tv Street Signs CNBC January 24, 2017 4:00am-5:01am EST
hi everybody. good morning. welcome. you're now watching "street signs." i'm louisa bojesen. >> i'm carolin roth. these are your headlines. let's kick it off with bt and italian impact. bt shares fall to the bottom of the stoxx 600 as it cuts its outlook following worse than expected accounting errors in its italian business. facing headwinds. easyjet shares fly lower in early trade as rising fuel costs and a weaker sterling hit the airline's bottom line. generali insures its independence, buying voting rights in intest is a sanchez, in a defensive move to block the
italian lender and allianz from any potential takeover. theresa may wants a clean brexit but things could about to get messy if the supreme court rules against her. we're live in front of the highest court in britain for a landmark decision on article 50. good morning, everyone. let's kick you off with some data this morning. looking at the eurozone january pmi, a flash estimate of 54.3 for the composite pmi verses a forecast of 54.5. a tad weaker than expected. the december composite was 54.4. i want to dig deeper into the manufacturing numbers. manufacturing pmi flash is 55.1. that is higher than the forecast. the services pmi estimate is .
53. 6 but that is lower. in germany the flash pmis were weaker with manufacturering stronger but services weaker. that tells you that, yes, we are still seeing some improvement, and that leads us on from a very strong fourth quarter which points to 0.5% growth for the eurozone, so seeing uneasiness. >> we still are. today is a super, super important day in britain. >> it is. >> in less than 30 minutes, the supreme court in london will be announcing its ruling on whether prime minister theresa may needs approval from parliament in order to trigger article 50 and thereby start britain's divorce proceedings from the european union. we'll bring you that decision live. speaking earlier on "squawk box," tim drayson outlined what he saw as the only option for
the uk. >> we should stick to what we heard from the plan, the government recognized the inconsistency of the previous position, trying to remain in the single market and yet have restrictions on freedom of movement, having control of our own rules. there really is only one option here, withdraw entirely and negotiate the best trading arrangements from outside the single market. >> nancy is at the supreme court in london. assuming that viewers may just be joining us from the states, pau paint a picture for us on why today is so crucial. >> well, a simple answer there is that the supreme court will make a landmark decision on whether or not the uk government needs the approval of parliament to go ahead and trigger article 50, which is the legal mechanism for formally leaving the european union. the government has appealed a
previous decision in the high court that they do need parliamentary approval. but the government would prefer to go it alone because they want to trigger article 50 by the end of march. they don't want any delay by remain proponents in parliament. what's critical here. we could get two decisions, one upholding the high court hearing which would mean the government has to get a reform bill in parliament. they have to get actual approval for that decision. of course the lead claimant in this case is business woman, gina miller. i believe she is arriving as we speak. many wonder whether or not she will deliver a statement on her expectations for this decision today. we could see whether or not she has a comment, of course. she was the lead claimant in this case appealing the government's decision, which they continue to fight. the assumption by markets and legal experts is that the high court decision will be upheld, that the uk government will have
to take a bill to parliament and they want to move quickly to do that. let's just see if we can get any comments here from gina miller as she goes into court. she is not going to stop for reporters here. we know the top lawyers in the case of the government have already been told of the decision. theresa may, however, will reportedly be inform the at 9:15 very soon, just 15 minutes before the broader public. and then the 11 judges who have been deliberating on this appeal since december will deliver their judgment. what to expect from there? well keep your eyes on parliament across the square from where we are now. we also heard reports that david davis, the secretary of state for brexit proceedings may appear before mps to talk about the next steps of getting the bill to then give the uk government authority for triggering article 50. the bottom line is even if the supreme court rules against the government, which is the best case assumption, this will not
block brexit. the only difference here is that it could delay things. you could see opponents put forward amendments. it's important to put out this is different from what we heard from theresa may just last week saying she would give parliamentary a final say on whether or not they approve of a deal with the european leaders when it comes to what brexit will look like. once article 50 is triggered, they have two years to try and reach a deal with the european counterparts. let's take a listen to theresa may's comments last week. >> the same rules and laws will apply on the day after brexit as they did before. it will be for the british parliament to decide on any changes to that law after full scrutiny and proper parliamentary debate. when it comes to parliament, there is one other way in which i would like to provide certainty. i can confirm today that the government will put the final deal which is agreed upon the uk
and the eu to a vote in both houses of parliament before it comes into force. >> that was uk prime minister theresa may speaking last week on her 12-point plan, perceived to be a plan for a hard brexit, though plenty members of the public are holding out hope here at the secure that perhaps that brexit won't look so hard if the supreme court rules against the government today. we'll be live with that decision at 9:30 local time. back to you. >> nancy, thank you very much. just to point out that all 11 supreme court judges, it's the first time they have come together to decide this since they came together since it was created back in 1876. it is crucial. nancy, we'll talk to you in a half hour's time for this live decision, as we hear it. our european equity markets this morning relatively mixed at the moment with the ftse 100 hanging on to meager gains, alongside the minute in italy.
the xetra dax going flat. that's what we're seeing. bt shares are on track for the biggest ever one-day drop after the company lowered revenue and earnings forecast for 2017 and '18 after finding improper accounting behaviors in italy were worse than anticipated. the investigation launched back in october found a broad set of improper transactions. bt says it expects related write-downs to be 535 million pounds, a sharp increase of 145 million pounds. so, it is looking to be a lot worse for bt. neil wilson, a senior market analyst put out a note on bt saying the fear is and why we're seeing people trading the stock off dramatically is is there more to come? is this the worst we have to see from bt and this bill, 530 million versus 145. >> a big difference. a huge difference. the bt ceo has been on the wire
thwires this morning, he thinks italy can be a growth market but it will take time. he also says the business has probably been unprofitable for a number of years, trying to correct that, that will take a long time. coming back to bt and what sort of stock this is, this is a stock you buy for the dividends. this is a stock you buy for income. and as long as bt tells investors, hey, we won't change our dividend payout, this is essentially what they're telling us this morning, they expect to increase the yearly dividend by 10%, this might be a very short yet drastic reaction to what's happening in italy. longer term the case for bt might still be in place. >> it is a solid dividend. you could argue that they're trying to hang on to investors at this stage. it's a big dividend, the 10% dividend. >> they want to increase it every year by 10%. i don't think their dividends are 10%.
>> yeah. >> if you're believe in these markets, you want to buy stock at these levels, 310, why not. >> yeah. >> can it get worse than this? >> well, if there's more fsh, i they lift the carpet and there's more. but this is their own internal investigation. we'll leave it to the market to decide. philips is back in the black. they swung a net profit of 640 million euros in the fourth quarter but missed analyst expectations. it set out a new goal of reaching comparable sales growth of 4% to 6% in the medium term but warned of elevated uncertainty in its markets. there was also problems with its defibrillator in the u.s. so plenty of concern on the part of investors. s.a.p. raised their multi-year outlook. fourth quarter operating profits rose by 4% thanks to a 40% jump
in new cloud business. s.a.p.'s revenue guidance is shy of the mean 2017 forecast. easyjet is limiting its declines. it's now actually -- no, it's still off by roughly 8.5%. easyjet is trading at the bottom of the stoxx 600 this morning after revenue proceeds fell more than 8%. they warn sterling's weakness in the wake of the brexit would result in a hit to the 2017 profit. we are joined by james halstead. any good news in these easyjet numbers? looking at higher fuel costs, revenue receipt to decline in the high single digits. what's the upshot? >> they are talking about the declines actually not being quite so bad as we look forward into the first quarter. the big problem is there is a lot of capacity going into the
short market in europe, not only is easyjet growing by 9% a year, but ryanair is also growing in double digits. so a lot of capacity going in. with fuel prices relatively weak in comparison with previous years, people are trying to get passengers on board. >> do you think easyjet can do this, the q1 trading statement is not that relevant because it's off-season. we have to wait for what the summer brings. >> the summer is the most important part. it's difficult seeing that far ahead. most airlines can't see beyond the end of next week, but easyjet has the booking profile that shows reasonable strength in booking. one positive thing for the summer is that easter falls into the third quarter for them which year, which has a big boost. but it will have a negative impact on the first half. >> they're planning to keep the london listing, planning to keep
the luten head quaurquarters, t said despite brexit they are devoted to staying here. you look at the pound off 17% since the actual vote. it's going to get super tough for them. already now a 90 million pound hit i think i saw, they're anticipating it could cost them that? >> they're talking about 100 million hit on like-like basis because of the sterling depr depreciati depreciation. yes, it's a problem. they do rely a lot on uk passenger traffic and ticket sales. but they are stronger in euros, they are -- they do have strong earnings in swiss francs. it's managing that sudden change that is difficult. where we're looking is that they do have 30% of their business that doesn't touch the uk.
a bit more than 30%. their problem will be following brexit being able to operate those satisfactorily. they are looking at trying to create an aoc elsewhere in europe. they already have one in switzerland, but they have not actually announced fully quite what they're doing. >> how do you do that? and they need to start doing that now as well it will take some time to put plans like that in place if they're going ahead. >> it's a question of deciding where they're going to do it, which jurisdiction, then transferring ownership of the -- or registration of the aircraft on to the new aoc. it's important. they will not be -- they may not be able to operate flights, for example, between france and italy once britain leaves the eu. unless the britain does negotiate something within the
common aviation area. we don't know what they'll negotiate. >> james, thanks for that. james halstead. let's talk about baked goods. you like a croissant early in the morning? >> yes, a new danish bakery opened in london. insane. crazy. >> not such a good day for shares in aryzta. the bakery business says it sees first half eps 20% lower than previously expected, this down to weakness in north america, brexit and ongoing german bakery commissioning from. generali has tried to block a takeover attempt from intesa sanpaolo by buying voting rights equal to 3% of share capital in the italian lender. that comes after a report that intesa was mulling a stake in italy's largest insurer which could become a part of a joint deal with rival allianz.
get in touch, e-mail the show. the address as usual, streetsignseurope@cn streetsignseurope@cnbc. we're also on twitter, tweet us directly at @louisabojesen. >> or @carolincnbc. we'll go for a quick break. coming up, samsung successes. analysis of strong q4 results after this short break. t'a saoma . e'c ot t'a saoma sie wh? e'.scpossl. oetas...what who doveaerial ke. evanaluhst. st stejust bussa
ou le,veaerial ke. u n mp tadirectv now. stream all your entertainment! anywhere! anytime! can we lose the 'all'. there's no cbs and we don't have a ton of sports. anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. good morning. welcome back. samsung shares trading higher in seoul as the company's fourth quarter earnings got a boost from its chip business. record numbers at this division offset the fallout from the note 7 battery issues. they expect profit growth this
year but warned political uncertainty could challenge its business strategy. alibaba is due to report third quarter earnings before the u.s. open. some analysts expecting a record revenue number. the company is seen having profited from its singles day event and large online retail growth in china. investors will be watching income from the cloud services business and updates on its brick-and-mortar integration strate strategy. neil kampling is with us. let's start with samsung. i'm surprised profits rose by 50% in the fourth quarter despite we had this galaxy note 7 disaster, which phones were setting on fire. >> they had two issues in the quarter. they lost the apple business for the chipset, and had the note 7 issue as well. despite that, you know, they still have a memory business that's very, very strong and also have the panel business,
the oled panels which are very strong. they have, you know, a goliath in all industries that they attack. they have dominant market share in many markets. despite everything, they still sold 90 million phones in the quarter, of which 85% were smartphones. >> which shows you people remain loyal to the brand despite the fact there's criticism that they didn't handle the galaxy note 7 issues quickly enough, nor handled it well enough. >> i think they actually realized quickly from that pr mistake with that product. when they shut that down completely and said we're no longer producing any phones on the note 7, that sent a positive message to the consumers that they were taking that action rather than trying to hide under the brand. they spent 30 years developing a brand that's synonymous even with u.s. consumers, if you did a survey in the u.s., half the
people would expect that samsung is a u.s. brand. we've seen over the years they have overtaken sony, lg and others to become a real dominant global brand. >> is there a sense that because samsung is doing so well when it comes to oled and the chips business that it could move away from being a hardware company that produces phones? in five years, what will samsung stand for? phones or chips? >> one thing that samsung are investing in is artificial intelligence, the internet of things, looking at an open source system. they have a diversified platform. so i think actually in history the memory division, the semiconductor division has been a core bed of samsung. so they're not as reliant on smartphones. >> we have run out of time. we can no longer talk about alibaba, but your topic in the sector in china, but we'll leave that for another time.
neil kampling. takata shares have shed nearly after their value over the last several trading days after plans to file for bankruptcy emerge as a possibility being considered by companies bidding to take over the japanese firm. we have our nikkei correspondent joining us now. >> share holders have continued to sell for the fourth straight day after nikkei reported last week that potential sponsors for takata's restructuring are reporting a court mediated turnaround for the firm. takata shares have been falling in the double digits for three straight days and ended 6% lower today. its value has gone down 47%. takata's total liabilities came to about $2.5 billion at the end of september without including potential penalties or compensation to victims. automakers are said to have spent $11.5 billion recalling
the faulty air bags which they want takata to pay back. the founding family has been pressing hard to keep the court out of the rehab rehabilitation, but that means automakers may have to give up on recouping those costs. so most are now set to support a more transparent court mediated process. takata employs about 60,000 workers in the industry, filing for bankruptcy carries the risk of complicated the air bag supply chain in the process. that's all from the nikkei. back to you. >> thank you very much. we are just minutes away from super important ruling. >> is it really that important? >> i think it is. >> i don't know. >> i think it is. we can ask. >> how about we discuss after this short break? >> i was about to say. sterling trader a bit lower. the supreme court in london will be announcing its ruling on whether or not the prime minister here needs approval
>> i'm louisa bojesen. your headlines today. an italian impact. italian impact. bt shares fall to the bottom of the stoxx 600 as it cuts its outlook following worse than expected accounting errors in its italian business. facing headwinds. easyjet shares fly lower in early trade as rising fuel costs and a weaker sterling hit the airline's bottom line. generali insures its independence, buying voting rights in intesa sanpaolo in a defensive move to block the italian lender and allianz from any potential takeover. >> we're live at the uk supreme court. awaiting a landmark decision on brexit and whether theresa may's government needs parliament approval to trigger article 50. we'll have that decision in minutes. hello, welcome to "street signs." we're standing in front of the uk supreme court awaiting a
decision from the supreme court on a ruling back at the high court that the government needs parliamentary approval to trigger article 50 and begin brexit talks. the key things to watch out for in the decision due any minute now are first and foremost whether or not they will uphold the high court ruling, which is a decision against the government, which could potentially delay brexit. second whether or not the supreme court says anything about devolved parliaments, their able ility to weigh in one decision either as a consultant or having power as a course of tr triggering article 50. it's believed that brexit
secretary of state david davis would go to parliament and brief the mps and talk about the process of getting a bill approved because no matter what happens in the next few minutes, theresa may and her government want to trigger article 50 by the end of march to begin the process of exiting the eu. we heard from theresa may last week on her 12-point brexit plan. she said she would give parliament final approval when it comes to what the deal looks like. that's very different than the matter we're discussing here today, which would give parliament a say in whether or not they want to trigger article 50 and begin those talks. no matter what happens, sources both on the legal side and within the government say brexit will not be blocked just potentially delayed because the mps ultimately want to vote in the way of the people. which, as you know, the majority was to leave the european union. we are awaiting this decision from the 11 justices of the
supreme court. we are then expecting the president of the supreme court to deliver the statement for a few minutes. you can expect investors are waiting on this one. on the one hand the best case assumption is that the ruling will be upheld. that could see sterling hold in its range if we get a surprise here, you may see some downside pressure to sterling. that would keep theresa may's brexit plans intact and what many perceive to be a hard brexit plan delivered just last week. guys? >> nancy, thank you very much for that we'll come back out to you once we have that decision. let's preview what we're about to hear from the supreme court with david owens from jeffries and anthony willich. david, let's kick things off with you. i argued with louisa before, i said this is not that important even if we get a ruling for the government, brexit will still go ahead. >> i said it's important because it means the opposition party
might be more involved. >> it's nuances. i'll wait to hear from the lawyer in that. i think he's probably got more value than i have. basically brexit will still happen but it's the mechanics of how that occurs and how much parliament will get after the two-year divorce proceedings. as far as we're concerned this is just about the divorce, not new trading arrangements. we need traditional arrangements in play. this kicks the whole thing off. the assumption is they'll push a bill through, whatever happens, article 50 will be triggered. the ball goes over to brussels, because theresa may last week laid out her visions of a clean brexit. >> anthony, come in. >> i think a key point in the ruling is whether or not the supreme court rules that the assemblies in other countries
could rule in it. northern ireland is about to have elections. scotland, there's clear opposition to triggering and pulling out of the eu. i think that's the key point. >> would that mean another scottish independence referendum? >> could do. >> what time frame? >> the time frame is unclear. who there's another scottish independence referendum, the economy of scotland depends on oil. the price of oil has dipped. so the scottish economy is not performing as well as it was when they held the referendum previously. i think the timing is uncertain, but a ruling by the supreme court that the devolved assem y assemblies may trigger a delay. >> how much of a delay? could you envision a year's delay? half year's delay? >> very difficult to predict.
we see the turmoil in scotland that this has caused. the smp would try to make maximum physical output. >> as you can see on the screen, the uk supreme court judges are walking into the courtroom to deliver their ruling. they're now sitting down. let's listen in. >> on the 1st of january, 1973 the united kingdom joined the european economic community. now the european union, the eu. this was achieved by government ministers signing a treaty of succession and parliament enacting the european community's act 1972. over the next 40 years the developments in the eu resulted from further treaties, many of which were adopted in subsequent
acts of parliament some of those acts curbed the exercises of the powers of uk ministers in eu institutions. one of those acts of parliament was in 2008, it approved the inclusion of article 50 into the eu treaties. in broad terms, article 50 provides that a country wishing to leave the eu must give notice in accordance with its own constitutional requirements and that the eu treaties shall cease to apply to that country within two years. on 23rd june, 2016, a uk-wide referendum produced a majority in favor of leaving the eu, and the government then announced its intention to trigger article 50. the issue in these proceedings have nothing to do with whether the uk should exit from the eu
or the terms or timetable for that exit. the main issue is whether the government can trigger article 50 without the prior authority of an act of parliament. the other issues concern the obligations of the uk government under the deevolution legislation and in particular whether the legislatures in scotland, wales and northern ireland must be consulted. as far as the main issue is concerned, as a general rule the government has a prerogative power to withdraw from international treaties as it sees fit. however, the government cannot exercise that power if it would thereby change uk laws unless it is authorized to do so by parliament. the claimants argue that as a result of leaving the eu uk law will change and legal rights
enjoyed by uk residents will be lost. accordingly, they say, the government cannot trigger article 50 unless authorized by parliament. in reply, the government argues that the 1972 act does not exclude the power for ministers to withdraw from the eu treaties, and that section 2 of the 1972 act caters for the exercise of such a power. today by a majority of 8-3, the supreme court rule that's government cannot trigger article 50 without an act of parliament authorizing it to do so. put briefly, the reasons given in a judgement written by all eight justices in the majority are as follows. section 2 of the 1972 act provides that whenever eu institutions make new laws those
new laws become part of uk law. the 1972 act therefore makes eu law an independent source of uk law until parliament decides otherwise. therefore when the uk withdraws from the eu treaties, a source of uk law will be cut off. further, certain rights enjoyed by uk citizens will be changed. therefore the government cannot trigger article 50 without parliament authorizing that course. we reject the government's argument that section 2 caters for the possibility of the government withdrawing from eu treaties. there is a vital difference between changes in uk law resulting from changes in the eu law, and those are authorized by section 2, and changes in uk law
resulting from withdrawal from the eu treaties. withdrawal affects a fundamental change by cutting off the source of eu law as well as changing legal rights. the uk's constitutional arrangements require such changes to be clearly authorized by parliament and the 1972 act does not do that. indeed, it has the opposite effect. the referendum is of great political significance. but the act of parliament which established it did not say what should happen as a result. so any change in the law to give effect to the referendum must be made in the only way permitted by the uk constitution, namely by an act of parliament. to proceed otherwise would be a breach of settled constitutional principles stretching back many centuries. the dissenting justices consider the government can trigger
article 50 without an authorizing act of parliament. their view is that the 1972 act taken with the 2008 act renders the domestic effect of eu law conditional on the eu treaties applying to the uk. in their view, parliament has not imposed limitation on the government's prerogative power to withdraw from treaties and if article 50 is triggered eu law will cease to have effect in uk law in accordance with the 1972 and 2008 acts. on the de-evolution issues, the court rules that uk ministers are not legally compelled to consult the devolved legislatures. they were enact the ed on the f that the uk would be a member of the eu but they do not require
it. relations with the eu are a matter for the uk government. the policing of its scope and its operation is not a matter for the courts. we thank all those who played a part in helping us determine these important legal questions. copies of the full judgment and of a summary version are now available on the supreme court website. the court is now adjourned. >> that was a landmark decision, the supreme court ruling against the government when it comes to consulting government before brexit. they will have to consult with the government before triggers article 50. we still have our guests. apartme there's a victory for theresa may because she does not have to
consult the countries of scotland and ireland, but there are other problems. >> she does need to get the consult of government before the article 50 notice, but she doesn't need to consult or get the consent of the devolved partners. so a bill will be presented to the uk parliament, expected to be a short bill. i doubt it will be significantly delayed in parliament because i don't think parliament will want to be seen to disrupt the democratic process of the referendum, but it does mean there will need to be some debate in parliament, maybe some amendments to the bill as presented by the government.
but i don't expect the timetable to be significantly delayed. >> mixed blessing for theresa may. >> it's a lot cleaner than it could have been if it had gone to devolved parliament t could have gotten messy. >> but with this, the ball is firmly in brussels court. theresa may laid out the logic of why the uk has to leave the single market. it's whether brussels concedes points on in the negotiations. the second point is the transitional arrangements which everyone knows needs to be in play early on it. will take more than two years for this all to unwind. it will be a long, torterourous process. >> do you think this ruling today will have an economic impact? if it had gone down the road of
scotland and northern ireland having their say, at this point it could have gotten messy that would have hit business decisions, led to more uncertainty. at least this is cleaner. we don't know where we're going, but it could have been messier over the next 3 to 6 months. at least we know broadly what will happen. the issue is when we stop negotiations, what then happens. also i'll low into the mix, donald trump. we saw overnight him throwing out a major trade agreement potentially. what's going to happen on friday when theresa may meets him? is he going to offer the uk particular concessions which could then be used as leverage over the rest. >> can she start working on the details of this brexit, is that smart, or do you need to wait for the details of brexit? >> she can start the discussions, but she can't finalize an agreement. while we're still in the eu, the
eu has competence over trade agreements. she can start discussions. i think she should. i think it's important to show the world that britain is global, as she says. she's also planning to visit china in the near future. we need to give business the confidence that international trade is still very important dimension for the uk. >> just reaction from the uk attorney general. he says the government is disappointed by the outcome of the supreme court case. i want to get back out to nancy hungerford outside the supreme court. nancy? >> yes, we have just heard from the attorney general, the government will comply with this decision, and worth noting that the secretary of state for the process of leaving the european union, david davis, is expected to appear in parliament later this afternoon. we were told ahead of this
decision that he may go ahead and presented a draft bill that will then grant the government authority to trigger article 50. they want to get this approved as soon as posble because we know theresa may's government is trying to hit a deadline by the end of march to trigger article 50. i know you were discussing one of the victories here for the government is the fact they will not have to consult with the governments in northern ireland, scotland, wales, that can be seen as a victory. so now the focus will go on the house of parliament later today. we're awaiting a statement from gina miller, the business woman who brought this case. let's see who else is commenting. >> today's decision vindicates his role in shining a spotlight on the rightful process as well as the role that the law plays in ensuring a lawful political
process. this has been a unique and difficult fight, where the legal issues were often clouded by a polarized and politically charged back drop. yet it's been made clear by the supreme court again today and the divisional court that this is a case not about whether we should withdraw from the european union but about the domestic constitution of the uk and the relationship between parliament and government. the result is a reassertion by the court that we live in a parliamentary democracy in which having been elected our mps in parliament have the sovereign power to grant rights and remove them. a power only constricted by consideration of human rights and the rule of law. these rights affect peoples lives, family lives, where they live, where they work, their very right to work in this country. >> let's have a quick look at
sterling/dollar. it's at 1.2462. right after the decision, that saw the rejection of the appeal by the government, we saw the sterling/dollar rising above the 1.2525 handle, but now dropping below that handle once again. i guess this very much reflects the mixed blessing for theresa may. on one hand the government's appeal has been rejected. on the other hand, it will be a lot cleaner for the uk government to push through the brexit triggering because she won't have to talk to the assemblies, the devolved assemblies. >> maybe we can get a chart up of a 12-month cable chart. because we talk about, you know, sterling rallying at the moment or coming off quite a bit. but we're still seeing these huge, huge slumps over the course of the last many months since the vote. we lost 17% or whatever it is. do you think -- you were
throwing trump into the mix. do you think we continue to see sterling go weaker? >> looking at the uk, we have these major imbalances, a very large account deficit, very large budget deficit. the gilt markets have seen substantial inflows of foreigners buying gilts, that's because investors thought the sterling had a flaw. but we need to see sterling weaken over the next couple of years. it's notable that it will go lower, because we need to get the current account back in balance. >> i wonder, anthony, the point, you were making earlier about what happens over the next two years with regards to uk business if we can't cement any of these deals, trade deals before we see the details of how a brexit will look. what is the impact going to be on uk plc. >> trade deals are not the be
all end all. china is the most successful trading nation in the world. it doesn't have any trade deals. you don't need a trade deal in order to trade what is important is that the government shows it's interested in exploring free trade agreements with other countries, important countries like the united states and china, not to mention australia and new zealand as well in the pipeline. i think uk plc has got to press ahead with confidence. we know now what the timetable will be more or less. a lot more certainty than there could have been. there could have been a reference to the european courts, which would have been politically damaging for the government and a delay of potentially years. i think this is a good damage limitation exercise. >> anthony, thank you very much for being with. david, thank you. >> yeah. >> both here to talk about this supreme court ruling. let's look at sterling again
supreme court. gina miller is now speaking, the investment manager in favor of having the brexit vote being challenged. let's have a listen in. >> can take them away. no prime minister, no government can expect to be unanswerable or unchallenged. parliament alone is sovereign. this ruling today means that mps we have elected will rightfully have the opportunity to bring their invaluable experience and
expertise to bear in helping the government select the best course in the forthcoming brexit negotiations. negotiations that will frame our place in the world and all our destinies to come. there is no doubt that brexit is the most divisive issue of a generation. but this case was about the legal process, not politics. today's decision has created legal certainty -- >> gina miller, one of the lead advocates to get the supreme court involved to decide that there needs to be parliamentary approval which is what we saw to today. >> "worldwide exchange" is next.
breaking news, the uk supreme court rules that the government must get approval from parliament to trigger the brexit. we'll tell you what it means and how markets are reacting. on the home front, the first 100 days, president trump set to meet with the ceos of the big three automakers today as he continues to talk trade and jobs. markets now. the bulls look to bounce back after the dow suffers its sixth negative session in the last seven. it's tuesday, january 24, 2017.