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tv   BBC Business Live  BBC News  June 16, 2017 8:30am-9:01am BST

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this is business live from bbc news with alice baxter and rachel horne. cash stops the crisis for now. greece gets more bailout money to stop it defaulting on its massive debts. live from london, that's our top story on friday the 16th ofjune. there's still no clear agreement on debt relief for now. so is the greek government right to call it light at the end of the tunnel? also in the programme... after the biggest recall in the history of the car industry, could faulty airbag maker takata be about to file for bankruptcy? we will keep across all market movements for you. european shares open on a positive note following thursday's losses. and we'll be getting the inside track on a tumultuous week for the uk's brexit
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negotiations and look at where the new government goes from here with our business editor, simonjack. we usually ask you a twitter question, but today the founder of amazon has one for you — what should he do with all his money? jeff bezos has posted a request for ideas from the public for philanthropy inspiration — what advice would you give? just use the hashtag #bbcbizlive. good to have you with us on business live. we start in greece, which has edged back from the brink of financial collapse once again. late on thursday — after months of wrangling — european finance ministers, together with the international monetary fund, finally agreed to give athens its latest slice of bailout money. and there's a hint it could get some relief from its crippling debt mountain next year. let's show you the details. greece will finally get this —
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8.5 billion euros — part of an 86 billion euro bailout plan agreed in 2015. it is the third it has had. it will come just in time, as greece faces 7.3 billion euros of debt repayments, due next month, which it wouldn't have otherwise been able to afford. its total debt now stands at more than 337 billion euros. to put that in perspective, have a look at this. the red is greece's debt level over the past decade. the grey is the size of the economy, everything the country produces. the debt is currently some 180% of gdp one of the highest levels in the world, and a number athens has struggled to cut. that's why greece has been insisting on debt relief, which may
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now happen next year. imf boss christine lagarde says a write—off is the only way greece will ever get back on its feet, and has been refusing to get involved without it. german finance minister wolfgang schaeuble has been amongst those insisting the debt must eventually be repaid in full. the chairman of the eurozone finance ministers‘ group is optimistic there could soon be an end in sight. overall i think this is a major step forward, i commend the euro group institutions, the greek authorities and foremost of course the greek people for their intense efforts and resolves. we are now going into the last year of the financial support programme of greece, we will prepare an exit strategy going forward to enable greece to stand on his own feet again over the course of next year. thanos vamvakidis of bank of america merrill lynch warns
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that the details of the deal are still vague. i think the agreement is a compromise, which is the best that we could have hoped for given all the constraints. but it is not the final solution. there is a broad understanding that debt relief could be required, but it is another kick of the can down the road. so you do not think we will see agreement for a haircut, for a chunk of debt to be written off? you think it is more extending the payments? this is exactly what they are discussing, depending on the physical performance and economic growth. they have to agreed to maturity extension to allow greece to eventually repay this debt. we are talking about maturity extension for between zoo road to 15 years, this is the discussion. —— zero to 15 yea rs. is the discussion. —— zero to 15 years. a is the discussion. —— zero to 15 yea rs. a lot is the discussion. —— zero to 15 years. a lot of it depends on your
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long—term growth assumption, this will affect the numbers. what will be the assumption on the interest rate you will be paying on these loa ns rate you will be paying on these loans also. this is what they are discussing, not a haircut. it still has to be approved by a number of european parliaments?” has to be approved by a number of european parliaments? i don't expect any problems. they require the participation of the imf. some good news from the deal is that the imf will participate with a so—called stand—by arrangement, which does not include any money before a final deal on the debt. do you feel there has been softening of the stance towards greece because of brexit? seeing the uk leaving has perhaps made yourfinance seeing the uk leaving has perhaps made your finance ministers think that we do not want another country to leave? not really. ithink, rightly so, they have kept these issues separate. if anything, i think the creditors were tough on greece, who were to approve measures for the next five years and guy on fiscal targets for the next few
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decades without actually getting a final answer on debt relief. this is com pletely final answer on debt relief. this is completely separate. that was a representative from the bank of american merrill lynch. let's take a look at some of the other stories making the news. tesco, which is one of the world's biggest supermarket companies, appears to be cementing its recovery here in its home market of the uk after sales growth beat expectations. in the three months to the end of may — like for like sales rose by 2.3%. it did less well abroad. the firm will face shareholders later today, who are expected to query a pay deal awarded to the firm's chief executive. the chinese bike—sharing start up mobike says it has raised $600 million to help fund its overseas expansion. since its launch last year, the firm has rolled out its brightly coloured bikes in china and singapore. it hopes to be in 200 cities by the end of the year. us authorities are moving to seize a picasso painting, an apartment in manhattan, and rights to a film as part of a global money laundering case. the us alleges high—level malaysian officials stole more than $4.5 billion from the country's
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economic development fund. the japanese company behind the biggest recall in the history of the car industry appears to be on the verge of bankruptcy. about 100 million takata airbags have been recalled so far because they can rupture with deadly force. most major car—makers have used them at some point. rupert wingfield—hayes is in tokyo. ruppert, tell us what is the latest? we have heard that shares have been suspended on the stock markets, could it be the end for the company? it certainly looks like the end for the company in its present form. it has been reported from several different sources that takata will file for protective bankruptcy both here injapan and in the united states sometime next week. that
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would pave the way for it to be taken over would pave the way for it to be ta ken over by would pave the way for it to be taken over by an american company, key safety systems,, the preferred bidderfor takata. this key safety systems,, the preferred bidder for takata. this is key safety systems,, the preferred bidderfor takata. this is the end ofa bidderfor takata. this is the end of a very long—running saga dating back to 2008 when these records began because of faulty inflator is inside takata made airbags. the recall has grown and grown and grown and, with it, potential liabilities for takata have and, with it, potential liabilities for ta kata have ballooned and, with it, potential liabilities for takata have ballooned to an extraordinary extent, 100 million records, perhaps 8 billion us dollars worth of products that they will have to may, essentially, for free, which is driving the company into bankruptcy. thanks. let's stay in the region where asian stocks were mixed, with shares injapan advancing, the nikkei rose to a one—week closing high. we also saw the yen remain near a two—week low against the dollar after the bank of japan left monetary policy unchanged as expected even as the federal reserve signalled further tightening. and that more hawkish tone meant we saw treasuries fall and gold
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retreat for a third day. so overall a steady performance in asia on friday — stocks seemingly taking the resumption of the us tech rout overnight in their stride meanwhile here in europe shares open on a positive note following thursday's losses. the ftse100 in london is currently up the ftse100 in london is currently up to 0.36%. and michelle fleury has the details about what's ahead on wall street today. president trump is expected to announce a shift in us policy towards cuba, possibly as soon as this friday. watch out for curves on american companies doing business with the cu ban american companies doing business with the cuban military —— watch out for curbs. and also tighter rules on travel to the island. it will be interesting to see how us businesses react. since 0bama loosened the embargo on cuba, several us airlines
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have daily flights there. will this dampened demand? the ceo of the marriot hotel group has said it would be exceedingly disappointing to see progress made in the last two yea rs to see progress made in the last two years between the us and cuba halted and reversed. meanwhile us agricultural businesses may be disappointed as they had hoped to export more american agricultural and food products to the country. on the economic front, watch out for the economic front, watch out for the latest survey on consumer sentiment from the university of michigan and housing starts from the month of may. joining us is jane foley, senior currency strategist at rabobank. thank you for coming in. we will start with interest rates, lots of big decisions this week. let's look at the uk. it has held them, but three members of the eight voted to increase? they did. that is interesting given the economic data
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we have had recently? it was a surprise for the market. looking at what the market is implying, yesterday the market had suggested that the bank of england would not hike interest rates to perhaps 2019. so to suddenly have three committee members voting for an interest rate hike took the market by surprise. my view, and i am an effect strategist, is that this might be about the pound. looking at what the bank of england has said for a few months, the inflation that has been coming through in the uk economy, which is very high, 2.9% each year, has been because of the weakness of sterling, which fell quite dramatically on the back of the referendum result last june. and because sterling has been weak, prices of goods such as food and energy, almost anything to nominated in another currency, has been going up and driving our inflation. the bank shot across the bows, which should mean that if the
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market is beginning to think the bank could hike interest rates, there might be less selling pressure. given those inflationary pressures you describe, if you look into your crystal ball, what do you see happening with regards to rates? 0ne of the most hawkish members of these eight people that decide whether or not the bank will raise rates, kristin forbes, is due to leave soon, she has been pushing bits for a while? she is due to leave at the end of the month and there will be two seats left on the committee. we don't know who will take them and whether they will be biased towards making change, or increasing rates. why the market thinks the banks will not hike interest rates for a few yea rs not hike interest rates for a few years is because of the type of inflation we have seen. as i have described, it is not the sort of inflation that is because we are all rich and demanding more, that is the sort of inflation we would like. u nfortu nately sort of inflation we would like. unfortunately wage inflation is very low, wages are rising a lot less
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than inflation, meaning we are poorer. we have seen very poor results in retail sales, meaning economic growth will be great as a consequence. inflation we have seen is acting in the same way as a tack site. if you saw an interest rate hike it would make is even pleura. acting in the same way as a tax hike. we do not think they will hike but they want to stabilise the plan. in the us, interest rates increased as expected but it still surprise the markets? yes, the us central bank has adjusted for a while they would hike interest rates injune, and they did, but similar to the uk, wage inflation is relatively low. again, meaning that demand type of inflation is not necessarily there, it is very moderate. what the market thought the federal reserve would do is hike interest rates because they said they would but then maybe signal they would do less further out, but they did not, they set out
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from the same area as before and said we will hike interest rates again, probably at the end of this year and maybe three times next year. the market was surprised by that. jane, you will take us through papers ina jane, you will take us through papers in a little while. thank you, jane. still to come... we'll get the inside track on the big business stories of the week — inlcuding the uk's brexit plan — with our business editor simonjack. you're with business live from bbc news. in an effort to help businesses grow, hsbc has today launched a £10 billion fund to support small and medium sized businesses in the uk. joining us from the london stock exchange is ian stuart, chief executive of hsbc uk. many thanks for joining many thanks forjoining us. tog us through the aim of this? this is the
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fourth fund that we have launched. £10 million which we hope smes will ta ke £10 million which we hope smes will take advantage of. it is notjust for hsbc customers. it is for all small and medium—sized businesses, spread regionally. for every corner of the uk there is a fund to access. we genuinely hope it will give businesses the oxygen to grow and hopefully do more overseas with export as well. this is a good time for businesses to borrow money when interest rates are low. but we were just speaking to jane a moment ago about bank of england committee members possibly trying to move towards an interest rate hike at some point in the nearfuture. might that mean less demand for these loa ns ? that mean less demand for these loans? ijust caught that mean less demand for these loans? i just caught the that mean less demand for these loans? ijust caught the end of that interview. what was coming across is, is there a genuine interest for interest rate rises now? there will be very little chance of a rate
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increase this year. i think it is still a great time to be borrowing money. i think money is as cheap as it ever has been. we help small businesses will take advantage of it and keep pushing forward and help the uk economy. no doubt smes are the uk economy. no doubt smes are the backbone of the uk economy. this is really important to support them through what is unchartered waters over the coming weeks and months. you talk about unchartered waters. in this post brexit environment, do small and medium—sized businesses need extra handholding ? small and medium—sized businesses need extra handholding? we are here to help take advantage of the opportunities. a lot of customers talking about exporting, who maybe have not exported in the past. we understand that taking that first step is a big step. 0urjob is to try to help customers take advantage of some of the markets, especially outside the eu, where there are genuine opportunities. many thanks, iain stewart.
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you're watching business live — our top story... finance ministers from the eurozone and the imf had a —— have agreed to give greece another multibillion—dollar bailout. there was no clear answer about whether athens will get debt relief. a quick look at how markets are faring... they have been open for a fair while. in europe, we can see they are closing the week on a positive note after the losses we saw on thursday. the ftse100 index in london still up 0.34%. that follows the positive trend in asia overnight. and now let's get the inside track on all the big business stories of the week. it was the first week of britian's new government and there have been several developments about the impact of the uk's departure from the european union. and on the other side of the atlantic the us
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federal reserve increased the cost of borrowing. our business editor simon jack is here to pick over it all. morning. let's start with the uk and brexit. we were expecting to hear philip hammond speaking last night in the mansion house but that was cancelled because of the dreadful tower fire cancelled because of the dreadful towerfire in london. what were we expecting to hear from towerfire in london. what were we expecting to hearfrom him? towerfire in london. what were we expecting to hear from him7m towerfire in london. what were we expecting to hear from him? it is a week since the uk election. that election was called so that the prime minister theresa may could get a mandate, strengthen your position, to deliver the kind of brexit she had promised. we are out of the single market, the customs union, no deal is better than a bad deal, that is what she said. she fell short of a majority and has to go into talks with the dup, the northern irish party, to try to get a majority. are we going to get that kind of approach now when the brexit negotiations start on monday? in a
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way it was a shame we didn't hear from philip hammond. 0f way it was a shame we didn't hear from philip hammond. of course, we com pletely from philip hammond. of course, we completely understand why he cancelled it. he is thought to favour a softer, if you like, soft and hard, not useful but we understand what they mean, he favours a more conciliatory approach to europe, a more collaborative approach, and possibly looking at things like reopening questions, is there a way we can stay in the customs union? that will be interesting because the northern ireland party, that border would cause a lot of friction going to and from macro if you had to open every vaniteuk customs checks. that would bea vaniteuk customs checks. that would be a big problem. we are trying to figure out what kind of approach we are going to get from this government. negotiations start on monday. it is not a brilliant position to start from. we don't know what our starting position is and what our objectives are. the clock is ticking to that is the thing. you trigger article 50, then call an election which you think you're going to win, and is a bit
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like going to the front door, ring the buzzer and runaway! brussels are waiting for us to come back around the corner. one of the areas of the economy there are questions over is euro clearing. what is it and why is it so important? this is one of the bits of plumbing of the financial system. buyers and sellers by derivatives. financial insurance. it isa derivatives. financial insurance. it is a massive business. there is 900 billion euros worth trading day. some people say it supports up to 85,000 jobs directly and indirectly. the europeans, the european union, have always wanted this huge business the nominated in europe to be done inside europe. this is too big an industry for us. it is too big an industry for us. it is too big for us to be conducted outside
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the eu bloc, they said. if they decide the matter trading is systemically important, which it is, they either want direct oversight of it, have their monitors monitoring it, have their monitors monitoring it, or they will force it back into the european union. that is what they came to have a look at. none of they came to have a look at. none of the customers that use this clearing house want this to happen. you get a big economy of scale if you have this deep pool of trading. you have to put up less margin. a bit in the kitty of something goes wrong. the bigger the pool, the less margin as a percentage of the business you do. they say it with drive up costs. it is one of the big titans of city trading, sir michael spencer, he said it was a political land grab, dressed up as concerns about financial stability. not holding back at all. bear in mind of course that this also happens in new york. a lot of people think of the eu and
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the uk start taking lumps out of each other, it would be mutually destructive and many big traders will just move destructive and many big traders willjust move to new york. that doesn't sound good. we will leave it there. simonjack, thank you. the duke of york has told the bbc that uk businesses face several years of uncertainty and upheaval due to brexit. but prince andrew, a former uk trade on by, said businesses should make the most of new international opportunities. the prince has been in singapore to attend a conference. he was also hosting pitch the palace, a programme he started to support. entrepreneurs from the uk and all around the world. we have been concentrating on 27 countries. if you take that as an internal market, there is an external market that is a lot bigger. and many businesses haven't got over that garden fence, to some
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extent. and in my experience recently, businesses that look over the garden fence have gone, the grass is not quite as dark and unforgiving as you might expect, and actually getting over the fence, there might be some fresh grass out there. what other business stories has the media been taking an interest in? jane has returned. at the top of the programme we usually give out our twitter question. this time we give you jeff bezos‘s twitter question. 6 billion short of being the world's richest man. he has tweeted asking people what he should do in terms of philanthropy. what tweets have we got? we have had aa what tweets have we got? we have had a a few. jeff bezos seven best in independent film—making. the studios are churning out cartoons and creativity is indy. another one here, give it to the people of
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g re nfell tower here, give it to the people of grenfell tower and help them rebuild their lives. a reference to that tower in west london that burnt down. in respect of that last response, that rings a tune with whatjeff bezos himself has said. he is looking in the longer term. what he indicated is in respect of philanthropy, you would perhaps like to look at the urgency. when picchu —— people really urgently need help. that rings true with the last tweet. when there are disasters, people wa nt to when there are disasters, people want to respond immediately. that is when they will. it is having the organisation and structure in place to ensure donations go to the right place and i used best? it is interesting. this newspaper article says he is less than 6 billion away from being the world's richest man. just a mere 6 billion! there is a
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lot of pressure within america for a very rich people to setup bodies, to read a script —— to redistribute their wealth. bill gates, warren buffet, the top five billionaires, giving away a lot of their money. if he is going to give away his money, you don't want him to give it to bitcoin, do you?! bitcoin has had a bad week. the worst week since january 2015. there are a number of factors. i'm sure your viewers are aware that this has been a very difficult week for a technological stocks. that has probably contributed to some of the pressure on here macron bitcoin as well. 0ther on here macron bitcoin as well. other factors, a on here macron bitcoin as well. 0therfactors, a bill on here macron bitcoin as well. other factors, a bill through parliament saying they need more regulation. that could take away some of the advantages will stop i'm going to have to pause that and what it back in slow motion. thank you. that is it. have a great weekend. good morning. it is great to turn a
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very warm if not hot over the weekend for some of us. it will not be the case everywhere. we have got a weather front situated towards the north and west of the uk. that will bring in more cloud and outbreaks of rain. for the bulk of the uk, this area of high pressure feeding in much warmer airfrom iberia. through the course of this morning, drizzle clearing from northern ireland through west wales. into the afternoon it will stay tramp —— damp and chizzy across the north of scotland. hot over the mountains towards aberdeenshire, temperatures around 20 celsius. some breaks in the cloud developing in northern ireland and across the east of the pennines. there will be some sunshine this afternoon. and across southern parts of england as well, some sunny southern parts of england as well, some sunny spells. where you have the sunshine coming through, temperatures getting up to 23
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degrees. through this evening and tonight damp and drizzly weather continues in the far north—west of scotland. clear skies elsewhere. a warmer night and it was last night. those temperatures not dropping much below 16 or 17 degrees. into saturday, lots of sunshine in england and wales. patchy cloud developing in the south—east. again, it is the north—west of scotland that will stay quite cloudy. rain and drizzle continuing to feed into the western and northern isles. that is where it will be cooler. elsewhere those temperatures ramping up. 25 to spidey seven. —— 25 to 27. high pressure doesn't move very far as we go into sunday. it dominates the weather across the bulk of the uk. the north—west corner, cloudy, wet. hotter still on sunday. temperatures getting up to 30
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celsius in the south—east. if you wa nt to celsius in the south—east. if you want to go to the coast, these are the sea temperatures. quite refreshing in some of that heat. also bear in mind uv levels. they will be very high. particularly in southern areas. high and moderate in scotla nd southern areas. high and moderate in scotland and northern ireland. hot on monday across wales and england. temperatures up to 30 celsius. scotla nd temperatures up to 30 celsius. scotland and northern ireland, 18 degrees with sunny spells. 0n the pleasa nt degrees with sunny spells. 0n the pleasant side. hello, it's nine o'clock, i'm joanna gosling, welcome to the programme. the dead and the missing and now the search for answers as police warned they may never be able to identify all the victims of the groenefeld fire. iam mark fire. i am mark lowen outside groenefeld tower, where it is —— weather continued attempts to identify those
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inside and there are fears that the number who have died may rise to 60. mohammed alhajali was the first person who died in the blaze on wednesday to be named — he was a 23—year—old syrian refugee who had fled the war for a better life here. we are going to be talking to his brother, hashem, and abdulaziz almashi, his best friend. we will bring you all the latest updates from the scene of the fire throughout the programme.
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