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tv   BBC Business Live  BBC News  May 5, 2017 8:30am-9:01am BST

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this is business live from bbc news with rachel horne and aaron heslehurst. the chief executive of the world's second largest investment bank — goldman sachs — has warned that london will stall because of the risks from the brexit process. live from london, that's our top story on friday 5th may. to stay or to leave? yep, the big boss of one of the world's largest banks, goldman sachs, tells the bbc about his preparations for a world after brexit — that's coming up in an exclusive interview. and it's in the air! not quite, it gets there eventually. a new rival to airbus and boeing takes to the skies. china's first home—grown c919 passengerjet has taken off on its maiden test flight in shanghai. and look at the markets. europe is open, it's all about oil, elections and us jobs figures. it's been an election campaign
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that's turned french politics upside down — now is the last chance for the two presidential candidates to appeal for voters before the polls open on sunday. we'll get the inside track on the last week of the contest and ask how much the winner can achieve when they get into office. no specific question today. just letters know what you think of the programme. be nice! just use the hashtag #bbcbizlive. hello and welcome to business live. the head of the american investment bank goldman sachs, has warned that britain's financial centre — the city of london — will stall when the country leaves the european union. lloyd blankfein told the bbc that the bank had contingency plans to move staff to mainland europe, depending on the outcome
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of brexit talks. at the moment goldman sachs employ 6,500 people here in the uk. the bank is due to move into a new premises in 2019 as it tries to bring all its london staff into the same building the stakes are high for goldman sachs. it has around 3a,000 staff worldwide. as one of the world's most successful investment banks it made a $7.1; billion profit last year with the uk operation playing a key part. let's stay with that story. our economics editor kamal ahmed is with me. good to see you. let's start. there he is. i will go of script, this is his first interview in the uk for yea rs 7 his first interview in the uk for years? a number of years. lloyd blankfein used the words london could stall. will stall. will stall,
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sorry. how strong is that from the people you know and we'll talk to? it isa people you know and we'll talk to? it is a strong warning, it is his most substantial take on the risks of brexit, and notjust to the united kingdom as britain leads the eu, but also to the european union. he does not really want to talk about his own profits and his own bank, he knows nobody really cares about goldman sachs and the billions of dollars they make every year, but he talks about the businesses that use the banks to raise money to invest, and governments that use the banks to raise money for the debts they are carrying. he says if there isa they are carrying. he says if there is a poor deal, it means the system of funding becomes less efficient and less secure. i asked him if the uk was less attractive for banks like goldmans and others outside the european union and the single market. a lot of people elect to have their
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european business concentrated in a single place. and the easiest place, certainly, for the biggest economy in the world to concentrate would be the uk — the culture, the language, the special relationship, and we are an example of that. if you cannot benefit from access to the eu from the uk, and nobody knows what those rules and determinations will be, then the risk is there will be some adjustment that will cause some people to have a smaller footprint in the uk. he talks about possibly having to move some people, they play 6500 in the uk, did he give any indication as to how many that means? they are being incredibly careful. britain does not officially leave the eu until 2019, lloyd blankfein said if there was not an implementation period of at least two years they might have to move more people than presently. no numbers on that yet
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but he said he had had discussions, 01’ but he said he had had discussions, or the bank had, in frankfurt, dublin and other centres where they could move to. i pushed him on how far they were on planning to move jobs away from the uk. without knowing how things will turn out, we have to plan for a number of contingencies, and our hope is that we don't have to implement anything until we know what we have to implement. but if there is no period of time to implement whatever changes are brought about in negotiations, we might have to do things prematurely and a range of things prematurely and a range of things a precaution. did he mention any other place around europe that could fill the shoes of london? if you look at places like frankfurt and dublin, where they have operations already, they have operations across europe,
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in lloyd blankfein's words we do not have the legal and regulatory heft that london has. london is a global financial centre and i think, frankly, the big winner if london loses some of our financial services trading into europe, will actually be new york. lots of people might move to new york rather than on to continental europe, because they do not have the breadth. the big message was we want to stay committed to london and europe, it is better for both sides if the trade deal between britain and the eu is as close to what the single market provides that the moment. cool market provides that the moment. cool. kamal ahmed, thank you. market provides that the moment. cool. kamalahmed, thank you. much appreciated. a great weekend. let's take a look at some of the other stories making the news. the oil price has fallen to a five—month low as investor concerns re—surface about a worldwide glut. during friday trading in asia, brent crude dropped to just a fraction over $47 a barrel. it means the gains made since last year's supply cut by the influential 0pec group of oil producers have been largely wiped out. the owners of british airways
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and iberia — iag — has reported better than expected operating profit for the first three months of this year of almost $187 million. cracking numbers! that was before one—off items and amounted to what the chief executive willie walsh said was a record performance for the quarter. us airline delta has apologised and offered compensation to a family who say they were kicked off a flight for refusing to give up a child's seat. individual of an incident, a crew member is film is warning the pa rents crew member is film is warning the parents that if they do not get off they will be committing a federal offence, they will go to jail and their children will be taken into foster ca re. their children will be taken into foster care. it comes after the incident last month were a passenger was injured after being taken off a
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flight. this is my favourite it is all our lines! i would love a weekly show about our lines! shares in the australian airline qantas have hit a nine year high after it said it expected profits for the current financial year to be the second highest on record. in the year to the end ofjune expects to make $1 billion as demand for domestic flights improves. it is the flying kangaroo. guess what, we have more aye lines. i will start and then i will do is the question. —— lets you ask the questions. china's first home made big commercialjet hasjust landed safely after making its maiden flight. the c919 took off in shanghai. the plane has been almost ten years in the making. it is designed to challenge airbus and boeing in the single aisle market. robin brant is in shanghai for us. robin, good to see you. we will talk about what this could mean for boeing and airbus, but nearly ten yea rs boeing and airbus, but nearly ten years in the making, this is a big deal in china? yes, this is a moment
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of national pride. it is a moment for china to prove its technical proficiency to people here and the outside world. it is politically important because china's leader, president xijingping, important because china's leader, president xi jingping, has called for a growing domestic aviation industry that he says can reflect the new capabilities of the world's number two economy. china is focusing on strategic industries in its effort to show technical proficiency and expand production abroad. part of that is the nuclear and is to, part of that is high—speed rail, aviation is one of those. this particularjet was first announced in 2008, we got the maytin take—off and a safe landing in shanghai today, about nine minutes ago. there will be sighs of relief. the key thing is to develop it and sell it not just the key thing is to develop it and sell it notjust in china where, to be honest, domestic airlines are
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very much on board, there are 570 orders and options, but how will they do abroad? make no mistake, selling domestically is important because the chinese domestic aviation markets has the potential to be huge. you have pretty much a nswered to be huge. you have pretty much answered me, whether abroad or not it is one of the fastest—growing aviation markets in the world. the country builds an airport what seems like every year or two. in china alone, abbas and boeing looked towards china for their future order books. this plane and its success could dent those companies? boeing has an assembly plant due to open in beijing in the north next year, i think. they are trying to move on to the domestic market. every time we fly in this country it is an airbus
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0ra boeing, similarto fly in this country it is an airbus 0ra boeing, similar to everyone around the world. this is an effort to show that china has a burgeoning industry and can take on particularly those were courses, the 737 and the a320 made by abbas. —— ta ke 737 and the a320 made by abbas. —— take on those workhorses. there are about 15 foreign suppliers on board, the engines and systems are made by foreign suppliers. getting international safety approval, there have been issues with aeroplanes made by this maker and that will be huge test of international acceptance, which is a crucial part of art for china. thank you. stock markets on the way down today — a plunge in oil prices pulling down energy companies right around the worls and we'll be talking more about that with our markets guest maike currie in a moment. also investors looking ahead to us jobs figures due out later today. the nikkei is shut for a holiday. it is children stay. children's
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day. in europe, markets are down. investors have seen a good run of company results — almost half of european companies have reported their earnings so far with 7a percent beating analyst expectations and 6% meeting them. now let's jump to the us. samira hussain has the details about what's ahead on wall street. if it's the first friday of a new month it can only mean one thing for business and economic news from america, non—farm payrolls. the employment rate is expected to have risen slightly to 4.6%, with a nalysts risen slightly to 4.6%, with analysts expecting the us economy will have added around 185,000 jobs. investors will be laser focused on thejobs report investors will be laser focused on the jobs report and investors will be laser focused on thejobs report and looking investors will be laser focused on the jobs report and looking for clues on the us federal reserve's interest—rate hike trajectory through the end of the year. in earnings news, the conglomerate run by billionaire warren buffett will be reporting. the results of
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berkshire hathaway reduce the date —— announced the day before its annual shareholder meeting. as of market close on thursday, one share in the oracle of 0maha's company will cost you about $249,5a0. there you go. joining us is maike currie, investment director for personal investing at fidelity international. afamiliar a familiarface, a familiar face, good a familiarface, good to have a familiar face, good to have the withers. the black stuff, oil, around $47 a barrel. —— good to have you with us. google will fundamentally is a case of supply and demand. as soon as 0pec brings in production cuts, the us shale producers romper production and there are always the other prejudices, russia. they are producing at record levels. 0ndemand, a year ago we saw the oil price languishing in the first
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quarter of 2016 at around $30 a barrel, there was global growth slowing, concerns around china, lots of that has disappeared so it is co nsta ntly of that has disappeared so it is constantly the of that has disappeared so it is co nsta ntly the bala nce of that has disappeared so it is constantly the balance between demand and supply. we had results from bp and royal dutch shell, good results, but now the oil price is starting to slip, what impact could ban have? it is cast a shadow over those really good results. shell reported a 136% rise in profits, share prices up over 30%, but they cautioned times would be tough and cost—cutting is key. we want the oil price to stay between $50 and $55, $60 a barrel, that is the golden locks scenario where oil is that a—level but it is low enough that global growth can continue but high enough that the oil producers can make money. what about 0pec, people seem make money. what about 0pec, people seem to be losing faith in them? there is a meeting on the 25th of
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the month, there is an idea that they will cut and people go, are you? have they almost lost power? 0pec has been disciplined in pushing through those cuts, but the market is losing faith. they have been resilient to the fall in the oil price and nimble and of course russia... indeed. you are going to come back and we are going to go through the papers. still to come, we'll get the inside track on the french presidential election before voting gets under way this weekend. you're with business live from bbc news. international airlines group, which includes british airways and iberia, has posted a record first—quarter performance in what is usually the weakest part of the year seeing a profit ofjust over $186 million, a rise of 9.7%. our business correspondent theo
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leggett joins us now. not only is he a redhead, but is also a bit of an aviation that, like me. you have to take your hat off in some ways in terms of making money. they have done a job in a three—month period, so what's behind it? lower oil? fuel prices is certainly part of it. it went down about 10%. there's also a resurgence in confidence. the industry has been under the cosh lately with the political uncertainties in the case of international airlines group, including rex it's because ba is a large part of its business but there's also been terrorism fears and that sort of things which have been weighing down on passenger numbers. these numbers this morning are numbers. these numbers this morning a re pretty numbers. these numbers this morning are pretty good. 0perating
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numbers. these numbers this morning are pretty good. operating profit, 170 million euros, up from 155 million from the same period last year. these are positive figures. there are some downsides. the effect of the weak pound, the get their profit in euros, a lot from british airways. the currency difference, it has cost the group as a whole about 32 million euros. passenger revenues, also decreased, down by 4.296 revenues, also decreased, down by 4.2% although the company said it's partly due to the timing of easter holidays which was in march last year. this year it was in april. the net profit figure was down by non—operating costs, basically re—evaluating derivative contracts which means a profit after tax was down by 75% but that's an accounting gesture. the markets like what they see and their profits are up more than 4% this morning. see and their profits are up more than 496 this morning. good
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see and their profits are up more than 4% this morning. good on you. you can talk, can't you? i had other questions but you have covered it all. good on you. we have our business life page. when the airline is going to learn about pr and customer service? picking on a two—year—old! 0k. you're watching business live. our top story. the chief executive of the world's second largest investment bank goldman sachs has warned that london will stall because of the risks from the brexit process. a quick look at how markets are faring. we can see they are all down and the big story is oil, it's pulling down energy stocks and impacting across the world. the two candidates battling for the french presidency are spending their last day
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on the campaign trail before sunday's vote. the frontrunner, emmanuel macron, is in the southern city of rodez. his rival, marine le pen, is campaigning in northern france. and the state of the economy has been a key concern for the voters they're meeting. emmanuel macron wants spending cuts of 60 billion euros. that's $66 billion over five years with a 50 billion euro stimulus package over the same period. he also wants to lower taxes and extend the welfare state. marine le pen has been very critical of austerity. she has pledged to cut taxes for households and increase welfare benefits for the working class. she also argues quitting the euro would give france the flexbility to reduce its huge debts. the french unemployment rate is stubbornly high at 10%. emmanuel macron wants to invest
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in training and apprenticeships, especially for the young. he also wants flexibility on overtime and the 35—hour working week. 0n the other hand marine le pen wants to maintain the 35—hour week, make overtime tax—free and lower the retirement age from 62 to 60. they want to lower it. everybody else's raising it. dr ittie lotem from the university of westminster here in london is an expert on france and joins us now. great to have you with us. can i pick up on one thing straightaway? both want to increase the welfare state. france has a deficit problem, meaning they spend more than it earns in taxes. they want to increase it? france can't afford it,
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can it? but as a whole different question but one of the things, the big problems in france is how to actually make the economy work, how to this is a take the economic model whilst retaining some kind of welfare level comfort. 0ne whilst retaining some kind of welfare level comfort. one of the things of course people in france are very proud of is the french model which has come through after the 2008 crisis, when actually poverty levels have remained extremely low compared to what's happening in the uk and the usa, so this is something france is aware of in terms of maintaining the welfare state. maintain it, but it doesn't mean it works. they can't afford it. their poverty levels are there because the government is throwing more money than they actually earn at its. that's not sustainable. is it? the question of sustainability
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in france always comes down to unemployment. just trying to get unemployment. just trying to get unemployment down, trying to get enough people into the labour market, into a working cycle in order to maintain the welfare state. of course, one of the biggest problems in france is unemployment, which has remained stubbornly high at around 10% for the last 40 years. it is the big building stumbling block for both candidates so whatever they say, the big problem is how to get unemployment down. being realistic, these are two very different candidate but whoever gets elected they got to try to get these changes through the legislative into law. what are the chances of that happening? we have elections coming up happening? we have elections coming up injune. happening? we have elections coming up in june. well, your guess is as good as mine. 0ne up in june. well, your guess is as good as mine. one of the issues here is of course the french election
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system. one will be elected as president, probably emmanuel macron looking at the polls right now, but that doesn't mean they'll have a working majority. they will have to come through from the legislative elections in june come through from the legislative elections injune where any kind of majority is still up in the air. 0k, so we majority is still up in the air. 0k, so we will know the president on sunday, who is the president of france but we wait untiljune to see if they can do anything. if they can make any reforms, 0k. an absolute pleasure to have you with us. have a great weekend. 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 life pages where you can stay ahead on the breaking business news and keep you up—to—date with the latest details between insight and analysis from the bbc‘s team of editors around the world and we want to hear from you. get involved on the business life website. and on twitter. and on
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facebook. business live on tv and online whenever you need to know. we have a story from a financial times about 0bamacare. is more than 100 days since his election and it looks like he's finally starting to achieve his objective is but this is not even definite, is it? no, it needs to go through the senate. it's important because the first 100 days have been a disappointment. he went into office with ten key promises and has not delivered on any of those. there has been a torrent of executive orders and minor tweaks but most are been focused on reversing some of barack 0bama's things he brought in. the key thing is why does trump want to push through health care reform? he wants
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to get his tax reform through and out of those three things he has promised, tax reform, infrastructure and deregulation, that's the one the market is focused on and a lot of the optimism is around that. we've got 30 seconds, so explain the dead mark oysters of china. denmark has a glut of oysters on its coastline and it has gone to the danish embassy in beijing and said, could we sell these oysters to you online? and they got ten days from when they are picked? they can live up to two weeks but they are trying to expedite the customs process. the last thing you want is a dodgy oyster, right? and a great weekend. i appreciate your time. that's it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report. bye bye. hello once again. a dry spell will
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continue the greater part of the british isles, not just continue the greater part of the british isles, notjust for the rest of the day but indeed into the weekend. there's an exception to the rule in the shape of weather fronts associated this low—pressure and if you're hoping that will come its way across the southern half of britain, very shorter rainfall recently, and the fate it'll keep to the french side of the channel. for the rest of the day, not a great deal of change from what we've seen lately. the early low cloud lurking offshore for the most part and the onshore breeze keeping it cool around exposed eastern shores of scotland, plenty of sunshine around and the best of the warmth towards the west. 17—19. asimilar the warmth towards the west. 17—19. a similar prospect across northern ireland with eastern shores are bit cooler. eastern coast of england, a bit more cloud perhaps across east anglia and the south—east and, generally, in the southern counties. but i think there's less of a chance
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ofa but i think there's less of a chance of a spot of showers on the breeze and a greater chance of some sunshine. through the evening, this weather front close by to the isles of scilly and the far west of cornwall down towards the channel islands and with clear skies in the countryside, scotland could see temperatures a few degrees below zero but at least that means a bright start. not a great deal of change across the northern half of britain but with a friend close by to the south, chance of rain getting into parts of cornwall, devon, down towards the channel islands, the isles of scilly and they could be enough of the cloud to bring the odd spot of rain through mid wales, the midlands, lincolnshire, but by the afternoon, i think, midlands, lincolnshire, but by the afternoon, ithink, these midlands, lincolnshire, but by the afternoon, i think, these areas will be dry and the best of the sunshine through the day. the highest temperatures to be found through western scotland, maybe the western side of wales and northern ireland. but the onshore breeze, at this stage, still affecting those eastern coasts. the frontal system moves away as the load trundles on into northern europe. notice how we are
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cranking up the isobars. a change in wind direction but not a warm one. a hint of northerly about it so eastern shores again, 9—12, still dry for the most part of the british isles but the best of the sunshine and the warmth likely to be found towards the west. next week, staying for the most part predominantly dry. take care. bye—bye. good morning from westminster, and welcome to our live coverage of the local election results in england, wales and scotland. at stake is control of dozens of local authorities, providing essential local services to millions of people. it's a very important exercise in local democracy, but it's also a useful insight into the state of public opinion ahead of next month's general election. we'll have coverage of results as they happen, but we already have plenty of news from the counting overnight.
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