tv BBC Business Live BBC News January 18, 2017 8:30am-9:01am GMT
this is business live from bbc news with rachael horne and sally bundock. weighing up the "wish—list", business leaders give us their take on theresa may's plans for brexit. live from london, that's our focus today on wednesday, 18th january. businesses have praised theresa may for offering clarity with her vision of britain's post—brexit place in the world, but will she be able to seal the deal she wants? also in the programme, samsung in the dock. a court in seoul is set to decide if it will detain the company's boss for offering millions of dollars in bribes to get approval of a controversial company merger. and we have the latest on the markets after tuesday when the pound enjoyed its best day since 2008. and we'll be live at
the world economic forum in davos to get the inside track on how the world's biggest institutions are dealing with the challenges of cyber security. the chief technology officer at bank of america will be joining us. also cambridge university is recruiting a professor of lego. so we want to know if the ubiquitous building blocks are now more than just child's play? are you a master builder? let us know. just use the hashtag bbcbizlive. today, for the first time ever, a freight train from china will arrive in the uk. it wasn't intended as a symbolic statement, but with the british prime minister now confirming the uk must leave the european single market, the train‘s arrival does illustrate that post—brexit britain may need to look further afield
for its trading partners. theresa may used her much anticipated speech yesterday to announce the uk's priorities for upcoming brexit negotiations. leaving the single market means britain will lose the right to trade with the european union without restrictions. despite this, the uk prime minister says the government will negotiate for the best possible access to the trading bloc. mrs may also said britain will aim for a new customs union agreement with the eu. this would allow the uk to form new relationships with non—european trading partners, but it could impose higher costs on businesses based in britain. the market reaction told another story with the value of the pound rocketing after theresa may said she would allow parliament joining me now is allie renison, head of europe and trade policy at the institute of directors.
good morning. so what is the institute‘s response to her speech? well, i think, institute‘s response to her speech? well, ithink, it institute‘s response to her speech? well, i think, it is welcome she provided certainty and clarity around the number of scenarios, that potentially businesses have to plan for. it is to be expected to some degree, we have to take at face value, not only what the prime minister has been talking with respect to controls on free movement, but the eu leaders saying you can't be in the single market and have those controls and the concern was that given there is a two year time con trant with article 50, do you want to go down the road of trying to negotiate controls within the single market, find out you can't do it and then go to plan bordo you can't do it and then go to plan b or do you want to start with plan b or do you want to start with plan bina b or do you want to start with plan b in a sense right away? she was certainly talking tough and many would argue that that runs the risk of there being a bitter negotiating process between europe and the uk and yet you've got david davis today saying to the bbc, the brexit
secretary, if you could describe him as that, there is so much common ground. there is so many reasons to do good trade between the uk and europe. he's confident negotiations will go well. it is all about that, isn't it, how the negotiations go? we are in what some would call the fondy war period before we have started, the triggering of article 50. the hope is and this is what the uk is trying to play for is that economic and commercial interests become the order of the day very, very quickly as opposed to a focus from the eu side on political sort of protecting the unity of the 27 so to speak. in the meantime, businesses are probably going to prepare now, aren't they, for worst case scenario, ie, no access to the single market. if that's the case for the city of london, for the car industry, they have to make some serious decisions? yes, i think that business particularly now with the single market ruled out the what the single market ruled out the what the single market ruled out the what the single market provides is that automatic predictability about single market access, you can get the same access, but it is subject to negotiation. i think what you
will start to see is businesses put in place the contingency plans particularly if financial services, we have seen that lloyds said they will begin opening up a subsidiary in other eu country and what business has to do is plan for the worst case scenario business has to do is plan for the worst case scenario and hope for the best. what do you think the outcome will be and how long is this process going to take? many are saying it will be much longer than the two yea rs will be much longer than the two years that we think it will take? well, that's one of the big issues that comes away in terms of question marks from the speech yesterday is that we're glad to see from that there will be an implementation phase after the agreement is concluded, but what happens if the negotiation goes on beyond the two year window? i know i'll talk to you gun in the next few years. thank you for coming in from the institute of directors. in other news: us regulators claim that the world's biggest producer of mobile phone chips, qualcomm, forced apple
into an exclusivity agreement in return for lower fees. the federal trade commission is suing qualcomm for unfair practices in the way it licenses its technology especially the processors used in cell phones and other devices. the company has denied the allegations saying the case is flawed. rolls—royce has apologised unreservedly after being found to have conspired to corrupt or failed to prevent bribery by rolls—royce in china, india and other markets by the uk's serious fraud office. the british engineering giant will pay $800 million to settle corruption cases with uk and us authorities spanning nearly 25 years. one of donald trump's closest advisers has told the bbc that the us would win a trade war with china. former wall street banker, anthony scaramucci, warned that if china chooses to retaliate when the trump administration imposed tariffs on imports, it would cost them "way more" than it would cost the us. the comments comes as the chinese president gave a staunch defence of globalisation at the world economic forum in davos. shall we have a look at the tablet?
yes. there are loads of great corporate stories on the tablet. i don't mean great news. some are bad news. but stocks are on the move on the markets in london. so, that's basically illustrated here. pearson shares down 20%. premier foods shares down 20%. premier foods shares plunging. all these companies coming out with warnings today and we'll discuss them in more detail later on, but premier foods makes bisto and it is warning that its profits will be 10% lower because food inflation costs are on the rise. very interesting given what's going on with regards to brexit, with regards to what we've discussed already in the programme and the
inflation figure that came out yesterday in the uk. we'll talk some more about it later. the defacto boss of samsung jay y lee arrived at a south korean court earlier today where a judge will decide whether he should be arrested over his alleged role in a major corruption scandal. kevin kim is in seoulfor us. tell us more about what happened today and whether we have had a decision yet or not. well, the hearing has ended and jay y lee, the head of samsung was seen leaving the courtroom as grim faced as he had arrived four hours earlier. he's now on stand—by as he and the public waits for the results later this evening. prosecutors believe samsung has committed bribery and has asked jay y lee, the head of south korea's largest com pa ny to jay y lee, the head of south korea's largest company to be jailed for. the allegation is that samsung gave millions of dollars in return for
the votes of national pension fund ina big the votes of national pension fund in a big and contested restuck turing of the company. last weekjay y lee was summoned as a suspect and was questioned for almost 2a hours. investigators said on monday that despite concerns, mr lee's arrest may have a negative effect on the economy, but establishing justice was more important. thank you, kevin. asian markets are back up following losses on tuesday. the dollar fell overnight against the yen, euro and the pound, partly because sterling strengthened during british prime minister theresa may's speech about britain's pending departure from the european union, also the dollar was weakened by comments from us president—elect donald trump about the currency being "too strong".
in europe markets have opened and after the pounds best day since 2008. samira hussain has the details about what's ahead on wall street today. more banks will be reporting earnings on wednesday including goldman sachs and citigroup. like other big us banks gold man's trading business is expected to have benefited from volatile markets around the us presidential elections. and executive of citigroup, the most international of banks, they will be asked about global trade prospects during the presidency of donald trump who said he will rework trade agreements. in non banking earnings news, if you areafan non banking earnings news, if you are a fan of shows like the stranger things 0r are a fan of shows like the stranger things or the crown. you are likely to be contributing to the success of netflix. wall street will be looking to see how many domestic and
international customers the streaming service added in the last quarter. david davis, who is the uk brexit minister, if you want to describe him as that, has been talking to the bbcment this is what he had to say about the uk leaving the european union. so basically, saying that we will, the uk, will seek a customs deal that's as frictionless as possible. yes, he said frictionless! as frictionless as possible. that's another line from the david davis interview that's under way at the moment. joining us is jane sydenham, investment director, rathbone investment management. every single detail is being picked up every single detail is being picked up on at the moment as what does this mean, how will the process go? it is not easy to predict at all, is it? no, not at all. we are in unchartered territory really in
terms of, we haven't been here before. we have got no reference pointment and normally investors can restore back to some historic precedent. david davis saying we wa nt precedent. david davis saying we want it to be as frictionless as possible and yet you heard theresa may saying if we don't get the deal we want, we're going to walk away. it is interesting, isn't it, the different angles? we would like it to be smooth, they are trying to set boundaries for the best outcome and the worst outcome and hoping that somewhere in the middle is the final outcome. it feels like for the last couple of weeks, every time we've talked about the markets, we have talked about politics, it is about brexit and it is about trump. yesterday we had inflation figures out in the uk and it was higher than expected and maybe it is time we start to look at these indicators and move away from politics for a bit? i think that's right. there has been a transition taking place since july right. there has been a transition taking place sincejuly of last year. inflation has been gradually ticking up. partly in the uk that's
because of currency weakness, partly because of currency weakness, partly because it is employment is fairly full and partly it is because energy prices are rising, but the impact that has on fixed interest investments and on the costs of borrowing, on how investors think about the stock market and which companies do well or badly, is changing quite dramatically. companies do well or badly, is changing quite dramaticallym companies do well or badly, is changing quite dramatically. it is also having an impact on food prices. premiere foods saying we're going to make less. its shares down 10% on the news, on its profit warning? yes, whether companies are able to pass on the price rises to their consumers, whether they have to absorb them themselves and whether they can negotiate with suppliers, it is a much more uncertain world. there was the marmite wars? absolutely. any cross—border trade is much more complicated than it was. all right, jane, you will return later. we'll find out if jane jane, you will return later. we'll find out ifjane is jane, you will return later. we'll find out if jane is a jane, you will return later. we'll find out ifjane is a master builder. i think you are. i'm
definitely a master builder! still to come, bank of america has over 210 thousand employees and 50 million customers. we're going to be asking their chief technology officer how she keeps them all safe from cyber attacks and what are her hopes for the trump presidency. you're with business live from bbc news. mobile phone company ee has been fined £2.7 million for overcharging customers by regulator, 0fcom. the fine is for fundamental billing errors which included customers being overcharged by as much as £250,000. lindsey fussell is the consumer group director at 0fcom. shejoins us now from our westminster studio. give us a bit of background into the fines. it is notjust the fact give us a bit of background into the fines. it is not just the fact that the customers were overcharged, but initially when you looked into it, ee weren't going to refund them? we all rely on big companies to do
the most basic thing, get our phone bills right. during our investigation we found ee had broken billing rules, not just investigation we found ee had broken billing rules, notjust once but twice that is why we have given out this fine, as well as requiring them to reimburse all the consumers affected. in terms of where the money goes, it goes to the treasury. there were thousands of customers where it could not be figured out who they were. what happens for them? we are glad that ee after our intervention have tracked down the majority of customers. we are encouraging them to find every one of those customers and make sure they are refunded. we have seen some significant finds from 0fcom this month. is the regulatorflexing its muscles? we think that customers throughout the communication industry deserves the highest possible standards of customer
service. that includes the most fundamental thing, people getting their bills right. we won't hesitate to step in and act on behalf of consumers, where we see things going wrong. do you think we will get to a point where you do not need to dish out these huge fines to these companies? we would certainly hope so. companies? we would certainly hope so. we know that 90% of people, nine out of ten, are happy with their mobile phone providers. we'll soon know how crucial mobile phones are to the way we all live and work these days. companies should be aware that where they get these fundamental things wrong they can expect to be on the receiving end of these kinds of hefty fines. thank you no much were taking the time to join us this morning. lots of corporate news today. good news for burberry as well as lots of profit warnings. a mixed reaction to the statement by
theresa may that britain will not remain in the single market. she insisted the uk could not be half in, half out. more on the website. a quick look at how markets are faring. the european markets have been open for a little while. the ftse is up a tiny bit. there have been some quite erratic falls by stocks. look at the dollar/ pound. as we said, yesterday, it had its birthday on the currency market since 2008. we're all living a lot more of our lives online these days. but how secure do we feel about that? hardly a day goes by without news of another major cyber attack — with hackers targeting everything from our emails to our bank accounts and big companies are also in the firing line. the cost to the global economy is huge — approximately $445 billion a year.
and that figure is expected to hit an astonishing $2.1 trillion by 2019. that's caught the attention of one donaldj trump — who says cyber—security will be a top priority when he gets into the white house. so, how on earth do we keep up with the constantly evolving cyber threat? cathy bessant is chief technology officer at bank of america and joins me now from davos. thank you very much for taking the time tojoin us thank you very much for taking the time to join us this morning. thank you very much for taking the time tojoin us this morning. is cyber security something that keeps you awake at night? absolutely. 24/7, you awake at night? absolutely. 2a/7, we have to be on our toes, focused on protecting customers and oui’ focused on protecting customers and our company. as you just said, we spend at a mendis amount of resources and bring in a tremendous amount of talent to do that. it is critical for any organisation, but certainly for a bank. we could name
several companies, big names, global names, which have become a victim of this. information and data are certainly important to protect, no question about it. for a financial institution, a bank, we also want to protect the movement of money and the protection of our customers, depositors and investors cash. what do you think needs to be done? do businesses need to do more question to governments need do more?” businesses need to do more question to governments need do more? i think we all have to do more. as individual consumers or companies, we have to protect ourselves as we access payments and financial systems. banks have to protect their own capabilities but also work to protect customers and be on the leading edge of defensive technologies. and i think there is a real place for government in this mix. we need a legal structure that works, infrastructure and power grids are strong and protected. this
is an ecosystem where we're only as strong as our weakest link. it is wide collaboration is the ball game. what is the obstacle to that collaboration? 0ur government is on—board enough? this is an international team effort that needs to be done here, isn't it? it really is. it does not work for one country to do it in a vacuum. the threats come from countries into other countries. threats are really cross—border. it requires the highest level of cooperation. no individual department and any individual department and any individual government but really ci’oss individual government but really cross department and cross—border governmental cooperation. it is tough. no question that we are trying to learn new ways of doing business together, protecting each other, protecting ourselves. that requires a new, social and commercial set of contract, if you don't mind the word. you are a regular at davos. how was the
atmosphere there this week? the chinese premier has been out for the first time. no representative from the us administration. we have been hearing from two reese eight about britain's exit from the european union. we had a conflict about detection is. what is the atmosphere like? i have been pleasantly surprised. there is an optimistic atmosphere, certainly in recognition of all of the challenges you mentioned. the spirit of cooperation, a spirit of ensuring that economic growth is pursued responsibly and equitably. the dialogue has a cautious optimism to it. a full recognition of the things we all face. i think a spirit of resilience that says these things can and must be worked through stop i have been very pleased with the calibre of the dialogue and the engagement. i believe our administration will step up in ways
that make it a constructive part of the dialogue as well. in terms of the dialogue as well. in terms of the year ahead, this time last year we did not realise that the uk would choose to leave the eu. we did not realise that donald trump will become the next president of the united states. it is an uncertain period, isn't it question what it is difficult for business leaders to gauge what to do next. difficult for business leaders to gauge what to do nextlj difficult for business leaders to gauge what to do next. i think we have to be extremely focused on trust. not just the have to be extremely focused on trust. notjust the trust of our customers and clients but the trust of the marketplace and communities asa of the marketplace and communities as a whole. if anything, the last year has taught us. last year we we re year has taught us. last year we were talking about $30 a barrel oil price will do we have come a long way. if the last year has taught us anything, i believe it is that our institutions have to focus every day on the building of trust and the bridging of social and economic divide. all right. thank you so much
for joining divide. all right. thank you so much forjoining as. chief technology officer at bank of america, who is, officer at bank of america, who is, of course, in davos. jane hasjoined jane has joined as jane hasjoined as again jane has joined as again to talk about what is in the business news. we'll get to lego in a second. china daily on its front page has the president being at the world economic forum for the first time. hopefully it will load up the pictures for us. it is almost ironic. the chinese premier is the keynote speaker at davos, which is all about capitalism and globalisation, and yet there is no one there from the united states. what a turnaround! i think it is the biggest delegation from china ever. in the last decade or so, china has put into place a lot of infrastructure for trade. currency trading hubs in major cities, the bond market, access to foreign
exchange will stop all of these building blocks will stop this is a great opportunity for them. they are seeing an opportunity here and making the most of it. absolutely. very interesting. we have had some really good tweets. cambridge university is advertising for a professor of lego. you have three more days to apply. lego can inspire future architects and engineers, carpenters and make creators out of us carpenters and make creators out of us all. it is relaxing fun. tom says he thinks he chose the wrong degree and should have done lego.|j he thinks he chose the wrong degree and should have done lego. i should have done lego. so, lego is sponsoring this professor of play at cambridge university. sponsoring this professor of play at cambridge universitylj sponsoring this professor of play at cambridge university. i am applying, straight to the front of the queue. it is about investigating the
effects of children in early years education and how that helps lateral thinking and so on. but, i am sure we can all benefit from play. maybe company should have some lego in the cafeteria is not just company should have some lego in the cafeteria is notjust coffey and fruit. i am sure that is on the minds of those who run companies like google. stop bouncing up and down on a space hopper. the donald trump effect is not so beneficial for tiffany ‘s. trump effect is not so beneficial for tiffany 's. next to trump tower, sales are down for the people cannot get into the store either because of security reasons or protesters. a real economic effect of the new president. that's it from business live today. we'll see you again tomorrow. good morning. very little change on
the weather front in the last 2a hours. for most of us, once again it is to be a pretty cloudy day. the south east and a different story. across the southeast this morning, it is clear. temperatures dipped down to minus six. the air is coming off the continent. try and cooler air. for most of the uk these south—westerly winds dominate. while they are sitting across the uk. frost in the south—east. let's see what is happening through the course of this morning. not a lot of change. the south eastern portion of the country will remain funny. very little in the way of cloud, i suspect, all the way from cornwall and devon, the isle of wight and up to norwich we are expecting
sunshine. really chilly. look at these temperatures. to the north of that, the cloud starts across the midlands and wales, northern england, northern ireland. across scotland, these areas, northern scotland, these areas, northern scotland, inverness, aberdeenshire, perhaps some sunshine and temperatures could exceed 10 degrees. because the higher pressure on top of us is not budging and doing much, the weather will not do much. it stays cloudy across much of the uk. the cloud will persist and the uk. the cloud will persist and the mild weather, where we have that gentle stream of air coming off the near continent, it will stay cold and frosty for places like portsmouth, london, and just about into norwich as well. tomorrow, more of the same. the weather is stalled. a few glimmers of brightness in the north—eastern areas of scotland. maybe in the north east of scotland cloud will break up from time to
time. on thursday it will feel less cold in the south. temperatures back up cold in the south. temperatures back up to cold in the south. temperatures back upto8 cold in the south. temperatures back up to 8 degrees. the sliver of sunshine will probably shrink as we go into friday. it really is ready cloudy through friday may maybe one oi’ cloudy through friday may maybe one or two spits and spots of drizzle. temperatures not changing much. as we head into the weekend, high—pressure is in charge. france may come oui’ high—pressure is in charge. france may come our way next week. goodbye. —— front. hello. it's wednesday. it's 9am. i'm victoria derbyshire. welcome to the programme. borisjohnson says countries are "queuing up" to sign free trade deals with britain when it leaves the eu. the foreign secretary's optimistic assessment comes as eu leaders prepare to give their verdicts on theresa may's brexit speech. we'll have the details. we have an exclusive report from a rescue ship in the mediterranean where thousands of migrants risk their lives to reach europ. we're going to come to you. stay