We are in london. I am guy johnson. And i am olivia sterns. Also coming up, a bloomberg exclusive. For the first time in three unveilingoschino is its collection in london and not milan. We are finding out why. Brandsporsche is making making moves to preserve its racecar past. We will speak to its ceo as well. First, lets return to our top story. Seven weeks after General Electric made a bid for alstoms energy assets, a story that bloomberg broke, siemens has made a counteroffer. We have the details of the siemens did. Bid. It is a little confusing. Good morning. You are right. This idea that we had initially giants,ing two european one in the rail sector and one in the energy sector, is not exactly what is on the tape on the table for siemens at the moment. What siemens is really interested in is alstoms gas turbines. They are offering three point 9 billion euros for these gas turbines. In order to make the bid more attractive, their japanese partners are adding 3. 1 billion that they would take in a joint venture with alstom, including this including the steam turbine business and the grid and hide your unit. Another she would add 900 Million Euros to take a 10 stake in houston, which siemens is saying, at the moment, that there offer tops ge by about one billion euros because it contains more assets. In order to convince the french government, they needed to add something else, jobs. They have also decided to match create 1000ee to french jobs in the next three years. What is likely to be ges potential reaction here . We heard them say they are not improving the financial terms of it. What other concessions might they make . At the moment, ge is saying that they are not planning to enter a bidding war. Of course, ge knows that with this new siemens offer, many analysts say that the siemens offer might become more attractive financially. Of course, ge is not going to just sit and wait. They might improve their offer. They are setting a path and they are ready to give more concessions to the french government. What will these concessions be . We will have to see. It may be more job guarantees for french jobs, which is very important for the french government. Gesy be some transfer of rail business to alstom. We will have to see. Of course, ge will keep looking in paris in the next few days. They have some executives in paris as well. Siemens is meeting the french president in just half an hour from now at the palace. Bids inill review both the next few days. Looks like it will be a busy morning. We are looking forward to continuing coverage. Thank you very much indeed. Some of the biggest names in tech are gathering for one of the leading events in the world this week for Cloud Computing. ,ondons Cloud World Forum always a hot topic. There are also a lot of myths out there about what cloud actually is. Caroline is live at the forum. Clear up some of these misconceptions for us. Yes, because phenomenal amounts of money are being poured into this socalled Cloud Computing. In fact, 800 billion over the next four years will be fueling Cloud Computing growth. That will help fuel the Global Economy to the tune of 6. 2 trillion per year by 2025. So says mckinsey. That is the value you can get from Cloud Computing. Meanwhile, still half of the United States do not understand what Cloud Computing is. Half of the population begins the weather might affect your ability to use this socalled cloud. So what is cloud . , youu use gmail or yahoo access your email from your mobile phone. That is using the cloud. It is basically accessing your data from whatever device you are from. The device is just a window into your own content. It helps you and i when we want to get in touch with our friends and we are on the move. Importantly, it is setting individuals free from their desks. A no longer have to be in their office to be creative, to innovate. They can be traveling, using their own computer at home, but still able to access their documents that they have saved in their computer at work. Asessing particular emails well. This sort of freedom is able to boost the economy. This is why the likes of amazon, aresoft, salesforce. Com so desperate to give you the software that you need in terms of the cloud. New this is why the chief executive of microsoft has said he has been he is putting Cloud Computing first. It is the new way we are going to work. We spoke to the Currency Cloud chief creative officer chief commercial officer earlier and he was saying cloud is not just a business. Cloud is a movement, the way in which we are going to develop. This event is showing us that very thing today, companies coming together to show the driving force that they can have and the more innovation that we can have within the start of community, setting people free because the cost of your doing business, the cost of your software and infrastructure isnt so much cheaper now that you have access to the cloud. We will be back later to talk far more about Cloud Computing and get those key innovations and viewpoints coming from microsoft in the next hour. Back to you. Looking forward to the rest of your interviews coming throughout the morning. I did detect a little bit of relish in your voice that that was an american survey. Thank you so much you would have thought it would have been a british survey, considering we have the clouds and Everything Else that goes on. There is better in it to there is Better Internet penetration in the u. K. You back. G to get we are fine. We know what the cloud is. We are fine. Ok, lets move on. Premier has begun his threeday visit to britain. He is ringing aliens of pounds of investments to the u. K. Joining us now he is bringing billions of pounds of investments to the u. K. Joining us now is manus cranny. Just last week, there were negative sentiments about what the british economy means to the chinese economy and the relationship has not been great. There has been lots of criticism towards china with regards to human rights. What country has not broached the subject of human rights with china . This is an official state visit. There is a little bit of pomp and ceremony. The basis of this visit is trade. Both leaders have something to garner here. Wants to change the perceptions and misgivings. For cap and for cameron, it is about focusing on trade under his government. To 12p 50 top 12 billion pounds. Cameron will make the point that we have fallen behind france and germany. We have done more trade in the past 18 months than in the past 30 years. Note, itmore serious is about the calibration of that relationship. Slightly more high tech. I know you are british, but that was irony. We get irony. I just jumped on her american bandwagon. Lets just get some numbers. Bilateral trade, 70 billion. Focusthe number three point. I know it lags far behind, but it is the number three trading partner for this country. That is what this visit is about. Tell us more about the deal that will be signed here. Of course, there is a big gas deal on the table. For at combine the two barbecue. We are also exporting semiconductors. Gas deal. Lets put it back on track. A 20yearbout to sign deal worth about 20 billion. I expect that show will also make an announcement as well. Much about the rhetoric of commitment as it is about the dollars. Private chinas largest Sector Company setting up shop, doing 1. 5 billion worth of investment. You have the Nuclear Investments as well. The chinese providing the capital along with the french. No irony here in the french own the Nuclear Business here in the u. K. You have china doing the nuclear deal. Yuan trading. This is about the rejuvenation of what the city of london is good at. What banks in the United Kingdom are great at, what Asset Managers and financial managers are good at. , create this as the hub of trading for this currency. Chineseestablish the instruction bank as a clearing bank. It is about getting london back on the map against frankfurt as the number one place to trade yuan and set up to do your business with china. Yuan trades are done right here in london and that is what they want to establish. Beef and lamb. You heard it here first. We will see be manus cranny, thank you very much indeed. In a few minutes time, we will consider the conversation. Looking forward to that. Moving onto another one of our top stories, iraq, the violence escalating. President obama saying he will send 275 military personnel to protect american interests and he also is weighing wider military action. Obama maintaining that there will not be combat troops on the ground. Now he is sending 275 military personnel into the country. What are you hearing . What is the latest . Do not expect any of those troops to show up in the north of the country, fighting the militants. That is not the idea. The idea is that they will mentor iraq he troops, perhaps act as liaisons. We have a lot of air reconnaissance going on. They can be an effective bridge the tween the air assets and the iraqi troops on the ground. The other purpose for these troops is to provide security for American Embassy personnel that are being relocated from baghdad to other places. Part ofn the kurdish the country, or basra, which is , which isth, or among in jordan, outside of iraq. The are concerned about fall of baghdad. They are moving nonessential people out of the embassy. A lot of people will hear about the deployment of these 275 soldiers and will say, here we go again. Iraq 2003 was supposed to be limited in scope. By 2007, we had a hundred 70,000 troops on the ground. It is clear that the Obama Administration wants to keep this very focused. Of the violence look like it is escalating or is the situation stabilizing . I am not really sure. What we have is the Iraqi Government fighting back. More of that. Particularly with the air force, striking militants. The most recent city to fall, just within the last 24 hours. It is an interesting place. 200,000 people. Not just sunnis, but also she which makes it different from the other cities in the sense that it is a mixed place. In the north of the country, you have 700,000 refugees who are now on the move, fleeing the violence and in the west of the country. And you have the United States secretary of state, john kerry, saying that the u. S. Is ready to collaborate with iran inside basis to fightoc the insurgents there. That is extraordinary. As far as the markets and oil is concerned, manus was just talking about bob dudley and moscow. He also said that he did not see any threats to the supply chain in iraq the on what we have already seen. We have not seen this spreading to the south. He does say that we should all be alarmed by the situation and the geopolitical conflict it has for the region. If you look at the oil market, oil has been giving up its gains. Down again today by about. 3 . Some investors out there have been feeling this for a couple of days now. A little bit of bad climb up in the price of oil that we saw was overdone. That is interesting. Given everything that is going on, oil only up about 3. 5 over the past couple of weeks. Coming up, the chinese premier lands in the u. K. More on that story when we return. Good morning, everybody. Welcome back. You are watching the pulse. Chinas premier has begun his threeday visit to the u. K. , bringing billions of pounds of investments. Here with us is manus cranny. No, that is wrong. We have already done that, havent we . Neil is going to talk about the same thing. Good morning. A lot is going to be made over the next two days, britains trading relationship with chuck. We with china. Youre not doing a great job. The chinese have a problem with visas, all kinds of things. The probability of u. K. Leaving the eu is also high on the list. Cameron is going to spin this positively, but what does britain need to do better . I think manus put it well a few moments ago. Some very important trade and investment potential for the u. K. Economy. I think there is an argument, given the euro zone, one of our main trading partners, this undy that istagnant economy difficult to get any economic growth. If we look at what is happening big picture and where the capital flows are and where the trade growth is, there is an argument for clearly recalibrating our relationship not only with china, but with asia. China is an increasingly important player in the Global Economy. It is a big investor. It wants to develop and trade and investment relations with china. It is already happening. China already has an a presence here. It is important to develop that and encourage the growth in exports and likewise, have a partnership in terms of investment, which is what the chinese want to do. That is going to be a key part of the talks with the Prime Minister today. For the chinese, it seems that the challenge is to let the air out of the credit hubble ubble without b actually breaking it. They want to have their noodles and eat them. What do you mean by that . Wax kind of like have their cake and eat it. On the one hand, they want the 7. 5 percent growth target. They seem confident from some of their more recent comments about trying to achieve that. On the one hand, there is a property bubble of gigantic proportions. The creditgdp ratio in china is 230 . That is flashing bright red. You have two schools of thought. One is, do not worry about it. They will be all right. It is up to the party to successfully deflate this. Risks, not just for the chinese economy, but the Global Economy. It is not just property, it is corporate debt. A report this week from Standard Poors talking about the scale of chinese or print debt and the exposure it of the Global Banking system to any downside risk. It is going to be very difficult, balancing this out and ensuring that a credit bubble does not capsize the chinese economy, which would have effects on the rest of the Global Economy. You talk about the chinese housing market. Reports going on here in the United Kingdom right now. Both nationsty for to be able to prick their housing bubbles slowly and deflate them is going to be something of a challenge. Is now seen as being the lead institution, the organization which will bring macro changes to the nature of the housing market. It all sounds great and fantastic. Slow it down without raising rates. Is that the reality of the situation . I think that the government understands that there are a number of tools here to try and event prevent another house price bubble and a boombust cycle in the u. K. Economy. In asia, for example, policymakers have successfully used macro credential measures as a way of trying to prevent property real estate speculation. It is all welldocumented. There is a huge literature with everything to do with financial regulation. It would be a compliment complement their Interest Rates. I think that Interest Rates should already be going up. Mark carney speech was important in signaling what could be a sea change in Interest Rates. And it did trigger a big indeed. I think that whatever the reason behind this, it is important to do that. I think the u. K. Economy is going to be the fastestgrowing economy in the g7. We clearly have a boom in the u. K. Housing market. It is now spreading out to the u. K. Regions. I think the bank of england has to take action. Measures, and i would be disappointed if they did not come out with something today, i think the bank of england needs to get the ball rolling. The danger is, the longer they leave it, the more they might have to get in the picture. We will leave it there. Tank you very much indeed. We are going to take a break and we will be back in a couple of minutes. Good morning. Coming up on the pulse, the ap p that lets you put your best face on. We will speak with the founder live from tel aviv. Also coming up, porsche suvs may be flying off the Assembly Lines these days. Moves tomaking preserve their racecar past as well. We will hear from the ceo. News comingreaking through. U. K. Inflation has come through in the last month 1. 5 . Of lets take a look at how the pound is reacting. That is the year on year number. The estimate was 1. 7. You moving away from target. The market is repricing this one. Well tell you how the markets are repricing out some of the recent hikes. But bring in jennifer ryan. Lets talk about what this means for the u. K. Economy. That is a big surprise. It affects what people will say about the outlook for inflation going forward. That looks like it is going to be staying below the 2 target. There is no risk of its inflation spiking above that. It gives the bank of england breathing space. That is a lot of excitement around the meeting. We have macro credentialed tools. Think do you think we will hear . We have different ideas of the state of the housing market. I dont see a bubble. It is going to be a bouncing back for them to say how they will manage big pickups in prices in london where outside the capital at night it might not be so acute. There is some repricing taking place. Might change . The target is two. The backende is in of this year. It is very confusing. You think the banks are as confused as we are . If theyre looking at gdp, they will see that if Growth Continues that will be a reason for thinking that the inflation they are attributing alongside that will be something. When you look at some of the other metrics, and suggested things are turning up. The other thing that this does is wage rushers. You still have people looking to make up for all that lost time when inflation went so far above target. Thank you very much indeed. Porsche failed to finish, they are seeking to preserve their racecar past. Spoke to the ceo and visited their factory. They have a storied history. Since the race started in 1923, they have the most wins. 956 was the 1982 entry. They havest