tv BBC Business Live BBC News July 26, 2017 8:30am-9:01am BST
this is business live from bbc news with ben bland and rachel horne. up or down? after the disappointing growth outlook the uk received from the imf earlier this week, today we get some real numbers for the british economy. live from london, that's our top story on wednesday, 26thjuly. economists predict uk growth will have picked up slightly — as consumer spending comes under pressure from rising prices. also in the programme, japan's nintendo returns to profit, thanks to bumper sales for its new switch console. markets in europe have opened. they are in the green. all eyes are on the states where the federal reserve meet. and full steam ahead. we'll be talking to one of europe's largest online train ticket
retailers which is trying to break into some of asia's biggest markets. bland and boring, today we want to know, what's the best named town you've ever visited. just use the hashtag bbcbizlive. hello and welcome to business live. in just under an hour, the uk will unveil its latest growth numbers for the three months to the end ofjune. earlier this week the international monetary fund warned that weaker economic activity means both the us and uk will expand more slowly than expected this year. however, in the numbers due out this morning, economists are expecting the uk's growth rate will have risen slightly in the last three months to 0.3%. it was 0.2% in the first quarter. following the brexit vote, the pound fell.
this put pressure on prices and last month inflation stayed above the bank of england's 2% target rate. and higher prices — partly from imported goods — are having an impact on consumer spending. now according to visa — household expenditure fell 0.3% last month — the lowest figure in almost four years. but government figures suggest uncertainty isn't deterring investors. the uk continues to be the top investment location in europe with more than 2,200 new foreign direct investment projects announced in the last year and that's 2% up on the year before. and on tuesday, bmw announced it had chosen oxford as the location of where it will build its new fully electric mini. joseph sternberg, editorial—page editor at the wall streetjournal is with me. welcome to business live. nice to see you. so if we get the growth that they're expecting, it will be very much as tends to be the case in the uk driven by consumers? right. i
think that one of the interesting stories here is that coming into the brexit referendum last year the economy was already in a very healthy condition and very resilient. so the fact that the growth is still positive even with all the uncertainty surrounding brexit is a good sign that that resilience is working, but there are a lot of head winds, consumer spending is taking the hit from the falling pound that should be causing concern even if the numbers are in the black. the weak pound was, especially after the brexit vote, was said to be, what was going to boost exporting which would give manufacturing a new lease of life and that it would rebalance the uk's economy away from consumerism and more to boost exports. we haven't really seen that happen. more to boost exports. we haven't really seen that happenli more to boost exports. we haven't really seen that happen. i think one of the stories to arise from that and this is something you would hope that policy makers would be paying attention to in westminster as they negotiate brexit. the economy is more complicated than it used to be. you know maybe price and the
exchange rate is less important than it once was. more focus on the quality and the productivity. joseph, if we get this 0.3% that many are expecting. it is an increasing it will be something like the 16th or 18th quarter in a row where we have seen an increase. which sounds good, but if we put it in context, this increase compared to the 0.6% increase that we were seeing a year ago, it is not great for the seeing a year ago, it is not great forthe uk, is seeing a year ago, it is not great for the uk, is it? right. when you look at the falling consumption worries about real income inflation adjusted, wages are not keeping up. i think that there is a lot of reason for concern. concern about how investment will perform with the uncertainty of the outcome of the brexit process. we were saying that some figures show that the uk is still open for business. lots of business investment. is that somewhere where we should be look to go seek comfort? yes, i think that one of britain's advantages has been that it one of britain's advantages has been thatitis one of britain's advantages has been that it is so open to investment and
it isa that it is so open to investment and it is a relatively liberal economy compared to the rest of europe. the brexit challenge is to expand on that benefit instead of assuming that benefit instead of assuming that the economy can just coast. 0k. joseph, thank you very much. let's take a look at some of the other stories making the news. president trump says apple's chief executive, tim cook, is committed to building three plants in the us. such an investment would help the administration follow through on a big campaign promise, reviving the country's manufacturing industry. when asked, apple declined to comment. britain is hitting the brakes on new petrol and diesel vehicles. the government plans to ban new cars and vans powered by fossil fuels by 2040. government officials are expected to unveil a $332 million fund to help cut down on pollution to improve air quality. the reported move follows a similar announcement earlier this month by the french government. the south korean car—maker hyundai has posted a 51% drop in profits to $730 million.
it blamed the poor performance on a slowdown in us sales, and political headwinds in china. chinese consumers bought 64% less hyundai cars compared to the same period last year. it's part of retaliation by chinese authorities who object to the installation of a new us defence system known as thaad. more stories updated throughout the day on the business live page online. on there right now, vw a dime letterface online. on there right now, vw a dime letter face accusations of running a cartel. the two firms have denied, that's volkswagen and daimler denied the allegations. this
plays into the diesel emissions scandal. you can read more about that online. has nintendo made a comeback? it's just announced a return to profit on strong demand for its switch console. mariko 0i is in singapore. give us the numbers. well, rachel the company has managed to make about $115 million in the three months between april and june and as you mentioned the company's basically back in the black after losing money last year. it is still nothing compared to its heyday though. about a decade ago when its very popular wii console was turning consumers into gamers. the company has been betting on this new console, switch, which was launched in march. in the first month the company managed to sell about three
million units worldwide which is about the same as its rival xbox as well as playstation 4 and the company hopes to sell ten million more switches in this financial year which analysts think is quite conservative, but the company has been having production issues to catch up with very strong demand. so, it's very good news for nintendo. thanks for that. it was a good day for markets in the states on tuesday, with strong results from caterpillar and mcdonald's boosting the s&p 500 to an all time high. the nikkei is up 0.5%. the hang sang up the nikkei is up 0.5%. the hang sang upa third the nikkei is up 0.5%. the hang sang up a third of a percent. europe have opened up. we're in the green. like markets in the states, markets in europe are waiting for the outcome of the federal reserve's two day
meeting. investors will be looking for more information on how the fed plans to start reducing its balance sheet. with that and more michelle fleury has the details about what's ahead on wall street today. well, some big tech names making big waves this wednesday. investors will want to hear more about apple's us plans. that's after donald trump told the wall streetjournal that tim cook, the boss of the tech giant, had committed to building three manufacturing plants in america. and facebook reports second—quarter earnings after the market closed. profits at the social media giant are likely to get a boost from its fast growing mobile ad business, but how long can that last? wall street wants to know what progress mark zuckerberg and company are making developing new advertising features. meanwhile, a day after general motors reported a drop in profits, ford is due to publish its first set of quarterly results that is sincejim hackett became chief executive and america's central bank wraps up a two—day monetary policy meeting. no change though expected to us interest rates. joining us isjeremy cook,
chief economist, world first. we heard michelle talking about the fed meeting. they are not expected to change the rate, but it is always watched closely? we are watching the language that's coming out of the federal reserve the more about the balance sheet, the $4.5 billion worth of assets that are sat on the federal reserve balance sheet which they bought as part of their quantitative easing plan. we will be looking to see how they plan on reducing that and whether they give any markers as to when that's going to happen. in the policy statement which comes out at about 7pm british summer time tonight. so why are investors interested in that? explain to us how the way that they choose to reduce the balance sheet could impact on the markets? while the federal reserve raised interest rates three times in the past nine months and people are saying we're
starting to get to a point where the us economy can be meaningfully creating growth and creating inflation, £4.5 trillion worth of mortgage assets were bought by the federal reserve. the way they sell those back is very interesting for economists and markets because we have to wonder who buys them? who feels ready to take the assets off the federal reserve and what that means for growth in the global economy as well? you can'tjust destroy them. you can'tjust say economy as well? you can'tjust destroy them. you can't just say the fed is going to let go of them, so where does that money flow to is the really interesting thing? keeping the focus on the us, facebook announcing it's quarter results. everyone's favourite app. so it seems in the sense of the growth that they have enjoyed, quarter on quarter, on quarter. something like 16 quarters and 1.2 billion users, not just of 16 quarters and 1.2 billion users, notjust of facebook, but of their messenger app, and they own whatsapp. the key thing that a lot
of people are talking about is they own instagram and instagram is starting to become the tip of the sphere for facebook in taking on people like snapchat, the instant stories and the use of filters and stickers on, i don't do this, but some people, some do! rumbles. but it is all about how that advertising revenue is coming through from that. facebook live is very interesting. whether we start to see adverts as pa rt whether we start to see adverts as part of facebook live moving forward. google reported, alphabet reported at the beginning of the week. ad revenues hit lower, hit by the eu fine. jeremy cooke, you will be joining the eu fine. jeremy cooke, you will bejoining us at the eu fine. jeremy cooke, you will be joining us at the end the eu fine. jeremy cooke, you will bejoining us at the end of the eu fine. jeremy cooke, you will be joining us at the end of the programme to go through the papers. i will. still to come, full steam ahead. we'll be talking to one of europe's largest online train ticket retailers which is trying to break into some of asia's biggest markets. you're with business live from bbc news. the uk government is set to announce today that new diesel and petrol
cars and vans will be banned in the uk from 2040 in a bid to tackle air pollution. the government is also due to publish its court—mandated clean air strategy later. it sounds like a huge move, but is it? let's get the answer from our business correspondent theo leggett. how big a move is this then? well, it is an admirable goal, but it is a long way off and the car industry is already moving in that direction. the chances are that within a few yea rs, the chances are that within a few years, you won't see many pure diesel and petrol cars on the road anyway. they will be hybrids and electric because of emissions regulations being brought in particularly in europe which mean that car makers are having to invest money in electrification technologies and if they are investing that money they will want us investing that money they will want us to buy electric cars and they will be trying to persuade us to buy them. so market forces will take us
in this direction. in order to have a complete ban on petrol and diesel ca rs by a complete ban on petrol and diesel cars by 2040 a lot will need to change. particularly charging infrastructure. it won't be enough to have a few fast charging stations up to have a few fast charging stations up and down the m1, there need to be comprehensive charging infrastructure, notjust on main roads, but rural areas. you might say particularly in rural areas so people can get around. that infrastructure doesn't exist yet. it will need comprehensive investment. the question is where does that money come from and who pays? we have got a plan for that better infrastructure for charging electric cars, but what other measures are on the table? there is 100 million for charging electric cars which may not seem charging electric cars which may not seem much, but there is an onus on local authorities to develop their plans and michael gove said this morning he would look at any plans drawn up by local areas for example to introduce highly localised scrappage schemes. it was thought there might be some national scrappage scheme for diesel cars because they are seen as being the
main source of the problem in terms ofair main source of the problem in terms of air quality. that hasn't happened. the onus will be on local authorities and they can get money for things like retro fitting buses. thank you very much for that. plenty on the business live page. we have a team of correspondents across the uk. there are three months left to spend, save or donate your old £1 coins and the cost of changing those is costing small firms thousands and thousands of pounds. check your kids' piggy banks for those £1 coins! you're watching business live. our top story... in just under an hour, the uk will unveil its latest growth numbers for the three months to the end ofjune. economists are expecting the uk's growth rate will have risen slightly to 0.3% let's ta ke let's take a look at how the markets
are faring. and now let's get the inside track on rail travel. 1.7 billion railjourneys were made in the uk in the past 12 months. this is a record high, with passenger numbers more than doubling over the last two decades. advance ticketjourneys increased nearly 10% over the last year, but sales of season tickets fell by 2.9%. trainline says it is the world's biggest independent online ticket retailer. it operates across 24 countries, helping passengers to find the quickest and most cost—effective routes. clare gilmartin is chief executive at trainline and joins us now. good to see you. welcome to the programme. this move towards advance tickets, e tickets, but still on
some routes you can't do it, you can't get the best bargains because they are still doing paper tickets. uri. we have been on a mission to bring the world's rail into one simple app and website. we operate across 24 different countries now and our mission is to help people see all their options, all the different prices for their journey, so they can get the best price and, increasingly, to get mobile tickets to people so that they never have to queuein to people so that they never have to queue in a train station, because the net result of all that is people ta ke the net result of all that is people take the train more. will it ever happen? it sounds like a noble ambition but no queues, completely ticketed? we've really got the bit between our teeth on this. we started in 2014 in the uk when there we re started in 2014 in the uk when there were hardly any mobile ticketed roots and today we are nearly 50% andi roots and today we are nearly 50% and i hope by the end of next year, we're partnering with the industry, the real companies on the government so by the end of 2018, hopefully the
full rail network in the uk will be eat ticketed. you are operating across europe and make inroads into asia. how do you collect up all those train lines, as trains crossed different borders, legal rules on cultural issues. what sort of challenges have you faced? cultural issues. what sort of challenges have you faced ?m cultural issues. what sort of challenges have you faced? it is complex and we are the leading global player in this at the moment. we have brought together nearly 90 different rail carriers into one app. there are 35,000 train stations in europe, competitive as airports, so it is a complexjob but we in europe, competitive as airports, so it is a complex job but we are making it easy for customers, easy to find the best price for your journey, easy to get a mobile ticket and increasingly we are using data to give people better real—time travel information on theirjourney. the big push for the company, the big untapped market, seems to be asia. what are you doing to break that? when i said 70% of rail still bought off—line, people queueing in
stations, that is a global number. japan isa stations, that is a global number. japan is a huge market, all off—line today, all people queueing in train stations, so we are looking to early next year start in japan by selling train tickets. we have the olympics coming up in a few years. today it is very hard for foreign travellers to buy a train ticket injapan and we wish to make that much easier but we're also looking beyond that to the us. before you came to trainline you were vice president at ebay. did you were vice president at ebay. did you see many comparisons between the two countries where companies? to survive spent 15 years working in companies that use technologies to make life a bit better. at trainline we are on a mission, we want to make train travel accessible to everybody and make it easy, we want to take the hassle away, take the anxiety of getting the best price away and make it simple, easy and transparent. as a company, you are very reliant on tech talent and people with the
know—how and skills. what are you doing as an organisation to nurture that and protect the tech talent of the future? we employ over 40 different nationalities and that's the lifeblood of any global high—growth tech company. so we take recruitment, hiring and developing our people really seriously. we host a whole load of tech events in our offices. we have a very vibrant tech and creative culture. we have been hiring a lot in technology and data science and it is exciting work for people. it is bringing artificial intelligence to railfor people. it is bringing artificial intelligence to rail for the first time, which tells customers in their journeys. do you have a favourite train journey? i love the journey along the $ to call more. it is beautiful. —— along with dawlish coast to cornwall. volkswagen will hold an emergency board meeting later today, regarding allegations that the car—maker operated a cartel alongside audi, porsche, mercedes and bmw, to control pricing on parts.
if true, the reports would be a further blow to the german car industry, which is trying to recover after the recent vw emissions scandal. damien mcguinness reports from berlin. volkswagen, bmw, daimler, audi, porsche, all german car brands accused of collusion. the allegation is that since the 1990s they regularly held talks to agree costs, eitherfor regularly held talks to agree costs, either for parts regularly held talks to agree costs, eitherfor parts orfor regularly held talks to agree costs, either for parts or for technology. the aim was allegedly to block competition. all five car companies deny the claims, all refused to comment, and it is possible that the talks were legal, held simply to discuss how to standardise technology across the industry. but the news has rattled investors. when german media first published on the reports last friday, vw shares fell by 4.9%, while shares for bmw and
daimler dropped by more than three percentage rock the european commission and the german cartel office have not yet launched an official probe but are looking into the allegations. folks like and daimler have declined to comment on the allegations. —— folks via and daimler. what other business stories has the media been taking an interest in? jeremy cook, chief economist, world first, isjoining us again to discuss. 0ne one of the big stories the financial times greece to raise euros of the first bomb selfie years but let's not breathe a sigh of relief? nobody should be popping such champagne corks over this. this is an incremental step awards greece being back. we are talking about uk gdp this morning, the q1 gdp increase was positive, we're starting to see green shoots of recovery, but when you look at the fundamentals of the economy, still very poor, 180%jet
to gdp ratio. whilst this increases the amount of debt that greece eventually owes, it has been financed at a lesser interest rate than most of the other debt that it has. its last bond issue was three yea rs has. its last bond issue was three years ago and was about 4.9%, this is 4.5, 4.6. so incrementally getting a bit better. what is interesting is this bond sale to dublin was a kickback for some of the people buying the bonds. a lot of people still hold greek debt and hold that previous debt which expires in 2019 so what has now happened is that some holders of that debt, which was due to expire in 2019, have been offered this new debt and if they took up this new debt, which expires further in the future, they get a windfall back from the greek government, which equates in total to about 1400 euros. that kind of makes this return to the bond market not as positive as it sounds? it is a
financing issue. is that a normal thing that can happen? companies will —— countries will try and elongate the amount of time they have to pay until they have to pay it back but this just seems to be a very, very short—term way of doing it. the other element that is interesting is that with interest rates that are persistently low, stubbornly low, investors are perhaps turning to these countries that they may not have wanted to touch in the past, where they can get a bit of a decent return. investors are get a bit of a decent return. investors a re not get a bit of a decent return. investors are not there for yield, they are there to make money. you look at us treasury debt or gilts in the uk, they are not getting the return that they would want so they have to go to the countries which are paying a bit more money but for an elevated amount of risk. argentina last month launched a 100 year bond. you give me your money now, i will pay you back in 100 yea rs now, i will pay you back in 100 years and you will get a %. 8% as previously used to happen and argentina has a history of default
so would you put your money and it? did you? no. let's touch on this story in the times. bland, dull and boring, they have teamed up, scotland, australia and the united states, to try and boost tourist numbers and draw attention. hopefully a little village called snore can get involved does well and we can have a commonwealth of boring cities. these are nice little village is getting together and hopefully it can continue. where did you recently holiday near?|j hopefully it can continue. where did you recently holiday near? i was in tuscany with some friends and this was... the town we were near was twinned with a place in belgium called 76 —— called silly. it made me giggle. that it. bland, dull and boring. not us! more business news throughout the day. good morning. while eastern areas of
the uk start off on a relatively dry note, further west we've got some heavy rain around at the moment and thatis heavy rain around at the moment and that is going to move eastwards and eventually clear away but it is all associated with an area of low pressure. you can see the massive cloud streaming in from the atlantic, some very cloudy skies. but this morning, a few brighter skies towards eastern parts before the rain finally moves into it could be quite heavy for a time across northern england and scotland but eventually you notice the rangers clear away to the north and east. things improving in northern ireland and by this afternoon we are looking at sunshine and showers dotted around. dry weather this afternoon across much of wales and the south—west of england and after a very wet start to the day, a fine enter the date with the sunshine feeling quite pleasant, temperature is about 19. fairly breezy
conditions in place but i think for central and southern england, the south—east and east anglia, quite dreary and cloudy with some spots of rain continuing by this stage but head further north across much of northern england, the odd shower dotted around. one or two showers across mainland scotland but in the northern isles, that is where you are likely to see the rain continuing into the afternoon, where it will be quite heavy. strong winds as well. this evening into tonight, further showers across northern ireland, into scotland. we could see the odd shower developing elsewhere but temperatures down to about 12 or 14. for thursday, low but temperatures down to about 12 or 14. forthursday, low pressure but temperatures down to about 12 or 14. for thursday, low pressure is still with us. that is bringing in a field of showers, frequent showers across scotland and northern ireland. elsewhere, the showers fairly well scattered throughout the day it sunny spells in between the showers. blustery conditions and
temperatures about 17 to 20 or 21. as we go into friday, it will bring showers to the north of that is not the main feature because if you look down to the south—west, this feature is going to slow the move for friday. quite frequent, northern parts and us we go into the afternoon, we see the rain slowly moving across the south and west. some drier and brighter weather elsewhere and for much of the day. more details online. hello. it's wednesday, it's nine o'clock. i'm victoria derbyshire. welcome to the programme. our top story today: this programme has seen evidence that kensington and chelsea council was warned as early as 2010 that building a new school at the base of grenfell tower could block access to fire trucks and other emergency vehicles. the fire brigades union has told us that some fire engines had huge difficulties getting to the tower that night. it now wants those access problems looked at as part of a full public inquiry.
we'll bring you reaction. also on the programme: is the culture of abuse towards mps getting out of control? mps from all parties have been telling us about the kind of intimidating and bullying messages they receive. caroline ansell is as bad as isis and hitler. kat smith should be lynched. you talibanic expletive!