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tv   BBC Business Live  BBC News  January 22, 2018 8:30am-9:01am GMT

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this is business live from bbc news with ben thompson and samantha simmonds. germany takes a big step towards finally forming a government, four months after holding inconclusive elections. live from london, that's our top story on monday the 22nd of january. angela merkel gets the go—ahead for coalition talks from her former partners, what will it mean for europe's biggest economy and the rest of us? also in the programme.... the us working week begins with the government in shutdown, what will it take for republicans and democrats to break the deadlock? and that will weigh on markets today — but investors upbeat after strong global growth forecasts and a raft of healthy corporate earnings — we'll have the details. and all aboard the yacht share. we'll hear from the man whose says
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if you can't afford your own boat the sharing economy has rigged up all the answers. and at amazon opens a supermarket with no checkout, relying on cameras and computers to check your shopping, we want to know if it is a welcome move for the rise of the robots. just use the hashtag #bbcbizlive. if it means you don't have to use those self—service checkouts, unexpected item in the bagging area, type things, it is good news as far asiam type things, it is good news as far as i am concerned! just use the hashtag #bbcbizlive. germany is creeping closer to forming a new government which would keep angela merkel in the topjob. it comes four months after an election that delivered no clear winner. talks will begin today after the centre—left social democratic party changed its mind and said it would now hold talks with chancellor merkel‘s conservative cdu group. but it could mean big changes for
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what is europe's largest economy. over the past two years, germany's economy has been growing consistently. rising incomes have helped to boost tax revenue, but mrs merkel‘s government has been criticised for not spending the extra money. germany remains the only country in the g7, the group of seven major economies, that earns more tax than it spends. in fact, germany has the largest budget surplus of any country in the world. the social democrats want that to change. they're pushing for a cut in taxes for low earners, and an increase in spending on schools, pensions and housing. pepijn bergsen is the germany analyst at the economist intelligence unit, which is a business advisory firm. thank you for coming in. we are expecting this coalition deal to go ahead in days, if not weeks. what is
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it going to mean for the german economy? more of the same, or all change? i don't think the deal will have that much impact on the german economy itself. there are a few things they have agreed on so far. there will be more talks in the coming weeks and there might be some changes. but these are all relatively small, it is not a big rejigging of the german economy that will take place under effectively the same government that we have had over the last four years. as we have just been hearing, they have the biggest budget surplus in the world, the only other g7 countries do have one. why are they holding onto this cash? part of it is the very german preference for alistair burt jet, financial prudence. they have been spending more. —— the german preference for budget prudence. they wa nt to preference for budget prudence. they want to keep that budget balanced. it shows what a fine balance it is, if you are in power in any country. clearly, good news that they have a
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surplus, always better to have money in the bank for a rainy day. but there is criticism that they need to start spending it? i have touched on some of the areas where they want to spend it. why have they not been doing so far? as i said, there has been some spending, but it has been quite limited and enough to counterbalance the really strong economy. on the other hand, germany just really wants to run a budget surplus. even if they do start spending, they have physical rules in place, which they have had in the last few years, saying that they can't go too much into deficit. if they do agree to new measures, i would not expect big changes in germany. the eurozone needs this to go ahead, they need stability, angela merkel leading the country will someone else. tell us how that will someone else. tell us how that will impact on their ambitious reform programme? with emmanuel macron coming in as president in france, there has been quite an ambitious reform agenda set out for the eu and eurozone. there is a
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really limited window of time in which they can end of this, which is the first half of this year. —— in which they can implement this. they need a government in place, not a ca reta ker need a government in place, not a caretaker capacity like the moment, but a full government in place with a mandate to go through with reforms. how rare is it to have such a surplus? i am taken by the fact that, given everything we have seen of the economy lately, and we acknowledge that the growth in germany has been pretty strong and consistent, how rare is that? extremely rare. as you said earlier, it is the only g7 country running a surplus. there are a few other countries in the world running small surpluses. none of these are the size of germany in terms of economy, let alone the surplus they are running. that is incredibly rare. that has also come with a cost, on one hand. germany has arguably not invested enough in infrastructure over the past decade at least. there
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has been a push to work on it in that direction, and to put more money into roads and other public infrastructure. good to see you today, thank you. let's look at some of the other stories making the news... the united states senate is due to hold a vote at noon that could end the government shutdown. more than 500,000 federal workers are being forced to stay away from work until republicans and democrats can agree a deal on how to fund government spending. essential services are continuing, but many such as visas and passports are being disrupted. facebook says it will open three new centres in europe to train i facebook says it will open three new centres in europe to traini million people in digital skills. that is over the next two years. it wants them to use the platform to launch and expand businesses. the so—called community skills hopes will be located in spain, poland and italy. oxfa m located in spain, poland and italy. oxfam says global inequality increased last year with tax
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evasion, the erosion of worker rights and cost—cutting contributing to the gap. the charity says 82% of money generated went to the top i% of the global population. it questioned how it reached the conclusion. let's turn our attention to events in asia. share in the japanese conglomerate toshiba have risen amid reports that it's considering selling it's prized memory chip business on the stock market. we have talked so much about it. it could be floated on the stock market. the financial times said it was being considered as another way of raising the billions of dollars it needs because of the problems at its us nuclear unit. christine hah is in our asia business hub is in singapore. i touched on the fact we have talked about this so many times, and finally there might be an end in sight? well, actually, there is a ha rd sight? well, actually, there is a hard end, the end of march, the deadline that they are waiting for. if you remember back in september, toshiba had agreed to sell the lucrative memory chip business to a
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consortium led by bain capital. but it was quite desperate then, liabilities were more than asset and it was facing a possible delisting from the tokyo stock exchange. since then, toshiba has managed to raise money from an equity issuance, which let it pay down some of the liabilities. it is in a much better bargaining position now. so, some shareholders are saying that the ipo option is a much better deal and that it should walk away from the agreement. that is where the anti—trust regulators are at the moment. they have until the end of march to approve the deal. if no approval is granted, toshiba can supposedly just walk away and consider other options. even if approval is granted, some people are saying that toshiba could still find a better option. toshiba still says it is committed to the bain sale, but investors like the alternate option. shares jumped by but investors like the alternate option. sharesjumped by as much as 7% today, before closing a little bit lower. something tells me we
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might speak about this again at some point in the near future! that have a look at the numbers. there is a new trading week. a bit more caution amongst investors, coming after hong kong hit new all—time highs and tokyo's nikkei cracked 2a,000 for the first time in 26 years last week. all of that momentum moving markets upwards. markets barely moved across asia by the close — all keeping an eye on the us where that government shutdown continues. in europe, attention likely to be on two important central bank rate meetings this week. firstly the bank of japan meets for the first time since that unexpected tweak of monetary policy this month — cutting its monthly bond buying program. and on thursday the ecb meeting will contend with the rise in the value of the euro. officials there have already warned that a strong currency isn't particularly what they need at the moment. more on that shortly, but first to the us where samira hussain has the details about what's ahead
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on wall street today. on monday, streaming giant netflix will be reporting earnings. its most popular shows like the crown, stranger things, will be boosting revenue and profit. netflix has been setting aside more money when it comes to creating content, so they can better compete with rivals. as a result, it had to raise the price for its servers. so, investors will be looking for comments on how viewers have reacted. also reporting, haliburton. the renewed drilling boom in the united states will help the company's profits. halliburton, which makes about 55% of its revenue from north america, is benefiting from higher us production, which is expected to surpass io production, which is expected to surpass 10 million barrels per day in the month of february. joining us is shaun port, chief investment officer at investment management company, nutmeg. good to see you. let's talk about
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the us federal shutdown. last time it happened in 2013, it closed 1a days. so far we are only going a couple of days. it cost the us economy $2 billion in lost productivity. that is not what few wa nts to productivity. that is not what few wants to see happening? but it is a political stalemate, not about the economy, it is pure politics, particularly in the republican party. it's not necessarily republican against democrat, it is within the republican party. there was a hit to the us economy, but not really material when he think of the size of the economy, and bearing in mind the big tax cuts coming in and potentially more infrastructure spending. the us economy doing well, this is a bit of a road bump. explain what it means for the day—to—day, what does it mean for people in the us? it cuts back nonessential spending. that might be parts being closed, it is not defence, not health care. the statue of liberty is shut? the new york mayor is trying to get it open. the
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people that were not going to work today, in theory not being paid, they have actually been paid historically for lost wages. it does not necessarily produce a lasting hit to people that have been sent home. i would love to see if the people that are not at work have gone to have lunch somewhere, you get a weird boost? if you have been through this before, if you expect to be paid, you might have a nice day. win- win! we are expecting this german deal to be signed, seemed and delivered. what kind of knock—on does this uncertainty? think it is holding back a lot of the progress that people want to make in the european union. france is pushing the agenda to be more integrated, more common european policies in germany. it can't really be involved in those talks. it has obviously had an impact on brexit negotiations as well. germany coming back to the table, with angela merkel having firm leadership, that is really important. bear in mind the italian
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general election in march. political risk in europe has fallen off the agenda, but it might come back when we get the italian elections. we will see you later for the we get the italian elections. we will see you laterfor the papers. sean is go to talk to us about amazon supermarkets with no checkout. keep your comments coming in. a lot of you getting in touch about whether it is good news or robots just about whether it is good news or robotsjust doing more about whether it is good news or robots just doing more stuff in day—to—day lives. jay still to come, all aboard, if you can't afford life on the high seas, codesharing a yacht didi and your prayers? one man says it is a way to have the lifestyle without the hefty price tag. stay with us. peugeot's boss carlos tavares is to meet with the uk unions and government officials, to discuss the future of peugeot's vauxhall plant mr tavares has already warned that 250 ukjobs could go — on top of the 400 that were lost last year — saying production costs in the uk are twice as high as in france.
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theo leggett is following the story for us. this is an interesting one. clearly, if you are affected by these job cuts, it is very serious news. but there is a big economic story when it comes to wear is cheaper to produce these cars? absolutely, this is about the big picture. ellesmere port currently builds the vauxhall astra. sales of the car is declining, it is not as popular as sport utility vehicles, and it is getting long in the tooth. that said, they have said that production will remain at elms —— elms near the top 2021. what happens after that? there is kind of a beauty contest going on within the entire psa group, about where the next generation of cars get built. what
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he has said frequently in the past is that he looks at efficiency and profitability. if plants can prove they are efficient and profitable, they are efficient and profitable, they stand a good chance of getting work. if they can't be, then they will not get the work. now, in the past, tells me a —— it has been inefficient compared to other plants in europe. it has an old production line, sales are declining. what people there tell me is, with the removal of one shift, the removal of several hundred jobs, it is becoming a lot more efficient and that puts it in the ballpark so it can compete with other plants across europe for the next generation of work. that is what len mccluskey, the chairman of unite, is going to be saying to them when they meet in paris. thank you very much with the details of what's happening with peugeot and vauxhall in the uk. there is a story online about ocado possibly having a
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deal with a canadian firm. i'm just trying to find it. it's going to be good news for ocado because they've been trying to make a deal with a company somewhere. plenty more details on that and check out the details on that and check out the details on that and check out the details on the website. our top story, the euro has risen after germany moved closer to forming a new government. all of this coming for months after an election in the country that delivered no clear winner. talks will continue later to try and form a coalition. a quick look at the markets. an interesting story, one that
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markets will be watching closely. britain's economy should be prepared for a more optimistic year ahead. all of that coming from an interview with the former treasury minister lordjim o'neill. he supported britain remaining inside the european union and has been speaking to our economics editor kamal ahmed. in principle i share the views of many that brexit is like a really weird things with the uk to impose on itself from an economic perspective. but i add at the same time, i have felt for a good couple of years, as important as brexit is, it isn't the most important thing facing britain's future. things like regional inequalities and the underlying productivity problem are much bigger issues. do you think now with this possibility of productivity being better, british economy is going to do far better than you expected a year and a half ago? i certainly wouldn't have thought the uk economy would be as
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robust as it currently seems. but, thatis robust as it currently seems. but, that is because it looks to me like some parts of the country led by the northwest a re actually some parts of the country led by the northwest are actually doing way better than people seem to realise or appreciate, as well as this crucial fact the rest of the world is doing way better than many people would have thought a year ago. it makes it easierfor the uk. would have thought a year ago. it makes it easier for the uk. lord 0'neill makes it easier for the uk. lord o'neill speaking about those brighter than expected forecasts for the uk economy. markets will buy just those and will have the details a little later. —— markets will buy now, you might think owning a yacht is the reserve of the rich and famous. and you're probably right. the market for boats and yachts is soaring, and it's good news for british exports. the uk industry grew by 3.4% in the last financial year — that's the best result since the financial crisis and it's largely because of the fall in the value of the pound after brexit — it makes british made goods cheaper overseas, and means foreign sales rose by 4.7%. but what if you can't afford
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to buy an entire boat? well, maybe you could own part of one. one company — flexisail — buys boats and allows between seven and eight customers to buy a share of it for a fraction of the price. boss richard pierrepont has been speaking with kim gittleson and she asked him how he got the idea for flexisail. flexisail started as an american concept back in 200a. it really came with the advent of the internet becoming available for people to be able to book online and we saw the concept and brought it over to the uk back in 200a. concept and brought it over to the uk back in 2004. 2005 concept and brought it over to the uk back in 200a. 2005 was our first season and here we are 1a years later, having built the business and developed it to quite a big size with training and social programme integrated part of what we do. how has business been? we've heard a lot
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about great in the uk in the yacht industry, is that something you've seen? our business is different from charter in that what we are doing is giving people the ownership experience without buying. of course what that means is they are getting the advantages of owning their own boat, having use of it throughout the year, having a high quality boat and being able to treat it as their own. we are very much an expanding part of the market because to go out and buy your own boat and have it sitting there for 300 days a year not being used is a very expensive and exclusive thing to do. the reality is it's better to have access to a boat that someone else is looking after. the time you have available for sailing you can actually spend it sailing and not maintaining itand actually spend it sailing and not maintaining it and getting your fingers frozen off in the winter doing maintenance. who are your competitors? we don't really have any. there are many companies out
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there that have one form or another of charter, where basically you have a fleet of boats and anybody can roll up and effectively charter that boat for one day, a week or a fortnight. to ask, the problem with thatis fortnight. to ask, the problem with that is that you're getting a very wide range of people using a boat. some are competent, some are highly incompetent. of course when you have multiple uses of anything it's a bit like an office paul carr, nobody wa nts to ta ke like an office paul carr, nobody wants to take responsibility for it and the rubbish gets left behind and everything else —— and office pool car. we've tried to take a boat and spec it to a very high standard that an owner would ideally like, and then having a very small number of people having exclusive use of that yacht. has brexit impacted your business so far and are you optimistic about the future? brexit is always in the back of people's
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minds. we tend to buy french bows, so they are always bought in euros. generally speaking i think we are an expanding market and there is a realisation that this is a more cost—effective and sensible weight to sail. the rise of the sharon economy has been one of the bigger stories over the past five years, —— sharing economy. people more co mforta ble sharing economy. people more comfortable with the idea of sharing a boat? i think it started with aircraft went if a company wanted a use of a private aircraft, they wouldn't buy one, they would rent a certain amount of time to have use of it. i think that has percolated down. there have been variations of sharing going on for a long time but i think we've modernised the concept and made it more accessible and easier to come into and out of. our members have nothing to purchase and nothing to sell so after a year or
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two years, they can tick that box and say we've done that, let's move onto something else we are interested in. or as many do, they've got the bug and they are off to buy their own boat and sail over the horizon. do you fancy one? shall we share one? laughter what other business stories? we've got the story about amazon opening a supermarket without any checkouts. this is about amazon go. you go into the store, log in with your smartphone and you can just walk out of the store having charged your credit card account. i love the idea of this. i sent you my quite like this. there are a real mix of use.
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one viewer says no issues, if it works and gets rid of cues. someone raises the point that this means you aren't paying someone minimum wage to work on the till. this is about data. this is absolutely about data. this is a test for a year without employees. seeing what people do in the stores, what they buy. you've got to bear in mind this is driven by artificial intelligence and predicting what people are going to do. if amazon can predict, they can sell that information to other providers, to the suppliers and also make their stores more efficient. up until now they've only been able to get that data from the website. this is taking what they've learned from the website and putting it into a physical store. absolutely. if you have an amazon customer with amazon prime, they can use that information in the stores. in some way it's
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quite scary from a security point of view but actually this is about amazon being predicted in how it uses its data. i think you'll start to see the these tests in giant supermarkets, this will happen quite a lot. one viewer says if all companies replace workers with robots, no one will have any money to buy anything in their shops. very good point. another story, new cars are safer than ever because of driver assistance systems. is this all part of improving safety or moving towards the inevitable which will be driverless cars? there's already a lot of safety systems and cars. predicting when you are about to have a collision and hitting the brakes. these are quite simple but moving on to autonomous cars, the level of sensors will predict accidents much more. it's amazing. thank you. thank you for watching. some milder temperatures on the way
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to start the week this week. if we compare the temperatures we saw yesterday, if you place is struggling to get above freezing. on tuesday a marked increase in temperatures in many places, up into the double figures. a maximum of 1a degrees on tuesday. as this milder airdrag them degrees on tuesday. as this milder air drag them from the south—west replacing that colder air slowly as we move through the day today. and improving picture with more persistent rain in the north to begin with. turning increasingly showery with the showers increasingly fewer and further between. a scattering of showers in northern ireland, north—west england and wales but drier weather around as well. this afternoon temperatures across scotland 6—7. still a few scattered showers in the north and west. if you like to showers in northern ireland. a lot of drier
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weather around. the best of any brightness in the east. the mildest temperatures in the south—west. as we go through this evening and overnight, some breaks in the cloud in the north and east will initially allow the temperatures to fall away fairly quickly. change will come as we move through the night. wet and windy weather approaching from the west. overnight temperatures not falling too far. a frost free start to the day tomorrow. this milder air firmly spreading across the country. tomorrow looks like it will be the mildest day of the week but it doesn't come with wall—to—wall sunshine. a fairly cloudy start of the day with outbreaks of rain. it will be windy across the board. the rain heaviest over higher ground and there will be some drier interludes as it works its way eastwards through the day. brightening up from the north—west but with that some blustery showers. as we move into
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wednesday a cold front will move eastwards, bringing a spell of wet and very windy weather. behind it something a bit brighter and fresher, temperatures between 7—13. as we move into thursday and friday a mixture of sunny spells and showers. temperatures down a bit on what we see at the start of the week. not quite as cold as what we've seen over the past few days. hello, it is monday, it is nine o'clock. welcome to the programme. the head of the army speaks out on defence funding in a rare public intervention. general sir nick carter will warn of the potential threat posed by russian long—range missiles and cyber warfare skills. his call for more money has been welcomed by military colleagues. there is a russian threat out there. i visited russia last year for the may day parade. i found that their capability was awesome. not only in
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the conventional side, but also, as we know, the developments in the cyber and high technology. large numbers of young women say they are too embarrassed to go for a smear test, putting themselves at risk of cervical cancer. i've not met a woman yet who didn't say they were embarrassed, so i did put lots of things in front of mine.
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