Good morning, everybody. Youre watching the pulse. Im guy johnson. Im francine lacqua. We begin with the show checking out what the oil is doing. It is hovering around 45. Were hearing about this standoff between shale producers in the u. S. And of course opec producers. I guess the question is everybody is asking themselves how low does it go . What is the ultimate end game in terms of where prices stabilize . A critical question, i think it is going to be one of those questions that is going to run through every single conversation. In davos. Everybody is going to be talking about this. This is affecting every business. It is also affecting the data. To be infected. I would say infected. That is a more accurate description. The bank of england looked through the higher level of oil. Will it look through the lower level . Oil prices very difficult to predict. It will be the biggest game changer for airlines and companies around the world. In an exclusive interview ahead of greeces general elections the countrys finance minister tells bloomberg that an exit from the euro is not impossible. He was speaking with our reporter, Elliott Gotkine who joins us from athens. Good morning to you, francine. He didnt seem particularly worried about many things, the finance minister. He seemed quite relaxed when we spoke to him in his office in athens. Whatever wins these elections, he may be doing less stressful things than being financester. He didnt seem perturbed about the possibility of a greek exit from the eurozone. He thinks that even if they were to win, they would not do anything too crazy. Responsibility transforms whoever runs the country. So i assume that rationality will eventually prevail. The question is how quickly. And greece doesnt have much time. There is a deadline of february 28. Of finishing the review with the i. M. F. And the European Partners and the e. C. B. And that whoever runs the government has to have in mind. The finance minister adamant that if they win these elections, of course the Campaign Promises to negotiate and write off some of greeces debt. It were to win, it must abide by greeces commitment to its creditors. He is maybe less involved in the politics of all of this. He is for instance not a member of n. D. , new democracy. He clearly thinks the economy is safer with the current administration. Is that just him being a politician or is it a real view of his . Well, i think he genuinely thinks that. He certainly thinks that the economy is in safer hands if the current government wins. Not just because its economic policies are better. Also because they are clearer. They know who they are dealing with if the current government remains in power. It will be huge, i believe. The market also take off. Contracts will be written. Investments will flow. I think we will be surprised positively. If you dont win, will that mean recession lack of investment and going backwards for greece . I cannot talk for the opposition, but if we do not win, it means delay, at least of a month or two. The quicker they manage to come with a plan, the better off it is for the economy. The lack of clarity, the uncertainty that is prevailing now and it could prevail where the antiausterity position is. Even if they win, it doesnt necessarily mean they will be able to form a Coalition Government. Perhaps they will have additional general elections as we had in 2012. The word that seems to be springing to mind that im hearing a lot at the moment austerity. We have an exclusive interview with wouvent key Economic Advisors who was announced as a candidate in the upcoming elections. He will be joining us later on the program. Should greece be in the eurozone . Tweet us. Im flacqua and he is at guy johnson tv. Lets get back to the u. K. Now and the Inflation Numbers due this hour. Yeah, that is the other big story were watching carefully. The price of oil. There is a number of factors in the mix. The eurozone cant be excluded in any of this, as well, a significant factor for the u. K. Economy. Joining us us is u. B. S. s economist, David Tinsley and also as we have already heard, our International Correspondent hans nichols is in london today. Good morning, gentlemen. Good morning. David, let me start with you. We are watching a world of lower prices low inflation, economic risk, political risk. Is this an environment in which any central bank is likely to be tightening rates . Not right now i think that is the answer in the u. K. You have the general election risk on top of all of that in the u. K. As well. Any near term rate rise is out of scope. I think the narrative of decent growth in the u. K. Because cash flow is solid and wage is picking up a bit. Clearly the timing of that is beginning to push out of it. At what level do we need for you to say that the u. K. Is losing momentum . Well get that from the inflation data. The p. M. I. s last week, the age as come off of u. K. Growth. When youre looking at inflation rates, there is po tension over the next few months. The pay growth at duo, youre looking at a bedrock of consumer demand that is Pretty Healthy in the u. K. I dont expect too poor outcomes. You do see some upward pressure . Some moderate upward pressure over the course of the next year or so. The m. P. C. Should be looking at this two years ahead. This is not about inflation today. This is about a price level. Not really about inflation. The eurozone. Lets talk about greece. Lets talk about the broader picture. The u. K. Economy does not exist in isolation. It is a big, big trading partner. It is experiencing what some would describe as deflation and certainly very, very low growth. Greece may be isolated. It may not be isolated. We simply dont know. Given that backdrop, how do you look at the u. K. Economy and the eurozone economy and find anything that is meaningfully significantly positive. The trend in growth is becoming normal. We get inflation growth. It would exist in a normal world. I think it is fair to say most people in terms of growth would have a pretty down beat view of the eurozone anyway. The interesting thing about the q. E. Debate as far as the eurozone is concerned is that people expect q. E. Duthey dont necessarily but they dont necessarily expect it to do much good. It is grolte positive and inflation positive. Do you think that is like sflip i think the Academic Research for the u. S. And the u. K. Experience is that q. E. Works. It may take a year, two years. More than 500 billion . Does it need to be north of that number . If you look at what other jurisdictions have done it is considerably more than that. A couple of trillion that have been put out there over the last few days and more in the order of what the other Central Banks have done. The first step is never going to tell you the final destination. There are difference between the other two countries is that mario draghi talked it down. He has managed by talking to bring it down. Just by threatening to do it. Yeah. But i guess you to come up with the good at some point. I think the market would be very disappointed for all intents and pumps if they didnt flag q. E. They dont have to buy the next day. But they need to for all intents and purposes say. Berlin you talk to people, and what are they saying . That berlin is onboard with it . No. It is amazing. Every time we get new inflation data, it has to do with oil. They want to keep seeing what the difference is between core inflation and headline inflation. You hear that that the price is going to stimulate the economy because oil is going to drop down to 40 45. It is stimulus. My only other country on that is at what point does it become less than what france seen drinking every night. Alcohol. That is 45 a barrel . Now were talking. David, in terms of how much does the German Government actually talk to us to mario draghi and how much do they give their consent . Angela merkel saying absolutely not. We dont want that. And then we understand people familiar with the story. She is ok with it. Right now were in the fine details of planning, if you sort of read dean with the lines in terms of what the staff has been working on. There is a lot to play for there. In terms of liability. Do they appear on national Central Banks or in the euro system as a whole . It makes stones carry on talking tough now. I dont think that is about whether they nabt some form of q. E. Or not. It is more about the details. All right. It seems like to germans, clearly they have given up the fight on the size on whether or not there is going to be q. E. And they are focusing on the size. What they buy . Yeah, what they buy. Is it going to be greek bonds . We get this decision in luxembourg. Delivering on that tomorrow. It certainly is. Im just check out the belvedere wine list. Ok. Guys, thank you so much. Stay with us. Well be back with these guys a little bit later. The inflation data out in 17 minutes. Also coming up well go live. Ready to release results. All that and much much more coming up on the pulse. Welcome back to the pulse. Were live on bloomberg tv and radio and streaming on bloomberg. Com, your tablet and your phone. Airbus is about to start its annual News Conference. Well see if aisle prices have had an impact. One of the critical things could be the level of the euro in the year ahead. Bloomberg news is there. What are we going to hear from the team . The conference is starting in just 15 minutes from now were going to get orders and deliveries for 2014 as well as the forecast for this year. Now in terms of orders according to analysts, airbus might actually do better than boeing. Boeing had last year 14032 net orders according to analysts, airbus might beat this number. They had a nice push from the a330. A 20yearold plane that was successful in the market so they decided to put a new engine on it. That plane has been doing pretty well last year. Then of course you have the commercial success of the a320. It has been the best commercial success ever for airbus. It is going to be delivered later this year in the Fourth Quarter. And then finally of course the a350, which is behind me. The first plane, as you remember, was delivered just a few days before christmas to qatar air ways. It might be difficult for airbus to beat the number of deliver roifs boeing over last year deliverries of boeing over last year. The priority for this year is to run production, especially on the a350 because at the moment they have no delivery slots until 2021 for the a350 which illustrates the success of this new plane. At the same time there is still a lot of concern surrounding the a380. Prosecutor yes, of course there will be questions during this press conference about the future of the double decker. It is a flagship plane. It has no new orders from the Passenger Airline last year. The only order they had was froming companies. As from leasing companies. There was some concern about whether the program should be discontinued in 2018. The last time we spoke with them, they said it was a crazy idea to cease production. They will find new customers for the a380, especially in asia and then of course you have the question of the engine of the a380. Emirates which is the biggest customer has asked for a new engine. This is something airbus is not in a hurry to do but may do it in the longer term. The 380 neo. Kind of cat out of the bag on that one i think a little bit. Well find out more in a little bit. Well be talking to the boss of airbus. The c. E. O. Of this business. That interview coming up at 11 30. Also coming up, the United StatesCentral Command 2013 accounts have been habbed. Find out who is claiming responsibility and whether anything classified was leaked. That is coming up next. Welcome back to the pulse live on bloomberg tv, radio, streaming on your tablet, phone and bloomberg. Com. Ok. The issue of the day, one of the issues of the day is oil and as you can see, we have seen a significant another significant leg lower. In dab dab d abu dhabi i we see the opec strategy is not going to change. It is up to the United States and the shale producers to blink first. Opec will not be changing course if that does not happen. That has sent the price of crude down 3 as you can see. That is having an impact all around the world. Future Interest Rates especially in the United States. The United StatesCentral Command twitter and youtube accounts have been hacked. Hans nichols is here with the latest. Was anything classified leaked . The white house, the pentagon, the f. B. I. All say no. They say this amounts to a prank, not a serious security breach. The public 2013 for the Operational Command in tampa was suspended for more than 30 minutes and their youtube account was compromised and there were comments about killing u. S. Soldiers. And documents planning for contingencies for north korea or china. Sensitive stuff which the white house now says was all publicly available. There is quite a bit of egg on the face in the u. S. They said the military networks were not compromise pd. Were viewing this as a case of cybervandalism. Cyberembarrassment too. Do we know how they did this . Isis looks like a reasonably deconstructed but well organized operation. Like a business. We dont know if it was isis. It is people claiming to be affiliated with it. They will be able to figure that from where the servers were on the initial account. If they wanted an extra degree of security they contact 2013 and get that blue check like we do when youre trying to figure out if it is a real person tweeting something out. They didnt do that and were not afforded an additional level of security. I suspect there will be some dressing down in tampa this morning. All right. Thanks so much. It goes to the crux of what we were talking about yesterday. Cybersecurity in 2015. This has implications for a lot of companies around the world. Hans is going to stick around throughout the day. Were enjoying him being here. As we head to break lets check out the value of the british pound. U. K. Inflation data out in four minutes. Cable at 1. 5122. We may see levels last seen around 2000 when we got a. 5 read. The guilt curve. Of course the quirky british mean that if it goes to level that guy was just mentioned, since 2002, the government will have to write an open letter to you know, the bank of england. I love it. It probably goes back 300, 400 years. No, it doesnt go back that far. To the beginning of the blair administration. When the bank was given independence. Is that bank embarrassment coming from cyberembarrassment . The governors have been writing letters. It is a little flexible. Understatement of the year. Were going to take a break and talk about greece a lot in this show. Join the conversation on twitter. Im at gay johnson tv. Francine is at flacqua. Should greece be in the eurozone . Hans nichols is also here today as well. That is his twitter at hans nichols. Well take a break and see you in a moment. Welcome back. You are watching the pulse echo we have numbers out from the u. K. As is the lowest level the weve seen for inflation in the u. K. Since 2000. This is a huge and important number. You can see that the chancellor will have to write a letter to the chancellor. The governor will have to write a letter to the chancellor. Its actually that are than expected. We were expecting different. The noncore is below estimates. Is likely going to be further affected by the january numbers. David tinsley is still with us. Your thoughts on that . Its going to go lower. If you throw in the petro price you could get a negative print on year on year cpi. Its not come down as much, nonetheless its a long way short of two. This is great news for the u. K. This is consumer positive. What does it mean for wage growth . What consumers can demand more wage growth and still buy more stuff. You were going to see wage growth to an extent. 80 basis points, right . I am terrified i am getting it wrong. What was a difference between the eu . What we are saying is oil is having a bigger effect in the u. K. Potentially. Is that right . Assuming my numbers are right. On that basis it could be right. We usually like to go the other way around. What does the bank of england make of this is the question everyone will be looking at. When inflation was up in the fives we were looking through it and not worrying about it. We were not changing the policy. If you can hold up to expectations in medium terms, then you neednt worry about the current rate. You worry about where you are headed. Nonetheless, you dont need to you are not in a eurozone position. We dont have an output gap and high unemployment. There isnt structural deflation. We are not there. The figures are more or less the same. They are comparable. This gets back to the german argument. You dont need to look at these numbers. It need to look at what the price of oil is doing to consumers pockets. Is that right for spain . Spain is a higher unemployment and via. Spain is growing faster than germany at this point. In a way the thing about these countries is you need to get a nominal gdp in order to facilitate leveraging. If you do get stuck in this dynamic, its well south of one or 2 . If you look at inflation and the price of oil going down, it adds to gdp across the board for exporting companies. If you look at the net outcome . There are winners and losers. The losers tend to be countries where there is a lower propensity to consume the services they run up on oil prices are high. The price may well be positive with winners and losers. Lets talk about politics. It strikes me that we could look through the number and its meaningful, but its not as meaningful as the political story. We have the general election covenant. The outcome is very open. We may wind up with a minority government. We may wind up with a very loose coalition being formed. It could be labor or the conservatives leading that. How much uncertainty is that going to create . How much political drag are we going to see in the u. K. Economy . I would distinguish between the u. K. And cap nettle europe. There is a lot of uncertainty in this election. We dont know the result. We do know when we get to the other side of the election is that the three largest parties in the u. K. Will have 600 of the 650 seats in the house of commons. These fringe parties like the Independence Party will not exert much power i