tv BBC Business Live BBC News January 10, 2017 8:30am-9:01am GMT
this is business live from bbc news with rachel horne and aaron heslehurst. the leader of the world's biggest economy gets ready to make his farewell speech. what will the world make of the obama legacy? live from london, that's our top story on tuesday 10th january. the us economy has grown, but wage growth has lagged behind. we'll assess the impact of the obama presidency. we also have news from the world's second—biggest economy. the goods it makes might be about to get more expensive. stay tuned to find out what that could mean for you. the ftse chalked up its tenth straight daily session of gains yesterday.
are you taking a break from the booze after the excesses of the festive season? we'll meet one man who hopes to turn abstinence into a business opportunity. but can non—alcoholic drinks really take over from the real thing? during yesterday's metro strike in london, uber prices surged by up to 500%. are companies right to reflect increased demand? or do price hikes leave you feeling ripped off? let us know what you think. welcome to the programme. there are just a couple of weeks of barack obama's presidency remaining, and later today he gives his big farewell speech. as well as being commander in chief he's also overseen the world's biggest economy for the last eight years. but what kind of legacy has he left? well, since his inauguration
injanuary 2009 more than 11 million jobs have been added, with the unemployment rate falling from 7.8% to 4.7%. it peaked at 10.0% in 0bama's first year in power. the typical american family brings home nearly $54,000 a year. that's almost exactly the same as 20 years ago, once you adjust for inflation. wage growth has been very low under 0bama, and has been called the "missing piece" of the recovery. the economy has grown about 1.5% a year over the course of his presidency. that compares to about 2% under his predecessor george w bush. one of the costs of that has been that us government debt has nearly doubled, from $10 trillion to $20 trillion, during 0bama's eight years in the oval office. marianne schneider—petsinger, us geo—economics fellow at chatham house, a think tank in london.
if you ask any president, you would not want to take on that economy. if you were a teacher, you had to grade him on his economic, what grade would you give him? overall, let's not forget where he started. when you talk about the economy, it was on the brink of depression. he averted that, it was just a recession. compared to when he took it over, he has done a solid job, but it was not anything spectacular. if you compare him to other presidents, he falls in the middle range. some may suggest it did not fall into depression because they threw a lot of money at it. they
pumped a lot of money in. some say not enough, though. pumped a lot of money in. some say not enough, thoughlj pumped a lot of money in. some say not enough, though. i did not catch the wage growth. it is the missing link. you have created these jobs, they lost a lot but they created some. why hasn't wage growth gone 7 some. why hasn't wage growth gone any some. why hasn't wage growth gone f some. why hasn't wage growth gone up? many of the jobs that were created were in low—wage sectors. there is pressure from overseas and from technological change, automation is a key worry or stop many of these jobs had that have been created are part—time. many people feel they are not making headway. there are a number of issues that go together. how do you think barack obama will be feeling? there are a lot of big issues, like his health care or trade deals, which may not be lasting. how will
he look at this? he hopes that with some democrats still in support of the things he has done, they will be attem pts the things he has done, they will be atte m pts by the things he has done, they will be attempts by the donald trump administration to overturn them, to chisel them down, but we will see, it is an open question. we have spoken before, looking forward, donald trump and his economic policies, there is a lot that people would look favourably on. animal spirit is back. in terms of the promised tax cuts and cutting down on regulation. businesses react favourably to that. they question whether he can deliver on many of those promises. in other news. two prototype models of a highly—anticipated gaming laptop have been stolen at the consumer electronics
show in las vegas. they belong to the gaming company razer, and each has three 4k screens. it's the first portable laptop of its kind. razer said the devices were taken from its press room on sunday, and the chief executive min—liang tan said they were treating the case as "industrial espionage". volkswagen's chief executive for the north america region says the company was "surprised" by the criminal charges laid against the executive in charge of complying with us environmental regulations. the german carmaker has admitted installing secret software to beat emissions tests. on monday 0liver schmidt appeared in court in miami charged with fraud and conspiracy over the scandal. he chose not to enter a plea and was remanded in custody. there are question marks about the future of yahoo's influential chief executive marissa mayer after it was revealed she will not serve on the board of the company that is left behind once yahoo's core assets are sold to verizon. five other directors will also not serve on the board.
we are looking at our web a cracking site. we will work with our uk audience later, but snapchat, or the company snap, which owns it, they are choosing the uk for anything outside the us. it isa outside the us. it is a vote of confidence in the uk. if those companies come to europe, they go for ireland. says the irish lady! luxembourg, the netherlands. could this be something to do with the fine that apple could be facing, 13 billion tax rebate? it could be. snapchat expected to go to the market this year. a big float. it hopes to raise $25 billion.
we've had some numbers out of china which show that the world's second—biggest economy could be about to push up the prices of the things we around the world all buy from china. sharanjit leyl is in singapore and she's got the figures. just explain, how could these increases in china affect us as buyers elsewhere in the world? will it cause our prices to go up? possibly. let me give you those figures, because they are interesting. they grew at their fastest pace in more than five yea rs. fastest pace in more than five years. the index for december was up 5.5% from the previous year, against expectations of. that could lead china to export inflation two nations around the world through its vast supply chains. this may prompt manufacturers who are enduring those
higher input costs to raise their prices and pass them on to everyone around the world. whether that rebound will be sustained depends on how the global economy fares, possibly under donald trump, and whether trade tensions flare between the us and china. consumer prices remain stable, rising just over 2%. 0thers remain stable, rising just over 2%. others say that is an indicator that the real inflation seems restricted to the industrial sector. hard—hit is the mining sector, prices surged over 21% in december from is the mining sector, prices surged over 21% in decemberfrom a year earlier. the us dollar started 2017 at a high but it's been sliding, along with the dow on wall street, which closed down yesterday. and asian stocks were mixed, with a decline injapan. the nikkei pretty flat, offsetting gains in hong kong, with the hang seng up.
this week we should keep an eye on the oil price. it crept back up today after a fall on monday over concerns about whether output cuts by major exporters will be enough to support the oil market as other producers have increased supplies. and samira hussain has the details about what's ahead on wall street today. more automotive news happening, general motors will be telling investors what they can expect from the number one american auto—maker in 2017. top officials will present the compa ny‘s financial outlook in 2017. top officials will present the company's financial outlook at a butcher bank conference in detroit. it is held at the same time as the detroit auto show. also happening, the ford motor company ceo will outline forecasts for 2017 financial performance at a conference during
the detroit auto show. investors will be watching for news on 2017 american market forecasts, as well as the outlook for asia and europe. and barack obama will deliver his farewell address in his home city of chicago. joining us is james bevan, chief investment officer at ccla investment management. we wa nt we want to talk about the american market. but let's talk about the ftse 100, market. but let's talk about the ftse100, the main market in london. 0ne record after another, but this isa 0ne record after another, but this is a story about the pound. the pound goes down in value, the ftse goes up. a very large chunk of the earnings are overseas, either through export all through selling overseas, and bringing the earnings back. whenever the pound goes down, profits go up, and vice versa. more bang for the buck. the american
markets, all eyes are onjanuary the 21st, the president—elect takes over. in the uk we have the weakness of the pound, in the us we have a strong dollar, and many people think, if you are going to talk about markets going up on the wea kness about markets going up on the weakness of the pound, white is it that american equities have gone up with a strong dollar. donald trump is promising to cut tax substantially. corporate earnings will rise because the government will take less money. if you join the dots on the current valuation and you should be tax cuts passed straight through to the bottom line is terms of earnings, the index goes all the way. it is an overly optimistic perspective, but if you said, let's cut the difference between some deflation of the optimism and a revaluation on the back of that earnings numbers, maybe 2500. looking at how the markets have gone up in the states, a lot of
it is on sentiment, we now know donald trump will be the president, and he will invest in infrastructure and he will invest in infrastructure and cut down on regulation and taxes. 0nce and cut down on regulation and taxes. once he is in power and things either do or don't begin to happen, at one point —— at what point will be see a reality check? have at least six months, because he will have to take the tax cuts right through the process, and we don't know if you will backdate them to early 2017 awful the date them to 2018. but the markets would begin to focus anyway forwards. all of the sentiment we have had for the global economy has been good, that has to remain in place, because it fits begin to slide back down the hill, no matter of cutting taxes will lead to better numbers. the us equity market is looking for 5% growth this year and next year, and that is what we have to focus on. we will see you
shortly. we're all getting a lot more health conscious these days, but can non—alcoholic drinks really take the place of booze? we'll hear from a man who's hoping to capitalise on the trend for adult soft drinks. you're with business live from bbc news. snap, the company behind messaging app snapchat, is setting up its international hq in britain, where it will book all sales made outside the uk. many tech firms have preferred ireland, luxembourg or the netherlands as their european tax base. theo leggett is in our business newsroom. snapchat, why this decision, it bodes well for the uk economy and for london? a lot of social media companies like facebook and google have run into trouble over setting up have run into trouble over setting up tax bases in lower tax
jurisdictions in europe and then diverting profits from other large markets into those jurisdictions diverting profits from other large markets into thosejurisdictions in order to minimise their tax bills. so schnapping is not doing that. they are setting up in the uk and they're channelling they are setting up in the uk and they‘ re channelling the they are setting up in the uk and they're channelling the profits from they're channelling the profits from the uk first of all, but also from other countries where they don't have a major base and that includes australia and saudi arabia and paying tax on them in the uk. now, that tax bill at the moment won't actually be very high because snapchat‘s revenues are not that high at the moment, but it is expanding rapidly. it is taking on more advertising and it is expecting its revenues to go up in the near future so there will be more money coming in and the money will be going through the uk. let's not forget. the uk itself as a major economy has a low corporation tax rate. 20% at moment. it will fall to 17% by 2020. so by doing this, schnapp is avoiding the prospect of big regulatory problems, like like the uk government and the european commission clamping down on
companies which have aggressive tax policies and at the same time, it's basing itself in the uk where it has a relatively low corporation tax rate. so i think that's what's behind it. by the way, some of our viewers may not be familiar with snapchat, it is an app aim at younger people. if you're under 25, younger people. if you're under 25, you almost certainly will have heard of it. if you're over 30, maybe you won't, but that's changing as well. snapchat allows you to take pictures and videos and send them and then have them deleted. it is becoming more popular among people the same age as myself and dare i say it, you too, aaron. i'm older than you theo! thanks, mate. morrison, christmas sales up. they are doing well, aren't they? good news for britain's fourth biggest supermarket. you're watching business live.
our top story, president obama is getting ready to make his farewell speech. he's expected to focus on his economic legacy especially the issue ofjob creation. a quick look at how markets are faring. we can see there the ftse continuing that winning streak up and up, pretty much every day since the start of the year. it is up almost 0.2%. the dax up and the cac down slightly. all the markets keeping an eye on the oil price which had its biggest fall in six weeks over concerns that some producers are making too much oil despite the 0pec agreement. you do like the markets! let's talk about something more interesting before i spit on the desk! now let's get the inside track on distilling and i don't mean bootlegging here! quite the opposite. herb and plant distillates have long been a medicinal tradition in the east but when ben branson, a british tee—total marketing executive stumbled across a copy of the art of distillation. he says it was a light bulb moment.
a solution to the problem of what to drink when you don't want to drink. so inspired by craft techniques he set up soft drink company seedlip last year. since then seedlip has gained investment from drinks giant diageo who seem to be betting on the rise of this adult market. the founder and chief executive of seedlip, ben branson is here. guess what, he brought us? nonalcoholic drinks! sorry, i'm probably not your target market here. welcome to the programme. are you serious from a book? i know you've got the book, right? from a book. ladies and gentlemen, this book. ladies and gentlemen, this book is 1664? the original copy was 1651. we managed to get our hands on a copy from 1664. this is original recipes, nonalcoholic herbal remedies all the distilling techniques that i found three years ago. so what prompted you? was this something you were thinking i want a
business opportunity, i can see a gap in this market? was it that you we re gap in this market? was it that you were doing something else that brought you into making nonalcoholic beverages? it was not a business gap, business opportunity. seedlip is just gap, business opportunity. seedlip isjust a product gap, business opportunity. seedlip is just a product of my upbringing. halfify family have been farming for over 300 years and we still farm today and that's really important. the other half of my company are in brand design. i grew up in the countryside and then went to work in brand design and i put the two together. you have an unusual, did you go to university? no. no. you did work experience for a big vodka company at the age of 14?” did work experience for a big vodka company at the age of 14? i was doing work experience for brand design agencies from the age of 14 and got to work on some fantastic global brands. and so got a real insight into what it means to create one. i imagine the biggest booze maker in the world, diageo, investing in you, which is kind of strange, but it sort of suggests this is a growing market?|j
strange, but it sort of suggests this is a growing market? i think we're now in an age... who are you targeting? we are in an age where you can go to a restaurant and have all kinds of food, it doesn't matter what allergy you have got and it doesn't matter what you want from wherever in the world, if you want an nonalcoholic cocktail, you can do the same. if you're not drinking for whatever reason, the options are poon whatever reason, the options are poor, they are one dimensional and sweet and fruity and there is no theatre, there is no adult sophisticated flavour that we're trying to do. you know, i like a drink. my wife will nod to that. i haven't even tasted this. we've mixed it with tonic water. they are both mixed with tonic. we have got two products. isn't the problem, it is not a problem, the issue, you we re is not a problem, the issue, you were saying, you wanted other options? i have got three children,
every time i was pregnant the offers of what you wanted to drink were limited. so i can see the appeal of an item like this, but your price bracket, it is £27 a bottle. that's expensive. 40 bucks, that's $40 of the that's pricey. it is pricey. because it takes us a long time to make. so we're individually distilling each individual ingredient. two of the ingredients come from my farm, my hay, my hand picked peas, the craft that goes into this and the actual time and hand labour means that actually we're creating something that's really grown—up. we're creating something that's really grown-up. here is my point. for a drinker like me, is it all about the taste? it might be, but you don't get the buzz? you don't get the feeling. i'm not talking about pregnant. if it is a monday lunch time or you're driving or as we are in dryjanuary and you're
having a month off, the opportunity to have a great grown—up nonalcoholic drink should still be there regardless of drinking for the effect. i think the effect of wanting to feel part of the group or wanting to feel part of the group or wanting to feel like you're not the dummy in the corner drinking orange juice. this product, that's filling this gap in the market for adult drinks. there are a lot of other companies rushing in, britvic have a company launching a similar sort of, more savoury company launching a similar sort of, more savoury alcoholic alternative rather than the fruity ones. we have nonalcoholic wines being introduced by one of the upmarket cordial companies. is there room for you as well? we are the world's first distilled nonalcoholic spirits. so we are taking the same rituals of a spirit mixer of a vodka and coke and ofa gin spirit mixer of a vodka and coke and of a gin and tonic that sits on the back bar that means you can make something at home so we're taking that side of the market. i guess we wa nt to
that side of the market. i guess we want to solve the problem of not drinking. if other people are coming in and helping to build that owication, happy days. ben branson, thank you. you can come back and see me when you've put some alcohol in that one and we'll talk them. i'm not your target market, i'm sorry! 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. the business live page is where you can stay ahead with the day's breaking business news. we will keep you up—to—date with the latest analysis from the bbc‘s team of editors around the world. we want to hear from you too. get involved on the business live web page. 0n twitter we're at: you can find us on facebook: business live on tv and online whenever you need to know. what other business stories has the media been taking an interest in? james bevan from ccla investment managementjoins us again. james, thank you for hanging around.
now, earlier we asked people to send in any tweets they might have. we we re in any tweets they might have. we were asking about the uber story, there was a tube strike in london and some uber charges went up by 500%! was that supply and demand? is that fine? is it ok to cash in? it is the core part of the uber business model. uber pays by the mile and the time spent behind the wheel and there is a loading factor to get people to join the ranks of the drivers when demand rises. when there is a strike in public transport, demand goes through the roof and hence the loading goes up hugely. some tweets have said, "look, they are really cheap norm times. this is their opportunity to cash in." there is a legitimate problem when there was too much traffic and you hope you're going to get a fast ride and you don't. the road system is
not good at coping with huge volumes. it is not an uber problem. another company that is weighing what is it going to do with president trump's dislike for cars made in mexico and sold in the us? it is made in mexico and sold in the usment there are successful car companies like nissan and vw and bmw that manufacture in mexico and sell around the world, not specifically to the united states. however, ford and gm have definitely decided in the past that they would want to manufacture cheaply in mexico and export to the us and they will have to re—think their strategy. export to the us and they will have to re-think their strategy. james bevan, thank you very much for joining us today. thank you for the tweets. we're running out of time to mention them, but a lot of people saying focus on the taxis as well, notjust uber. but a lot of people saying focus on the taxis as well, not just uberlj will. bye-bye. hello. it looks as if it will be a
fairly cloudy day for many parts of the british isles and there is a chance of rain on a weak weather front for many areas too. but it is not all doom and gloom. there will be brightness and things will turn milder across western parts. there isafairamount milder across western parts. there is a fair amount of cloud across western areas. that will organise itself into a band of weather which will ease further east across the british isles. but it is making pretty slow progress. so it could well be that after the disappearance of early morning showers, i think much of east anglia and the south east could be in for a predominantly dry day with a wee bit of brightness. there is that weather front, the thicker cloud just bringing the odd bit and piece of rain. it could be that once it has moved further to the east, western parts of scotland, parts of northern ireland, could end up the afternoon being essentially quite dry, a little bit of brightness around. temperatures at best around about
ten celsius or 11 celsius. what's left of the weather front clears away towards the continent and then we bring a new weather feature in across the northern half of britain during the night. this begins to open the door to a couple of things. some colder air. but much, much stronger winds and they could be a real problem during wednesday. so if you're thinking of travelling there could be speed restrictions on some of the bridges and certainly some of the high level routes could be exposed to gusts of wind to 60mph or 70mph. please bear that in in mind across the northern half of the british isles. essentially a bright day, but plenty of wintry showers urged along by the near gale force winds ina urged along by the near gale force winds in a number of locations across scotland. by thursday it will be cold all over the british isles. the real problem is that we're going to introduce moisture across the southern counties of england and wales. quite how far north that goes isa wales. quite how far north that goes is a little bit uncertain at the moment and it is important because on the northern flank, where the
moisture meets the cold air, there could be a conversion of rain into some snow fall. we'll need to keep a close eye on that. further north, it is just close eye on that. further north, it isjust a close eye on that. further north, it is just a cold, close eye on that. further north, it isjust a cold, raw, blustery day with frequent snow showers getting into the western side of scotland. that's how cold it's going to feel. and then as we move out of thursday and on into friday, the isobars go around into a northerly and it stays cold as we move towards the weekend. take care. bye—bye. hello, it's tuesday, it's 9am. i'm victoria derbyshire, welcome to the programme. this morning, strikes, delays and cancellations. again. southern rail commuters tell us their view on the operator on another day of strike action. i get iget up i get up early to get the overground or the bus, it takes a lot longer. today marks the first of six days of strikes by southern rail this month, so what's the solution? do get in touch with us
throughout the programme. also today, in an exclusive interview nicole kidman tells us why she wants more children at the age of 49, but her husband won't let her. when people talk about regrets, do i have regrets? i wish i had more children. my husband tells me to shut it down. i would have liked to or three more.