tv BBC Business Live BBC News August 30, 2017 8:30am-9:01am BST
this is business live from bbc news with ben thompson and sally bundock. doing a deal injapan. the uk prime minister travels to tokyo to talk trade, but will the talks be overshadowed by north korea? live from london, that's our top story on wednesday 30th august. theresa may meets shinzo abe to discuss life after brexit. but the uk can't strike any sort of free—trade deal until it actually quits the eu — so what progress will they make? we'll have an expert view. also in the programme, in touching distance of parity. a strong euro and weak pound push the two closer. but it's good news and bad. we'll assess the winners and losers. and here's how those markets are faring across europe —
and that euro sterling rate. that's the current rate and how european markets are doing. we will tell you all you need to know. and cashing in on cupcakes. we meet the man who created an empire built on baking. the founder of the hummingbird bakery will give us the inside track on the finding the recipe for success. and so today — and this is in no way a business question, but we just want to know — what's your favourite? lemon drizzle, red velvet, double chcolate? let us know. no reason. just because. use the hashtag #bbcbizlive. we look forward to hearing from you. if you follow me on twitter you know that the home—made banana bread is tough to beat. and there are photos as well. let's start with japan.
british prime minister theresa may is in japan for talks with her counterpart shinzo abe on everything from defence to brexit and trade. although the uk can't officially start any trade negotiations until it leaves the european union, both sides are already weighing up what a future deal might look like. while the uk's investment injapan is relatively small, in 2015 it was just over $6 billion, japan's direct investment in the uk is worth over $52 billion. and that investment feeds through to the real economy, roughly a thousand japanese firms operate in the uk, employing close to 160,000 people. one of theresa may's key aims will be to keep as many of those jobs as possible in the uk in the coming years. that might be tricky though. a strongly worded report from japan's foreign ministry last year said firms might want to move
"if eu laws cease to be applicable in the uk". meanwhile japanese banks nomura and daiwa have already chosen frankfurt as their new eu hubs in the wake of the brexit vote. the meeting also has added significance as only last month the eu signed its own free trade deal with japan — a deal the uk will soon be locked out of. with me is yuichiro nakajima, managing partner at advisory firm crimson phoenix. nice to see you. sally running through some of the issues there. if you can run through what is at sta ke, you can run through what is at stake, how significant is trade between the countries? it's very important, certainly for the uk, as the figures we have just seen show. japan has been one of the biggest investors in this country. and the uk has been the largest investment
destination for japanese uk has been the largest investment destination forjapanese companies coming to europe. it really started in the 80s when margaret thatcher promoted britain as the gateway into the european market, and japan bought that. there is a long history of japanese companies coming bought that. there is a long history ofjapanese companies coming to this country, setting up shop and then doing business with the rest of the continent. and now that bridge is likely to be removed. you talk about that gateway to europe. we should say these are very early—stage talks because, as sally pointed out, nothing can be done and no deal can be put in place until the uk has left the european union. how will that affect the issues they will encounter in these very early—stage talks? i guess mrs may work like to get some kind of undertaking from the japanese government that they
will do their best to not... to keep japanese companies here, and there is so much a government can do to control a private compa ny‘s behaviour. she is sunny petite tight rope to tread. —— she is on a pretty tight rope to tread. she has the domestic political audience to satisfy in the meantime. she needs to make sure that she isn't seen to be going against eu rules about negotiating with third countries on an independent basis. a funny irony about this, as he said last month, the european union struck its own trades deal with japan. ultimately that's a deal the uk will be locked out of and we now go to japan saying that we want something similar. is there a willingness injapan to
grant that? i thinkjapan, there a willingness injapan to grant that? ithinkjapan, because the uk and japanese relationships are very good, and strategically quite important, so i thinkjapan would like to do the best it can to support the uk government. but the trade and investment with the eu, the remainder of the eu, so to speak, is important, of course, and the uk is but one part of it. japan isn't going to be able to do anything particularly formal whilst the picture is very unclear as to the picture is very unclear as to the terms on which the uk will be leaving the eu. we will follow that closely to see how it plays out. thank you very much. let's take a look at some of the other stories making the news. uber says it is cooperating with an investigation by authorities in the united states into accusations it bribed foreign officials. it's not yet clear whether the allegations focus
on one country or several where the company operates. it's the latest in a series of legal problems the ride—hailing app faces as it waits for a new chief executive. sky is to stop broadcasting fox news in the uk due to low audience figures. 21st century fox, which is owned by rupert murdoch, says the channel is being withdrawn as it is not commercially viable. sources say the decision is not related to fox's takeover bid for sky. the london company that makes the rubik's cube has sued two us companies for selling what it says is a knock—off of the classic puzzle. rubik's brand limited says retailer toys "r" us and manufacturer duncan toys are violating its trademark and hurting its reputation with an "imitation twist puzzle cube". let's look at the financial markets.
they are regaining composure around the world following concern this time yesterday about what was happening with regard to north korea and its latest missile test. you can see japan and its latest missile test. you can seejapanjumping and its latest missile test. you can see japan jumping today from eight four—month low, that was yesterday's story. the yen was weakening as well. wall street wobbled at the start of trade on tuesday but ended high. looking at europe so we have a sense of how things are going. all these markets were down more than 1% yesterday. right now you can see they have already gained some composure today. we will talk you through the winners and losers in a moment, in particular the euro and pound relationship. and michelle fleury has the details about what's ahead on wall street today. donald trump will make the case for overhauling america's tax system this wednesday, in a speech in missouri. he is expected to talk about the need to simplify the tax code and make the us corporate system more globally competitive. treasury secretary steven mnuchin has said in the past he hopes to get tax reform done by the end of the year. that was a tall order,
even before attention shifted to tropical storm harvey. sceptics warn that while the white house and republicans generally agree on a lower tax rate, they still have yet to figure out specifically what they want to do and how to proceed. meanwhile ahead of friday's jobs report, investors will be looking at hiring figures from private employers to see if there were any signs that the jobs market was cooling down in august. and the us commerce department will provide an update on the economic expansion in the second quarter. gdp growth likely came in at 2.7%, that's instead of the 2.6% estimated earlier. james hughes is here, he's chief market analyst at gkfx. we will come onto the us stuff in a minute. but first of all the pound and europe. all the attention has
been on the pound and dollar relationship. but the euro is really interesting right now. it's interesting right now. it's interesting because it's getting close to parity, one for one, the euro and pound been worth the same amount. it's something we have not seen amount. it's something we have not seen for a long time. we always talk about this sort of stuff when the markets get to those areas, and very often we don't end up seeing it. very often there is something psychological that happens and the market will move. it's because we are all talking about it. everybody puts money on it and it doesn't necessarily work. because we have seen necessarily work. because we have seen strength in the euro, with the eurozone recovering particularly well, but in the uk we have so much uncertainty around brexit. because we don't have any idea what breaks it means, what post brexit means or what it means right now, the issue means we see negativity in the pound, strength in the euro, driving it closer and closer to parity. any of us going on holiday to europe, we
can feel the difference this year and last summer. but it's a huge dealfor and last summer. but it's a huge deal for businesses and it can not huge sums of their quarterly profits, or it can add, as the case may be. importers and exporters get hit and not hit on both sides. also from an economic point of view, the wea ker from an economic point of view, the weaker currency in the country, it tends to push up inflation that little bit. 0n the other side, if the currency is too strong, it can push down inflation. the problem we have in the uk is that inflation is that little bit too high at the moment. if there are problems with the eurozone with recovery, it's that inflation is too low. the strength with the euro and the wea kness strength with the euro and the weakness with the pound are doing just that. and a quick word on america. gdp, we are expecting 2.7%, slightly higher than what we expected and saw earlier in the month. not too many surprises but good news for the economy there. you will talk us through the papers
later. still to come — cashing in on cupcakes. your tweets about favourite cupcakes have been flooding in. the founder of hummingbird bakery is here to talk all things sweet, sugar and icing. and he has brought cake as well! but how did the one bakery in west london expand around the world? stay tuned. you're with business live from bbc news. kate and debt, the two can be linked... —— cake and debt. soaring levels of consumer debt are worrying the bank of england — unsecured debts have risen 10% over the last year. and now new figures suggest people already struggling with long term credit card debt are being offered more credit, and more likely to have their limit raised. matthew upton is from citizens advice who produced the research. it's an interesting one, this. they
say people most at risk of not being able to pay it back are being offered more money. as you say, credit cards are very popular as well as cake, and credit card debt currently stands at £67 billion and is growing quickly. we have all had the experience of getting the letter through the door saying our credit ca rd through the door saying our credit card limit has been increased without is asking it to happen. research has shown that small likely to happen if you are stuck in debt and struggling to pay off that credit. these are often people stuck on paying the minimum payments and barely chipping away at their debt, discovering the interest payments. this can only be characterised as irresponsible behaviour on the part of lenders and we want to see it banned. you say that, but i'm amazed this hasn't been tackled already. the issue of debt and those in debt being offered further credit, as you say, it's been around for years. how has it not been sorted? it's a very
good question. the reality is that credit card companies and lenders stand to make huge amounts of money from these people who are often stuck on minimum payments and stuck in debt for many years and struggling to pay it off. that's why we think it's time to act. we can't see there being anyjustification. credit cards are clearly a good product for some, but for flexible payments, good for when people want to make a purchase and will struggle to make a purchase and will struggle to pay it down initially. but we don't think there is any justification for keeping people stuck in a cycle of debt that happens in these circumstances. matthew upson from citizens advice, thank you for your time. all the stuff we can't fit into the show is on the business live page. that includes the story in a lot of the business pages this morning, the news that the online retailer asos is set to overtake marks & spencer
in terms of value. you're watching business live — our top story. british prime minister theresa may is in japan for talks with her counterpart shinzo abe on everything from defence to brexit and trade. between the world's third biggest economy and the uk. a quick look at how markets are faring. the pound and the euro are getting ever closer. uncertainty over brexit really weighing on the value of the pound. 0ur weighing on the value of the pound. our next guest is here to prove you can have your cake and eat it. red velvet cupcakes.
frosted chocolate brownies. marshmallow fluff—filled whoopie pies. am i making you hungry? these are just some of the sweet treats that our next guest offers at his businesses. tarek malouf started up the hummingbird bakery to fill a gap in the uk market for traditional american baking. he's taken the business from a single store on notting hill's portobello road to a 129—person strong company, with seven stores in the uk, and a turnover of £6.6 million — that's around $8.5 million — last year. the company is now expanding abroad. it has four franchises in the middle east, and is seeking franchise partners in russia, india and china. and tarek has written four best—selling cookbooks, sharing the secrets of his sweet recipes. he is here with a box of cupcakes and they've not been eaten yet! i've
never seen anyone so and they've not been eaten yet! i've never seen anyone so excited about a box! laughter tarek, good morning. we'd like to talk to you. welcome to the programme. let's talk about how it all began. we probably take this for granted, cupcakes in the uk. they are an american import and you we re they are an american import and you were inspired to do it after a trip to america. yes, i was inspired after visiting my sister who lived in new york for many years. i grew up in new york for many years. i grew up in london but went to an american school so these were really familiar to me. they didn't exist in london at the time and they also had a bad reputation for being cheap and not very well made. i wanted to remedy that and show people the amazingness of american baking. interestingly you're working as a reporter for another tv broadcaster which we won't name. after five years of doing that, you thought i'm going to
start this company. you went back to the us to learn the trade. this is what is key about your company, it's about the american way of breaking with american ingredients and that's your usp. that's right. we always wanted to use traditional recipes. it's really important that everything we make is freshly made, we bake on site. i wanted to have that authentic home—made feel, even though it wasn't made at home. we talk about cupcakes and there was a real boom in their popularity, a lot of that was related to things like sex and the city. we often see with these things they are short lived trends, you are proof that isn't the case. 14 years later i can say it's not a trend. many things can be fads. but ultimately cupcakes are ca ke fads. but ultimately cupcakes are cake and they are just in an
individual size. who is your typical customer? customers are mostly female. we have all age ranges but i would say women between 18 and 40 something. people like me! you're looking so longingly at this box! cani looking so longingly at this box! can i eat while you two tour?! i wa nt to can i eat while you two tour?! i want to bring up the point that you make all your cakes on the day. they have to be made the day they are sold or consumed and you believe that's really important. you aren't making them en masse and freezing them. that's right. cake is delicate. it dries out quickly and can go stale. you are selling something like 25,000 cakes a week and you've got 120 people. how do you physically make that many on the day and shift them on the day? do
you have to have lots of premises? we have seven in the uk. we've grown used to it over the years. the ovens are high—capacity, the storage space, but we make do and manage somehow. we talked about your expansion plans. looking around the country, certainly in the uk. i know you've got big plans in dubai. it's interesting the dynamic. sweet things in the uae and the gulf are really popular. it's a social activity, it's not about going to the pub or the bar, it's about ice cream and cake. how would you pick where you would opening in the uk? you said london for you is tough. it's tough because of friends. any area where there is a relatively afflue nt area where there is a relatively affluent population but also businesses nearby, lots of kids, mums with kids. tourists help. the
ideal place would be somewhere that combines all of those elements. right here, giving the interest you've seen in the studio! thank you for coming. the cakes are staying! nice to meet you. you just want the ca kes! nice to meet you. you just want the cakes! what's your favourite cake? someone's pointed out on twitter that millionaires shortbread should be the one we talk about the most. it's technically not a cake. it's my ba na na it's technically not a cake. it's my banana bread, isn't it?! just saying! still to come, we are talking about the sharing economy. john sudworth had a look around the chinese city of beijing. xylophone music. but what about ball sharing? the company behind this venture plan to make 20 million footballs and basketballs available for hire
right across china. music continues. the cakes have gone! not far. a lot of you getting in touch. red velvet is one viewer ‘s favourite. of you getting in touch. red velvet is one viewer 's favourite. welsh ca kes, is one viewer 's favourite. welsh cakes, madeira cake and we've got one more saying date and walnut, ha rd to one more saying date and walnut, hard to find a good one she says. remember the w y shops and their home—made cakes. —— wi shops. james hughes is back with us, he's chief market analyst at gkfx. favourite cake? i'm partialto a lemon drizzle cake. let's talk about apple. this is really interesting.
spars with movie studios overpricing ahead of apple tv roll—out? spars with movie studios overpricing ahead of apple tv roll-out? in the next couple of weeks apple will have their keynote presentation, launch a new iphone we imagine. they are also launching another version of apple tv. one of the capabilities is being able to stream 4k quality videos and films. it's super high definition. the problem they are having is they are ina the problem they are having is they are in a tussle with the film studios about how much they want to charge. apple want to charge around 1999 per film. but the film studios are saying is they are looking at charging more like $5 — are saying is they are looking at charging more like $5 - $10 per film. it seems like the wrong way round. it's not necessarily always been apple's major point of being cheap. the fact that this is a big
difference between $5 and $19. an interesting quote from one of the film studios says, i wouldn't tell apple how to price their ipads. ford and dominoes trialling delivering pizza in self driving cars. how does that work? automated cars and self driving cars are big business. apple are looking at doing this. this is a collaboration between domino's and ford to say let's get your pizza to you quickly without some on taking at there. it wouldn't get past family if it's like the cakes! laughter we'll see you again tomorrow. good morning. feeling much cooler today across the south—east of england. temperature is 29 degrees
yesterday, today they are going to plummet. in the north and the west a mixture of sunshine and showers. in the south and east it is very cloudy with outbreaks of rain and significantly cooler. you can see where we've got that rain this morning across the midlands, eastern and south—eastern parts of england. things are improving a bit towards the west of wales and south—west england. it's across england and northern ireland where the showers will continue. maximum temperature 16-17. will continue. maximum temperature 16—17. northern england and northern ireland with a mixture of sunshine and showers. increasing sunshine across the west of wales and the south—west of england, eventually the west midlands as well. but the rest of the south will be stuck beneath this rain. it will be cool, a good 13 degrees lower than yesterday. it's because we've got this weather front which will eventually move away as we go
through wednesday evening. going through wednesday evening. going through the night to night we are going to see some clear skies. with those clear skies it's going to turn chilly. temperatures in the towns and cities are no lower than about 11, 12 degrees. and cities are no lower than about 11,12 degrees. heading to and cities are no lower than about 11, 12 degrees. heading to the countryside, that's where temperatures could be as low as 5—7. thursday morning plenty of sunshine for many. if you showers in north wales and the north—west of england in the morning. those showers spreading out across the uk. for many of us into the afternoon we could be catching the odd shower. some sunshine in between and maximum temperatures around 17—20. on friday this area of high pressure is going to come up from the south. a ridge of high pressure making things more settled. for many of us on friday looking like a dry day with light winds. there could be the odd shower towards kent. those are tending to
disappear and with that sunshine and light winds it's going to feel quite warm. for the weekend it's going to bea dry warm. for the weekend it's going to be a dry start with that area of high pressure sticking around. later on sunday there's going to be some rain spreading into the west. goodbye. hello, it's wednesday at 9am. in joanna gosling. welcome to the programme. the united nations security council condemns north korea's firing of a ballistic missile overjapan during emergency talks in new york last night. delegates said the weapons test was outrageous. it's time for the north korean regime to recognise the danger they are putting themselves in. the united states will not allow their lawlessness to continue, and the rest of the world is with us. theresa may has arrived injapan for a planned three day visit — telling reporters that china must put more pressure on pyongyang. we'll have the latest. also this morning, we will have the