question to chancellor hammond . Is there one thing you want to get out of him if you had the opportunity . To me, the interesting thing is infrastructure. Weve heard so much about additional Infrastructure Spending and Global Economic thinking and shifting towards this idea that Monetary Policy has run out of ammunition. T, so far what he have had from Philip Hammond seems to be a very limited policy. I question with be how much more is going to happen on it . Francine thank you so much. Elizabeth martin. Both stay with us. Bloomberg will be live as the chancellor speech kicks off. Later we speak to greg clark. And bloomberg customers can follow all of that on our top live page. Tlivego. Stay with surveillance. Plenty coming up, including brexit and the u. K. Economy. We are live in westminster with the Scottish National partys spokesman. Could the president elect move to reshape the u. S. Century bank . We will bring you analysis on trumps plans for his first 100 days. Falling returns and pressure on pricing. I will bring you the interview with italys biggest insurer. This is bloomberg. Francine this is bloomberg surveillance. Lets get straight to the Bloomberg Business flash. Sebastian former Credit Suisse ceo is planning to start a Merchant Bank. Gan has lined up 3 billion to start the venture in the first half of next year. The funding is said to come from partners backed by a network of ruling families from the middle east and asia and sovereign wealth funds. Dougan didnt immediately respond to messages. Lufthansa disrupted travel for 100,000 people after a bid to block a pilot strike over pay was dismissed. Premium services such as beijing to frankfurt and los angeles to munich are among those being wiped out. Monsanto is being sued on behalf of shareholders over claims its Board Members stand to profit from a planned acquisition by bayer. They suffer conflict of interest and have withheld information from investors. A spokeswoman says the firm believes the claims are without merit. Thats your Bloomberg Business flash. Francine in just over three hours, the u. K. Chancellor is due to give his first statement. We are in westminster where we are joined by a guest. Anna thanks very much. Im joined by stuart mp who speaks on economic and treasury related matters. What are you expecting, what you hoping for from the chancellor . What do you want to see . We expect the big numbers to be pretty awful. And we expect in truth that the numbers promised in20 2010 for 2015 barely to be reached in this parliament if at all. It is going to be a gloomy picture. What we would like to see is action on productivity finally on innovation, on exports, on investment, and, of course, focus on the impact of brexit. The treasury have told us how bad it could be. Its got to put in place to mitigate against that. Anna lets talk about brexit. This will feature heavily in the numbers and in the planning. Your party has been talking about a norway model for scotland. Is it possible for scotland to have a different relationship with the e. U. Than the relationship that england and wales has with the e. U. . It is possible. It might be complicated. It would require a lot more power to devolve to scotland and the u. K. Government would be required to ask for that is part of the negotiations. Certainly achievable. The reason it is necessary, not just achievable, is if we believe some of the numbers we are seeing, our loss of productivity driven by a loss of trade, amounting to a 9. 5 of gdp, we have got to make sure that does not happen. However complicated, however muc h hard work we have got to make it happen. Anna they cost money to stay in the European Economic area. The majority of people in scotland voted to stay in the e. U. Yes, it cost money but nothing comes without a price tag. If the u. K. Postbrexit was to continue trading with the e. U. They are going to have to accept a huge number of the regulations on the rules and a cost associated with that. This is not a free lunch the way that some of the brexiteers suggested. If that is the deal to stay in and maximize our trade and jobs, that is what we need to do. Anna you joined the court case around trying to get houses of parliament to have more of a say in the triggering of article 50. If the government loses their appeal, if your side is successful in that case, what kind of process do you think needs to take place in the house behind his . The argument was made in the house of commons so far. There has to be a public and a parliamentary debate. It is not good enough for the government to say, we are keeping our cards close to the chest when they have no negotiating strategy and no plant. Anna they can put a three line, very brief statement to the house and get them to vote on that. I think a three line statement or something equivalent, even if threepage statement would be insulting beyond belief and it would give no confidence at all to our friends and neighbors into the markets. The u. K. Government has a clue of the impact of brexit and what was required to mitigate its effects. Does that leave us on independence, and the timing . Would you consider another referendum . The first minister has a big team to work out how the u. K. Maintains maximum access. And scotland maintains maximum access. Only if this is completely refused by the u. K. , as the first minister said, it is likely there would be a second independence referendum. But it is far too soon. , to talk about timing, right now the sole focus is on maintaining access for the whole of the u. K. And for scotland to the Single Market. Far too soon. Anna it sounds as if you would, a vote for independence would come after brexit negotiations. I would not read too much into that in terms of timing. Lets maintain access to the Single Market and maintain a number of jobs and wealth. If we could do that, that is a great result. What comes after, if that fails or of the u. K. Government says no, time will tell. Anna thank you for joining us. Stuart hosie joining us on the green. We will hear from the chancellor. Francine anna edwards and westminster with the s p mp. As europes Political Parties intend to face down the challenge of the far right, we have more on the u. K. Governments fiscal plants. This is over. This is bloomberg. Francine this is bloomberg surveillance. In london, lets talk about the uks statement as europes Political Parties try to face down the challenge of the far right. The u. K. Government will set out measures to help what it calls workingclass families. Lets get more from our guests. Elizabeth, it is clear they are trying to make this a more Fairer Society, right . Looking after the people that have less. Maybe also changing the way we think about capitalism. Talk to me about jam, a new ackerman the government is using, which is basically a new acronym. This is the new buzzword. There has been a big focus of the Prime Minister theresa may. She is keen to help families she addressed after becoming Prime Minister. From what we have heard so far dan terms of the leaked policy for today, we hear there will be more on child care, for working families. And it will be perhaps some help on universal credit, the National Living wage will rise. This is a conservative chancellor and measures look relatively modest. We do not think he will go all out and launch a massive fiscal stimulus. The measures will be quite small. Francine are there fear surrounding the trump election, this brexit, which pushes government to look at a Fairer Society or does it come from the Prime Minister . Again, i think it is more linked to brexit vote than to trump. Ishink it is about, there clearly concerned about inequality in our societies. And i think that is one of the things being addressed, but at the same time, it will be fairly modest. I think this is the key thing. What i also think is interesting is that there is clearly also some ideas about incentivizing people to get into work and not taking away benefits so quickly. That could be another idea. There are a number of ideas out there that are being discussed, but i think they will be fairly modest in terms of the impact in terms of the public finances. Francine how important is it to actually bridge the northern75 . Southern divide . We have had people trying to focus on that. I think it is really important. I think the government will be well aware of the geographical divisions of the brexit vote. So, i think there will be something there, perhaps not George Osbornes favorites but more investment to support the regions outside of london. But i think the other concern that they are going to have as likely toe obr is forecast higher inflation. And we have already had five years of real wage declines. We have just come back and higher inflation threatens to send us back into that again. That will be a working for working families a worry for working families. Francine this is the productivity puzzle weve been talking about for quite some time. I think it is a global puzzle and it is a complex one that economies are trying to understand her to my mind, there are structural aspects, but there is also a cyclical aspect. If you come into a situation and im speaking more globally, where labor markets are tightening up where you do get some Wage Inflation coming through, that i would expect companies to be more incentivized to invest in productivity saving measures. That is something i expect to see coming out of the u. S. In 2017. In the case of the u. K. , i think it is very hard unless you go out and actually legislate real wage gains to do that. The only way to get gains is to drive Economic Growth. Sadly, it is slowing. Francine thank you to our guests. Coming up, we talk trump and the fed. This is bloomberg. Seeing is believing, and thats why were opening more Xfinity Stores closer to you. Visit us today and learn how to get the most out of all your services, like xfinity x1. Well put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. Theres more in store than you imagine. Visit an xfinity store today and see for yourself. Xfinity, the future of awesome. Francine this is bloomberg surveillance. Lets get straight to the first word news. Talks didlks opec not say iran or iraq would join in production cuts. They will meet next wednesday, continuing questions around the countrys production do not make a deal in possible next week but a lack of agreement leaves open the Possibility Group will fail to limit because outlined first in september. Lufthansa canceled almost 900 fights today after a twoday pilot strike over pay was dismissed by the frankfurt labor court. Beijing to frankfurt and los angeles to munich are among those wiped out to charles and david coke and dozens of other Bernie Madoff customers are going to keep as much as 2 billion. U. S. Is after eight bankruptcy judge ruled the caches out of reach of a trustee recovering money for victims, coke industrys and other defendants offers the prophet was beyond u. S. Jurisdiction because it was transferred using offshore to foreign banks in the years before Bernie Madoffs arrest. Lobal news this bloomberg. Francine what does the future hold for the fed . Transition the sources say donald trump will move within his fi