tv World Business Report BBC News May 19, 2022 5:30am-6:00am BST
this is bbc news with the latest business headlines for viewers in the uk and around the world. the cost of living crisis deepens. prices in the uk rise at their fastest rate for a0 years as pressure grows on the government to take action. the next few months, will be tough. but where we can act, we will. those inflation fears rattle wall street again as us shares suffer the worst sell—off in almost two years. setting a flight plan for recovery. but will a squeeze on incomes bring the airline business back down to earth just as it's taking off? plus — the scandal of india's exploding e—scooters. in the rush for cheap electric transport, is safety taking a back seat?
we start with the soaring cost of living — because prices here in the uk are now rising at the fastest rate in a0 years. the annual rate of inflation hit 9% in april — up from 7% in march, driven bya bigjump in energy bills. britain's finance minister, chancellor of the exchequer, rishi sunak is warning of tougher times ahead as pressure grows on him to take action. our economics editor faisal islam has more. when prices rise this fast it hits everyone, the fracture seen on every street, office and household in the country,
including in lancashire. she recently ran her business, after the pandemic she finds money running out as bills get more expensive and even essential things become too expensive. essential things become too “pensive-— expensive. gas and electric because i — expensive. gas and electric because i got _ expensive. gas and electric because i got in _ expensive. gas and electric because i got in arrears - because i got in arrears because i got in arrears because i got in arrears because i didn't have enough money coming in for so long i had no control over what they were going to take, if you were to do the maths when i looked at the balance this morning there was £335 left in my bank. and i need to pay my mortgage, and i'm just, and i need to pay my mortgage, and i'mjust, ijust and i need to pay my mortgage, and i'm just, ijust thought, oh, my god. and i'mjust, i 'ust thought, on. my god._ and i'mjust, i 'ust thought, oh,m god. ,, , ., ., ., oh, my god. she used to donate to food banks, _ oh, my god. she used to donate to food banks, now— oh, my god. she used to donate to food banks, now she - oh, my god. she used to donate to food banks, now she is - to food banks, now she is advised to use them as the energy crisis compounds the effects of the covid—i9 pandemic. effects of the covid-19 pandemic.— effects of the covid-19 andemic. �* , ~ , pandemic. it's like hustling the hardest _ pandemic. it's like hustling the hardest you _ pandemic. it's like hustling the hardest you can - pandemic. it's like hustling the hardest you can hustle | the hardest you can hustle every day just to the hardest you can hustle every dayjust to get through, exhausting. totally exhausting, all the time. it's absolutely
draining, it's absolutely draining. and, you, you are not living, you are really not living. living, you are really not livina. ., ., , living. high inflation hits everyone _ living. high inflation hits everyone but _ living. high inflation hits everyone but lower - living. high inflation hits i everyone but lower earners living. high inflation hits - everyone but lower earners with a higher proportion spent on food and energy the highest, doubling the use of these facilities. inflation rates the site at 9% and heading high with high energy cost has not been seen a0 years in this country since march 1982. the lesson of history is when inflation gets to these levels it takes years to come back down as it did in the 1970s and nearly in the 1990s. in the months currently predicted. it is notjust about months currently predicted. it is not just about the worst inflation figures for decades, it is about what is with the
extraordinary it is the. it is taking out turned into how long is it going dinner there is nothing we can do to make these global forces disappear overnight.— global forces disappear overniaht. ., , overnight. the next months will be tough. _ overnight. the next months will be tough. we — overnight. the next months will be tough, we can _ overnight. the next months will be tough, we can act, _ overnight. the next months will be tough, we can act, we - overnight. the next months will be tough, we can act, we will. l be tough, we can act, we will. . this man runs a beer hall and he says for businesses double—digit inflation is already here. it double-digit inflation is already here.— double-digit inflation is already here. it feels like it is higher— already here. it feels like it is higher than _ already here. it feels like it is higher than two - already here. it feels like it is higher than two digits . already here. it feels like it i is higher than two digits now. he says while his customers are managing pennies he has to manage a shortage of staff. the
spontaneity _ manage a shortage of staff. the spontaneity of _ manage a shortage of staff. tye: spontaneity of people manage a shortage of staff. he spontaneity of people going manage a shortage of staff. tt2 spontaneity of people going out for a meal because they wanted to has gone. you get a lot more pre— book when people organise themselves, you can't guarantee someone can get you in because of the staffing situation, your handling bookings a bit more strict circumstances than you might have done, of a particular weekend. the worker shorta . e particular weekend. the worker shortage another _ particular weekend. the worker shortage another moving - particular weekend. the worker shortage another moving part l particular weekend. the worker| shortage another moving part in the economy caused by the 50 year low in joblessness, but that could change as the economy heads for stagnation and perhaps recession, many people are simply not allowed to experience prices rising at such a fast rate. , a problem, we haven't seen the worst of it yet. depressing, isn't it. the uk now has the highest rate of inflation in the g7 group of developed economies — overtaking the united states. as you can see here it's almost double that of france. but it is a global problem. concerns about soaring
prices in the us sparked renewed selling on wall street where leading shares had their worst day in almost two years. samira hussan reports from new york. after a short reprieve financial markets in the us have rebooted the sell—off, the drop some of the biggest scene since the height of the pandemic. recently released consumer spending money showed americans were still shopping in the month of april, that gave investors a little hope that perhaps soaring inflation hasn't hit the us consumer. but then target reported earnings and profits fell significantly in the last quarter because of higher fuel in the last quarter because of higherfuel and labour in the last quarter because of higher fuel and labour cost, what does that sound familiar? it should because another giant in retailing walmart said something similar when it reported earnings on tuesday. both companies have seen she is dropped by more than 25% on that use. now we are seeing
clearly that rising inflation is hurting profits and household budgets. investors are now concerned that as the federal reserve the american central bank raises interest rates economic growth will be hurt, some economists warning, that a recession may follow. david madden is a market analyst at equiti capital. the uk has the worst inflation in the g7, why is that? tt’s the uk has the worst inflation in the g7, why is that?- in the g7, why is that? it's a combination _ in the g7, why is that? it's a combination of _ in the g7, why is that? it's a combination of factors, - in the g7, why is that? it's a combination of factors, to i in the g7, why is that? it's a | combination of factors, to do with higher energy prices, higher cost of living in relation to food, transportation issues, complications because of brexit, complications because of the global supply chain issues, in relation to the lockdowns and re— openings of the economy, and more recently, the economy, and more recently, the war in ukraine. 50
the economy, and more recently, the war in ukraine.— the war in ukraine. so every sinale the war in ukraine. so every single one _ the war in ukraine. so every single one of _ the war in ukraine. so every single one of those - the war in ukraine. so every single one of those factors l single one of those factors with the exception of brexit, everyone else is facing, am i right in saying, that your assessment is that the reason the uk has got the worst inflation of the g7, is the factor everyone else is facing, plus brexit?— plus brexit? basically, yes, other economies _ plus brexit? basically, yes, other economies face - plus brexit? basically, yes, | other economies face similar issues, some to a more or less extent, it is worth remembering things like say, for example, the headlines in relation to the headlines in relation to the shortage of long—distance lorry driver is, affecting most economies cross the word but some more than others such as the uk. and it is for these sorts of reasons has contributed to the factor that the uk is where it is. it is worth pointing out, the bank of england response to the pandemic itself, the cutting of interest rates, the quantitative easing scheme used
to turn the economy round in 2020 that was a more robust and rapid response than the european central bank although right now the uk has the highest inflation of the g7 i wouldn't be surprised if we see many eurozone countries catch up many eurozone countries catch up with the uk as it were in six or nine months in terms of high levels of inflation, uk was quick to respond to the lockdown itself, in terms of fiscal and monetary action, two years ago, thereabouts, so wouldn't be surprised if we see a similar situation and the likes of italy, spain and france in the next six to nine months. . , . to germany now — where finance chiefs from the g7 group of industrialized nations are gathering for talks later. high on the agenda of course, inflation and the economic impact of the war in ukraine. they are trying to decide how to keep up the economic
pressure on russia, without causing too much damage to their own economies. on wednesday, the eu published plans to end its reliance on russian gas, oil and coal by 2027. but the us wants action sooner. joining me now is richard black. there seems to be consensus on severely limiting the flow of funds to russia from its energy resources. how long will it take to come into effect? i think ithink mid i think mid this decade, broadly it's easier with some fuels than others, cole is done, oiland fuels than others, cole is done, oil and gas type of. the eu has moved quite swiftly, i've been quite surprised with the pace at which they have done two things, one is secure alternative supplies of gas, secondly, to move forward on a clean energy infrastructure, increasing the speed of the rollout of renewables, energy
efficiency, all of which will undercut total demand for oil, gas and coal. undercut total demand for oil, gas and coal-— gas and coal. there are widespread _ gas and coal. there are widespread fears - gas and coal. there are widespread fears of - gas and coal. there are - widespread fears of famine and mass debating as a result of what the german foreign minister called a grain war that has been initiated by russia, russia deliberately targeting the ukraine agricultural industry and blockading the ports at the black sea meeting exports cannot leave. what can the g7 do, if anything, cannot leave. what can the g7 do, ifanything, to cannot leave. what can the g7 do, if anything, to avert a serious insecurity when it comes to global food supply? this is very hard, because russia accounts for a quarter of all grain exports around the world in ukraine is not insignificant either, and moves to limit grain exports as well. it's hard to do because you can't magic extra seeds into the ground, what you can do is a few things, you can look at
reserves that different countries sold, you can look at speculators because a decade ago we had a similar confluence of factors causing a spike in the international grain price and one of the things that happened in the speculators were deliberately withholding grain from international markets, that something that could be looked at. and it is an educational thing if there is going to be less grain around, it's going to be more expensive let's prepare for that, no it's going to happen, individual countries and communities, can seek ways around it. communities, can seek ways around it— around it. the us treasury secretary _ around it. the us treasury secretary spoke _ around it. the us treasury secretary spoke ahead - around it. the us treasury secretary spoke ahead of. around it. the us treasury i secretary spoke ahead of this meeting and said she expects the us to swerve a recession but europe is unlikely to be as lucky, would you agree with that assessment? tt’s lucky, would you agree with that assessment?— lucky, would you agree with that assessment? it's very hard to say from _ that assessment? it's very hard to say from here, _ that assessment? it's very hard to say from here, if _ that assessment? it's very hard to say from here, if we're - to say from here, if we're talking about prices i would be more worried about the impact outside the g7 nations, most vulnerable of the world where
people pay a lot of money for food, we saw going back a decade ago, one of the regions where it had a massive impact was across the arab world because grain exports are so widespread. we are already seeing massive inflation in the uk as you were talking about earlier, interesting to see whether other countries like france who are far less dependent on food exports can swerve that. at least finance ministers know the pressures there and they do have a little bit of time to plan responses. and that meeting happening today. to the travel business now — because there should be more evidence of a recovery when we get financial results from easyjet in an hour or so's time. the budget airline has already said it expects business to be back to up pre—pandemic levels this summer. but could the cost of living crisis bring those plans down to earth with a bump?
joining me now is martin alcock. from the pandemic to a cost of living crisis — this industry has gone from the frying pan and into the fire. how resilient is demand for travel given the squeeze we've already seen on budgets and what we're being told is to come? good morning, a tough few years, hasn't it? i think the results that will come out later this morning, i think the best way i would expect them to best way i would expect them to be is cautiously optimistic. we have had a couple, busy couple of weeks from operators and airlines and there are consistent themes coming through, some bookings are looking very strong, starting to see demand returning, back to see demand returning, back to pre— pandemic levels, easyjet last time they announced would talk about this year bring back to 2019 levels, what they are seeing is pricing strong, customers having to pay a lot but that is helping cut
travel companies to maintain their margins. i think it will be a reasonably positive outlook for them but challenges on the horizon just like you articulated bowls. brute on the horizon just like you articulated bowls. we talked about what _ articulated bowls. we talked about what happened - articulated bowls. we talked about what happened with l about what happened with ryanair, it says it has to depress prices to get people to book even though prices are low people are booking later, how long can that model go on? tt you are right here and have deep pockets that is a strategy they can deploy where others can't, if you look at easyjet a few things will be concerning them, one thing is they are in orbit less hedged than other airlines. fuel prices, fuel is airlines. fuel prices, fuel is a major cost for these airlines, court of the cost base altogether may be, what they tend to do was put on financial arrangements to smooth the price over a long period of time, what happens during covid—19, a lot of airlines reduce the amount of fuel they were buying because demand was so uncertain, now
they find themselves, when the invasion in ukraine started they found themselves under hedged and actually now have to buy fuel in the market at that inflated price, that is really going to hurt them. i think cost of living further down the horizon, has a concern, less so for some departures, we get to the back end of this calendar year when the expected energy bills will land on doormats, you will have a full year of this kind of 10% level inflation may be more talk of recession, that is when you will see demand start to be curtailed, people may be less willing to book when we get the winter and next summer. martin, thank ou winter and next summer. martin, thank you very — winter and next summer. martin, thank you very much _ winter and next summer. martin, thank you very much for - winter and next summer. martin, thank you very much for your - thank you very much for your time. stay with us on bbc news. still to come, is safety taking a back seat in india's rush for cheap electric transport?
this morning, an indian air force plane, carrying mr gandhi's body, landed in delhi. the president of india walked to the plane to solemnly witness mr gandhi's final return from the political battlefield. ireland has voted overwhelmingly in favour of gay marriage. in doing so, it has become the first country in the world to approve the change in a national referendum. it was a remarkable climax. to what was surely the most extraordinary funeral ever given to a pop singer. - it's been a peacefulfuneral demonstration so far, but suddenly, the police are tear—gassing the crowd. we don't yet know why. the pre—launch ritual is well—established here. helen was said to be in good spirits, butjust a little apprehensive. in the last hour, east timor- has become the world's newest nation. it was a bloody birth for a poor country, i and the challengesl ahead are daunting. but for now, at least, i it is time to celebrate.
this is bbc world news. the latest headlines — the united nations secretary general has warned that the war in ukraine is increasing the risk of a global food shortage and the possibility of mass hunger. australia goes to the polls on saturday, with incumbent prime minister, scott morrison, hoping to fend off a challenge from the labor party, which could end nine years of conservative government. to india, where the narendra modi government has been pumping in billions of dollars in subsidies to help the country transition to electric vehicles. but a spate of scooter battery explosions in the past few months have triggered concerns about the country's ambitious push towards electric bikes, as nikhil inamdar reports from new delhi.
it has been five months since the battery of his electric scooter exploded, killing his parents and leaving him and his brothers with severe burns. in the stinging afternoon heat of the stinging afternoon heat of the north indian summer, the h is particularly bad, he tells us. he can't go to work. —— the h. translation: i us. he can't go to work. -- the h. translation:— h. translation: i can't even walk properly- _ h. translation: i can't even walk properly. me _ h. translation: i can't even walk properly. me and - h. translation: i can't even walk properly. me and my - h. translation: | can't even | walk properly. me and my other siblings are now entirely dependent on our elder brother for everything. tt dependent on our elder brother for everything-— for everything. it was past ten o'clock at _ for everything. it was past ten o'clock at night _ for everything. it was past ten o'clock at night when - for everything. it was past ten o'clock at night when he - for everything. it was past ten l o'clock at night when he played this battery info charging inside the room while leaving the scooter outside in the courtyard. in about half an hour it exploded, killing his father on the spot, while leaving his mum with 95% burns. in a week, she died in hospital. now all that remains are the photographs and the memories. across india, images
like these of e—scooters going up like these of e—scooters going up in flames, have triggered safety concerns about the country's rush to embrace electric vehicles. there have been more than a dozen incidents, and hundreds of electric bikes recalled by various manufacturers. many of them start—up companies. t them start—up companies. i don't think they have gone through— don't think they have gone through a rigorous validation process, _ through a rigorous validation process, and you know a lot of start-ups _ process, and you know a lot of start—ups probably don't have that— start—ups probably don't have that culture or mentality of what — that culture or mentality of what legacy auto—makers have come — what legacy auto—makers have come of — what legacy auto—makers have come of understanding you have to go— come of understanding you have to go through a certain kind of a test — to go through a certain kind of a test procedure, certain test cycle, — a test procedure, certain test cycle, and _ a test procedure, certain test cycle, and that can't be kind of shorten. cycle, and that can't be kind of shorten-— cycle, and that can't be kind of shorten. another problem, according _ of shorten. another problem, according to _ of shorten. another problem, according to ev _ of shorten. another problem, according to ev maker- of shorten. another problem, according to ev maker in - of shorten. another problem, according to ev maker in for. of shorten. another problem, | according to ev maker in for an injury, that battery packs imported into india are not optimally designed for local conditions.— conditions. they are not designed _ conditions. they are not designed for _ conditions. they are not designed for indian - conditions. they are not| designed for indian road conditions _ designed for indian road conditions for— designed for indian road conditions for the - designed for indian road i conditions for the extreme
pressure _ conditions for the extreme pressure that— conditions for the extreme pressure that they - conditions for the extreme pressure that they go - conditions for the extreme i pressure that they go through because — pressure that they go through because of— pressure that they go through because of the _ pressure that they go through because of the bumps - pressure that they go through because of the bumps and i pressure that they go through because of the bumps and all| because of the bumps and all that, — because of the bumps and all that, it — because of the bumps and all that, it has _ because of the bumps and all that, it has an— because of the bumps and all that, it has an impact- because of the bumps and all that, it has an impact on- because of the bumps and all that, it has an impact on thei that, it has an impact on the battery— that, it has an impact on the battery because _ that, it has an impact on the battery because of _ that, it has an impact on the| battery because of vibrations and all— battery because of vibrations and all that. _ battery because of vibrations and all that. and _ battery because of vibrations and all that. and to - battery because of vibrations and all that. and to design . battery because of vibrations. and all that. and to design for ambient — and all that. and to design for ambient conditions, _ and all that. and to design for ambient conditions, given- and all that. and to design for ambient conditions, given the| ambient conditions, given the variability _ ambient conditions, given the variability we _ ambient conditions, given the variability we have _ ambient conditions, given the variability we have in - ambient conditions, given the variability we have in the i variability we have in the country _ variability we have in the country-— variability we have in the count . ., :: ., country. more than 50 million new two wheelers _ country. more than 50 million new two wheelers get - country. more than 50 million new two wheelers get added l country. more than 50 million. new two wheelers get added to india's roads every year. the government wants electric ones to account for 80% of two wheeler sales by the end of the decade. authorities are investigating these incidents and say they won't —— they will penalise manufacturers are found to be negligent. in the meantime, demand for e—scooters continues to soar, as rising fuel prices make petrol more and more unaffordable. finally, let's talk advertising because since the arrival of tv streaming services, we've got used to binge—watching our favourite shows without it. but could that be about to change? disney+ and netflix have both announced they're planning services which will run ads. last month, netflix announced its first ever fall in subscribers as consumers tighten their belts.
the news has since wiped out half the value of the company on the stock market. let's talk to ruth mortimer, global president of advertising week europe, which is hosting a three—day event for the ad industry this week. what do you make of all of this? those comments from disney+, and netflix in particular, they have really sort of stroke the entire sort of business community, and i wonder what your thoughts are on all of this. do you think the days of the subscription business model might be numbered? t business model might be numbered?— business model might be numbered? .. �* ~' numbered? i don't think the da s of numbered? i don't think the days of the _ numbered? i don't think the days of the subscription i numbered? i don't think the i days of the subscription model are numbered, but what i do think is, during the pandemic, we saw people really upgrade the amount of subscriptions they needed. people were sitting at home all day, and that what i think we are seeing is a bit of a correction of that and what you are seeing is the big players like netflix and disney+ starting to explore
new business models, and i think the interesting thing is that disney+ has a real advantage in this area. it obviously owns hulu, which i think is the only streamer with its own ad servers, very well developed and product, so i think what we will actually see is a big shuffle in the dominance of those big streaming players. dominance of those big streamin: -la ers. .. . ., , streaming players. how valuable do ou streaming players. how valuable do you think _ streaming players. how valuable do you think the _ streaming players. how valuable do you think the likes _ streaming players. how valuable do you think the likes of- do you think the likes of netflix will beat advertisers? i think they have a great range of shows. i think if and when they launch their ad model, i think it will be as successful, but i think the issue as there is a much, much larger market of people operating in that space. until now, they have had a subscription model, so they haven't built the same relationships, whereas i think disney, for example, has already got a very, very well established advertising industry, particularly in promotional products and merchandising sector. with; merchandising sector. why should consumers - merchandising sector. why should consumers accept l merchandising sector. why should consumers accept a worse consumer experience to access
the same content that they are used to getting without the ads? t used to getting without the ads? ~' .. . , ads? ithink, unfortunately, it is 'ust ads? ithink, unfortunately, it isjust economics, _ ads? ithink, unfortunately, it isjust economics, but- ads? ithink, unfortunately, it isjust economics, but maybe | is just economics, but maybe they won't. i think one of the interesting things we have seen advertising in europe this week as we launched a study of on the cost of living. we had some figures from lu said, which showed us that actually streaming services are one of the first thing is that consumers are getting ready to cut, as the cost of living crisis bites. so i think the real problem for streamers is are they relevant overall when money is tighter for people? 0kay, thank you very much for your time. 0kay, thank you very much for yourtime. interesting 0kay, thank you very much for your time. interesting analysis there. let's see how the asian markets are faring today. certainly sold after some point with the hang seng leading the losses, ten sent shares down by almost 7%, this following wall street, the us stock suffering their worst day since the early
days of the pandemic, all about inflation and the rising costs of living. thank you for joining me. iam of living. thank you for joining me. i am victoria fritz. i will see you very soon. hello, again. there's a few big thunderstorms to watch out for over the next few hours. particularly of concern is across parts of central, southern england, southeast england, and into areas of east anglia, as well. but on into thursday's forecast, they'll all be out of the way, and we're looking at some warm spells of sunshine. so let's take a look at those storms, then. they first developed across the channel islands, and in the first hour that they existed, there had already been over 10,000 lightning strikes, these storms here. now, what's going happen over the next several hours is they'll work in probably around hampshire, sussex, surrey, greater london, moving into east anglia. they could bring some localised flash flooding — 25 millimetres of rain in some of them falling injust one hour. some large hail is a possibility, as well as some very strong gusts of wind, locally. eventually it will become drier and quieter, and temperatures, as we start thursday morning, around 10—1a celsius,
so it is going to be mild. now, there could be an odd shower left over across the far southeast of england, but otherwise, a largely fine morning, with spells of sunshine. there'll be a bit of high cloud in the sky, that'll make the sunshine a little hazy at times, and through the afternoon, we could see a few passing showers for northern ireland and northwest scotland, but even here, not many. most of you feeling warm in the sunshine — 19 celsius in aberdeen, 23 towards london and southeast england. it won't be quite so warm, though, on friday. the wind'll pick up, and we've got this band of rain that's going to be pushing its way eastwards off the atlantic. now, there could be another batch of thunderstorms coming in from europe, that gets very close to southeast england, so we'll have to keep a close eye on that. but otherwise, there'll be a gap between the showers and the more general rain across the north and the west, so there could be some areas that just about stay dry. but whether you stay dry or not, temperatures will be a little bit lower, 15—18 celsius. now, the weekend starts off with some sunshine, showers mostly confined to the northwest, and after that sunny start, things tend to turn a little bit cloudier through the afternoon, but still with some sunny spells coming through
from time to time. temperatures on saturday in any sunshine should reach the low 20s, but across the north and west, not much sunshine, a bit of rain, 1a—15 celsius here. sunday and monday, again, there could be one or two showers, mostly across the northwest of the uk, but otherwise some pleasant spells of sunshine. that's the latest weather. bye— bye.
good morning, welcome to breakfast with charlie stayt and naga munchetty. 0ur headlines today. a warning from the chancellor that households face a tough few months with the cost of living crisis. rishi sunak says he's ready to help, but he's under pressure to take more action sooner. the next few months will be tough but where we can act we will. aaron ramsey pays the penalty, on a bitter night for rangers here in seville. they lose the europa league final