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tv   BBC Business Live  BBC News  June 20, 2017 8:30am-9:01am BST

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this is business live from bbc news with ben thompson and sally bundock. uk authorities launch criminal proceedings against barclays bank over claims it committed fraud in a deal with qatar at the height of the financial crisis. live from london, that's our top story on tuesday 20th june. the former chief executive and three other ex barclays staff are also facing criminal charges. we'll get the latest from our business editor. also in the programme, setting a course for brexit, the uk's finance minister outlines his vision for britain outside the eu. this is what the european markets
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are looking like. we'll tell you all you need to know for the day ahead. banks down under in trouble as well. some down—graded by moody's. today, as venetians vote to ban the big cruise ships, let us know what you think. are you a fan of a cruise or is it possibly the worst holiday idea that you could even come across? ! use # bizlive. hello and welcome to business live. 7? ?? newsub the former chief executive and three other ex barclays staff are also ba rclays staff are also facing criminal charges. the charge relate to the emergency funding. at the height of the
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financial crisis in 2008 this was. it was at the same time that rival banks, rbs and lloyds turned to the government here in the uk for help, but barclays government here in the uk for help, but ba rclays instead government here in the uk for help, but barclays instead opted to seek money from qatar, the gulf state. there are now questions over how the funds were raised and what barclays offered to qatar in return. let's get the details with our business editor simon jack get the details with our business editor simonjack who is in central london for us. this has been rumbling on for a time. it's interesting to look at the detail. rbs and lloyds went one way, turned to the government, barclays said we are going to ask qatar for money? yes. there are two bits of that transaction and fund—raising in kay far which prompted this five—year investigation. the first was advisory fees that were not disclosed first and eventually it was disclosed at £332 million, that was disclosed at £332 million, that was the amount paid to qatar holdings who supplied the investment
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in advisory fees. there was a question mark over whether that advice was non—existent and this was really just like a advice was non—existent and this was reallyjust like a bung to their new benefactors in the middle east, if you like. the second was a loan that was made from the bank to qatar holdings at around the same time as this investment and the charge there is that essentially the bank was lending qatar money to buy shares in ba rclays lending qatar money to buy shares in barclays bank. lending qatar money to buy shares in ba rclays bank. that's lending qatar money to buy shares in barclays bank. that's what's known as unlawful financial assistance, a big no—no for regulators. the most interesting thing is, this is the first time senior executives have been personally charged with criminal conduct for their role in the financial crisis. now, as you say, around this time, rbs and lloyds were turning to the government, barclays was desperate not to do that and some wild say the sfa may eventually get their man one day when it goes to court, but have they got the right person, because ina way they got the right person, because in a way it was barclays attemptses
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that ousted this person. barclays is considering its position. we are yet to hear from considering its position. we are yet to hearfrom john considering its position. we are yet to hear from john varley, the former chief executive and the other executives. one very important point i should point out, this is barclays plc, this is the holding company that has been charged. it's an operating company which is barclays bank. that has not been charged. that is important because, if ba rclays that is important because, if barclays bank, that is important because, if ba rclays bank, the that is important because, if barclays bank, the operating company, was to be convicted of criminal charges, they would find it very difficult to do business in other areas of the world, including at least 50% of their business in the us in their investment banking business. it's very important, the distinction between the holding company and the operating company. the operating compa ny‘s company and the operating company. the operating company's not been charged. i'm told if they can get a fine in the low hundreds of millions and carry on with their business in the us and barclays bank wasn't charged, they might plead guilty to
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this so they can move on with their lives and start rebuilding the business. they're considering their position as we speak this morning. just a brief word on what it tells us just a brief word on what it tells us about the culture of banking, we know since the financial crisis so much has changed in terms of regulation. what does it tell us about what was happening in that fateful weekend in 2008? yes, about what was happening in that fatefulweekend in 2008? yes, it tells us that the powerful bankers we re tells us that the powerful bankers were well connected to some of the wealthiest people in the world, sheikh mansuhr for example in wealthiest people in the world, sheikh mansuhrfor example in qatar. there are claims from other parties saying they were owed money as well and that rumbles on. they were desperate for the government not to bea desperate for the government not to be a shareholder. if you watched rbs over the last ten years, you will remember the boss there had to forego his bonus year after year because it was government—owned and it was felt the government couldn't sanction big payouts like that, so by keeping the government out of their business, they were able to
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keep paying themselves by industry standards pretty well. thank you very much. we have heard from rogerjenkins, one of the four individuals being charged. he said he'll vigorously defend himself against the criminal charges filed by the serious fraud office. that's rogerjenkins, the first to respond. let's take a look at some of the other stories making the news. the republican house speaker has vowed to complete tax reform this year. paul ryan says president trump and his fellow republicans in congress cannot allow the chance of overhauling the us tax code to slip. it's no longer just about funny faces and filters. snapchat users will be able to watch scripted dramas and comedies after time warner and snap agreed a deal to develop original content. time warner brands hbo, turner and warner bros will also advertise on the platform.
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the deal is reportedly worth us $100 million. tokyo's nikkei finished at its highest level since august 2015 boosted by optimism over the health of the us economy — the world's largest economy. comments from the new york fed chief suggesting that the outlook for the us economy was pretty good. oil prices hitting a new seven month low, as increasing shale production, along with rising output from libya and nigeria undermined opec attempts to cap output. in europe there's a lot going on today not least here in london. bank of england governor mark carney is speaking this morning, with his delayed mansion speech. one to watch after last week's wide spilt on the monetary policy
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committee with three policymakers voting to raise uk interest rates. the pound didn't do much as the first day of brexit talks got under way without too much drama. and as we've been reporting — barclays and four individuals, including former bossjohn varley, have been charged with conspiracy to commit fraud relating to the bank's emergency fundraising during the financial crisis. and, the details about what's ahead on wall street today. here is samira. fedex's shipping company's here is samira. fedex's shipping compa ny‘s bottom here is samira. fedex's shipping company's bottom line will be revealed. investors will be interested on what is coming up looking at forecasts for the new fiscal year and on the cost
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measures. the maker of photo shop will be reporting earnings. its higher demand for software on the cloud will be boosting revenue. and the second largest us home builder will also be reporting earnings, thatis will also be reporting earnings, that is lennar. betterjob opportunities for young people have boosted home sale else. investors will be looking to the spring selling season and what the company expects going forward. joining us is james bevan, chief investment officer at ccla investment management. nice to see you, james. good to be here. whilst we are chatting away, mark carney‘s delivering his speech, this is all ongoing in london at the moment. absolutely. we can see there the governor of the bank of england, just following on from philip hammond, the chancellor of the exchequer, they are all discussing brexit, the negotiating stance. at the same time, we have barclays
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unfolding, a serious fraud office investigation, criminal charges, just gives your thoughts on all of this? a busy day? as a microcosm for ba rclays this? a busy day? as a microcosm for barclays itself, this is relatively old news, and if there is a fine of say £200 million, that's worth around two bases points off capital. this is a bank trading on 0.7 with tangible book value, in other words cheap given that banks tiply shouldn't trade to discount to their tangible book value. can i ask though, four individual bankers are also being charged, john varley one of them to who is really respected... a man of immense integrity, absolutely. he's being charged, criminal charges by the sfo, him and three others? exactly. i want to separate out the extraordinary personal misery mr va rley will extraordinary personal misery mr varley will be feeling on the back of the charges and the fact that he isa man of the charges and the fact that he is a man of immense integrity from oui’ is a man of immense integrity from our position as market commentators and investors where frankly we have to let that go. mr varley has
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retired. where is bay clays? it has ruffly a 5% return. it has an opportunity to do much better. that is why people don't want to sell the shares. that is why the shares are down a bit, not a big reaction? people are saying, it's still sorting problems out from the past. it's not affecting barclays, they have a huge opportunity, shares could go a lot better. let us talk about the other big uk story, mark carney speaking, the governor of the bank of england. we got the interest rate decision last week, no change? quite right. the split was what eve ryo ne quite right. the split was what everyone was looking at; three voting for a rate rise. we are not there yet, of course rates aren't going up, but they're looking to the us where rates are going up, what does it tell us? we might get three more hikes in the us to a peak in the current cycle of around 2% in the current cycle of around 2% in the states and that would be consistent with a climate of really quite low growth and also low
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inflation, so we have this extraordinary situation where we have bond yields falling and equity markets rising. on the face of it that appears odd, if it's correct that appears odd, if it's correct that we have a climate now of sustainable noninflationary growth, we can see bond yields continuing to stay low. we keep talking about rates going up but they are going up to historically low levels, emergency levels, we have to keep remembering we are emergency low levels ? remembering we are emergency low levels? we absolutely are and the uk economy faces many hurdles, brexit clearly is the headline issue but we have a composition challenge, we have a composition challenge, we have an economy that cannot deliver strong productivity growth because it's overly dependent on financial services that not enough manufacturing production is happening. where does the productivity come from? historically it's come because we put more money into the economy. we don't want to have more debt. productivity debt is challenging. that will be a big challenge for the may government. james will be back later to talk about more stories, including his
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ta ke about more stories, including his take on cruise holidays. don't forget that one! lots of comments coming in already on that one, cruising holidays — your idea of heaven or hell. or somewhere in—between! moodies has downgraded i2 moodies has downgraded 12 australian banks. hywel griffith is in sydney for us. talk us through this, they have said in big cities like melbourne and sydney, prices are booming and that is not sustainable? yes, and they have been booming for several years, it's what everyone here in sydney talks about, when will that boom finally come to an end, the bubble burst? moodies weren't expecting a sharp correction. a month ago we heard from standard & poor, they thought things could go south quickly as they downgraded the ratings of the
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banks, so there is concern about how much debt has been carried, about how wages growth is slow and the number of interest—only mortgages being offered by the banks. the australian reserve bank is also worried. we had the minutes of its last meetings two weeks ago, it's kept interest rates low, it's trying to follow things really day—by—day. but everyone expecting some sort of correction. we know already that the prices of apartments have started to cool prices of apartments have started to cool. that's where we have seen a lot of money spent in the last couple of years. thank you very much indeed. still to come: the uk finance minister, philip hammond, has just set out his vision of britain after brexit. we'll be assessing what he had to say right now, as we speak, mark carney, the governor of the bank of england, is in the same place delivering his speech as well. that is the scene live now at the mansion house. stay with us. day two of brexit negotiations —
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and more calls from business to protect their interests. the latest is from the society of motor manufacturers and traders. it says the government needs to make sure there's a transitional brexit deal to protect the car industry. the boss — mike hawes — told us a full deal can't be done quickly. we need a back—up plan. something that gives us part of the customs union, ideally part of the single market so we can maintain the success that we're currently enjoying. we have a trading relationship with over 160 countries around the world. we benefit from some of the existing trade aagreements that the eu already has with europe. what happens with those
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existing arrangements and the new deals that are currently already being negotiated, we really want to see the uk trading and being successful around the world, but not at the jeopardy what we currently have. in his speech today mr hawes will say that a lot still needs to be done. a lot of cars are made in the uk, but they say it is europe that's their priority not necessarily the home market, the uk. if we look at where we are, there is less than 20 months before we leave the eu and we recognise we're leaving the eu. for our sector to be a success we need to have a new arrangement with our biggest market. the chances of doing that in less than 20 months and having to be approved by all the respective parliaments, i think is slim. so we need that back—up plan. we certainly don't want brinksmanship and we don't want to go near the cliff edge without having some arrangement supporting
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us. we are part of the european automotive industry and yes, we are automotive industry and yes, we are a big market, but europe is a bigger market and i have been talking to various member states, organisations across europe and they say the future is more europe than the uk automotive market and that makes sense. the chancellor of the exchequer, philip hammond, has just the chancellor of the exchequer, philip hammond, hasjust been delivering his speech at mansion house. you're watching business live. our top story, barclays bank and four individuals including its former chief executive, john varley, have been charged with conspiracy to commit fraud. the charges relate to the bank's emergency fundraising during the financial crisis in 2008 and agreements between barclays and qatari investors. ba rclays shares down
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barclays shares down a touch on the news. all eyes are on the uk's finance minister today as he outlines his vision of britain after brexit. the chancellor of the exchequer, philip hammond has been delivering his famous mansion house speech in london — one of the biggest set—piece events of britain's economic calendar. mr hammond is hoping to calm fears of an abrupt shift in relations between the eu and uk. he acknowledges the uk will leave the single market and customs union, but insists it should reach a deal that allows british goods to flow without tariffs, delays and bureaucracy. and he stresses it would be "a very, very bad outcome" if no deal was reached. that's despite the prime minister theresa may's mantra that no deal is better than a bad deal. one of the biggest issues, of
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course, is immigration and the chancellor says that while the uk seeks to manage migration t doesn't wa nt to seeks to manage migration t doesn't want to shut it down entirely. we are not about to turn inward, but we wa nt we are not about to turn inward, but we want to make sure that the arrangements that we have in place work for our economyjust as arrangements that we have in place work for our economy just as the british people understand the benefits of trade so too they understand how important it is to business to be able to access global talent and to move individuals around their organisations. so while we seek to manage migration, we do not seek to shut 2 it down. neil williams, chief economist, hermesjoins us now. the governor of the bank of england
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is delivering his speech. what did you make of what he had to say? well, a softer tone. many of us in business would welcome that. talking about free trade and not turning inward and also encouragingly pointing out the importance of services and financial services which respectively are about 80% and 10% of what we do in the uk. this is the start of a negotiating process. there is a lot of cherry—picking here at the beginning and after 12 months of being in the departure lounge in terms of brexit, i for one are buckling up for a long journey. it will take way beyond the two yea rs it will take way beyond the two years we're hoping for for article 50. it's only day two. so much more to deal with. it's interesting because we heard earlier from to deal with. it's interesting because we heard earlierfrom uk car makers, we hear from because we heard earlierfrom uk car makers, we hearfrom the because we heard earlierfrom uk car makers, we hear from the city of london, we hearfrom so many different parts of industry and business. as you say, it is a balancing act. who gets what at these negotiations and who for the uk should be a priority. who do you think should be a priority? well,
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the bottom line as well is that we have possibly chosen one of the worst times to go into these negotiations because of course elsewhere in europe there are elections almost everywhere. we have managed to get through france and holland without too much disruption, but we've got germany and italy next spring to come. it is surely not in the interests of those mrushtions to give us a no strings attached deal otherwise it will look like we're opening the trap door for other countries to follow suit. there will bea countries to follow suit. there will be a lot of position swapping on the way and that slope that mr haloned talks about out of the eu, i hope that that is a slope that doesn't lead to a path that effectively gets us lead to a path that effectively gets us back to square one which takes many years. what's your view on our position now on this side of the general election? well, if you believe the process is going to be a long one then the election upheaval was an additional speed bump on the way. en route to the calendar we're
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going to have to get this through parliament and looking at it briefly, what mr hammond seems to wa nt briefly, what mr hammond seems to want is negotiations leading to november 2018 and then sign off in 2019. we then effectively try to get the whole thing sorted after a two year settling in period. has he factored in the 27 other countries signing off as well though in his timetable? well, i hoe he hasn't. it is often at stages like this, to look at what presidents, the only two we have is greenland in the mid—1980s, it took three years to sign itself out of the eu. they had one issue which was fishing rights and canada, you may remember, last year signed a deal. that took seven yea rs year signed a deal. that took seven years and it was almost derailed by a small state in belgium. so, straightforward probably, it's not going to be. i think you're right on that! that's something we can be certain of, neil, thank you. mark carney, the governor of the
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bank of england is still talking! lots to get through. people call him the george clooney of central bankers. did you know that?” bankers. did you know that? i did that. but maybe george clooney moves a bit quicker. 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 of all the day's breaking business news. we'll keep you up—to—date with all the latest details, with insight and analysis from the bbc‘s team of editors right around the world. and we want to hear from you, too. get involved on the bbc business live web page: bbc.com/business. on twitter: @bbcbusiness and you can find us on facebook at bbc business news. business live on tv and online, whenever you need to know. we have touched on a subject that gets you talking. that's the cruise holiday. it's like marmite, you love it or you hate it.
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james is back. where are you? just declare... well, i have been a non participant, but i don't have much ofa participant, but i don't have much of a view either way. come on, james. are you sitting on the fence? iam james. are you sitting on the fence? i am because i have no visceral appetite to go cruising and yet if you said look, this there is this marvellous opportunity i'd probably ta ke marvellous opportunity i'd probably take it. if you lived in venice... definitely. what would be your take on it? many are saying and this is the story in the press the nations have voted against these cruise ships docking, coming in to venice and yet many are saying the economy relies on the people on those ships? i don't buy this issue of reliance on cruises. venice gets one million tourists in round figures. one of these large cruise ships has 4,000 people. so, the number of people who come, via aeroplanes or cars or trains is huge. equally, the vote
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which is non binding and indicative only is saying we want you to come, but we don't want you to actually have your big boats here, come in small boats and park outside. the reason i'm laughing is because a lot of you have been getting in touch with your tweets this morning talking about them. lesley, a big fan. yes, i have been on three already this year. cruising is big business and the venice economy will suffer says lesley. jonathan says "great news they have been banned." naomi says, "a friend of mine went ona naomi says, "a friend of mine went on a cruise and the ship was so big, it was like walking around croydon! " i have been on a cruise to the falklands and the other was north cape and spits burg. thank you, we know your holiday calendar so far. more on those stories that we have been covering on the website. bye— bye. hello there. good morning. yesterday
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was the hottest day of the year so far. temperatures got to 32.5 celsius in south west london. we ran that up to 33 celsius and just for a bit of fun that was hotter than rome where they got to 32 celsius. even in ibiza and miami, they have only had 29 celsius. today is going to be another hot day across southern parts of wales and southern england, but this weather front here is just introducing some fresher conditions in north—eastern parts of england and eastern scotland. temperatures could be about ten to 13 celsius. lower than they were yesterday. the hottest weather today will be across the south—west, around the bristol area, south—west england, temperatures could reach 32 celsius. hot again across the london area. for the midlands and wales, lots of sunny spells. perhaps cooler, 26 celsius in wrexham, but hull,
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newcastle those temperatures 17 and 18 celsius. for northern ireland and scotland, a better day. there will be sunny spells. temperatures 17 celsius, but it will feel fresher on the aberdeenshire coastline. if you suffer from hay fever this the aberdeenshire coastline. if you sufferfrom hay fever this isn't the aberdeenshire coastline. if you suffer from hay fever this isn't a great chart to look at. very high, mainly grass pollen expected today. going into wednesday, the hot air from the south will continue to move its way further north and it will hit colder air across scotland and northern ireland and that's where we're going to see the risk of thunderstorms throughout wednesday. sunny spells elsewhere with any showers cropping up late in the day across wales and the midlands and northern parts of england and into wednesday evening. wednesday the hottest day of the heatwave. we could see temperatures up to 34 celsius in some southern areas. but it is through wednesday night that there is a real risk of seeing intense and violent thunderstorms developing across the midlands,
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eastern parts of england which will tend to clear away as we go into thursday. fresher conditions. those thunderstorms making it feel much fresher, the breakdown of the heatwave. as for friday, all of us now under the influence of this fresher weather. there will be some rain moving south and east. breaking up rain moving south and east. breaking up as it does so, but the temperatures 15 to 22 celsius. bye— bye. hello it's tuesday, it's 9 o'clock, i'm joanna gosling in for victoria. welcome to the programme. hundreds of people attended a vigil last night close to the north london mosque where a van was driven into a crowd of muslim worshippers. but will it take more than shows of unity to bring people together after yesterday's attack? and how do we prevent further violence? everyone is still shocked by what happened. there is a little bit of fear, but at the same time, no—one's
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staying away or hiding because of what happened, everyone is still coming out to pray. a week since the devastating fire at grenfell tower, we speak to a family who lived on the 15th floor, and who escaped with nothing but their lives, about where they have been staying and what support they have received. and with more and more high—profile sportswomen taking time
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