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tv   BBC Business Live  BBC News  October 15, 2018 8:30am-9:01am BST

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this is business live from bbc news with ben thompson and sally bundock. italy is on a collision course with brussels over its planned spending spree — but rome says it won't back down on costly election promises. live from london, that's our top story on monday 15th october. italy's populist government is about to submit its budget plans to the european commission — but can it afford to boost spending on infrastructure and welfare — and lower the retirement age? also in the programme... it's a big week for brexit as chief negotiators struggle to reach agreement as the irish border remains a key stubbling block. around the world
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publishers are struggling as they battle the digital revolution — we'll be talking to one uk magazine which thinks there's a future in print. as the iconic department store sears files for bankruptcy in the us — we want to know are we as consumers partly to blame for the crisis on our the high streets? just use the hashtag bbcbizlive. hello and welcome to business live. all these lot to fit. but today we start in italy. the italian government could be on the fast—track to a spectacular showdown with the european commission later. it's all because of it's spending plans. like the other 18 eu countries that use the euro as their currency, it is due to submit its 2019 budget plans to brussels today. but there's a problem. the coalition government — which came to power earlier this year wants to spend more —
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it's promised a boost to infrastructure spending and welfare payments and lower the retirement age. too good to be true, many say. the eu and imf are already warning these plans are unaffordable and will only add to the government's $2.6 trillion debt pile. that's more than 130% of the size of the economy — in the eu only greece has a bigger debt burden. investors are worried that number isn't coming down and the government won't be able to afford it's debt repayments so as you can see the cost of borrowing has been rising in recent weeks. and that graf says it all. sally... federico santi, european analyst, eurasia group is with me now... good morning. tell us how important this week as for italy and why this matters. it's really important, italy is a large economy of course, the worsening crisis could have
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potentially systemic applications but it's an important test for the eu going forward, the first time and openly eurosceptic government comes to power in a major european country, both parties in the coalition drop the early demands to lead the single market, the campaign is on decreasing the deficit, this is on decreasing the deficit, this is at odd with eu rules. —— increasing the deficit. we call it a collision course but what ramifications are there for italy at the dos not stick to the rules? this is part of the problem, the roofs are not easy to enforce, i think the government is betting on the eu commission passing the budget, i think it's a miscalculation but the government could simply ignored demands by the commission, it could lead to sanctions but it's never been done against any member state. what italy can't ignore is as my colleague mentioned, the rise in borrowing costs, if people outside of italy lose confidence in what is
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going on within that real problem, isn't it? exactly, financial markets are constrained for the government, the government is betting that a higher deficit will lead to higher growth and pay for itself, that's not formally the case, on top of that any potential benefits from the new budget are being set by rising borrowing costs. what italy needs is deep reforms rather than more public spending. we collaborate a bedford outcome of what is the right medicine for the italian economy? the bernard reforms affecting the judicial system, the labour market, the public sector, as part of the broader package you could argue a tax reduction would be advisable but it needs to be not in a way that's financially sustainable. we leave it there, thank you. we will keep an eye on how that pans out. absolutely, big week for italy and the wider eurozone, more for that —— on that for you later. let's take a look at some of the other
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stories making the news. the us department store sears has filed for chapter 11 bankruptcy. sears was once the largest retailer in the us but has been hit hard by the shift to online shopping. that's left the firm unable to meet a deadline to repay $130m worth of debt. the company still has 90,000 employees and in its heyday owned over 3000 stores. jp morgan's chief executive jamie dimon has cancelled plans to attend an investment conference in riyadh amid growing tensions between the us and saudi arabia. he is the latest high—profile figure to pull out of a conference dubbed "davos in the desert" after the disappearance of saudi journalist jamal khashoggi. shares of china's internet giant tencent have been hit by beijing's freeze on approvals for new titles that could last until next year. china is the world's largest gaming market. tencent has lost $200bn in market capitalisation this year, largely as a result of stagnant growth in games sales, which make up most of its revenues. we're asking you if we should do
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more to help retailers on the high street, on the business page we have serious filing for bankruptcy, also super dry has had to issue a profits warning after the heatwave hits its sales. super dry as well, talking about £18 million hit because late spells of hot weather hurt sales of winter clothes. it's a story we are hearing a lot with retailers grappling with changing times. much more online. let's return to one of the top stories, about brexit, of course. the brexit secretary, dominic raab, yesterday held an unscheduled meeting with his european union counterpart, michel barnier, ahead of a key summit later this week. but there's still no agreement over the future of the irish border. so what happens now? our politicial correspondent leila naithoojoins us from westminster.
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it was a fuss. visit, wasn't it, i think they talked for an hour but it didn't be any fruit. that's right, a flurry of activity in brussels, all the signs were could this be the sign of the deal with dominic rabb, the brexit secretary, going to brussels to potentially sealed a deal but it wasn't to be. both sides admitting there are issues that need to be resolved and it now seems to be throwing the timetable for the talks and the deal and the agreements out of whack. wednesday isa agreements out of whack. wednesday is a key summit in brussels of eu leaders, that is when the divorce deal, that withdrawal agreement, the outline of it was supposed to be done, then there would be work over the coming weeks on the future relationship, the plan was to be outlined in november but that has all been thrown into jeopardy
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because there is still a fundamental disagreement over the issue of how to keep the irish border open and no checks returning to that border after brexit. there is a complete difference of opinion between the uk and brussels and theresa may very mindful of her pressures at home with within her own party and with her allies the democratic unionists, the northern irish party who say they won't tolerate anything that carbs of northern ireland from the rest of the uk. they give the tory government crucial votes over legislation. if you read any of the newspapers over the weekend you would think theresa may is on very, very thin ground right now given the deadlock talks and further there will be any progress further progress can be made that would secure the future? she certainly is on the ropes. it's always been the case she has had to try to balance competing interests, visions for
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brexit within her own party and she has tried through these many, many months of negotiations, outlining the positions, bit by bit, she has tried to keep all sides happy and to appeal to their better nature to try to come together but i think this week because the timetable is so tight, just days away from what was supposed to be essentially the final summit to agree the withdrawal deal, i think time is running out for her to find a compromise that will really satisfy all sides. thank you so really satisfy all sides. thank you so much. more on that later in the programme. let's show you what happened on markets around the world. asian markets lower overnight despite a bounce back in global equities at the end of last week. there are lingering concerns over the higher cost of us borrowing, as well as the now—familiar tensions between the us and china, brexit, italy's budget proposal and now increased political tensions
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between the us and saudi arabia, are set to keep pressure on this week. oil is the spotlight again too — the disappearance of the saudi journalist piling pressure on riyadh and destabilize the oil rich nation. saudi arabian shares dived 7% at their lowest on sunday. you can see light crude is up. brent crude $81 a barrel. more on that in a moment, but first kim gittleson has the details of what's ahead on wall street today. this week on wall street, earnings season continues in earnest afterjp morgan, citigroup and wells fargo kicked things off on friday of last week. today, we'll hear from bank of america. will it too beat investor forecasts and report better than expected profits? we'll also get a range of reports of companies — from netflix to paypal tojohnson & johnson. we'll also find out about what the impact of president donald trump's steel and aluminium tariffs have
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been on american business. alcoa will report its earnings on wednesday, and nucor, a steel—maker, will report its earnings on thursday. the question is whether or not rising steel and aluminium prices have helped or harmed american business. that was kim, part of our new york team. joining us is kathleen brooks, research director for capital index. a really busy week, we've mentioned italy, brexit, kim looking at the fa ct italy, brexit, kim looking at the fact it's easy for earnings in the us, we haven't even touched on chancellor angela merkel. such a busy season, you have what's going on with the saudi journalist and oil, then that story broke a week ago i don't think many people thought or will open 2% higher next sunday, a huge mishmash, difficult
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to predict for markets will go next but volatility on the rise. we talk about those links, fascinating, no one ina about those links, fascinating, no one in a million years imagining that could have an effect on the oil price but it shows how nervous investors are, clinging onto any bit of information. they are, the ideology going around the markets that politics and different political relations around the world are disintegrating and they are not are disintegrating and they are not a strong, used to believe that saudi in the us would be best mates, you have the stepping up of tension, trump, the new saudi prince who both really wa nt trump, the new saudi prince who both really want to get one up on each other. that's dangerous for markets. also i saw in the news, there was an article talking about the possibility of new trade sanctions coming from the trump administration and of course there's going to be lots of front with the news coming out of the white house head of the mid—term elections, something he believes his base will want to hear about his indications for the markets. the markets will take some
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of it with a pinch of salt, that's a lot of election pledges eating up to the mid—term elections which is crucial to the trump administration, some weakening in support for republicans but on the other hand will they be implemented after the elections? it depends, if democrats win the congress. volatility is a given but which to wrexham we are going in, not that clear. exactly. sorry, we are not helping you that much, are we? still to come... you're with business live from bbc news. is there is still a place for printed magazines? i next guess says yes. you are with us in this life. let's discuss the story we are looking at today. fewer shoppers hit the high street last month, as consumers to rein
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in their spending. visits to the uk's high streets and shopping centres were down by 1.7% overall compared to the previous year. diane wehrle is the marketing & insights director from springboard that compiled the figures, she joins us from the newsroom. good morning. tell us more about this, it's not just good morning. tell us more about this, it's notjust about the weather, is it? no, it's more about our long—term trend and pressure on the household purse. footfall on a downward trend anyway, a drop of around 1% year—on—year, mainly due to the shift in online but over recent months we've seen an acceleration of that decline, has been an issue around the weather, we had a very severe winter followed by a very hot summer, both extremes don't really help retail to a great degree but it's more than that. we are seeing a lesser rise in online spend as well and that was only whether then online would be doing well. it's more about economic pressures that households are facing. it is a perfect storm, we've
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talked about it before, giving people a reason to go back to these places, making shopping centres, high streets, notjust about shopping but give people a reason to go there. absolutely, if we want convenience we can do that online and it's well documented. but if we are going to go out and shop and paid by petrol and car parking to get there then we have to have an experience and more and more retailers are embracing that but to be fairto retailers are embracing that but to be fair to retailers, to shift what used to be a perfectly satisfactory retail offer to an offer that is releva nt to retail offer to an offer that is relevant to today's shopper is really expensive than 20 have economic pressures pushing margins down on retailers that makes it really difficult for them so we see a springboard, and ongoing pressure in football because shoppers are reflecting that in their actions, there are simply fewer shoppers not going to retail destinations. good to see you, thank you for explaining that. i mentioned super dry, on the
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business life page is alerting us to the fact super dry shares down 20%, profits warning which came out earlier this morning. virgin money, agile enough to take on rivals, clydesdale and george bank group officially take over virgin money. if you are a customer i'm sure you are well aware, read the detail online. we'll bring you an update on breaking news we are about to give you, from the press association, the duke and duchess of sussex are pleased to announce that the duchess is expecting a baby, due in the spring of 2019. a statement from kensington palace. the duke and duchess of sussex police to announce
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that the duchess is expecting a baby in the spring of 2019. can i say something? that's so exciting. we have been looking at the fact they arrived in sydney earlier today, her first tour as a royal couple together. it would be if they were together. it would be if they were together as a couple! they arrived in sydney earlier today, on a 16 day tour, and they are going to be going tour, and they are going to be going to australia,, new zealand, tonga, fiji, that area, let's look at the bbc news app, you can see, i'm hoping they will bring it up, harry and meghan arrived in australia, the news breaking the fact that she is expecting their first child, the happy couple you can see, just arrived earlier. i hope she's not got morning sickness. that's a tough flight got morning sickness. that's a tough flight to do. morning sickness or not. congratulations to them! more and more of us are getting our news
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and entertainment online and that's causing a headache for the global publishing industry. the magazine industry has been particularly hard hit, with global revenue declining almost five percent to $65bn over the past five years. but many people still believe in the future of printed magazines. in 2016 stream publishing acquired attitude media, which owns attitude, the uk's best—selling gay magazine. attitude, which was started in 1994, celebrated its 300th issue this year. darren styles is publisher & managing director, attitude magazine. welcome to the programme. good morning ulster you took this magazine two years ago. two years ago, the first gay owner of the magazine in its history. it's really weird. when richard desmond bought express newspapers he disposed of that along with his top shelf
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titles. u2 cover the magazine a couple of years ago, at the time it was not doing well at all. it was stuck in a rut, part of the same decline that you referred to, uk magazine sales have have it since 2011 and 800 million copies a year to 400 million and attitude was part of that and we've had to reinvent and change the positioning of the magazine a bit but that's happening across the board, the days of high—volume low price have gone and there is a move to that coffee on there is a move to that coffee on the sofa moment, the luxury model. you talk about the cheap and cheerful, sell a lot magazines. they had a real heyday in the 90s. you could pick them up for a pound, they we re very could pick them up for a pound, they were very disposable. that has gone, you are saying. pretty much, in the men's sector in particular, nuts and zoo men's sector in particular, nuts and zoo with a big exponents but even loaded and fhm, the huge value monthly is have gone, palmer, the
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handbag sized format was one of the big revolutions of the late 90s and early 2000 is, nme has gone, that's just a website now. big names. quite a few casualties. what are you doing to make sure you're not the next one? any publisher now has to have 67 income streams, it used to be you could exist with advertising revenue and copy sales alone, now you have to be earning money from online, the social space, and from live events, one of the biggest things we do is the annual attitude of words which happened last thursday night and a significant contributor to the revenues, probably 30—40% losses explain how that works. is it actually hosting the event, the money you make from that particular night? absolutely, funded by sponsorship, two big headline sponsorship, two big headline sponsors a car manufacturer and an airline, they plus table cells allow
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us to run that event, 600 guests, black—tie, it's a big showpiece. will you stay in print, every time we have these conversations about magazines or newspapers, online, but rise of online is here to stay. will you stay in print? i think so, certainly for the perceivable future. we found its not price sensitive anyway it once was, we've been able to sell a product that a higher price, invest that money back into the product, we print on better paper and more pages than we did before. people are prepared to pay for that little luxury item that allows them to indulge their specialist interest, really, sadly, i don't want to wish for my own demise, it feels like having a magazine for someone who is left—handed or brown eyes, it's still not universally accept that and we are still a specialist minority community and that's a valuable audience. darren, we have
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to leave it there, i'm afraid, it's a real shame, somewhat more to discuss, as ever with these,... blame the royals, a royal baby announcement! here's how to stay in touch. stay up—to—date with all the days business news as it happens on the bbc business life page, there is inside analysis from our team of editors around the globe. and we wa nt to editors around the globe. and we want to hear from you too. get involved on the web page. on twitter... and you can find us on facebook. business life, on tv and online, what you need to know, when you need to know. some of you getting in touch about the breaking story, we told you some moments ago news that the duchess of sussex and prince harry of course, announcing she is pregnant. they are very
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pleased to announce that the duchess of sussex is expecting a baby, this is not like footage, by the way, in case are wondering. they got married in may. yes in indeed, at windsor castle. we just had another wedding at windsor castle on friday, princess eugenie got married. they are going to have a baby in the spring. how exciting. currently in australia, very exciting, i am sure the weather was much like that. it's not like that in london. let's get kathleen involved. lots to talk about. we are asking the viewers about. we are asking the viewers about the high street and sears. it employs still 90,000 people in the us, a lot of people. it is a lot. wondering if they will have a job in the future. what's interesting about this new york times article, the rise of e—commerce striking it
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affects the chairman who was a hedge fund manager, even that management model tends to be frowned upon but it basically blames him. it says when he acquired sears about a decade ago he stripped out the profit making strong parts of the business and left this floundering business and left this floundering business and left this floundering business and what's interesting, the bits he stripped are actually doing very well. it's a bit more... that was the reason he went to sears. it's a bit more nuanced. the figures are astonishing, by $20 billion lost over five years, shelving and more than a thousand stores, 68,000 staff who work there. when you see those numbers how do you sleep at night knowing you've lost five pointed billion dollars, incredible. he is a billionaire anywhere, maybe numbers are relatively new get to that stage. a decade ago it employed over
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300,000, what's interesting about it and the article goes on, the original series was almost an early version of amazon, a postal order business that the selling watches to railroad men to remote parts of the country using a postal service. why do you go to the high street? it's for niche products, i love independent stores, coffee, definitely, restaurants, ido independent stores, coffee, definitely, restaurants, i do more of that and they do a lot of online, i have to say. let's bring in some pure comments, one, peter, says we have to do our bit to increase footfall, a lot simpler to order from home, i'm taking this further, having across the atlantic, i refuse to use trains that aren't steam powered. he's going all out for it. keep an eye out on those messages using our hash tag. thank you for your company and messages. that's it from us. goodbye. hello, good morning. a very wet
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weekend but things improving for this week. looking mostly dry although this morning some rain around across central and eastern areas that will clear away, some sunshine for some of us developing. on the satellite you can see a fair amount of cloud, springing rain from yorkshire and lincolnshire down towards the south—west. that gradually petering out, this afternoon confined to lincolnshire, parts of norfolk, the far south—east of england are some sunshine developing, sunshine for scotland and northern ireland, the far north and northern ireland, the far north and north—west of england. temperatures between 11 and 14, in the south—east temperatures reaching 18 perhaps even 19 degrees. through tonight it remains quite cloudy, some patchy mist and fog developing for england and wales. that'll keep temperatures up in double figures,
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the scotland and northern ireland some serious bills, temperatures falling into single figures. chilly start on tuesday, rain pushing in, gale force winds expected in the far north—west of scotland, the rain moving its way through northern ireland, some sunny spells later, some sunny spells developing for england and wales, mostly dry, temperatures in the south—east doing quite well, 20—21, elsewhere 14—16d. tuesday night into wednesday, the weather front of the uk gradually weakening, by the time we get through wednesday, looking at hands of cloud and some spots of light rain and result down towards south western areas of england. gradually easing, further north and west lots of sunshine on wednesday, a fine and dry day and temperatures about 14-18d. dry day and temperatures about 14—18d. thursday, the weatherfront
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moving its way out, this big area of high pressure, the azores high taking hold across the uk, extending this dry, settled weather throughout thursday, still a little bit of cloud, mist and fog first thing on thursday, mostly clearing for most of us, dry with some sunny spells developing. maximum temperatures between 12 and 15 degrees. that's all from me, have a great day. goodbye. hello, it's monday, it's nine o'clock, i'm victoria derbyshire, welcome to the programme. our exclusive story today — hampshire police become the first force in the uk to hand out leaflets to suspected child sex offenders warning them to change their behaviour. we are reassured by the fact that, through that supported police engagement, that management of the risk they present, that actually we are not seeing those people coming back across our threshold.
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this is effectively criminalisation by default without going through the proper mechanisms that have been set out by parliament to ensure that people's due process rights are protected. hampshire police say the notices are only handed once an investigation is done but there's not enough evidence to charge. one police and crime commissioner tells us the leaflets "won't protect a soul".
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