tv BBC Business Live BBC News June 1, 2017 8:30am-9:01am BST
this is business live from bbc news with ben thompson and ben bland. to for the price of one! can the european union and china create their own alliance — cutting out america? as eu and chinese leaders meet in brussels they're looking to counter president trump's stance on trade and climate change. live from london, that's our top story on thursday 1st june. so what would a deal between the eu and china look like — and what role for india in the middle? we'll have all you need to know. also in the programme... in from the cold. pakistan's economy rejoins the emerging markets index — a sign that stability could be returning to the turbulent nation. and european markets are looking like this at the start of a new month, but the same worries for them
persist. and divide and rule — we get the inside track on the business that's split the world up into 57 trillion three—metre squares, each with its own code... it's an innovative approach to mapping that's being taken up by the likes of the red cross and deutsche bahn. don't forget, we always want to hear from you about anything on the programme — it's easy to get in touch, just use the hashtag #bbcbizlive. welcome to the programme, stay tuned for that inside track, it is fascinating, this three metres square here has its own unique code, we will explain that for you later. the eu and china will attempt to deepen ties at a summit later. there is concern among some about us president donald trump's stance on trade and climate change. chinese premier li keqiang will meet european council president
donald tusk and the head of the european commission jean—claude juncker. chinese premier li keqiang will meet european council president they're looking at how they can counter donald trump's policy of putting america first. trade in goods between the eu and china is worth well over 1.5 billion euros a day. the eu is china's biggest trading partner, while china is the eu's second—largest trading partner after the united states. it all sounds complicated, but crucial to this negotiation. the eu is worried about industrial overcapacity in china — most notably in the steel sector. china invested four times as much in the eu last year as european companies did in china. meanwhile, eu investment in china fell for the second consecutive year — to 7.7 billion euros. chinese and eu leaders are hoping to agree a joint statement on the paris climate agreement, saying it is "an imperative more important than ever".
that of course is widely seen as a rebuff to the us, as president trump looks set to announce the us will withdraw from the deal. with me is dr linda yueh, fellow in economics at oxford university. ben was running through some of the issues there, if they are looking to doa issues there, if they are looking to do a deal, do you think there is enough that unites them, enough common ground to override the point of division? in terms of climate change it would be easy for them to come to an agreement because they arejust affirming come to an agreement because they are just affirming what they have signed up to, the paris climate change are called, so i think anything that president trump looks like he is pulling away from, for them it is an easy eu china alliance to form because they are giving nothing else away, they have already signed up to it and trump is expected today at 3pm new york time to pull out of the paris accord, so i think that is one area. there are of course areas where it will be
harderfor of course areas where it will be harder for them of course areas where it will be harderfor them to come of course areas where it will be harder for them to come to an agreement, for instance the eu and china agree and investment treaty, there is an imbalance in terms of investment, china invests a lot in the eu but china protects it a economy more than the use of the europeans don't get to invest as much there so on those kinds of points they don't quite see i die. but i should add they are hoping to make a breakthrough there because that would be the precursor to a trade agreement and if there was a trade agreement and if there was a trade agreement and if there was a trade agreement between the eu and china, the biggest trade bloc in the world and second—biggest economy, it would be the biggest free—trade area in the world. if china and the eu to reach a joint statement on this in what some are saying would be a rebuff to donald trump against his plan, as everyone expects, to pull the us out of the paris climate deal, would it do any harm to america economically, or do you think that would be overstating things? i think economically what trump is doing, putting america
first, is likely to have a global impact for america, also likely to have an impact around trade if you sta rts have an impact around trade if you starts to hint at the way multinational american businesses do supply chains, for instance. but i think for the most part things like where trump is focusing in terms of trade and protectionism, the feeling is again with the chinese and european sat it is harmful and wouldn't be hard for them to come out with a statement that they reaffirmed their opposition to protectionism, something which the american opposition to preclude it from being in the g—7 summit, which was just about a week ago, so again easy with things where you don't have to put any money on the table, you can just say, have to put any money on the table, you canjust say, trump is not helping the world economy, doing things that we think are not responsible as the world's biggest economy, so here are some easy ways toa economy, so here are some easy ways to a firm that we will take this forward. of course it is symbolic
but sometimes in trade and global lines symbolism does matter and i suspect we will see a lot of that today in stead of a lot of concrete details. linda, thank you for that, dr yeuh there from oxford university. let's take a look at some of the other stories making the news... china's manufacturing activity slowed unexpectedly in may for the first time in nearly a year. figures show that companies cut more jobs as demand weakened and falling prices hit profits. the findings contrast sharply with official readings earlier this week which showed steady manufacturing growth. the controlling shareholder of the world's largest meat—packing company, jbs, has agreed to pay a record $3.2 billion fine for its role in brazil's corruption scandals. j&f investimentos will begin payments in december and will have 25 years to repay the debt entirely. the fine exceeds the $2.6 billion imposed on brazilian building firm odebrecht. shareholders in exxon mobil have backed calls demanding the company assesses the risks
from climate change. the plan, proposed by investors, was supported by over 62% of those eligible to vote. it will mean exxon has to share more information about how new technologies and climate change regulations could impact the business and profits at the world's largest publicly traded oil company. uber says its head of finance, gautam gupta, is leaving the company. it comes as the taxi firm said first—quarter losses narrowed substantially from the quarter before, finally putting it on a path to profitability. mr gupta will leave injuly tojoin another startup in san francisco. he's just the latest high—profile executive to leave uber. let's have a look at what is happening on the bbc business live page, lots of news coming in including this story, as you can see, aboutjimmy choo, i don't have
it in front of me so i can't say what it shows! here it is, releasing trading update ahead of the agm later today. we promise you it is live, these come in and we see them as you see them. excellent progress, telling us there is strong growth with men's shoes the star performer, also fragrances performing particularly well, that is there at jimmy choo, which has its agm later today. pakistan has become the latest economy to join the msci emerging markets index — putting them alongside economies like india, china and brazil. mariko oi is in singapore. this is quite a landmark moment, talk us through the significance of it? indeed, the country has long been known as the basket case of south asia but now it is being called the new asian tiger and, as ben mentioned, it has rejoined the emerging markets index, it was
kicked out years ago because of all of the political and terror related issues, and in fact the pakistani shares have actually been outperforming the index in recent yea rs, outperforming the index in recent years, despite all those troubles, the continuing troubles. it is basically because of good corporate governance reforms as well as strong domestic consumption and china for one have been investing billions of dollars in the country, so definitely a landmark moment for the country. as always, really good to see you, thank you so much. let me show you what the numbers are doing, you saw the decay at the bottom of the screen, but new month, same old worries, trump, brexit, and the election, greece's debt worries, all that on the minds of investors. but ending a four—day losing run. in the us yesterday, slightly different picture on wall street, banking shares saw the biggest falls over
worries the recent economic optimism in the united states off the back of that trump pump, as it has been called, might be fading, more on that shortly. in the uk, the month of may was decent for the ftse 100, it saw of may was decent for the ftse100, it saw its best month this year despite falling commodity prices, and remember it is the weak pound helping to boost how earnings look on the ftse100, that is why it is doing pretty well. but lots of uncertainty still to come in the form of elections all over europe. no—one quite willing to call what happens next, probably a safe choice. more on that shortly with our markets guest, who is standing by, but let's head to the us, where samir hussein has an assessment of what we move the market on wall street. us paints and coatings maker ppg industries have until thursday midnight to either file papers with dutch regulators detailing its plans to launch a formal bid for the paint maker akzo nobel, or walk away
for at least six months. those plans will also include the actual bidding price. earlier this week dutch regulators denied ppg industries' request for a deadline extension. the us commerce department will likely report that construction spending is up 0.5% in april from a 0.2% fall in march. and finally, auto—makers report may us car and truck sales, with investors watching to see if the industry can snap a two—month streak of declines. a third down month in a row could put pressure on detroit auto—makers to order more lay—offs and production cuts. simon derrick, chief markets strategist at the bank of new york mellon joins us now. nice to see you. all this data from china, two differing pictures depending on which bit you choose to go with. and i think the weakening
economy story is the central one here, the latest manufacturing numbers confirm that. over the course of the last month or so the chinese markets have been reacting very negatively to this, you had seen the equity markets down, moody ‘s downgraded china last week. over the last few days, something curious has happened, there has been talked about some of the big state banks in china, some talk about the national tea m china, some talk about the national team stepping in to support the equity markets, equities are up, and it feels as though what we are seeing is an attempt to support markets, an attempt to reconfirm that they are there to provide stability. whether that is possible in the long—term, given the fact that we have this underlying wea kness that we have this underlying
weakness and underlying concerns in the chinese market, tough to say, but clear that the authorities want to try and provide support. let's talk about the fed briefly as well because we also talked about what happens next and it is interesting if you look at what trump has been doing, there was all of that excitement which has faded away and it is whether they can put a floor under this. yes, fairly anodyne reports on the us economy did not sound full throated. the question is now, are we going to have a second rate hike before the end of the year? given what we have heard from the fed, it suggests maybe it is open to question. if that is true, we may be talking about that. there has been talk about it being a done deal but the markets have got ahead of themselves? from the perspective of themselves? from the perspective ofjune, guidance is so clear it is ha rd to ofjune, guidance is so clear it is hard to argue anything else. the december rate hike, maybe the market
has got ahead of itself although governors have been given that guidance and i think they will back of ita guidance and i think they will back of it a little bit. good to see you, i know you will talk us through some stories later including the climate change issue that is on everyone's agenda at the moment, whether trump and the us will ditch it, so we will talk about that later. still to come, mapping out the world, three words at a time. we will meet the firm that says it can pinpoint anywhere in the world with just three words. the man behind it is here to explain how it works. you are with business live from bbc news. we are going to talk house prices. they continued to slow in may, according to the nationwide. it is the third month in a row that prices have cooled. overall prices are rising at 2.1%, the slowest rate of growth in four years.
robert gardner is nationwide's chief economist and hejoins us now. last time i think i spoke to somebody about house prices, they said you can't be too much into month by month. is this now a trend? if you look at the annual house prices, things have soft and a little. i would emphasise it is probably a little bit at this stage. if you look at the annual rate of house price growth in recent years, it has largely been confined to a three to 6% band. we have just moved outside that. only a little below. robert, we should discuss the election. all sorts of issues on the table as we approach the vote next week. housing is clearly a big issue for people trying to get on the ladder, but also for people on it.
your assessment? the key thing is the supply side. if you look at the stock of homes on the market, it is still close to a 30 year low. in the last few years we have seen the number of homes being built consistently lagging behind increasing population. whoever wins the election, a key focus has to be how to increase supply on a sustainable basis. up or down next? what happens next? we think the economy will probably slow a little as the squeeze on household budgets intensifies. there is support for a house prices from low interest rates and the lack of supply. overall house price growth will probably around 2% and activity a little bit wea ker around 2% and activity a little bit weaker from where we are at the moment. thank you. robert gardner. you can read more about that on the business life page. lloyds banking group saying it has completed the
acquisition of mbna, the credit card business. that gives them a share of 26%. full details on the website. you're watching business live — our top story... can the eu and china create their own alliance, cutting out america? there is a lot of concern of late about donald trump's plans to ditch the paris climate accord. eu and chinese leaders are meeting later looking to deal with worries on donald trump's stance on climate change, and trade. if you live in a city, town or village, your postal address is probably something you just take for granted. but millions of people live in communities so remote or so un—industrialised, that there simply is no address system. how do you find it?
that's where our next guest comes in. he runs an alternative mapping company called what3words. the aim is pretty ambitious — to completely revolutionise the global address system. it aims to do this by splitting the globe into 57 trillion three metre squares, each described by a unique combination of three random words. it's already been taken up by postal services in five countries, including mongolia, djibouti and ivory coast. emergency services around the world are also using the system to pinpoint people with no addresses. chris sheldrick, is the founder and boss of what3words and joins me now. welcome to the programme. we sort of rent through how it works. you can probably do a betterjob at! it all rests on three little words to map out a small area that is unique to that footprint. i was looking on it earlier. depending on where we are in this building... how does it
work? it is a global address system. the idea is to make a fast, simpler alternative to gps coordinates, the only other thing available everywhere. nobody wants to remember an eight digit longitude prize macca latitude. we have divided the world into three metre squares. there are enough combinations of three words. you can go around the world and name everywhere with something simple. out there in english? we do this in 14 out there in english? we do this in 1a languages. it means if you live ina 1a languages. it means if you live in a country where there just is no real address system you can use, what will you put when you order something online? when you call emergency services? you look up your three word address and you can use it for any of these things. how do you make money? the what3words app is free. we licensed businesses.
courier companies, postal services, navigation apps, car companies, anybody who wants to use three word addresses in bulk to improve their efficiency, we charge them a licence fee. ups say that for each mile they get lost every day, that costs their business 15 billion —— $15 million a year. if companies can benefit, that is who we charge a licence fee too. who would use it? in many developing countries it is vital because there are some honey parts that don't have an address system. it is also releva nt an address system. it is also relevant in developed places. i lived in dubai for a long time. struggling with an address system. i would describe my address to the postman. that was how people found you. ican postman. that was how people found you. i can see the use it there. what he is in the centre of london? that is exactly it. there are also
some places you don't think would have a problem. in london, if people come to our office, you put the postcode in and it takes you to the 40 postcode in and it takes you to the a0 flyover. people call and say, i can see you down there. if you think about where we are going with cars which may not have steering wheels, it is kind of ok, you go, it's a little bit inaccurate but i will drive on further and i will find it. we should have a way to reference anywhere very precisely. no delivery driver should be getting lost trying to find your business. people are losing so much time and money over the developed world with this problem that could be so easily fixed. that is why is three metre square. it is very precise? absolutely. we wanted to make squares as small as possible but make sure we didn't run out of words. how did you get into this? how did you get started?”
words. how did you get into this? how did you get started? i used to work on the live music business. every day i had to get people to somewhere new in the world, whether at wembley or an italian mountainside. everybody used to go, i'm lost! gps coordinates were a total no—go. i thought, if i can make this so easy that anybody from a child to a grandparent to a musician can use this, this would be globally valuable. thank you for talking's through it. really fascinating. best of luck with it. now take a look at this. that's the tarmac of an airport in sri lanka, which has been dubbed the world's emptiest international airport. it cost about $1 billion to build, funded by loans from china. but why is it hardly in use? our team went there, to mattala rajapa ksa international airport, to find out. this is sri lanka's second
international airport after colombo. it is in the south of the country and opened in 2013. i'm told there's not a whole lot going on here. let's take a look. flybe is the only airline that operates. how many passengers do you think? actually per day we can say about 50 to seven beast —— 75% depart from this airport. what other business stories has the media been
taking an interest in? simon derrick, chief markets strategist, bank of new york mellon — is joining us again to discuss. simon, we have been talking about this climate change change of heart by donald trump. i suppose it was a lwa ys by donald trump. i suppose it was always saying all along...|j by donald trump. i suppose it was always saying all along... i think the first thing is, he has always beenin the first thing is, he has always been in there all the way through his campaign and onwards. that doesn't mean we are going to go through with this. there have been campaign pledges not carried out. remember backing off on china and currency manipulation? it is not certain he will say something this afternoon. but it looks likely. there is definite opposition within the white house. we know rex tillerson has obviously got concerns. ivanka trump has made
comments as well. what impact does this have on markets? interesting on the day that exxon tells us the —— they need to be more transparent and look at how climate change affects business. the there are some easy things that can happen for markets. maybe it is an old energy, new energy thing. i think the markets will focus on isolationism. is that the real story? is the us moving towards that? if it moves towards this idea of the eu and china, is that a pro—euro story? that might be interesting. thank you. have a good weekend. that's it from business live today. we'll see you again tomorrow. bye— bye. good morning. today marks the start
of meteorological summer. if you weren't up at a:a0am you would have missed this gorgeous sunrise. look at this. another lovely sunrise here in dorset. lovely beach. a lovely start to the day. for many it has been misty and mikey. as we go through the afternoon there will be sunny spells developing. look at this weather from developing sunny spells developing. look at this weatherfrom developing in sunny spells developing. look at this weather from developing in the north and west bringing outbreaks of rain across scotland and northern ireland. during this afternoon in the south—west of england into the south—east, plenty of dry weather with some sunny spells. pleasantly warm as well. temperatures 2a to 26. more cloud coming into north—west wales, northern england. certainly for the isle of man, a wet afternoon. the rain extending its way into the west and south—west of scotland. fergie to scotland,
staying dry. that rain will move its way in here. gradually the rain will move further eastwards into wales, perhaps north—west england and the south—west. a warm and muggy night in the south—east. temperatures no lower than 1a to 16. fresher further north and west. that fresh air will move its way in across scotland and northern ireland. this weatherfront moving further eastwards towards the south—east of england. the heat really bills. temperatures up to 27, 208 really bills. temperatures up to 27, 20 8 degrees. friday night into saturday, the weather front continues to move. it takes with it that warmer air. a fresher feel as we go into saturday. low pressure in charge. air coming in from the atla ntic charge. air coming in from the atlantic would bring a mixture of sunny spells and some showers on saturday. a fresher day in the
south—east compared to today and friday. those showers in northern and western areas. iron on saturday, mixture of sunny spells and showers. some of them could be on the heavy side. some lengthy sunny spells as well. it will feel fresher over the weekend. temperatures in the mid to high teens. there will be some sunny spells and showers. more details on the website. hello, it's 9am, i'm victoria derbyshire — welcome to the programme. we speak exclusively to two brothers whose father shot dead their mother and sister following years of controlling behaviour. luke and ryan hart, speaking for the first time, say it was an act of ‘total evil‘. it doesn't hit you in one go and then you have to deal with it, it seeps into you and it's just really disorientating. i think for me, there's still a huge amount of confusion because you obviously still try and make sense, obviously you can't make sense of total evil. with just a week to go until the general election —