the thing for the market what is the bank of ignore -- bank of england signaling what's coming? they don't really know what it will impact. i think i would ugly say perhaps we will not -- i thing i would probably say perhaps we will not reinvest but we don't know what's coming. we have no historical precedent and in some sense that's the fed's position and the ecb position. we will see the bank of england raising rates again and again in six months, they go oops in reverse. the thing is to have a consistent story. you are waiting and watching. people are really hurting so there rising energy prices and taxes coming up and more people going to food banks than have ever been in worrying about paying the bills. i would stay out of the politics and weight. lisa: it's hard to understand the pellet -- the politics. in the u.s., there is a divergent story essentially from the ecb that the longer inflation remains, the more people belief in inflation will cause it to become insecure. why is not that the story in your but everything else is going up? >> i think what goes up does come dow

the bank of england was a surprise. the fact that we got 25 basis points out of the boe today wasn't, but that four numbers voted for a 50 basis point hike was a surprise. that pales compared to the shock we got out of the christine lagarde press conference. that has moved markets massively in europe. take a look at the two-year across europe. he will see a series of bright red numbers on your bloomberg screen. the biggest one, they standup story is italy. the two-year yield is up by 18 basis points right now. christine lagarde had a very tough day at the office. kailey: she did indeed. speaking of struggling, stocks are struggling here in the u.s., most specifically tech stocks. the nasdaq 100 down more than 2.5%. that is largely thanks to one stock in particular, meta platforms. down nearly 25%, wiping more than $200 billion off of its market value. typically do not see a mega cop step -- a mega cap stock moving in this way, and yet it is. what is interesting is usually you see risk appetite and specifically appetite

bank of england. they make their decisions based on the data that they see, but the government need to do much more to help people with the cost of living. a national insurance contribution price in april is the wrong tax at the wrong time. the package of measures today to help people with their bills is insufficient. it is a buy now pay later scheme, a big gamble on what is going to happen to energy prices in the future. and not enough support for those people who need it most. the government should have done what labour has proposed, a windfall tax on the big profits being made by oil and gas companies and use that money to keep bills low for everybody else. you and use that money to keep bills low for everybody else.— for everybody else. you have made that point- — for everybody else. you have made that point. thank _ for everybody else. you have made that point. thank you _ for everybody else. you have made that point. thank you for _ for everybody else. you have made that point. thank you for

for the bank of england. that prompt at some of these officials to go harder and vote for more. tom: this bodes well for our visit to london in the coming weeks as well. team "surveillance" over in london. see how that goes. right now we mix part of this pandemic and the medicine, the miracle medicines that have helped all of us through the pandemic, and also look at the ability to run a pharmaceutical company. rob davis is president and chief executive officer at merck. it has been a tool to us -- a to mulch was -- a tumultuous two years. i know of the miracle for rubella conceived by merck in the 1970's. here is the criticism. you guys missed pfizer-moderna boat. respond. rob: i look at what the company has done, and i am proud of our ability to contribute to the covid-19 situation. this is an all hands on deck situation. obviously we brought forward an important antiviral drug to help in the fight against covid-19. it reduces the risk of desk by about 90% -- of death by about 90%. we think about battling c

today, naomi and other have the bank of england to thank for - the bank of england to thank for turning up the heat even further by making new variable rate more expensive. the committee narrowly voted five in favour and four against to double the official interest rate from 0.25% to 0.5%. they are now predicting inflation might get as high as 7.25% by april. sterling oil prices are almost 90% above their level is at the end of 2020. uk household gas prices are almost 400% higher. wholesale electricity price rises have risen by more than 300%. the electricity price rises have risen by more than 300%.— electricity price rises have risen by more than 300%. the idea is by makin: it by more than 300%. the idea is by making it more _ by more than 300%. the idea is by making it more expensive - by more than 300%. the idea is by making it more expensive to - by more than 300%. the idea is by| making it more expensive to borrow it will call down the inflationary temperature. a rate rise looks a lot less scary when you look back in time. it is important to put this historic rate rise in its hi

we will get francine's interview with the governor of the bank of england next. this is bloomberg. ♪ yep, it's go time with wireless on the most reliable network. ok, that jump was crazy! but what's crazier? you get unlimited for just 30 bucks. nice! but mine has 5g included. wait! 5g included? yup, even these guys get it. nice ride, by the way. and the icing on the cake? saving up to 400 bucks? exactly. wait, shouldn't you be navigating? xfinity mobile. it's wireless that does it all and saves a lot. like a lot, a lot. francine: welcome back to the open. 30 minutes into european trading day. amazon delivers front results from the e-commerce giant. the hawks have it with a boe hike for a bigger increase while the ecb and christine lagarde no longer rule it out. plus the brink of crisis for boris johnson is deepening. if you look at the markets, the bets are on the hawkish central-bank environment around the world are also impacting japanese yields. there is a lift off thanks to amazon on the tech stocks. tom: what a historic day for central banks yesterday with

the bank of england's job is to take the drinks bowl away from the party. but there is no party here, nor in millions of households up and down the country. the bank of england has lowered its forecast for the economy this year and next. and rising energy prices and food prices, and taxes too, are outweighing the rise in wages. this is a black day for living standards. the bank's forecast showed that factoring in prices and taxes, the average take—home pay of households, which normally goes up, was going down by the largest amount since these figures began in 1990. and yet, it is high rises in wages that the bank of england is most concerned about. what we can do is try to prevent it becoming, inflation spreading, becoming more ingrained. so you're trying to get into people's heads and ask them not to ask for too high pay rises? is that what you're trying to do? well, broadly, yes. really? in the sense of saying that we do need to see moderation of wage rises. ., ., , ~ rises. now, that is painful. an unusually _ rises. now, that is painful. an unusually

a couple of hours ago the bank of england increased its rate by .25%. four of the nine members of the committee wanted more than that, they wanted .5%. you're going to tell me that different economies means different decisions. good you tell me what is the difference between the 5.4% inflation in the u.k. and the 5.1% in the euro zone. the other question is about wage growth. what can you tell us about wage growth in the euro zone? you see any sign of that? pres. legarde: it is interesting because your second question is almost the answer to your first question. i will go back a little bit into history. the united kingdom has had a history of much higher inflation than what we have had in the euro area. that is point number one. the critical difference now between our respective economies, the critical one has to do with the labor market, where clearly there is a lot at stake -- a lot of pressure on wages. there is scarcity of workers for jobs that are available, and i do not want to take a political stand, but there was a lot of on -- a lot of non-u.k.

a lot from the bank of england and the ecb. as you know, there will be a lot of divergence. where in that camp with most people expecting back-to-back hikes. the ecb, we think it will not hike until sometime later next year. the market is already pricing in basis point said it likes. that will be a tough ask for the president that already told us -- already downplayed inflation and hike expectations. it will be interesting to see how lagarde manages to push back against tightening expectations that others say are ramping up. also, coming off the back of a high inflation reading yesterday, it is going to be a tough job. i think that will be a hard call for ecb to stay on goal with asset purchases that will continue for the next few months. lease now before comes down where is the bank of england, that is an easier story. growth is recovering, omicron is declining, inflation will be sustained higher. the question is how much is priced in? i think we already have over 100 basis point hikes. allies priced in here. -- a lot is prici

of england is ready to act to try— the bank of england is ready to act to try to— the bank of england is ready to act to try to take out some of the inflationary pressure from the economy _ inflationary pressure from the economy. of course, it does for the vast majority — economy. of course, it does for the vast majority of households it won't cost anything more for it now, given that i'm _ cost anything more for it now, given that i'm thinking of people who are renting _ that i'm thinking of people who are renting or— that i'm thinking of people who are renting or have paid off their mortgages are on fixed rate mortgages. but for those 20% outstanding mortgages on a variable rate, these borrowing costs will rise _ rate, these borrowing costs will rise and — rate, these borrowing costs will rise and if— rate, these borrowing costs will rise. and if we do see successive rises _ rise. and if we do see successive rises in _ rise. and if we do see successive rises in interest rates, as we think may be _ rises in interest rates, as we think may be the — rises in interest rates, a

tom: what is the data on the screen that matters to the leader of the bank of england and the leader of the european central bank? jonathan: apparently, wages. wages seem to be the big issue at the moment. the bank of england governor was essentially asked whether he is saying that people in the u.k. shouldn't ask for a big pay rise , and the bank of england governor basically said yes. you can go back and listen to the interview. that is just remarkable stuff to hear from the governor of the bank of england, and that tells you the ecb is spooked. president lagarde. watching these news conferences with these central bankers so often, you get to know them and get to understand when they feel confident, have some conviction about the message, and when they are starting to crumble. listening to president lagarde yesterday, that message was crumbling fast. tom: it crumbled from the initial headlines, including the t word transitory, out to something that we heard and the market heard differently. a lot of just once in euro -- a lot of adjustments in the euro statistics today. i need you

the bank of england was a surprise. the fact that we got 25 basis points out of the boe today wasn't, but that four numbers voted for a 50 basis point hike was a surprise. that pales

francine: how will traders diverge between the ecb and the bank of england? the euro is adding pressure on the ecb to get more hawkish. this is what the sectors are doing. technology on the downside. this is not a surprise after we had that earnings report from meta. energy is leading the gains. materials the only other sector that is seeing gains of 0.1%. there is a lot of pressure on technology, leading losses down. health care is also down. we're looking forward to our interview with -- i am so excited about the dax. tom: it is currently up 0.5%. we are going to be speaking to the cfo later in the show and we will talk about the logistics. currently they do see increased demand as a result of testing. that is what's to focus on. we will talk with the cfo of siemens later. infineon with a down after they released earnings that expected more demand for semiconductors. shell gaining 1.3%, the share buyback and the higher energy costs are a major factor for how they can input additional cash to play with. coming up, we will speak with their ceo. it has been a

the bank of england's job is to take the drinks bowl away from the party. but there is no party here, nor in millions of households up and down the country. the bank of england has lowered its forecast for the economy this year and next. and rising energy prices and food prices, and taxes too, are outweighing the rise in wages. this is a black day for living standards. the bank's forecasts showed that factoring in prices and taxes, the average take—home pay of households, which normally goes up, was going down by the largest amount since these figures began in 1990. and yet, it is high rises in wages that the bank of england is most concerned about. what we can do is try to prevent it becoming — it spreading — inflation spreading, and inflation becoming more ingrained. so you're trying to get into people's heads and ask them not to ask for too—high pay rises? is that what you're trying to do? well, broadly, yes. really? i will say that — in the sense of saying we do need to see moderation of wage rises. now, that's painful. an unusually blunt ackn

the bank of england says we are facing _ the bank of england says we are facing the — the bank of england says we are facing the biggest squeeze on living standards on record. isn't this the time _ standards on record. isn't this the time to— standards on record. isn't this the time to think again about that natiohat— time to think again about that national insurance rise that will hit average workers with an extra £250 _ hit average workers with an extra £250 biii— hit average workers with an extra £250 bill this yearand the wider political— £250 bill this yearand the wider political picture, the pm said sorry atrout— political picture, the pm said sorry about some of the parties that took place _ about some of the parties that took piece in _ about some of the parties that took place in this street. some of your mp5 place in this street. some of your mps and — place in this street. some of your mp5 and some of the public are still mps and some of the public are still very angry— mps and some of the public are still very angry with him. you, i think very angry with him.

the bank of england has taken _ quite there yet. the bank of england has taken a - quite there yet. the bank of england has taken a big - quite there yet. the bank of i england has taken a big batch to the pinata, hasn't it? slashed its forecast for growth for next year. is the party over before it really started? this is a hard one. it's very difficult that the how inflation is going to hit. inevitably, the cost of living, we know is going to go up for everybody it going to hit different people in different ways but certainly growth is looking likely. i would say that even, you know, forecasters have got it around about somewhere between 3.8, 4%. still quite higher than we would normally expect pre—pandemic levels. we were looking at annual growth phase of about 1.4 so fast it might feel like the party is over the economy is still recovering and still growing. economy is still recovering and still growing-— still growing. one of the much vaunted claims _ still growing. one of the much vaunted claims of— still growing. one of the much vaunted claims of the - still growing. one

shery: the bank of england are leading the charge on inflation. kathleen: in a way, with the meeting today where the bank of england did their 25 basis point rate hike -- that was telegraphed. there was a vote. four out of nine wanted a 50 basis point rate hike, out in front of not only the ecb, but in front of fed reserve as well. if you see what's going on with inflation in the u.k., you can see why andrew bailey and his colleagues are continuing to be ready to move hard. 5.4%, highest rate of inflation since 1992. energy prices rising. the u.k. government today unveiling a program, $1.2 billion to help british people pay high-energy bills. that is one of the reasons these high energy prices, the boe raised its forecast for peak inflation. they expect by the middle of the year, april, to 7.2 pipe percent. -- to 7.25%. they will start reducing holdings of government bonds. they will completely work down their corporate bond holdings, get them to zero by next year. they are moving differently towards getting that inflation rate solved. andrew bail

i fear the bank of encland discussion? i fear the bank of england intervention - discussion? i fear the bank of england intervention last i discussion? i fear the bank of| england intervention last week was another chapter the truth is we have a labour market, we call it the workers will price they can, with great starting rates for permanent workers and we will see that through the spring as companies look to what to do with existing stuff. a break on that will be how much companies themselves can afford, they are arranging —— facing a range of higher costs. some pay pressure is not only to be expected but legitimate because people are seeing living costs going up. this is about what companies can do for staff than taking a moral stand, one way or another. indeed and we understand if prices go up, wages go up again and we end up in an economic spiral that can be harmful and curtail growth. but the problem is if you are running a business and you need staff, and they are demanding a certain wage, i mean, not going to negotiate them down, are you, are really struggling to

did you see the headlines from the governor of the bank of england? can you imagine if the head of the federal reserve said what they said yesterday. he said don't ask for a big pay rise. when the bbc lease with that headline, that's not good news. in the sense of saying we need to see a moderation of wage hikes, i don't want to sugarcoat that stop it's painful but we need to see that you get through this problem more quickly. that's the situation we are in. energy bills shut up for many people in the u.k. yesterday and mortgage cost went up as well in the bank of england governor is saying don't ask for a big pay rise this year. lisa: they would be eviscerated in the united states. there is a nuanced argument about who is seeing the pay raises whether it's at the top and that will get passed along to the bottom in terms of earning power. in terms of earnings, higher wages are viewed as a good ink so people can get ahead of the price increases we are seeing globally. jonathan: are they worried about people asking for a pay rise in the united kingdom?

and the bank of england. i think it's going to be hard for the ecb to sit there with the depot rates so low with the rest of the world is seeing these rate hikes. jonathan: michael kushner, never mind germany, which is getting all the headlines. there's some fragility here. the italian two-year, yesterday at 20 basis points, up another 16 basis points today. my colleague, lisa abramowicz, called this the taper tantrum. is that what you see emerging here, michael? michael: it's going to be a challenge. one of the issues europe faced, back in 2011, 2012, they were in the midst of a sovereign debt crisis. europe was the leader in that issue. a lot of the quantitative programs, the buying of peripheral debt in europe has been to support those economies, make sure the flow of credit and resources go to those countries, went across borders. private sector capital had really dried up. this is a point of concern for the ecb to make sure that your, as a whole -- europe, as a whole, does well. they deal with likely --

as one bank of england official put it to us, the burden on the bank of england compared to that on the treasury's diddly squat. -- treasury is diddly squat. manus: i was just about to do the same which is topped out in front of the ecb. lizzy burden in front of the bank of england. thank you very much. i am in frankfurt. it's all about the ecb. let's check the futures prices. is about -- it is about a reappraisal of big tech and where matters fit into that. the nasdaq down over 2% at this juncture. dani: they said they saw some of the inflationary pressures for those who buy advertisements mentioned that they were spending less so it does feel that often in earnings, this can be used as a catchall. we did not hear that from google but it is having an effect on overall markets given how big of an exposure the indices have to facebook and other tech giants. manus: so you saw this by the depth question for equity traders is whether they sell the day. the ecb -- in the very short and for the two-year paper, barnstorming ahead. the highest inflation on record is the backdrop to christine la

in the end, the bank of england waited and did very little. it was the federal reserve that was almost flying solo. it will be different this time. the head of america's research of fx strategy at hsbc joins us now. how difficult and different will this one he compared to what we saw last time around? >> it's a tricky time for central banks. it's a conundrum in terms of market havey or. -- of market behavior. you've got a real income squeeze and you take greater account of this so it's tricky. we think the fed errs on the side of a basis point move in march. the effects take away that. the fed call is finally balanced in our view -- is finally - finely balanced in our view. tom: are we going to start to see currency pairs in a junk condition where there is a big figure opportunity? >> i think the fx market is struggling to get its head around this. it's facing that same conundrum. what will be the spin? in the u.k., it will be a very transparent income squeeze coming off of the energy price hikes. we know they are coming but that will have a h

and obviously we have had the bank of england governor today talking _ the bank of england governor today talking about howl the bank of england governor today talking about how i think essentially there are some concerns about _ essentially there are some concerns about if_ essentially there are some concerns about if pain keeps pace with inflation, _ about if pain keeps pace with inflation, we willjust continue in this spirab — inflation, we willjust continue in this spiral. obviously he is in a bit of— this spiral. obviously he is in a bit of trouble because he is a man you cannot — bit of trouble because he is a man you cannot actually member his own pay and _ you cannot actually member his own pay and perks packages, and so it's always— pay and perks packages, and so it's always hard — pay and perks packages, and so it's always hard to take that advice on keeping _ always hard to take that advice on keeping your pay rise love amanda does not _ keeping your pay rise love amanda does not know how much he actually earns _ does not know how much he actually earns so. _ does no

we got on the bank of england. 0ne based on a couple of signals we got on the bank of england. one of which was that four members of the monetary policy committee wanted not just to see a 25 percentage point reyes but a 50 percentage point raised so that has caused the financial markets to think that may be a lot more could be coming. banks like hsbc will — be a lot more could be coming. banks like hsbc will necessarily _ be a lot more could be coming. banks like hsbc will necessarily pass - be a lot more could be coming. banks like hsbc will necessarily pass on - like hsbc will necessarily pass on the rate rises to their customers? i am an economist so i won't comment on their mortgage policy but generally speaking if we look through history there is a relationship between the bank rate and people's mortgages. find relationship between the bank rate and people's mortgages.— and people's mortgages. and for savers this _ and people's mortgages. and for savers this is _ and people's mortgages. and for savers this is good _ and people's mortgages. and for savers this is good

if we are at risk of the markets trying to price in a policy error, if you like, in the bank of england, if they hike every meeting for the rest of the year and we do have inflation moderating, you could end up putting the brakes on growth just at the point where the global economy is getting back on their feet so i suspect, whether it be the fed where the bank of england, we will get through q2 and we will find some of these expectations for policy hikes moderating. manus: i thought it was interesting when christine lagarde talked about the employment situation in this country. she did not use the word brexit that it was certainly as a result of brexit. let's talk about the currency because the impact was not just in the rates market. sterling was up on the back of a dollar. stephen england -- we were looking at this this morning. he said, look, you sort of rally into these moves from the short end both for the currency and the rates market and then we face a little bit of exhaustion. if you think they do not manage to do the 1.5%, it is presuming. is there a consequence in the fx mark

these central banks are starting to move. the bank of england goes along for the ride. then it is the ecb stepping away from the t word. switch up the board and get to this. the german two-year has been beneath zero going back to 2014. it has been 6, 7, 8 years since we have been above zero on a sustainable basis, and even then we were nipping and diving around the zero line around the charts. right now on the german two-year, -28 basis points, and yields are up by five. the ecb stepping into rate hikes may be at the back end of this year. socgen in that club, goldman in that club. the changes keep pouring in. tom: i wonder about the behavioral construct. jonathan: it is a massive change. for a lot of people for a long time, that german bund market has been like an anchor for the global bond market, a center of gravity. euro-dollar with a $1.14 handle, 1.1472 -- 1.1472. in europe, you are not quite sure why we are not seeing this bleed out a little more. out of germany come out of italy specifically, into the rest of the world. lisa: it has provided the bid into the u.s

bank of england, ecb. the pressure being piled on both at the moment. expectations are that we get a rate hike out of the bank of england, but the pressure on christine lagarde absolutely enormous as today's inflation data out of the euro zone highlights persistently higher inflation than the ecb was planning for. euro sterling continues to track lower. then you get to the bond market. take a look at the front end of the curve. in germany, inside the -50 at the ecb, -40 six. yields continuing to climb in europe. kailey: i'm focused on the equity story in the u.s. because we are off of session highs, still up about 0.4% on the nasdaq 100, the equivalent of about 55 points. more than 35 of those points coming from one stock alone, and that is alphabet, up about 6.5% at this point after really strong results on the advertising front, plus that 20 for one stock split not hurting either. elsewhere in equities, not too much action. we are seeing yields coming in on the 10 year, down about two basis points to just shy of 77. in oil, down about 0.4% after opec+

is more of a refection of today's move, where the market may think the bank of england is too aggressive. employment data, unemployment is at record lows pretty much. wage growth is very strong. so i could easily read the narrative saying despite this expectation of strong interest rate rises i the bank of england , the economy may be taking over quite strongly, and it can take more hikes. when they hike again over the very much on the table. kailey: let's talk about the ecb because we heard from the latvian central bank chief earlier today, and he said it is going to be data-dependent. we will see, but it is quite likely that it happens this year, referring to a rate hike. where will the ecb in the year in terms of where that rate will be? tatjana: i'm very glad they are talking about the dependency now, and this is a big shift. at the end of last year they were referring to the forecast in order to make an interest rate decision. to me, that was really the wrong indicator. the shift really was actually are models are not able to calibrate correctly so that in this new inflation environ

the ecb thursday, the bank of england thursday. we need to talk about the inflation data, particularly coming out of the euro zone right now, and how that relates to the ecb. the market is pricing 25 basis point of hikes out of the ecb this year. that does not fit with the forward guidance we are getting from that central bank. the inflation data is really worth paying attention to. european inflation growth hi, but easing, but not easing fast enough, and certainly above expert asians. have add spanish data, french data, german data. spain, 6.1%. germany, 5.1%. france, 3.3%. let me take you over here. you can see these numbers are certainly starting to come down, but they are not coming down as fast as anticipated. is that going to be a problem for the ecb? let's find out. katharina utermoehl, allianz senior european economist, joining us for her take. are you surprised how sticky they are turning out to be? katharina: i think everybody has been a little bit surprised about inflation in december as well as january. we have had some

of england and the bank of england. mike mckee running, has been week. we have seen significant pricing and christine lagarde that -- since christine lagarde had that press conference. our where we in terms of this journey, whereas the market pricing? >> rates will go up. in 2019 and 2020, right -- rates were higher. my question of how long it for them to come back. the bad news for the united that we are seeing more information big move in terms of what market is pricing has been the u.s.. right behind it, you can have already started with its right moves. governor bailey talking about the fact that information is a problem not just because of kobane, but brexit. but news conference, god said we are not -- madame lumbar said that we are not right you. european do not have the same kind of information we are going. 510 and right. this mean worst into acting sooner -- forced into acting sooner, but it will take a while for that to practice right through the governing council and get them to do something. the question you

the financial times reads that chancellor of the exchequer, rishi sunak, and the bank of england are working together to head off the �*cost of living catastrophe�*. —— what is already in. the metro reads "putin gives boris a bus," which refers to the raf intercepting four russian planes ahead of a phone call. the telegraph says rishi sunak loans billions to energy firms and plans to cut taxes for the poorest. between the prime minister and the russian president a few hours ago. the i reads "no more funding to level up the uk." that's according to a treasury source. it also says there will be no new tax rises to pay for the government's flagship policy. the guardian leads on pressure on the prime minister as more tory mps call for him to go, and the mounting anger at the met police. cressida dick in particular over racist messages shared by officers and the promotion of one allegedly involved. good to see you both. penny, should we start with you? cost of living catastrophe. i think the times had it today, if people are watching later on, about the bank of england working in

inflation is on the up too — the bank of england warns by april it could hit its highest rate for more than 30 years. also on the programme tonight:

once we get closer to the 2% mark in terms of the fed fund rate or the bank of england bank rates, we will get significant decline in gdp growth. four rate hikes, which we expect over the next you meetings -- few meetings, reduce u.s. gdp growth at this point. that will already tell you that growth is falling for 2023. francine: thank you for indulging me because i love that chart. our managing editor from the markets team came up with it so he should get the credit for it, but what does it mean that we price in the rate hikes now? do we price hike aggressively to frontload that now? joachim: i think the fed and the bank of england are right to hike aggressively now. and basically stand back in the second half and see how these rate hikes filter through to lower inflation. together with the base effect on energy prices that i have already mentioned, which end of itself should bring the headline of inflation to two percents this year, i think the case should be made to stop hiking rates in early 2023 and leaving it somewhere around 1.5 percent for the bank rates before you make a furth

., where the bank of england is considering hiking a third time. let's get back to the geopolitics and the invasion of ukraine. day two of that invasion. there's a report that vladimir putin is open to talks. henry meyer kicks off our coverage. what do we know about these talks? henry: the offer emerged today, with president putin's spokesman , who confirmed russia is ready to discuss the neutrality of ukraine. this came after some comments made by president zelensky of ukraine earlier in the day, in which he said he would not be afraid to discuss this. this is the first indication of any kind of diplomatic effort, but i would say that the russians have made it abundantly clear that they are willing to discuss the surrender of zelensky's government and ukraine. so it is unclear what response will be in kyiv. kailey: thank you so much to bloomberg's henry meyer in moscow. the european union coming out with its own package of sanctions on russia. bloomberg's maria tadeo is in brussels with that story. we understand the eu was getting ready to freeze

i do not know if that will change with it bank of england does. in interest rate hike seems like a done deal. lizzy: if it is 50 basis points, it would be unprecedented in the bank's history. this figure compounds the data we already have. the gdp figure stronger-than-expected. the jobs data showing the labor market might be tight but is not delivering real wage growth. that pressure is there. we were so close to it. four already voted for a hike last time. bloomberg economics sees 25 basis points in march and may. francine: bloomberg economics, the only one that was right for that november meeting. what does it mean for sterling? lizzy: it really depends on whether we get 25 or 50, but it will be interesting to see how the markets react. francine: thank you so much, lizzy burden. we will have plenty more on the pound. the one thing we need to look at is differentials between the bank of england and the fed. we will have plenty more on inflation worldwide, and we will look at the impact the liquidity from the central bank has on markets including

the ecb, the fed, and the bank of england? kit: in the long run we are. they will have to turn the policy around. but their inflation data is not bad enough at the moment to push them into a corner. that is reflective of the comments we got last week. at some point, there economy is very strong. terms of trade are astonishing. they are in a good position to benefit from global recovery and you can see that in their export numbers. they have chosen a path that keeps the currency down and monetary policy easing in fiscal pulitzer cash and fiscal policy -- and fiscal policy relatively tight. it is a real one for being patient because it could take quite a long time. dani: every time i look at aussie rates, you continue to see them push higher despite a central bank trying to that down -- to bat down the calls for rate hikes. at what point do the vigilantes win out? kit: in 1994, the market priced the bundestag raising -- the bundesbank raising rates because the u.s. fed did. central banks always do win if they want to and in the

it is not just the bank of england and gilts. it is now the ecb on the euro zone debt market as well. that is something we have got to think about in a way we have not been able to for a long time because the ecb set out the less rate hiking cycle. tom: all of that is correct, but i would do a behavioral overlay of the percentage of people involved in the game who have never experienced this. i think that is highly unusual coming off before the volcker era and along the great moderation as well. tom: i remember -- jonathan: i remember sitting down with ubs before the last rate hiking cycle and asking the average age of the trading floor and how many have actually seen fed rate hikes. at the same question of any trading floor in europe right now. it was july 2011. president draghi, eight years on the job come no rate hikes. there are a lot of people who have never seen this, to your point. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. russia's vladimir putin and france's emmanuel macron meet today in m

the bank of england's set to raise interest rates again — to rein in soaring inflation losing friends on wall street. shares in facebook owner meta plunge by a fifth as growth stalls. plus, wrong note. spotterfive slums as fewer people sign up to the music streaming giant. —— spotify slumps. we start with the soaring cost of living here in the uk — because in a few hours time the energy regulator ofgem is set to announce the biggest—ever rise in energy bills. every six months it reviews the maximum price suppliers can charge consumers. and with gas prices at record highs — the industry's predicting bills could rise as much as 50%. the bbc has been told the government is planning financial help for consumers. but there are doubts over whether the measures will be ready by the time higher prices start on the first of april. our social affairs correspondent michael buchanan reports from glasgow. i'm lucky if i have breakfast in the middle of the afternoon to keep me going, and a snack at night. having cut down on food, zahada safdar is now facing reducing herfuel. the hot water

the governor of the bank of england in hot water accused of pay rise hypocrisy. this was a bbc interview yesterday. he said that we need a sense of moderation or ways right does —— wage rises. a lot of people have pointed out it's ok for him to say that when he's on 575,000 pounds a year. he ok for him to say that when he's on 575,000 pounds a year.— 575,000 pounds a year. he also thinks they _ 575,000 pounds a year. he also thinks they automatically - 575,000 pounds a year. he also thinks they automatically get. 575,000 pounds a year. he also| thinks they automatically get pay rises. if someone on £24,000 a year gets a slight pay rise, that's going to have a massive impact on the economy. where is someone at his level, the rise as you get between jobs or years might be multiple tens of thousands of pounds. he's been slapped down by the prime minister, who said this isn't what we want and we do want to have people earning more money. we had government policy, not five minutes ago, which was in order to get over the lorry driver shortage. we needed to pay t

we'lljust have to cope with soaring prices, says the boss of the bank of england, amid the biggest income squeeze in decades. plus, a bridge too far. whyjeff bezos�*s new superyacht is making waves in rotterdam. we start in the us, where amazon has delivered, sorry, i almost lost my shoe! we start in the us, where amazon has delivered, once again, for its investors — reporting record earnings over the peak holiday season. the online retail and media giant racked up sales of $137 billiob in the three months to the end of december. amazon also said it's raising the price of a prime subscription in the us, as it faces rising labour and shipping costs. from new york, michelle fleury has more. anna is on is raising the price of prime in the us, to $139 per yearfrom $119 for the of prime in the us, to $139 per year from $119 for the annual fee. prime is its subscription service which gives users access to other amazon services like video streaming. the price from monthly membership, but has also gone up, by $2, to $14 per month. the price hike was meant to address higher costs that amazon n

the bank of england raises interest rates and the point of- down. the bank of england raises | interest rates and the point of that is to get us to save my money, spend less, borrow less, reducing demand in the economy for a given level of supply, and takes some of the heat out of inflation. unfortunately it works very slowly and there is only certain parts of inflation that it can target, so the 54% price rise in april, there is nothing the bank of england can do about that. that will happen anyway. what the bank of england is trying to do is to try and reduce demand in the economy so that people think that inflation is more under control so that our expectations don't become the anchored and we don't get into a spiral where costs have risen so now i am spiral where costs have risen so now iam demanding spiral where costs have risen so now i am demanding a wage rise and now my manager's costs have risen so they are passing it on to consumers and it goes into a spiral lasting longer than it needs to. the bank of england is looking to the two to thre

the bank of england have warned that we could see 7% in the next few months before it begins to taper down again but we have got to remember yesterday we had to the wage inflation numbers and wages are not rising as much as cpa inflation. not rising as much as cpa inflation-— inflation. so people are feelin: inflation. so people are feeling it _ inflation. so people are feeling it in _ inflation. so people are feeling it in the - inflation. so people are feeling it in the wallet i inflation. so people are - feeling it in the wallet across the country. what are your thoughts on that, why has wage inflation not been rising in a similarfashion, given the inflation not been rising in a similar fashion, given the fact that many are struggling to employ people, you would assume they would of the higher wages? they are but not at the sort of pace that we have seen the acceleration in food prices. second hand cars for instance, so many shocks because of the pandemic of that has driven up cost inflation. this is important because people will be saying, inflation is strong so the bank of engl

it was decision day at the ecb and bank of england. the bank of england hiked its key rate, said that it was start running down bond holdings. meanwhile, european president christine lagarde is no longer rolling out an interest rate hike this year, which she had previously. this means the ecb is kind of getting the pack in terms of the global tightening regime. no surprise since we had inflation well over 5% or the entire euro zone, even higher for germany, considered the engine of european growth. for more on today's central-bank announcements, let's bring on padhraic garvey, head of global debt and rates strategy at ing. thank you for joining us. what do you make of the ecb move? it was just a week ago, many thought that the ecb would not hike this year. issue job owning or issue prepared to do it? padhraic: thanks for having me. there has been a significant change in central banks over the course of 2022. boe hiked today, that that is gearing up. the ecb -- look, negative rates are not natural. if there was ever to be a period where

of england — the 7.5% figure that the bank of england reckons— the 7.5% figure that the bank of england reckons it _ the 7.5% figure that the bank of england reckons it will- the 7.5% figure that the bank of england reckons it will be - the 7.5% figure that the bank of. england reckons it will be around april— england reckons it will be around april time~ — england reckons it will be around april time. you've _ england reckons it will be around april time. you've got— england reckons it will be around april time. you've got an - england reckons it will be around i april time. you've got an increase in taxes _ april time. you've got an increase in taxes in — april time. you've got an increase in taxes in national— april time. you've got an increase in taxes in national insurance - in taxes in national insurance coming, _ in taxes in national insurance coming, you've _ in taxes in national insurance coming, you've got _ in taxes in national insurance coming, you've got the - in taxes in national insurance . coming, you've got the increase in taxes in national insurance - coming,

millions of households are bracing themselves for what the bank of england is calling the biggest squeeze on living standards for more than 30 years. it's after the largest ever increase to the energy price cap was approved by the regulator, ofgem — meaning gas and electricity bills in england, scotland and wales will go up to nearly £2,000 a year. the government has announced measures to help cushion the blow but critics say they don't go far enough. theo leggett reports. for hussain and halima master, who have three kids, rising energy bills means life is getting tougher. it's gone up again, hasn't it? yeah, to 250 — that's crazy, that. hussain has a full—time job, but they are struggling to make ends meet. we have looked into the local food bank. 0n the weekends, they have it open to the public where you pay a couple of pounds and fill your bags up. so we have had a look at that and we have started to kind of use that. it's...how can i say? it's not nice, that we had to kind of use that. but it's coming to a stage where we have to use it, we don't have any choice. for many famil

will the bank of england be able to be as hawkish as the fed? saed: i expect the bank of england to have a very straightforward policy in terms of their plan. the big issue is not whether they will hike or not, they want to hike and they want to aggressively hike. if they are too aggressive, the market will sell off. what they have to do is slowly hike in the face of rising inflation. it is a balancing act between the bank of england, the fed and the ecb. no one wants to be blamed. they also need to normalize as soon as possible in the face of rising inflation. dani: u.k. markets have gotten very hawkish. saed, you are going to stick around with us. coming up after a volatile start to the year, the s&p 500 tends january -- ends january on a high note. this is bloomberg. ♪ dani: welcome back to "bloomberg daybreak: europe." january was a very volatile month for stocks. at one point, the s&p 500 was down over 5%. the nasdaq down more than 10%. the end of the month was the best back to back performance since april 2020. will february prove less v

bank of england. he is now chair of nesta a foundation focused on innovation in areas, including government, education and health. this is the least they could have been, wasn't it? i this is the least they could have been, wasn't it?— been, wasn't it? i think it was. everyone was _ been, wasn't it? i think it was. everyone was expecting i been, wasn't it? i think it was. everyone was expecting it i been, wasn't it? i think it was. everyone was expecting it to l been, wasn't it? i think it was. i everyone was expecting it to move been, wasn't it? i think it was. - everyone was expecting it to move up a quarter of a percent, and also they stop the easing and they are reversing that, so that is 100% expected. what was news today was that four members, four out of nine said they wanted to go further and wanted to raise interest rates up to 7.5. �* �* ., , wanted to raise interest rates up to 7.5. ~ g , ., , wanted to raise interest rates up to 7.5.~ , ., wanted to raise interest rates up to 7.5. an

bank of england, ecb. the pressure being piled on both at the moment. expectations are that we get a rate hike out of the bank of england, but the pressure on christine lagarde absolutely enormous as today's inflation data out of the euro zone highlights persistently higher inflation than the ecb was planning for. euro sterling continues to track lower. then you get to the bond market. take a look at th

bank of england hikes again. we think it's good news on jobless claims and q4 productivity vested more than a year road map begins withet

the bank of england and the bank of england has a mandate and target to keep inflation at 2% and they like everyone else were taken by surprise by the high inflation late last year and early this year but if inflation was to continue and the cost of living were to continue, this would be on the bank of england, because they have the tools and the mandate to avoid inflation from entrenching itself and being persistent. but inflation from entrenching itself and being persistent.— inflation from entrenching itself and being persistent. but when you sa the and being persistent. but when you say the tools. _ and being persistent. but when you say the tools, the _ and being persistent. but when you say the tools, the obvious - and being persistent. but when you say the tools, the obvious one i and being persistent. but when you say the tools, the obvious one is i and being persistent. but when you say the tools, the obvious one is in | say the tools, the obvious one is in interest rates going up. and that impacts as well on cost of living. interest rates will have to go up to avoid inflat