tv World Business Report BBC News September 8, 2022 5:30am-6:01am BST
this is bbc news with the latest business headlines for viewers in the uk and around the world. emergency switch. the uk unveils plans to cap soaring energy bills. but who should pick up the tab? another pounding on the markets. sterling slumps to its lowest against the us dollar since 1985. playing catch—up. europe braces for a record rise in the cost of borrowing, with more to come. plus gadget envy or upgrade fatigue? apple launches expensive new iphones and watches, but will consumers want to splash the cash this winter?
we start here in the uk, where in the next few hours prime minister liz truss will unveil a multibillion—pound plan to protect consumers and businesses from soaring energy prices. typical household energy bills could be capped at around 2,500 pounds a year, with companies also likely to get help. but the cost of subsidising bills is likely to be astronomical. the prime minister has ruled out tax increases, and further windfall taxes on energy firms. so, it could mean extra government borrowing of at least a hundred billion pounds. our business editor simonjack has more.
heat means energy means bills, huge bills. this woman employs so many people at her glassblowing business but won't belong without an edgy lifeline. ~ , belong without an edgy lifeline. y , ., ' belong without an edgy lifeline. g , ., lifeline. my staff are terrified _ lifeline. my staff are terrified not - lifeline. my staff are terrified not only - lifeline. my staff are terrified not only fori lifeline. my staff are - terrified not only for the domestic bills but for their jobs. our gas bill has gone up from m grand due to hundred and 33,000. it is alice in wonderland, we cannot exist. if the government doesn't take axne, businesses will fall like flies. ,, , ., ., ., flies. she is not alone. insolvency _ flies. she is not alone. insolvency experts - flies. she is not alone. insolvency experts say| flies. she is not alone. - insolvency experts say 53,000 substantial businesses with more than ten employees may fail before next year. that more than ten employees may fail before next year.— fail before next year. that is a colossal — fail before next year. that is a colossal number _ fail before next year. that is a colossal number of - fail before next year. that is a colossal number of people i a colossal number of people whose businesses will fail. more than would have failed in a pandemic and more than had everfelt in any a pandemic and more than had ever felt in any previous recession. ever felt in any previous recession-— ever felt in any previous recession. ., ., , recession. the government has -romised recession. the government has promised to — recession. the government has promised to that _ recession. the government has promised to that help - recession. the government has
promised to that help is - recession. the government has promised to that help is on - recession. the government has promised to that help is on the | promised to that help is on the way the business, the cost of energy will be capped. the household the typical 0ctober hike for bills will be reduced to a new, we think around 2500 pounds with a £400 rebate coming in october and possibly a cut in vat on energy, bills in october or many households may remain roughly the same as april. the cost of these subsidies could easily exceed £100 billion which we expect the government to borrow and add to that uk's large and growing debt burden. the government may think that is preferable to adding money to consumer bills the next decade or two, consumer bills the next decade ortwo, but consumer bills the next decade or two, but the interest on that debt causes more than half an nhs peryearand is that debt causes more than half an nhs per year and is forecast to rise. while £100 billion deftly helps bills were much higher than they were before the crisis and there is no guarantee people won't go cold, hungry or both this winter and many businesses may still fail. the patient is brutal, it
raises business costs while emptying customer pockets. which is why personal finance campaign is welcome these measures. campaign is welcome these measures-— campaign is welcome these measures. ~ ., ., measures. we could argue that the are measures. we could argue that they are expensive, _ measures. we could argue that they are expensive, they - measures. we could argue that they are expensive, they are. l they are expensive, they are. we can argue that they are not well targeted, bayard. but the point is they will fulfil the remit of giving many people as they are related they are able to pay their energy bills in the short term.— to pay their energy bills in the short term. energy costs are pervasive, _ the short term. energy costs are pervasive, they - the short term. energy costs are pervasive, they put - the short term. energy costs are pervasive, they put up i the short term. energy costs. are pervasive, they put up the price of everything. if there is a riot at the end of the tunnel it is that if you could call those, you can call inflation. let's get some reaction from the business world. alex hall—chen is a senior policy advisor at the uk's bosses lobby group, the institute of directors. thank you so much forjoining me. we don't know the details of this plan, so let's not talk about that because what is the point. let's talk about the funding of this. do you think liz truss has boxed herself in, government borrowing of another
£100 billion we think?— £100 billion we think? alex, can ou £100 billion we think? alex, can you hear _ £100 billion we think? alex, can you hear because - £100 billion we think? alex, can you hear because mac . £100 billion we think? alex, can you hear because mac i | £100 billion we think? alex, i can you hear because mac i can now, sorry about that. the world was _ now, sorry about that. the world was waiting - now, sorry about that. the world was waiting for - now, sorry about that. the world was waiting for your answer, i'll ask the question again. liz truss has ruled out windfall taxes and this cannot be put on the bills of people who are desperately trying to get their bills down. in terms of funding, whatever is announced today, how worried are you? how concerned are you about the fact that we are looking at another £100 billion at least of borrowing? i looking at another £100 billion at least of borrowing?- at least of borrowing? i think the office — at least of borrowing? i think the office for— at least of borrowing? i think the office for budget - the office for budget responsibility will at the next budget produce an assessment of the fiscal responsibility and
sustainability of this intervention. if they were to conclude that it is not a fiscally sustainable intervention that i think business leaders would absolutely be concerned and it may affect confidence in the economy. however, if the intervention is successful in allaying business and consumer concerns about the future of the economy, particularly inflation and the ability to meet energy prices, then it may well be what we need to avoid a recession or at least to reduce the severity of recession in the severity of recession in the uk. if it is the intervention that is needed to shore up confidence in the economy we will consider it money well spent. it economy we will consider it money well spent.- money well spent. it is interesting _ money well spent. it is interesting because - money well spent. it is interesting because we money well spent. it is - interesting because we will talk about the pounds in a moment with another guest but the fact that the pound is now at a 37 year low against the dollar evidence at the fact that people think that waking up that people think that waking up borrowing in an environment in which interest rates will only go up is not a fiscally sustainable policy. it only go up is not a fiscally sustainable policy.- sustainable policy. it is possible _ sustainable policy. it is possible and _ sustainable policy. it is possible and like - sustainable policy. it is
possible and like i - sustainable policy. it is possible and like i said | sustainable policy. it is i possible and like i said if sustainable policy. it 3 possible and like i said if the cpi possible and like i said if the 0pi determines that it is not they will be concerning to us. it is also the case that not taking action and helping businesses and consumers with spiralling energy costs would have serious economic ratification there is no easy answer to this but it is clear that this needs support otherwise viable organisations will go under and the next few months. , . ., ., months. there is recognition here that _ months. there is recognition here that a _ months. there is recognition here that a competitive - here that a competitive restructure of how we meet energy needs is required not just to avert a crisis this winter but in 2033 and 2043. what is the iod�*s view on how best to achieve energy security in the long term? it is clear that in a medium to long—term the only way to stop this happening is to substantially reborn and reduced the uk volatility to international energy markets. we would see immediate government action to move the uk towards being a low carbon
commie. we think of the business side the best way to do this is to leverage the tax system to have a lower tax rate for those who achieve lower carbon stop we want to see government support for businesses particular small businesses particular small businesses to invest in energy efficiency measures. it is clear the uk needs to develop its own mystic anti— sources particularly nuclear, we would see government action on that immediately. see government action on that immediately-— see government action on that immediatel . ., ,, . immediately. thank you so much for bein: immediately. thank you so much for being with — immediately. thank you so much for being with us. _ let's stay with the uk economy. prime minister liz truss is a self—professed fan of margaret thatcher, but on wednesday there was another echo of the 1980s she will be less keen on. the pound slumped to levels not seen since mrs thatcher's time in office, hitting a 37 year lowjust above 1.14 to the us dollar. since the beginning of the year, sterling has lost 15% against the dollar.
it's partly down to strong demand for the us currency, as interest rates rise aggressively. but it also reflects growing concerns about the uk economy, a looming recession, weaker trade post—brexit, and rising government borrowing at greater costs of repayment. as we were just talking about they are. sunaina sinha haldea is global head of private capital at the investment bank raymond james. thank you so much forjoining me. close to 24% of uk government debt issued is inflation—linked. this means if some of the top—end forecasts are to be believed, the uk could end up paying close to 3% of all growth next year on coupons for inflation—linked debt alone. how much of a debt problem does this country have? well, we have a large and rising debt problem in the face
of rising interest rates, a slowing economy, high and consistent ablation more than we thought we would have. that is led sterling is reacting the way it is. it is important to note that currencies are cross bears, we are treating the currency again something, sterling dollar. as much as this is a story about a week sterling it is a story about a strong dollar and a dollar buddies reflecting its status as a safe haven currency when the market is in turmoil. there are both sides of the coin but there is no hiding from the fact that the uk economy is believed had an investors are showing that through the powder selling off to the level that it has. i selling off to the level that it has. ., ., ., it has. i do hear about the u.k.'s problems - it has. i do hear about the u.k.'s problems are - it has. i do hear about the - u.k.'s problems are exacerbated by single point of batch up and stop its current account deficit, the can't do that country had long run a large deficit and the budget deficit is large two, 20 5% also of
outstanding debts owed by foreigners. is there a way out foreigners. is there a way out for britain?— foreigners. is there a way out for britain? there are a couple of wa s for britain? there are a couple of ways out- — for britain? there are a couple of ways out. only _ for britain? there are a couple of ways out. only time - for britain? there are a couple of ways out. only time will. of ways out. only time will tell which one is going to be the most affected and the government pursues. what is of course the taxpayers find it and somehow there is a package that comes to the table where this is funded by taxpayer money over a reasonable period of time on the market will react to that. the other way as inflation, you can inflate away the debt if you will. that is good but nobody, inflation is bad for markets and there has been a lot ofjitters that is reflected in the power because the bank of england versus the government, because of the comments made by the other of the bank of england, the chandler reversed some of that to try to show solidarity. all of these impacts were still in trades and eventually will impact borrowing costs as well. by impact borrowing costs as well. by your assessments, we don't want to inflate our way out. therefore the only option is
for taxpayers to essentially buy their way out of this which is not going to go down well with taxpayers. the other thing, of course, to think about is a notion of foreign capital is needed to keep the wheels of the british economy turning. we know growth is slowing and access to the biggest export market, the eu, is fraught with challenges, sterling is in decline as a reserve asset, is the rest of the world, the people who do invest in this country, are they likely to come to britain's aid. good morning to whoever that was outside the window. ., , whoever that was outside the window. . , ., window. that is the dog in the background- _ window. that is the dog in the background. telling _ window. that is the dog in the background. telling you - window. that is the dog in the background. telling you good | background. telling you good morning add to your audience as well. are there investors out there? sure. rising interest rates when the bank of england raises rates, that makes the bod rates go up, the interest rate of borrowing go up for us. that also has a way of attracting investors, debt of a
government like the united kingdom, that is usually considered a very safe government to borrow from at higher interest rates which should attract investors to say they will lead to the uk government. is the market worried about the ability of the uk to borrow? no. it is a question of what is going to cost us. investors looking at uk at these interest rates, the uk at these interest rates, the uk paper looks very attractive on a global basis.— on a global basis. thank you very much- _ on a global basis. thank you very much- i _ on a global basis. thank you very much. i think— on a global basis. thank you very much. i think it - on a global basis. thank you very much. i think it might. on a global basis. thank you | very much. i think it might be time for you to get the little one some breakfast. let's move to europe now, where much higher borrowing costs are on the way for the 19 countries that use the euro currency. the european central bank is expected to raise its key interest rate by a record 0.75% later today, with more rises to come. for years eurozone rates have been below zero, as governments and firms struggled with a debt crisis and then covid. but injuly the ecb raised rates to zero, the first increase in 11 years.
christian schulz is deputy chief european economist at citi, he's in the german spa town of bad homburg, just outside frankfurt. we've got a few unknowns here. financing conditions are starting to vary across the region. will higher rates hit countries with extremely high levels of public debt, greece and italy, harder than others? good morning. we do expect the 75 basis point increase today as well, the record increase. it will reflect higher inflation, notjust higher spot inflation, not just higher spot inflation, notjust higher spot inflation, we are heading for 10%. also longer term because this energy crisis is not going to go away anytime soon. longer term inflation isjustified. as you say because of certain challenges, some we see everywhere in the world such as rising borrowing costs for the government which is under
pressure anyway. in europe we have a special rest, every country is borrowing in the same market at its own risk. some are perceived riskier than others. thinking greece and italy. as the ecb is raising interest rates, therefore costs rise more and those countries which are considered safe such as italy. that causes challenges for the occasion of the europe area and easy. i the europe area and easy. i want to pick up on that. the ecb, the eu lacks a full physical banking and capital markets union. there are people who are already buffeting on this, widening the yield between the different euro area and government bonds. dealing is possible that the investors of the world could pull the eurozone project apart? the of the world could pull the eurozone project apart? eurozone pro'ect apart? the ecb itself has eurozone project apart? the ecb itself has created _ eurozone project apart? the ecb itself has created a _ eurozone project apart? the ecb itself has created a backstop, i itself has created a backstop, in fact three. we have three from the easybeats, various programmes they could use in
order to counter speculation in that market that the euro pulls apart. we are pretty safe from that. it still depends of course on the will of the countries to stay together. if borrowing costs diverged, either because the italian state more to say help households with high energy costs that it does the german government, there will be people, there is elections in italy in a few weeks, they will think if it really worth staying in the euro and having a stable currency if we have high inflation anyway and we have to pay more than the germans for the same things? that is a big risk.— that is a big risk. they have their elections _ that is a big risk. they have their elections on _ that is a big risk. they have their elections on the - that is a big risk. they have their elections on the 25th. | their elections on the 25th. turning our attention to italy. the right wing bloc that is leading in the polls has signalled that it may try to rewrite the terms of access to the eu recovery fund. what impact might that level of political rupture have on markets? the same right—wing parties
which are now potentially winning the election have torn down there and tie euro rhetoric if you like, and people are less concerned than they were. the high inflation rates —— anti—euro. it makes it difficult for italy to strike its own path. the tensions may be building slowly. the recovery fund conditions, over time they can build into more serious tensions. maybe not short run, but maybe the next few years. short run, but maybe the next few years-— few years. we will certainly watch with _ few years. we will certainly watch with interest. - few years. we will certainly watch with interest. thank| few years. we will certainly i watch with interest. thank you so much for your time. stay with us on bbc news. still to come: apple unveils expensive new gadgets. but can we afford them? george w bush: freedom itself was attacked this morning, i and freedom will be defended. the united states
will hunt down and punish those responsible. bishop tutu now becomes spiritual leader of 100,000 anglicans here, of the blacks in soweto township, as well as the whites in their rich suburbs. we say to you today- in a loud and a clear voice, "enough of blood and tears. enough!" _ translation: the difficult | decision we reached together was one that required great and exceptional courage. it's an exodus of up to 60,000 people caused by the uneven pace of political change in eastern europe. lam free!
this is bbc news. the latest headlines: police in canada confirm a man suspected of killing ten people in a mass stabbing has died after being arrested. trials in west africa of a new malaria vaccine show it gives up to 80% protection for two years. to the us now, where reality tv megastar—turned—entrepreneur kim kardashian is moving into investing. she is everywhere else, so why not? the bbc�*s business correspondent michelle fleury has more from new york. and kim kardashian needs little introduction. she found fame in 2007 when her reality tv show began. she is a successful businesswoman of her own make—up line and shape wear company. now she is moving into the world of finance to launch
her own private equity firm. she has teamed up with the person best known for investing in hot brands and streetwear firms. it will invest in areas like consumer media and entertainment businesses. he reportedly approached kim kardashian and her mother about citing the company earlier this year. msjenner is also a partner in the firm. the kardashians first found fame on the heat reality tv show which started airing in 2007. they hoped their ability to influence our society and culture will help them build an even wider following. finally, to the world of tech, because apple has unveiled its new generation of iphones and smart watches at a packed event at its californian headquarters. the iphone 14 can send out an emergency call via satellite even if there is no mobile reception. 0ur tech reporter
james clayton was there. this is apple's ceo pressing the flesh with fans. it does not happen for a while. these apple events have become legendary. there hasn't been one in person for three years until now. look around. there are actual people here. there was a time in these launches have the potential to revolutionise tech, think the ipod,iphone revolutionise tech, think the ipod, iphone and ipad. these days shows a little less inspiring. there were however some interesting things announced. take this, new feature of the iphone and apple watch that can detect whether the user has been in a car crash and will alert the emergency services. there were a few athletic changes to the iphone 14, a few athletic changes to the iphone14, nothing massive stop but the thing that caught our eye �*s satellite connectivity. if you are off the grid, in theory this new phone will be able to text the emergency
services stop that could be hugely helpful. many of these announcements felt pretty niche, you might have to use in a specific emergency you will probably never need. is it a game changer? for probably never need. is it a game changer?— probably never need. is it a game changer? if game changer? for some, yes. if ou are game changer? for some, yes. if you are lost _ game changer? for some, yes. if you are lost in — game changer? for some, yes. if you are lost in the _ game changer? for some, yes. if you are lost in the wild. - game changer? for some, yes. if you are lost in the wild. there i you are lost in the wild. there will be stories _ you are lost in the wild. there will be stories of _ you are lost in the wild. there will be stories of people i will be stories of people writing in the same values the feature and save their life and it will be for some people. there were other announcements like a feature for the watch that use an inbuilt thermometer to track ovulation. that is useful no doubt, but many of us the activists warn against putting any information about fertility in a digital format. the worry is that in the us and other countries, law enforcement could subpoena the information if they suspect an illegal abortion has taken place. apple says the data is encrypted. the company will be happy the event ran smoothly and in person, and there were some interesting features on display. but perhaps the days
when apple events came with the expect and game changing gadgets are a thing of the past. james clayton, abc news, california. russ frushtick is co—founder of polygon, which provides news and reviews on tech and gaming. there's always criticism that these events are style over su bsta nce. do you ever get bored by these apple unveils? i guess it is part of the gig to not get bored by them. if i did, i should to not get bored by them. if i did, ishould probably to not get bored by them. if i did, i should probably be in a different business. but i do parliamentary wing. they trot out new features. the thing that stood out to me, the satellite was very interesting. also the fact they are bringing out the screen so you can glance at your phone and not have to leave it on all the time and see what time it is or what the temperature is, stuff like that. but i do agree with you, there is a diminishing returns, we are not seen a game changing moment that there used to be. it changing moment that there used to be. , ., ,.,
changing moment that there used to be. _, changing moment that there used tobe. _, ., to be. it is also sort of notable _ to be. it is also sort of notable also _ to be. it is also sort of notable also for i to be. it is also sort of notable also for what l to be. it is also sort of i notable also for what the company didn't do. it didn't rise prices on the top and smart phones. has apple read the room correctly here, do you think? t the room correctly here, do you think? ., ~ ~ ,, think? i do think so. i apple feels like — think? i do think so. i apple feels like it— think? i do think so. i apple feels like it a _ think? i do think so. i apple feels like it a lot _ think? i do think so. i apple feels like it a lot control- feels like it a lot control over the marketplace and used to take more and more presented from android, but at this point given the economy, given all the unfairness in the world right now, i think they didn't want to take the pr hit of raising prices yet again and sticking with where they are at i think is the smart move. are you going to lose any sleep over apple's profit margin? i think they will be ok! 0h, they will be fine. i think they probably will.— probably will. thank you so much for — probably will. thank you so much for your _ probably will. thank you so much for your time - probably will. thank you so much for your time and i probably will. thank you sol much for your time and your analysis there. we do have plenty more if you are interested on all our business news on our website. let's see how the asian markets are faring today. you can see the nikaev and up
to present at the moment, brent crude trading at $88 a barrel. thank you very much for your time. it has been a pleasure as always. if you are watching internationally, i will see you again very soon. goodbye. hello there. over the last few nights, mother nature has been putting on a pretty impressive display of thunder and lightning. late in the day on wednesday, we had a number of storms move across northern england, and that was one of them late in the day in county durham. and recently, the storms have been forming thanks to this area of low pressure just to the south of the republic of ireland. we've had these trough features, these organised bands of showers being thrown in from the south and west, and for wednesday night, we had two clutches of storms — one affecting north wales, the north midlands, northern england. that really was the most active. but we also had another area of storms in the south—east as well. here's the weather picture over the next few hours. there will be a few more downpours coming and going, one or two mist and fog patches forming as well. perhaps some more persistent and heavier rain setting in across some central
and eastern area of scotland, and these are the kind of temperatures you'll have to start the day heading into thursday. thursday is another day of sunshine and showers, broadly speaking, but i think we could see an area of persistent heavy rain affecting central and eastern areas of scotland and perhaps lasting through thursday into friday as well, bringing the risk of some localised flooding here, but otherwise, it's another day of showers. for many of you, there'll be quite a lot of showers, so most of you will see at least one or two, perhaps more than that through the course of the day, and by the afternoon, some of them, again, will be turning thundery in nature. the area of low pressure driving this lot will continue to bring showery weather across all parts of the uk through friday. again, some hefty downpours, but notice there is that zone of heavier, more persistent rain affecting some central and eastern areas of scotland, with a heightened risk of seeing some localised flooding as those rainfall totals continue to build up during the course of the next couple of days. beyond that, we'll take a look at the weather pattern into the weekend. that area of low pressure finally clears out of the way — good, it's been with us all week. we get this ridge of high
pressurejust for a time on saturday, but then we see more rain arriving from the west. so, saturday looks like a dry day for the vast majority. make the most of that because sunday sees a return of some heavy rain, particularly across western areas. now, one thing you might have noticed — i certainly have — recently is that it's been getting dark pretty quickly. at this time of the year, we're losing daylight at its fastest rate. that means in london, we're losing, well, nearly four minutes of daylight each and every day, but it gets worse the further north you go. in lerwick, we're losing nearly 5.5 minutes each and every day. that's the latest.
good morning. welcome to breakfast with naga munchetty and charlie stayt. 0ur headlines today: the new prime minister's plan to tackle soaring energy costs. liz truss will set out measures to limit price rises for millions of households and businesses. what will it mean for businesses like this? — what will it mean for businesses like this? good morning from newcastle where i've been hearing what people think the government should _ what people think the government should prioritise. a man suspected of killing 10 people in a mass stabbing in canada has died in police custody after he was arrested. a miserable night for rangers and liverpool in the champions league. both concede four goals away
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