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tv   BBC Business Live  BBC News  January 24, 2018 8:30am-9:01am GMT

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this is business live from bbc news. i'm ben bland in london. and i'm sally bundock in davos, at the world economic forum. could europe he set for a big pay rise? germany's biggest union demands an inflation—busting deal for millions of workers. live from london and davos, that's our top story on wednesday 24th january. the industrial workers union normally sets the tone for pay across germany — but will they end up helping the eurozone wind down its stimulus programme? also in the programme... full steam ahead for the pacific's free trade deal. australia welcomes the new deal that's been reached a year after the united states withdrew.
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of climate change. i will be talking to the boss of the world's biggest wind energy producer, who is here in davos. and we want you to be a part of the conversation. as quitting smartphones is described as the new "quitting smoking" in the ft, we're asking, are you addicted to your device? and if you quit your smartphone, what would you miss most? let us know — just use the #bbcbizlive. that's an easy question, i would
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miss your tweets the most! hello and welcome to business live. as europe's biggest economy germany often sets the tone for what's happening across the rest of the continent. and a big pay increase could be on the cards if germany's biggest trade union, ig metall, gets its way in the latest round of talks with the industrial manufacturers that are the bedrock of the economy. ig metall represents about 2.3 million workers and wants an above inflation 6% pay rise. the other key demand is the flexibility of switching to a 28—hour working week. the union is threatening more strikes. but one of the big concerns for companies is that unemployment is at a record low 3.6%, so they're worried there won't be enough staff to fulfil all orders if those workers have the option of less hours. unemployment has also been falling across the rest of the eurozone as the global economy continues to pick up, so workers
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are in a strong position to demand higher wages. if they get them, it could prove helpfulfor meeting the european central bank's target inflation rate ofjust below 2%. they've been struggling to do that, but moving forward, it will help them unwind their stimulus programme. with me is karl brenke, an economist at the german institute for economic research — he joins us from berlin. so, if these demands are met, what do you think the impact would be on the german economy and the wider european economy? last year the great unions, we have had wage increase of about 2%. and the
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inflation rate in germany is nearly 2%. and therefore we have no increase in real wages. on the other hand the companies had a good business last year and therefore i think higher wages are necessary, and in my opinion, the increase must be 4% or more. and i think it is important that we have a push for the business cycle inside germany, for the domestic demand here. and how damaging do you think these strikes would be? yes, strikes in germany! i think most of our leaders of the great unions know strikes
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only from history! i don't think we will have strikes a! so, what do you think as the rest of europe watches this round going on between unions and the manufacturers, as i have mentioned, which form the bedrock of the german economy — do you think there will be any discomfort elsewhere at how this is unfolding oi’ elsewhere at how this is unfolding or not? of course. we have a good employment situation, and therefore, the trade unions are in a strong position. and i think it would be good also for the other countries of the eurozone if we will have higher wages in the manufacturing, because in the last year's, from germany, in the last year's there was a pressure from germany to other countries because of too slow wage increase. so, you think that if they get their
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wages increases in germany, we could see wage increases across the rest of the continent? i don't understand? so, if they get these wage rises in germany, do you think that would be reflected by wage rises elsewhere in europe? no. i think we have a special situation in germany. we have nearly full employment, and if! germany. we have nearly full employment, and if i compare the situation with the south, i think there are others which will have not such an increase in other countries, like greece or spain. i think in germany, a stronger wage increase is necessary, but not in the south of europe. karl brenke from the german institute for economic research, thank you very much indeed. if you wa nted thank you very much indeed. if you wanted a theme for the day at davos, as opposed today would be europe
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day. angela merkel and other european leaders will be there, sally? yes, there's more heads of state this year than there have been for many years. we have got a helicopter just above us for many years. we have got a helicopterjust above us and i think thatis helicopterjust above us and i think that is delivering a guest, a delegate who is arriving! us president donald trump will be arriving by helicopter tomorrow morning. so, it is all going on here. it is interesting to hear your guest karl brenke, i wonder if angela merkel was listening to him as well as a man of course bbc world news is broadcasting here in davos, and she is here and she is preparing to deliver her special address to all those who are gathered here for the world economic forum. and i would imagine many will be wondering what she will have to say when she has so much going on in germany, with the dispute between ig metall and businesses, but also, of course, trying to form a coalition government. so, a very busy day here
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in davos. we have got her and emmanuel macron speaking later as well as the italian prime minister. back to you. let's take a look at some of the other stories making the news. us senators have approved president trump's choice ofjerome powell for the next chair of the us central bank, the federal reserve. the man taking over the world's most powerfuljob in economics is a republican who is seen to back low interest rates. the former lawyer is expected to take over from janet powell to take over from janet yelen at the beginning of next month. the boss of ikea group has told the bbc that the company pays its fair share of tax worldwide. speaking in davos, jesper brodin said the swedish furniture giant thinks it is "important to contribute to society in many ways and paying tax is one of them". eu tax officials opened an investigation last month into inter ikea — a seperate part of ikea, which
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controls the company's brand rights. the entertainment giant walt disney says it is giving 125,000 of its us staff a one—time bonus of $1,000. it's because of the tax reforms that president trump signed into law just before christmas. the company also says it is launching a $50 million education fund for staff on hourly conditions, in order to help them earn degrees and other qualifications. australia's prime minister has become the latest to welcome a big new trade deal. the trans—pacific partnership covers 11 countries and received a major boost at davos on tuesday when canada confirmed it would join the deal, a deal which the us pulled out of last year. leisha santorelli is in singapore. tell us more about what the
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australian prime minister had to say? well, sally, after us president trump pulled america out of the tpp, many trump pulled america out of the tpp, ma ny a nalysts trump pulled america out of the tpp, many analysts said it was dead in the water. but it was clearlyjust on life support because it has been revived. australia's prime minister has hailed the new deal, calling it a multibillion—dollar windfall for his country. australia along with japan was critical to convincing canada and justin trudeau to return to the table after he refused to finalise the tpp last year. however, the critics and the australian opposition leader say that without the us trade deal has pretty much lost its shine and that there is a lack of specifics, especially because the us it counts for 40% of the global economy, but without it, just 13%. earlier this month it was
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reported that the uk was possibly looking tojoin the reported that the uk was possibly looking to join the tpp, so who knows, after brexit, could replace the us? thanks very much to you both. asian share markets took a time out on wednesday as investors were left breathless at the breakneck pace of recent gains, while a fresh burst of speculative selling took the us dollar to three—year lows against the euro. japan's nikkei lost 0.8%, though that was coming down from a 26—year high. that reflects the strengthening yen, which hits japanese exporters. the main stock markets across europe were steady at their open — none of them moving much in either direction. the pound held above $1.40 overnight. investors were betting on tighter
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monetary policies from central banks, bringing them in line with the federal reserve. it is a big day for corporate earnings here in the us, among the many companies reporting results being general electric, which had to lay off thousands of people in 2017 and it also changed its leadership as it tried to plug falling profits. investors will be keen to find out if rumours about the conglomerate splitting into smaller parts are true. ford motor company will also announced results and its forecast for 2018. many will be waiting to hear what tax reforms will mean for the car—maker. whirlpool is expected to report an increase in revenue. it stands to benefit greatly from the latest tariffs imposed on washing the genes in the us. there will be interested to find outjust how much the company thinks it could gain. joining us is james hughes,
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chief carket mnalyst at axi trader. good to see you. sup of the dollar doing really interesting things — what is your take on what we're seeing? we're seeing some real big moves. the overall dollar index, which isn't paired against other currencies, saw its biggest fall for three years. so that is a big, big move. dollar weakness has been almost a hallmark of donald trump's presidency. we all talk about the upside that we have seen in equity markets and the dowjones hitting new landmarks pretty much every day, but the us dollar has been particularly weak. if you couple that with the fact that we've had slightly better stories out of the uk over brexit, that is why you can see sterling flying above 1.40 against the dollar. stories out of europe as well, and we have seen the bank ofjapan, all positive for their currency as well. add that towards the negativity in the dollar
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and it all gets confounded. it almost doesn't seem like a continuation at the moment, it seems difficult to find any positivity for the dollar at the moment, because it has been so aggressively lower. as you know, sally is in davos and i think she has got a question for you?! i have always got plenty of questions forjames! what i wanted to ask you, actually, is to what extent you and your colleagues are watching what is going on here in davos, because here we get a sense that there's so much being said, so many announcements, a lot about trade, for example, especially with trump arriving tomorrow — are you guys watching it or is itjust business as usual this week for you? we do keep and eye on it. it is an incredibly important weak. but i don't think it necessarily causes too much in the way of a big change too much in the way of a big change to the way we work. it is seen as a lot of hot air sometimes over there. it isa lot of hot air sometimes over there. it is a lot of political posturing, and the markets don't really care
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for anything too political. however, when get so many heads of spray state, angela merkel, emmanuel macron and donald trump etc, but is where we will get much more focus on davos. thank you very much, james. still to come: plenty more here from the world economic forum. i will talk to the boss of the world's biggest wind power energy supplier. that's just coming up later here on business life. jd wetherspoons reports a 6 % increase in second quarter sales — and says the unexpected increase — may lead to better than expected half year resultsjoining us now is our business correspondent theo leggett — tell us more. as you say, like—for—like sales were
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up as you say, like—for—like sales were ‘7. as you say, like—for—like sales were up 6%, and that is sales which are directly comparable with previous quarters. overall sales were only up 4.3%, and that is because whether spoons closed more pubs than it opened, and that took a little gloss from the figures. overall, sales have been better—than—expected, meaning the first half results will be better—than—expected. that is a good thing this week because the company has also had a bit of embarrassment. last night was supposed to be steak night and due to a supplier problem, the stakes are to be recall, so customers were offered things like quinoa and the leumi salad. that has generated headlines like this. other than that, the company is doing well but it does not know if it can sustain that in the rest of the year. have they said anything about the
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company's they said anything about the compa ny‘s performance going they said anything about the company's performance going forward? there are factors that may have an impact. for example, increases in the minimum wage and the sugar tax may push up costs. the world cup happens in the second half of the year, which is unpredictable. when home nations do well, people pour into the pubs, one to watch the game and buy a lot of food and drink and someone. if the home teams go out early, it's not so good. that makes things a little unpredictable. one area that isn't such an issue is brexit. the chief executive of whether spoons is a renowned enthusiasm brexit and he says that evenif enthusiasm brexit and he says that even if there is no deal with the eu, that doesn't mean prices will go up eu, that doesn't mean prices will go up or anything like that. he's very positive about the future. thank you very much. as always, plenty more on our website. just go to bbc .co .uk/
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business. on there right now, details about calls for road pricing tailored to drivers based on factors like the time of day and congestion. read more about that report. you can also breed it via the bbc news app. —— you can also read it on their bbc news app. you're watching business live. our top story: critical talks get under way later between germany's biggest trade union and employers. the trade union is demanding a 6% pay rise. could this lead to inflation busting pay deals across europe? speaking about europe, let's check on the markets. all of them down to a greater or
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lesser extent. at the bottom of the screen, currency markets, the pound holding above $140. climate change is a big topic for discussion here at the world economic forum at davos. plenty have been talking about responsibility to do more around the world to tackle the issue. i am joined by a representative of the world's biggest wind energy producer. welcome to the programme. among those who have been appealing to governments around the world to do more about the issue of climate change is christine lagarde, the managing director of the imf. her argument is, whilst the sun is shining, fix the roof. this is the area where governments need to share. what is your take? the last
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20 years, we have already invested more than $100 billion in renewables. in britain we closed all of our coal powered plants. my position is very clear. 195 countries have already signed an agreement to do everything necessary to protect the world and diminish climate change emissions. the time is overand we climate change emissions. the time is over and we need to take actions. when you say 185 countries, you are repairing to the paris climate change agreement which the united states has said this is not happy with. it may withdraw or want
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changes to it. what impact has that had to its relevance? when you talk about the united states, you talk about the united states, you talk about the united states, you talk about the american administration. it is true that the administration has decided to withdraw from the paris agreement, but i think that there is an alliance of different cities promoting all the necessary for diminishing emissions. the business in the country will continue investing heavily, and i think many large corporations are already signing contracts with us because they would like to secure clean energy for the future. to what extent was the announcement of us ta riffs extent was the announcement of us tariffs on steel products coming out of asia, what impact does that have
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on the trade of these goods? where do you source a lot of your steel for the wind turbines that you guys provide? most of them are produced in the united states, and we have using established companies. it is a protection for the american solar panel industry. we have bought some from america in the past. from your perspective, and you deal with governments all over the world, what is the biggest obstacle to significant progress in this area? always our investment is long—term. we are investing for 40—60 years. we need stable regulation, predictable and maintaining the rules. when countries change the rules,
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introducing an intervention, automatically opposes a risk, and the flow of investment diminish. we require predictability and a legal framework that will be respected. thank you so much for being on the programme. back to you. james is back. we will look at our story in the ft talking about why people are quitting these. a p pa re ntly people are quitting these. apparently we are so addicted to our devices. can we actually live without them? this is the whole point. i think it's becoming such a pa rt point. i think it's becoming such a part of life now that people are becoming more addicted to them rather than just using them on the off chance. one of the interesting things it says here is that it co m pa res things it says here is that it compares it to junk food. you things it says here is that it compares it tojunk food. you know it's not particularly good for you
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but you do enjoy it when you are there. you know you shouldn't do it all of the time. that is the feeling we have with smartphones. there is so much on a smartphone now that we have to live with. you have to check e—mails for work, there is all sorts of different things, but of course, the argument in the article is that we don't actually need any of these things. we got on pretty well beforehand and we will get on afterwards if we don't have to use these. it is the classification of these. it is the classification of these companies, very much like the cigarette companies used to be in the 90s, that the tobacco industry. these companies are being categorised as big tech, and investors are saying, we want you to do something about the addictive nature or how many people are becoming addicted to these devices, to make sure it doesn't have a knock—on effect on mental health, the same way happened with big tobacco in the 90s. james, thank you very much indeed. thank you for all the messages you have sent. we have
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been having a look through those. we will go through them a little later. i want to bring some breaking news, and wejoin i want to bring some breaking news, and we join sally i want to bring some breaking news, and wejoin sally in davos. i want to bring some breaking news, and we join sally in davos. thank you. we're hearing through reuters news agency that they are quoting wilbur ross, who is here, the us commerce secretary, saying, trade war isa commerce secretary, saying, trade war is a thought every single day. that is a quote coming from reuters. he is here. the us president arrives here tomorrow. that is all from me for now. 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. we'll see you again tomorrow. storm georgina is with us today, so
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strong winds in the forecast. severe gales to parts of the uk. also heavy rain and localised flooding. in the north, we have this cold front edging its way to the south—east through the day, some torrential rain associated with that feature as it passes through. here we are at midday, severe gales for northern scotland. some gusty winds inland, 50-60 scotland. some gusty winds inland, 50—60 mph for parts of scotland. scattered showers for parts of northern ireland, northern england and wales. this cold front sitting across the midlands. parts of east anglia. some heavy rain associated with that. it will continue to move south—east. behind it, we start the brighter, cooler conditions feeding income and some scattered showers.
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temperatures finishing a little bit cooler than they started for some of us, a maximum of10 cooler than they started for some of us, a maximum of 10 celsius. as we go through this evening and overnight, we see the back of that cold front finally clearing the south—east. we see scattered showers in the west, some of which will fall as snow over the hills. temperatures cooler than last night. overnight low s between two celsius and seven celsius. tomorrow, i make sure of sunny spells and showers, the show was working their way across from the west. the north of scotland and south—east england will escape the majority of the showers. temperatures reaching a maximum of 10 celsius. as we move into friday, a ridge of high pressure pushes in and settle things down, so dry and bright weather. a few scattered showers for eastern coastal areas. the north—westerly breeze will feel a bit cooler. hello, it's wednesday, it's nine o'clock, i'm victoria derbyshire — welcome to the programme. how has scotland managed to cut knife crime by 70% in a decade, when in england and wales,
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it's on the rise? i've been stabbed in the back, punctured lungs... so, what lessons can be learnt? we have an exclusive report. the politician who helped london win the 2012 olympic games has spoken publicly for the first time to the bbc about being diagnosed with an aggressive form of brain cancer. i have not a single apparent... symptom symptom.
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