Good morning. You are watching the pulse. Im guy johnson. Im francine lacqua. 14 years after inheriting the biggest budget deficit since 1945, the u. K. Chancellor will give his last autumn statement before the general election. Ispite the recovery, osborne less than halfway toward his goal of returning public finances to surplus. So what can we expect from the statement . We will bring you coverage of all those issues that matter of ahead of the statement this morning. We are bringing full coverage of the statement. We will take that live at 12 30 london time. First, we got two hours of analysis right here on the pulse. Some key guests. A game of numbers is a good way of looking at this. George osborne delivering his auto statement and the forecast are all about the deficit. Around 100 billion pounds for much of this year. Much higher than previously anticipated. Cut or spend, we will do the math with the institute of fiscal studies Program Director. She is going to be working through the figures. Make theborne Investment Case for britain . Will the statement give the markets the signal they are looking for . Himill discuss it with the portfolio manager. Finally, we are going to focus on airports and roads. Among other things, we will be asking the ceo of Norwegian Air shuttles. He has just got off a plane at gatwick airport. He is going to be talking to us later this hour. The chancellorh extending the funding for lending scheme for another year. The program will be aimed at giving incentives to lend to small and mediumsized businesses. With more on that, we cross over to westminster. Mark. Thank you very much indeed. Im joined by the British Chambers of commerce director general. John, it is all preannounced, most of it. One of the big ones was the extension of the funding for lending scheme which will be focused on Small Businesses. Is there a big cheer from the Small Business community . The chancellor is focusing on small and mediumsized enterprises. He is very constrained by deficit and debt. I think he is taking a targeted approach as far as we can see. It all depends on the execution. The thing that has defeated him in the past were things like funding for lending is the execution. Will that money actually get to Small Businesses or go into the mortgage is again . Instrument on the Enterprise Finance guarantee scheme. In the past, they have used it as double indemnity. They asked for personal guarantees from Business People which defeats the object. It has got to work in practice if it is going to work at all. What you want is more of a focus on infrastructure development. We had the rose revolution announced, 15 billion pounds to be spent over five years. What more to you one . The roads revolution itself is a big question mark. Labour and conservative governments over the years have done these things and it has never happened. We have to see execution. Why thesee the reasons big infrastructure schemes dont go through, it is the influence of the people affected by it. We want to see extra compensation for individuals. It is amazing how the problems go away when people feel like they are being treated generously. Have for fracking, to conversations for people who are being fracked. The chancellor has said he is going into consultation. That is the information we are getting out. What we are following in the autumn statement. Another thing the economy needs, which businesses and consumers have been crying for, is a revolution of the air force airports issue. The Airports Commission has narrow down the choices. How close are we to some sort of solution here . How much does business need a resolution . We absolutely need a resolution. It is critically important to businesses around the world that they can get to the markets. Ining a proper hub airport england is crucially important. The government is not going to announce this until after the election. But we need a decision after the election. Of this the outcome report is, Everybody Needs to get behind the outcome and back it. Another interesting aspect which you are focusing on is export finance. We need support for our exporters. In the latest gdp report, exports declined. The economy is being propped up by consumer spending. Businesses didnt invest last quarter. What more can the chancellor do to help exporters when it comes to finance . Clearly, we have not done very well. The Prime Minister announced in 2010 that he wants to double exports by 2020. So far, we have dismally failed. They havent moved the dial at all. By contrast, a developed economy like the united states, strong currency, doesnt need to export , has increasedo exports by 60 more than we have in the same period. If we carry on doing the same things and expecting different results, that is the definition of madness. Better way toe a help exporters. Out,are really reaching which wasnt the case a couple of years ago, but we need the banks to provide working capital so businesses have the confidence to take that plunge into exporting and have a cushion. Where does the bpc stand on the u. K. Within the European Union . Where do your members stand on our position within the eu . Actually asked the membership of 100,000 businesses in the network what they think. What they tell is overwhelmingly is, we want to remain part of the european market. It is good for business. They also say, they do not want to have any further integration. They dont want to join the eurozone and they say they want a referendum. It is much more nuanced. If businesses dont get some sort of reformation of the system, they are happy to exit , as thepean Union Conservatives are threatening. It is too early to tell. People cant make that decision until they understand the facts. That ourno question Business Community wants reform of the European Union. There are lots of things that hold back business. Additionalors put burdens on businesses and make them uncompetitive. There are guarantees around decisionmaking. Good if we end up like norway. What do your members think about David Camerons re cent speech on immigration . The quota push has been dropped. Do businesses support of that idea . We said the Prime Minister was right to take a balanced view. Businesses need workers from overseas. It is very important for the u. K. Economy. It creates wealth and helps growth. We need skills, we need soft skills. Again, it is a complex picture. At the same time, we need to help our large number of young unemployed to get work, and the Education System has failed those young people. We need to make them capable competing in an International Market for work. Fixing the Education System is part of the answer. We also need a strict point system. In the shortterm, we need workers from overseas. We started on public finances, lets finish on it. He doesnt have much room to maneuver. Not much room at all. He is constrained by the debt and the deficit. He can only do certain things. He seems to be targeting quite well but it is clear to me that the autumn statement is not going to be the place for big announcements that might influence the electorate. He is going to leave that for the spring. Thank you very much for joining us today. The director general of the British Chambers of commerce. The big announcements will come closer to the election. Probably not today. Back to you in the studio. Thank you so much, mark barton on the green. Areng up, the british taking wagers ahead of the chancellors autumn statement. The color of from his tie to how well his speech is received is on the table. How the brits are gambling on osborne. Our twitter question of the day will you watch osbornes autumn statement . Let us know. We are back in just a couple minutes. Welcome back to the pulse we are live on bloomberg tv on radio. In a few hours, George Osborne delivers his autumn statement. The latest forecast has the deficit closer to 100 billion pounds, much higher than anticipated. So, walkthrough the Reduction Plan into a lower gear. Crunch the numbers is the Program Director of the institute for fiscal studies. Is there anything announced today that is going to move the dial when it comes to the deficit . I think the big picture is that today wont really change anything. We are halfway through a nine fiscal tightening plan. There is a large hole that needs to be filled. Todays numbers perhaps are slightly higher than forecast. That is not going to change the big picture, really. Just staying the course is something that we could applaud given what the rest of europe is doing. 2010,we look back to George Osborne thought there was a hole in public finances. Thethe last few years, Economic News hasnt been great for the chancellor. Delivered ontually the tax increases and spending cuts that he said he was going to. That is good news. Why isnt the deficit falling faster . Growth is up. They should be fixing the problem. Growth is up. It is not up as it was expected. , we have seen a few things that suggest the hits to the u. K. Economy were larger than we expected. From what you are suggesting, if they stayed the course, this is something that we should welcome. Why not take a little bit more time and actually since we are seeing actions, why should they not promise a little bit more to the people . Osborne and the next out next election need to do is reduce borrowing. At the last election, there was disagreement about how quickly that should happen. They could cut borrowing more slowly but it is worth remembering that pain is going to come eventually. In terms of the structure of the way the deficit has been tackled, we have seen tax rises thus far. Is the fiscal story done and now we face the cuts . Deficit. Lk about the what does the next few years bring in terms of how the economics work . The overall deficit Reduction Plan was heavily weighted towards spending cuts. We have seen essentially all the tax rises him in. In. Ome the borrowing cuts are coming off of further cuts to public spending. It is relatively easy as a alitician the pencil in reduction without telling us where it is coming. That is the key question. Where does it now come from . Exactly. Seem a lot less happy about telling us where those cuts come from. They are starting their campaign. This is to be expected. You are not expecting any spending cuts to be announced today. The election is looming over us. One would hope that between now and the elections, the parties start giving us more details on where the elections are coming from. No politicians were talking about those cuts and yet postelection, we did see further tax increases and spending cuts. Where does the risk lie over the course of the next parliament . The chancellor is going to may be announced legislation today to lock in a balanced a jet. Balanced budget. Where does the risk lie if that legislation isnt passed . Story, is itwth the inability to force through the cuts . Where does the risk lie in terms of the next parliament . I think the legislation is probably neither here nor there. Is aext parliament, there number of potential risks. One is that if they keep trying to find deeper cuts to public services, this parliament we have seen a lot of political but in delivering those, perhaps that becomes harder as the cuts become a permanent become a parent. We have also seen a series of tax cuts announced, for example personal allowance on income tax, paid for by some temporary takeaways. The risk to public finances has been increased Going Forward. That is a little bit concerning. Hopefully we wont see a similar repeat. Where would you cut spending . It is a difficult question, but we areu look at looking at a referendum, you have to make sure businesses are happy to invest in this country, you have to deal with that, spending cuts and other social goods, where do you cut . It depends what your priorities are. Thinking about the supply potential for the u. K. Economy, you might want to make spending investment in things like skills and training for the workforce. You might want to continue to make sure that people are in good health and able to be productive. Should we exclude Infrastructure Spending . Infrastructure spending is different. And liberalbour democrats have said they are happy to borrow. Certain things that contribute to the future economy, future generations will benefit from a new hospital, new school, new road. There are reasons to expect them to pay a bit for that. The history of this, though, is fairly patchy. The difficulty is, some elements of investment are longterm benefits. You could look back to the millennium dome. It is difficult to know what the economic but in terms of monitoring the governments performance, there is an advantage to taking a ,easure of investment spending allowing politicians to define what they think is growth. Fairpoint. Thank you so much for all of that, gemma tetlow. Coming up, we will ask the ceo of Norwegian Air shuttle what impact the u. K. Governments plans for airport hubs will have on his company and his transatlantic expansion plans. Welcome back. Lets get you some company news. North korea may have had a hand in the digital attack against Sony Pictures. That is according to people with knowledge of the investigation which found that some of the malware contained korean language code. The hack released unreleased titles. Annie hasrted been on some filesharing websites. An announcement following a surprise exit is of Stephen Murphy who has been at the helm of the Company Since 2010. The change comes just weeks after the loss of rival 70s and of his resignation as well. Mexico fund the pilots are set to strike tomorrow pilots lufthansa pilots are sent to strike tomorrow. The 20 million victorias secret fashion show came to london last night. Victorias secret turned over 6. 6 billion last year. It operates over 1000 stores. Bloomberg caught up with its ceo. It is very exciting for us. , weg an International Brand opened our store over three years ago, it is such a wonderful feeling to be here. It is one of the fashion capitals too, london. Last night, they had the London Fashion awards. We were there. 75,000them raise about to bring new kids into the fashion world. Very exciting to be in london. With christmas just around the corner, it is the most important time of the year for retailers across the world. After an underwhelming black friday, we asked the victorias secret ceo if she is still optimistic for the Holiday Season . We are cautiously optimistic. We are excited about what is going on. We are very wellprepared. All in all, i think we are going to stay optimistic for this Holiday Season. Up next, paying it forward. Yesterday was giving tuesday. Today, i cap holds its Second Annual charity day. Prince harry will lead a starstudded guest list. You can follow us on twitter. Michael spencer, icap coming up next. Welcome back to the pulse. Im francine lacqua. Im guy johnson. Lets talk about what is happening in the aviation sector. The eu says a u. S. Delay on transatlantic licenses for Norwegian Air could reach the aviation deal that was struck with washington. That is according to the wall street journal. For more, we are joined by the ceo of norwegian, bjoern kjos. He joins us on the phone. Good morning, thanks for taking the time to join us today. Weve been hearing reports that brussels will object to how washington is treating you. Are you hearing confirmation of that as well . , good morning to everybody. We have just read that in the newspaper. Source. Is also our but we expect, actually, eu to stand up and do something about it. To us, it is a clear breach of the open sky agreement. Wendy you think that is going to happen . This sideg to happen of christmas or do we expect it to happen at the beginning of next year . Should actually execute this as soon as possible. Overdue. Ong time they should have acted actually yesterday. It to happen very soon. Very soon. There will be some watching this program who havent followed the norwegian story and your attempts to set up a lowcost transatlantic airline. Why aont understand norwegian carrier is looking to the eu to fight its battles. How would you answer that question . That, simple thing is anday is not part of the eu we need access to be able to serve passengers in and out of gatwick. U license. E if we are going to fly east or south, not west because we have open sky there. Airportsgo to other that we need the eu license. How much is it affecting your business . You have you are in the process of acquiring a large number of airplanes. How much is this costing you . Have to, because we have these aircraft because we cant fly into u. S. We have to have a substitute for that. It has cost us a lot this year. Wouldnt actually state the cost of it, but you are talking about several million dollars, lots of million dollars. There are those in washington and those who lobby for the u. S. Aviation sector that say that you are bending the rules to the point at which they are breaking and that is why there has been resistance from washington. What response do you give those lobbyists . What do you say to those that say you are not playing by the rules . It is a slanderous allegation. Crew, weth new york are setting up a base here in london. Out of Fort Lauderdale miami, we fly with miami crew. We are serving flights with the american crew. So this allegation is totally slanderous. Lets just change tact if i might. At gatwick. There you have a significant base down there in gatwick. London is trying to figure out what it should d