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tv   BBC Business Live  BBC News  January 4, 2017 8:30am-9:01am GMT

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this is business live from bbc news with rachel home and sally bundock. are eurozone‘s prospects beginning to inflate? in a few hours we find out if price rises in the block are back on track. live from london, that's our top story on wednesday 4th january. onwards and upwards! will inflation continue its march towards the european central bank's 2% target? and a clear road ahead for takata. reports suggest the japanese company could draw a line under its faulty airbags saga, but how much will it cost? we'll cross live to asia with the latest. the european markets have opened. the european markets have opened. the ftse is slightly down. we will bring you more figures throughout
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the programme. turning back time on a family business. later in the programme we'll speak to the young entrepreneur who's hoping to revive the watch—making company set up my his ancestors. and according to the trade union congress, today's the day that an average chief executive in the uk has earned as much as an average worker in a whole year, so we want to know, are they worth it? just use the hashtag bbcbizlive. welcome to the programme. in a few hours we'll receive the latest inflation figures for the eurozone economy. the block managed growth of 0.3% in the third quarter of last year and a sustained rise in prices could lead to the scaling back of the european central banks de facto money—printing program. as you can see here, there has been a marked improvement in the rate of inflation for the block and in yellow you can see the 1% inflation rate that economists are predicting
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for the last month of 2016. although this is still some way below the european central bank's target ofjust under 2%, it's still a marked improvement on november's reading of only 0.6%. back in february of last year, the eurozone was actually suffering from deflation orfalling prices. but since then, the value of oil has more doubled and this has fed through to prices on the shelves. looking forward, many experts expect the us dollar to continue strengthening against not only the euro, but against nearly every major currencey. again, this feeds into the oil price story as a stronger dollar pushes up the price of commodities. with me is our economics correspondent andrew walker. rachel outlining the reason why we are seeing such a leap in december. presumably that could continue this year? indeed, the price of crude oil
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started the year on a strong note as markets with thinking that perhaps the agreement by opec, the oil producers group, with some nonmembers to restrict supply in the new year and that would bite. it does seem to have reinforced a price thatis does seem to have reinforced a price that is already well up from below. it is only half the level it was in 2014. but there is the prospect for further increases in energy prices paid by consumers and therefore any further increase in the headline rate of inflation. let's look at the other rate of inflation without oil, what is it telling us? things are remaining in the eurozone, pretty subdued. what we are expecting is no change in that rate, not .8% is among recent figure. —— 0.8%. we expected to stay at about the same
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level. the european central bank, and it does care what the headline rate is, but the story that also indicates more about the strength of inflationary pressures generated within the eurozone economy itself, is that underlying rate. i think it is telling us demand across the eurozone does remain a bit subdued. what kind of a year can we expect from an economic point of view? we have this situation of inflation being pushed up by the price of oil but everything is substituted, elections in france and germany and often the economy is a factor for voters ? often the economy is a factor for voters? and the fact is you have a rise of anti—euro and anti—forces in those political systems has the potential to create a lot of uncertainty that will hang over economic life. another point worth bearing in mind, in terms of
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avoiding deflation, this rise in inflation is welcome to the european central bank. when wage growth is pretty subdued as well, it does mean it will hold back on consumer spending power. the rise in inflation is not an unambiguously good thing. so the eu will not change its plan for tapering back in april in terms of the money it is pumping in? no, but there have been calls for some economists in germany saying it should end this programme in march, as it originally suggested it should do. the german inflation figures were pretty strong, 1.7% but i don't think the ecb is ready to pull the plug yet. thank you, andrew. when we do get the numbers, we will fill you in here at the bbc. in other news: ford has said it will cancel a $1.6 billion plant it planned to build in mexico and instead extend operations at its factory in michigan. the boss of the us car giant,
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mark fields, said the decision was partly due to falling sales of small cars and partly a "vote of confidence" in donald trump's policies. the president—elect has criticised both ford and its rival general motors over production of models in mexico. some british airways cabin crew are to stage a 48—hour strike starting on january the 10th. members of the uk's unite union have rejected a new offer aimed at resolving a pay dispute. a previous walkout planned for christmas day and boxing day was called off after talks. ba says it will ensure that all their customers can travel to their destinations as planned. tesla, one of the world's biggest electric car makers, increased vehicle production by 64% last year. the company made almost 83,000 cars in 2016 but missed its delivery target for the final three months of the year. tesla, which is run by elon musk, said that problems with the cars new autopilot driving hardware had led to the company producing fewer vehicle's than they had previously forecast. there is more competition out there
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because the world's fastest self driving electric car has been unveiled. the company plans to release the car in 2018 with a range of up to 482 miles. shares in troubled car parts maker takata jumped 17% today in tokyo. this is down to reports of a possible deal with the us authorities over faulty airbags which have been linked to 11 deaths in the states. we have our guest in our asia hub today. it has all been about takata shares sinking dramatically. will this company draw a line under this saga? we saw takata car shares rally at the end of last year. it is
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continuing on the first trading day of 2017 in tokyo. it is because of reports the company could be settling a us criminal probe into its exploding airbags. it'll be before the 0bama administration leaves office. pa rt before the 0bama administration leaves office. part of settlement would include takata pleading guilty to criminal misconduct and it might have to pay up to $1 billion. south korea's shipping, once one of the biggest container shipping companies in the world which went bankrupt last you, they surged on their daily limit by 30% because of a possible deal. thank you for your time. it feels like the markets are still celebrating the new year. stocks injapan up 2.5%, making the biggest gains in about two months, and closing at its highest level since early december 2015. hang seng was slightly down but the dowjones closed up. investors looking forward
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to the tax cuts and regulatory reform they believe president—elect donald trump could bring. michelle fleury has the details about what's ahead on wall street today. after a strong 2016, is the party over when it comes to us car sales. ford said americans were not buying as many small cars. we should get a clearer picture of the health of the industry were major car companies report theirfigures industry were major car companies report their figures later on wednesday. minutes from last month's federal reserve policy meeting could
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explain their thinking on how many increases to expect in 2017. in december, america's central bank raised rates for only the second time in nearly a decade. the head of friday's job data, look out for a report on employment in the private sector. quite a busy week in the states. our guest is from gkfx. michelle talking about lots of information, employment data at the end of the week, they keep going up. i know the ftse 100 end of the week, they keep going up. i know the ftse100 is down a bit now, but what is going on? i know the ftse100 is down a bit now, but what is going 0mm i know the ftse100 is down a bit now, but what is going on? it is just record highs after record highs. are you not loving it, is it not your dreamtime? we want
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volatility, when the markets go in one way, it gets boring. less opportunity for money markets? this does not give you any opportunities. eventually it will turn round and thatis eventually it will turn round and that is the worrying point. not much substance on the way up, all on the back of donald trump winning the election. when it does turn around, and it will sooner or later, when there is no substance on the way up, there is no substance on the way up, the downside can be quite aggressive. it is how quickly it can come back down after that. when do you think that will come? 0nce things start to happen?” you think that will come? 0nce things start to happen? i would love to know exactly when it will happen, it would make myjob incredibly easy. the whole world is waiting for this dowjones easy. the whole world is waiting for this dow jones level. easy. the whole world is waiting for this dowjones level. once it goes to the 20,000 level, there is a lot of profit—taking, people taking their money out and a lot of big orders coming in and that sparks the
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markets to come lower. we are still quite a way away from there. that is half an hour's work. check it out, james hughes is honest. what else are you watching, the equity rallies are you watching, the equity rallies area big are you watching, the equity rallies are a big deal, or oil, the dollar, what else is on your mind? the oil price is the key one. yesterday we we re price is the key one. yesterday we were running very strongly, oil prices fell off a cliff yesterday. we have oil inventories today which could see oil rise again this morning and they could give us a bit more reason why that is going up. 0pec deal, non—0pec deals, we have a lot going on. james will be talking about fat cat pay. turning back time onafamily about fat cat pay. turning back time on a family business. late in the programme we will speak to the young entrepreneur who is hoping to revive the watchmaking company set up by
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his ancestors. you are with business live from bbc news. next has reported its christmas sales figures. 0verall sales for november and december were down 0.4% and sales for the whole year we re down 0.4% and sales for the whole year were down 1.1%. but there are online catalogue service fared better, up 3.6% in 2016. let's talk to kate ha rd castle better, up 3.6% in 2016. let's talk to kate hardcastle about this. good to see you. what is going wrong with next? their shares down around 11% on the ftse 100? next? their shares down around 11% on the ftse100? i cannot say next has any challenges specific to them. it is the high street and the battle of sales. 20% of online sales versus heavy discounting from expectation from consumers. black friday coming
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in at the end of november, discounting in that period prior to christmas and consumers feeling that is the way they want to shop and thatis is the way they want to shop and that is the state of the high street and the state of retail. when you look at other companies, they are not seeing a similar fall of like marks & spencer is an next. some a nalysts marks & spencer is an next. some analysts said they are specific to next and they are not grabbing the interest like they used to do. next and they are not grabbing the interest like they used to dam next and they are not grabbing the interest like they used to do. it is the middle high—street brand, a vanilla brand, not cutting edge of fashion are not discounted heavily enough to appeal to those consumers. the consumers have one set of money, whoever will provide the fashionable goods and excitement, that is where they will shop. you have got to fight hard for the sales and next are dictating that is what next year will look like. next also want prices could rise by as much as 5% next year because of inflation, do you think consumers. at that? with
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an increase in textiles and prices, consumers will be looking for discount, high fashion and they will only buy so much. increasing prices will not make them buy any more. kate hardcastle, thank you very much. tashi that making headlines for the wrong reasons against. the japanese media porting they are under fire again for lying about their profits. read the details on our website. you're watching business live. our top story. in a few hours' time we'll receive the latest inflation figures for the eurozone economy. the headline rate of inflation is expected tojump to 1%, from 0.6%. this is a significant improvement given that the eurozone was grappling with inflation through much of 2016. and now let's get the inside track on one entrepreneur's attempt to revive his family business.
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the fears watch company was founded in 1846 and for well over 100 years it produced watches that were designed in england and manufactured in switzerland. then, due to lack of interest from the fourth and fifth generation of the family, the business was forced to close down. but in 2016, after a hiatus of some 60 years, the great—great—great—grandson of the company's founder took up the challenge of bringing the brand back to life. nicholas bowman—scargill, director of fears watch company, is with us in the studio. we mentioned you are a young entrepreneur, 29? 30 next month. before you started, you were working for rolex? yes, i worked in the workshops for five years as they watched technician, doing parts of
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repairing, but also serving customers, talking to them about their watches, what was going wrong and how to fix it. that is a coincidence, given that you have this heritage and your family. coincidence, given that you have this heritage and yourfamily. but what prompted you to work at rolex? i knew half the story. i was aware there had been watchmakers in the family, andi there had been watchmakers in the family, and i thought it could be a career i could take up, but it was only when i was at rolex that it became apparent that there was more to the family history. it was over sunday lunch at the story came out, i had been talking about wanting to set up my own business and my mum said, why don't you restart the family company? doing a start-up is one thing, but restarting a business like this is quite different. did you have any copyright issues? the first thing was to check and make sure i could incorporate the name, but then trade market. with the
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heritage, it is difficult, because it isa heritage, it is difficult, because it is a blessing, you have the watches and the story to go back to, but it means you have to be careful that what you are doing is going to last another hundred years, as the company did before. how do you get the interest back? fears is not a name people will have heard of. it isa name people will have heard of. it is a great story of hundreds of yea rs is a great story of hundreds of years ago and a family history, but how do you get yourself on the market when it is so saturated already? exactly, and there is a lot of interest in things like smart watches as well. but being true to the heritage, the story, that does not meanjust the heritage, the story, that does not mean just putting the date on it, but by going back to the values of the company and certain design elements and the history, bringing those things and updating them for
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today, people like to look back and see that something has been authentic, it has notjust been picked up for no reason. none of yourfamily had an auld fears picked up for no reason. none of your family had an auld fears watch, so how did you get hold of them? to get hold of some of the original ones, ifirst get hold of some of the original ones, i first turned to ebay, and started looking online and came across them. for several years i was picking them up for a few pounds. since the relaunch of the company, you cannot do that any more, u nfortu nately. you cannot do that any more, unfortunately. 0nce you cannot do that any more, unfortunately. once i got them, i was inspired to find out more, and then speaking to different family members, i was pleased that nobody else had thought to do the relaunch, but it was nice to find little snippets of information, that a bit of history, everybody started going through all photo albums and started finding of documents and paperwork. it isa finding of documents and paperwork. it is a reddish story, —— british story, but an element of the watches
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have to be made in switzerland? as the case is today, if you want to make a watch in switzerland, you have loads of companies all next to each other, all in the same region, who make the individual components. to try to do that in the uk is almost impossible. there are people who do it but the watches result in being very expensive. it may get better over time, but for the moment switzerland is the place to go to. at the moment it is just you, so how do you market? you don't have a marketing or pr team. it is a lot easier than it was five or ten years ago, with social media? exactly. in the summer last year before i launched, i had several months of building up interest just launched, i had several months of building up interestjust using instagram, twitter, facebook, using photographs, things from the heritage and the archives, and starting to generate a buzz around
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it. i had never used instagram until june, so it was all new to me, but once you get going, it is exciting and creative, and you are getting interest from people. fears used to export to 95 countries. today i already have watches on almost every continent. that is largely because on social media you can put out a tweet or photo and somebody in tokyo can look at it and get in contact with you straightaway, there is no delay. to use a terrible cliche, time will tell! a fascinating story. in a moment we'll take a look through the business pages. but first, here's a quick reminder of how to get in touch with us. powerpage is where you can stay ahead with all of the day's breaking business news. we will keep you up—to—date with the latest details with insight and analysis from the
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bbc‘s team of editors around the world. we want to hear from you. bbc‘s team of editors around the world. we want to hearfrom you. get involved in the bbc business life web page. we are on twitter and facebook. whenever you need to know. you have been getting in touch with the story we are about to talk about. uk bosses make today, january the 4th, the amount that the average worker would earn in a whole year. that is a staggering statistic. £28,000. the average wage is £28,200 or whatever, and if you take into account the average pay from these bossesis account the average pay from these
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bosses is enormous, around £5 million a year, from one working week, by wednesday afternoon they have earned the same amount as the annual average wage, which is staggering. 0ne annual average wage, which is staggering. one of the real key things about this, and why people get so annoyed, it is an insane amount of money for anyone, but these people get paid this money whether you succeed or fail. but if it isa whether you succeed or fail. but if it is a listed company and you have shareholders, maybe not. a good example is not necessarily a listed company but a company owned by the government, rbs and the banks. there is so much public rush on those companies, and it is the companies with public russia where you will see a eeo who will forego his bonus or will not get paid all of this money. but the ftse100 companies, not all of them do that, so there are companies that do not perform well but still pay. when it looked
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at the average ceo, they measured it asa£4 at the average ceo, they measured it as a £4 million average salary. if you added martin sorrell‘s salary m, you added martin sorrell‘s salary in, it would skew the figures, because he is paid $71 million. he started the company from nothing and built the company up to stop play on the world's biggest advertising agency. sometimes you can say, ok, if somebody has built up a company to be so successful, you deserve a lot of money, but it is the company where it is more of a public service, and the companies are not assembly performing well. one person tweeted to say, they still earn less than a footballer. if they create jobs and wealth for others, it is fine. 0ne fine. one person says, as long as they are held accountable by shareholders, they are worth it, but then some
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others say, nobody brings that much value to a company or needs or deserves a salary so high. total mixed opinion. let's look at another story, getting talent from students in china. do you play golf? yes, and if you watch on tv there is an enormous movement of people from china, south korea, the far east, playing golf and being incredibly good at it. one every where it is massive if the women's game. the lpga tour is dominated by people from the far east. the young golfers are getting scholarships to study in the united states, which is fantastic. if you can do it, do it. iwish i could! that is it. there is more business news through the day on the bbc life web page and on world business report. see you again tomorrow, goodbye. it isa
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it is a bit cloudy now, but we have lots of sunshine in the forecast today. tonight it will turn very frosty, so some nippy weather on the way. you can see the cloud across the south breaking up, allowing for the south breaking up, allowing for the sunshine to come through, but in the sunshine to come through, but in the north it will be sunny from the word go. a crisp, sunny afternoon for scotland, northern ireland, northern england. 0n the north sea coast, windy conditions. it feels pretty raw in a strong and gusty wind, but inland it will be sunny and crisp. further south more cloud, i would not be surprised if there we re i would not be surprised if there were one or two light showers. high—pressure giving clear weather,
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but a big winter storm across the continent. clear skies tonight, watch the frost developed, engels and much of the uk. a really nippy start to thursday morning. he is the frost again. one or two areas frost free. for many of us, another sunny day on the way tomorrow. things will be changing in the far north—west of the country very late in the day. before that happens, we can enjoy all of that sunshine. it is raw, though. here are the weather fronts for the weekend, marching in off the atlantic. the wind will push in. the mild able sit on top of the uk during the weekend. the end of the week, we anticipate a change in the
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weather. the weather front and rain marchers in, it is still cold in the extreme eastern parts, had much milder weather getting into belfast and glasgow. the weekend is looking and glasgow. the weekend is looking and miss, there will be some cloud and miss, there will be some cloud and a bit of brightness, but the temperatures will be back into double figures throughout most of the uk. have a great day. hello it's wednesday, it's 9:00, i'm victoria derbyshire. welcome to the programme. this morning: muddled thinking. ill founded arguments. how britain's outgoing ambassador to the describes the brexit strategy and how it will affect negotiations. also on the programme: this programme has discovered that some staff at a private ambulance company have had as little as one hour's training to drive under blue lights.
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we'll bring you the full exclusive story after 9.15 this morning and keen to hear your experiences of private ambulance companies. didn't really tell me what to do. he just
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