tv World Business Report BBC News November 3, 2022 5:30am-6:00am GMT
this is bbc news with the latest business headlines for viewers in the uk and around the world. how high will interest rates go? the bank of england poised for its biggest hike since the late �*80s — as inflation continues to bite. it comes as the us federal reserve pushes borrowing costs to a ill—year high — and warns they will keep rising. also coming up, the flight to net—zero — airbus says emission—free airliners could be here in a little over a decade. plus — winning bid! ebay cashes in as more of us shop second hand, and collectors hunt down everything from watches to sneakers.
lets now get down to business. the biggest interest rate rise since 1989. that's what we are awaiting from the bank of england in just a few hours�* time as it battles to control soaring prices. the bank is widely expected to raise its benchmark rate — from 2.25% to 3% — pushing up the cost of mortgages, credit cards and loans. it comes as america's central bank — the us federal reserve — raised its main rate by three quarters of a percentage point — and warned borrowing costs will have to go higher than many are expecting. michelle fleury has this from new york. this is the fourth time in a row that the us central bank has raised interest rates so aggressively, with another hike possible in december. the rapid pace of increases is in response to prices that have been rising
at their fastest pace in four decades. now, as the race to beat inflation continues, the question for everyone is, will mr powell and his colleagues really keep up this pace? in its statement, for the first time in this tightening cycle, the fed did explicitly acknowledge that a slower pace will be warranted at some point, since it takes a long time for the effect of a rate hike to show up in economic data. us financial markets leapt on this news — stock prices surged before falling back to earth following comments by mr powell. during his press conference, the fed chair warned investors not to get ahead of themselves, suggesting that it was too soon to hit a pause on its rate hikes. let me say this. it's... it is very premature to be thinking about pausing. so people, when they hear lags, they think about about a pause. it's very premature, in my view, to think about or be talking about pausing our rate hike. we have...
we have a ways to go. clearly, the fed thinks there's more ground to cover. for americans, this means more economic pain ahead, as this decision pushes up the cost of borrowing. us labor leader afl—cio president liz shuler criticised the fed's approach, warning that it would have a direct and harmful effect on working families. meanwhile, a number of democrats have warned that the fed's actions have done little to reduce inflation, while increasing the risk ofjob losses. acknowledging that rate hikes had been difficult for americans and businesses, mr powell defended the fed's actions, noting that unchecked inflation was even worse for the health of the american economy. as michelle mentioned, on wall street it proved to be a volatile session as investors reacted to what fed chair jerome powell had to say about future rate rises. if we look at asia, japan is fairly muted. hong kong is down
by almost 3% but hong kong often reflects what is happening in mainland china. concerns in china about a disease micro—lockdown policy, currently under way. let's look at the next board, to show you the full out in the us —— a covid lockdown policy. the nasdaq falling these markets initially were trading higher. fiona cincotta is market analyst at city index here in london. good morning. markets were reacting well initially to what they knew was coming but then it was the comments that followed that has investors worried. ., , followed that has investors worried. . , , followed that has investors worried. . , ., worried. that is exactly what happened- — worried. that is exactly what happened. the _ worried. that is exactly what happened. the market - worried. that is exactly what happened. the market was l happened. the market was expecting that rate hike, and if we think about the lead up to this meeting, the markets have been getting very much ahead of themselves. we have
this sensation in the markets that they were expecting the federal reserve to really actually slow the pace of rate hikes going forward but not just at one or two meetings. really change the pace going forward. because of that we have seen the stock markets rally. especially the dow jones, which was up 14% across october. the us dollar has come lower. now, the statement suggested that maybe the fed was coming towards the end of that hiking cycle, butjerome powell was really quite sure in his words that there is still a lot of work to do and let's not forget inflation in the us, it is still at 8%, still high. data from thejobs is still at 8%, still high. data from the jobs market has still been really quite strong, suggesting the labour market is quite resilient. we have seen some cooling off in the housing market, but so far that has
been the major showing, where we have seen these interest rate hikes coming through. there is still a lot of work to be done stop right there is, and the real concern is, and this is something i will unpack further with other guests later in the programme, that this could push the us into recession but the thinking is, jerome powell is feeling that is the worse of the two evils, embedded inflation out of control is a lot worse than a period of recession. exactly. that is what we have heard and we have heard the fed say on more than one occasion, almost more meetings, the bigger risk is leaving inflation in check. tightening and raising interest rates to the extent that it slows the economy, because that is what the fed is looking to do here, slow the economy so that inflation also slows. that could mean that they could overdo it because there is this
lag time between hiking interest rates and the impact on the actual economy. we usually expected to be around six months, possibly nine months. there is potentialfor this to be overdone but it seems the fed is not concerned about that at the moment. let’s about that at the moment. let's talk about _ about that at the moment. let's talk about the _ about that at the moment. let's talk about the bank _ about that at the moment. let's talk about the bank of _ about that at the moment. let's talk about the bank of england because we are acutely aware in the uk of the price we pay when markets react like they did following the minute budget in september. we don't want to go back there in terms of market reaction. today we shouldn't see that, should we? it is priced in, that the bank of england could go as far as a 75 basis increase.— basis increase. correct. the market had _ basis increase. correct. the market had this _ basis increase. correct. the market had this priced - basis increase. correct. the market had this priced in. l basis increase. correct. thej market had this priced in. if we think about, as well, as you said, this bank of england management policy meeting has come after a really chaotic time, not only politically but also in the market. there have been some very wild swings. the
bank of england will not want to do anything that could really rock the boat again but it won't be able to, we know that 0.75% is pretty much baked in. what will be interesting is what the bank of england are going to say going forward because let's not forget they are flying blind here. they were supposed to have had that fiscal statement out from the government before this meeting. that has not been the case now because the fiscal statement isn't coming in until the 17th of november, so they will have to not have those details looking forward to what is happening going forward. inflation here in the uk is still over 10% and the uk is expected to head into a recession, as well, so it is going to be a difficult time in the uk. ~ ., , a, a, ., the uk. we are acutely aware of that. the uk. we are acutely aware of that- good _ the uk. we are acutely aware of that. good to _ the uk. we are acutely aware of that. good to talk— the uk. we are acutely aware of that. good to talk to _ the uk. we are acutely aware of that. good to talk to you, - that. good to talk to you, fiona, have a good day. let's stay with the soaring cost of living —
because food prices are continuing to rise at record rates. food price inflation jumped from 10.6% to 11.6% in september, according to the british retail consortium. food and clothing charities say that at a time when they're dealing with increasing need, donations are falling — and rising prices mean they are struggling to restock, as our social affairs correspondent michael buchanan reports. these empty pallets show the stark reality for some charities. falling donations mean it's a weekly scramble for this charity to fill up to 1,000 food boxes a week for needy families across the north—east. we used to have 19 items in a box of food that we sent out. we're down to 17 now because we just simply don't have the money to put those extra items in. what have you taken out? we've taken out tea bags and we're just on the point of taking out meat. the charity was formed to provide help at christmas, and last year 9,000 hampers were distributed. this year it'll
likely be far fewer. last year, the christmas cake cost us 93p. this year the price we're quoted is £1.40, so at the moment i can only commit to buying 6,000. i can't blow the whole of the budgetjust on christmas cakes. people say it is going out as soon as it is coming in. it does, it's likel a revolving door. a few miles away, a much—needed donation for a small food bank in newcastle. its shelves are also near empty, just as demand is surging. we're nearly at crisis point again, and if we don't continue getting donations in, we are at risk of closing. like businesses, charities will benefit from a government scheme to cut energy bills for six months. but other costs are rising, donations are falling, and demands are increasing. our members were the front line of supporting people during the covid crisis over
the last two or three years. they haven't really recovered from the impact of that, and now they're facing this massive double whammy. at this drop—in centre for the homeless in manchester, they're seeing more and more people seeking help, but the organisers are reaching the limit of what they can do. staff have been cut, and some services have been reduced. we're having to say no to people at the minute because our guests are used to coming in and getting a pair of boxer shorts and a pair of socks and we're having to... we're not having the donations in that we were having, so we're having to say no about that. we can still provide the food and stuff, but we haven't got it in in the abundance that we did have. one irony of the cost—of—living crisis is that those now seeking help are the very people that often donated to the charities that are now struggling to support them. michael buchanan, bbc news.
inflation of 10% or ii% is bad enough for people here in europe. so spare a thought for households and businesses in turkey, where they are grappling with prices rising at more than 80% a year. official figures out later are expected to show an inflation rate of 86%, and rather than raising borrowing costs — the usual way to try and control inflation — the government of president erdogan has been cutting interest rates — causing the currency to spiral lower against the us dollar, and further pushing up the prices of imported goods. let's talk to professor guido cozzi from the university of st gallen in switzerland, who is following this. i have spoken to you about this before in the months gone by. i they still cutting rates in turkey? they still cutting rates in turke ? , , . ., , turkey? yes, they cut rates recently. — turkey? yes, they cut rates recently, but _ turkey? yes, they cut rates recently, but in _ turkey? yes, they cut rates recently, but in order- turkey? yes, they cut rates recently, but in order to - turkey? yes, they cut rates
recently, but in order to cut rates they are massively increasing the supply of money, and in fact if we consider the last 12 months, the supply of money has increased by between 80% and 90%, so turkey is becoming a textbook case of the quantity theory of money, and in the same period the price of the dollar has increased by nearly the same amount, so the true point, the best predictor of turkish inflation, is the money created by the central bank. if the central bank stops doubling the money, nearly doubling the money, nearly doubling the money every year, inflation will slow down massively. it inflation will slow down massively.— inflation will slow down massively. it is a bizarre situation, _ massively. it is a bizarre situation, looking - massively. it is a bizarre situation, looking at - massively. it is a bizarre situation, looking at it i massively. it is a bizarre i situation, looking at it from the outside. i assume households, businesses, you know, the behaviour in this circumstances, you delay buying... well, no, because prices are rising so rapidly,
you buy quickly... took us through how people are responding. it through how people are responding.— through how people are resondinu. , . , responding. it is incredible as an experiment _ responding. it is incredible as an experiment because, - an experiment because, actually, prices became very flexible, which again is the ideal case to experiment with the quantity theory of money, and people expect inflation and they translate money into goods as soon as possible. they buy a durable good to sell later on so this process is obviously boosting demand. but so this process is obviously boosting demand.- so this process is obviously boosting demand. but it is also fuellin: boosting demand. but it is also fuelling inflation, _ boosting demand. but it is also fuelling inflation, isn't - boosting demand. but it is also fuelling inflation, isn't it, - fuelling inflation, isn't it, making it worse? so how will this all end up? it sounds like the perfect storm. it this all end up? it sounds like the perfect storm.— the perfect storm. it is, but while inflation _ the perfect storm. it is, but while inflation is _ the perfect storm. it is, but while inflation is perfectly l while inflation is perfectly predicted, in a way there is a disconnect between monetary real valuables and in real terms, it is predicted to grow at 5%, which is higher than
china, for example. they are coping with that at the moment, moving on a razor edge, but pretty well. moving on a razor edge, but pretty well-— pretty well. but in terms of movement... _ pretty well. but in terms of movement. .. if— pretty well. but in terms of movement... if you - pretty well. but in terms of movement... if you are - pretty well. but in terms of movement... if you are in i movement... if you are in turkey, you can't really go anywhere outside of turkey, really, with the value of the lira, it is not possible that some of the well, it is possible but not viable, is it? it is not, especially considering that the country has a lot of debt, so if the dollar appreciates more and more, the country will have to pay more and more to the rest of the world and it needs the dollar to buy oil and gas, so it is a net importer of that. the situation could rapidly deteriorate even in real valuables.— deteriorate even in real valuables. ~ ,, .,~ ., valuables. we will speak to you aaain valuables. we will speak to you again soon. _ valuables. we will speak to you again soon. i — valuables. we will speak to you again soon, i am _ valuables. we will speak to you again soon, i am sure, - valuables. we will speak to you again soon, i am sure, as- valuables. we will speak to you again soon, i am sure, as we i again soon, i am sure, as we keep track of what is going on in turkey. thank you again for your analysis. stay with us on bbc news, still to come... winning bid!
ebay dodges the turmoil in the tech industry — it's cashing in as more of us shop second hand. the israeli prime minister, yitzhak rabin, the architect of the middle east peace process, has been assassinated. of the american hostages, there was no sign. should the americans attempt rescue, they will all die. this mission has surpassed all expectations. _ to keep on going. of our nation comes not
from the might of our arms or the scale of our wealth but from the enduring power of our ideals. this is bbc news — the latest headlines... five years after the manchester arena bombing, an official report's expected to make serious criticisms of the emergency services�* response. the united states condemns attempts by north korea to fire a long—range intercontinental ballistic missile towards japan. the airline industry is finally getting airborne again after losing tens of billions of dollars during the pandemic. but it now has another colossal challenge ahead of it — addressing its role in climate change, and the huge carbon footprint of air travel. the world's biggest planemaker airbus says it wants to have a zero emissions commercial airliner in service by 2035.
at an industry summit in california, the company's head of marketing stan shparberg has been telling my colleague aaron heslehurst about the challenges and opportunities that presents. sustainability is going to be the biggest challenge. and, of course, our passengers do not want to have a compromised experience when they are travelling, but they do want to obviously make sure that we decarbonise our... you know, the industry, and we move forward to the 2050 goals that we all set for ourselves. the net—zero goal. absolutely. but, stan, i have to ask you this, because you'll know this — i mean, the critics will say that not just airbus, your competitor, you guys are just tinkering around the edges, but reversioning current existing models. what's really needed for climate change is to go back to the drawing board of a fresh piece of paper to really tackle climate change. when is that going to happen? we're very happy to say that we're planning to have an entry into service of the zero—emission aircraft by 2035. that's a brand—new plane? that's going to have a brand
new plane that's going to have zero emissions. so that is starting from a clean—sheet design. and, of course, what we are doing, as well, to our existing products is keep on improving on our existing platforms and making them better and more sustainable — and at the same time making sure that the passenger experience gets improved with that. as we know, one of the reasons planes need so much fuel is to get all that weight off the ground. so i wonder, what is airbus doing to reduce the weight on the plane? lots of different things that we're looking at. one great example that we've just launched at this show is we've just done a major improvement to our a350 platform, which is a flagship carrier for a lot of airlines around the world. it is already a composite aircraft, but by using more composite, we've been able to reduce the weight by 1.3 tonne. we're also using digitalisation to reduce the amount of waste. so we believe with the data tools that we have, with the artificial intelligence, we are able to reduce up to 30% of waste, 30% of weight of the waste, and the waste is — obviously reducing the waste allows us to use, you know,
products and food and materials that are coming on board a lot more efficiently. so that's going to be the name of the game. and obviously we're talking about recycled seats. we are talking about different materials, 3d printing, all of those things that are coming in. we are rethinking how we use water tanks or waste tanks that are going on the planes. what are the new materials that we could use to make it lightweight? this is priority number one for our engineering teams. good to hear! last week was a brutal one for the tech giants of silicon valley — with hundreds of billions of dollars wiped off the values the likes of amazon and google owner alphabet as they warned of consumers cutting back spending. but on wednesday, online market place ebay rather bucked the trend — actually doing better than investors were expecting. it says customers are looking for second—hand and refurbished bargains. and it's cashing in on the growing trend of collecting — everything from sneakers to watches to vintage electronics.
hitha herzog is a retail expert and author based in new york. hello to you. ebay seems to be doing rather well, despite the economic challenges we are all feeling around the world. we are feeling around the world. - are definitely feeling challenges, not only in the us but, as you said, all over the world. but one thing is for sure. the global resale business, the industry, is set to reach $53 billion, so that is according to the brain trust that we have so we were studying this and because of this not only do companies want to take advantage but also sellers because of potential revenue streams. sellers can
benefit and companies can. one thing ebay is leaning into is the way that gen z shops. we are notjust talking about going into a shop and buying something but a lot of what gen z is doing in the collectables market is going to online auctions, discord and twitch, and ebay is looking to those platforms to potentially life broadcast some of their auctions. broadcast some of their auctione— auctions. that is really interesting _ auctions. that is really interesting because i auctions. that is really i interesting because that auctions. that is really - interesting because that was the challenge for ebay, how to stay relevant. it had first mover advantage, was disrupted backin mover advantage, was disrupted back in the day but that was a long time ago and there are many alternatives to ebay now and that was quite a worry some time ago, wasn't it? definitely. you are seeing amazon really eclipse ebay, especially when it came to revenues. we saw ebay have a bump in revenues during the pandemic, i think everyone in lockdown just pandemic, i think everyone in lockdownjust wanted to pandemic, i think everyone in lockdown just wanted to feel a bit of nostalgia, may be buy collectables are what they
needed. a lot of us couldn't leave the appointments. but in the last year, we saw that revenue decline and ebay, knowing that they once had this bump, wants to return to that glory of what they were seen during the pandemic. but glory of what they were seen during the pandemic.- during the pandemic. but we still balk at _ during the pandemic. but we still balk at what _ during the pandemic. but we still balk at what we - during the pandemic. but we still balk at what we are - still balk at what we are charged by ebay and we sell something. when you have that i°y something. when you have that joy of, well, i have sold it for this much, and then ebay takes its share. i know it runs these little short campaigns at times, 80% off the fee if you do this now, etc, etc, but do you think that is an issue for ebay, how much it charges people? ebay, how much it charges --eole? �* , ., ebay, how much it charges --eole? ~ , ., ., people? absolutely. you are ri . ht, people? absolutely. you are right. ebay _ people? absolutely. you are right, ebay does _ people? absolutely. you are right, ebay does charge - people? absolutely. you are right, ebay does charge a i people? absolutely. you are | right, ebay does charge a lot of fees and there are different streaming apps such as whatnot, which is a competitive ebay, so people are starting to sell here, so people are selling
significantly less in terms of fees for the sale of items. —— they are paying significantly less. ebay doesn't want to be decimated by this potential platform so they are looking to partner with other platforms to try to take a that market share, from the platform that is taking away market share from ebay! it is definitely competitive and they want to maintain the glory they had as the original reseller. titer? the original reseller. very . uickl the original reseller. very quickly because _ the original reseller. very quickly because we - the original reseller. very| quickly because we almost the original reseller. very - quickly because we almost out of time, a sentence, it really suits gen z in their concern about the time to stop and absolutely, sustainability is number one on gen z's agenda and this is one way to number one on gen z's agenda and this is one way— and this is one way to continue the sustainability. _ and this is one way to continue the sustainability. reselling i the sustainability. reselling and not buying _ the sustainability. reselling and not buying new. - the sustainability. reselling and not buying new. the . the sustainability. reselling| and not buying new. the two have you on the programme, hitha. thank you for your company, as well, really busy day ahead. the bank of england decision will be mid—day here in the uk so we will keep you
up—to—date throughout. stay with us here on bbc news. i will see you soon. hello, there. it was a stormy end to wednesday — low pressure sweeping rain and gales across the uk. as we move into thursday, though, we'll see some improvements, with some sunshine around. one or two showers, but it will stay quite wet in the south—east as the overnight rain band lingers. and you can see here on the pressure chart, eventually it'll wriggle away as we move into thursday afternoon, but this new area of low pressure will bring increasing showers to the south—west quadrant of the country, along with strengthening winds. you notice the blue hue there on the temperature map. it will feel cooler across the northern half of the country throughout the day today. so a wet, damp morning across the south—east. eventually that should clear away into the afternoon. elsewhere, plenty of sunshine around. one or two showers. most of the showers affecting wales and the south—west of england, with increasing winds here, particularly through the channel. but it will be a blustery day across the southern
half of the country. winds slightly lighter further north — that is away from the far north of scotland, and temperatures ten, 11 degrees in the north, at around 12 or 13 in the south, so it will feel cooler for all. it looks like that area of low pressure will bring showers or longer spells of rain through thursday night for wales, south—west england, perhaps the south coast as well, and certainly through the channel for the channel islands, winds will be strong for a while. but a ridge of high pressure starts to build in early on friday, so winds veering to a more northerly direction and it will be quite cold. temperatures down to freezing across some northern areas and a bit of mist and fog too. so here it is — ridge of high pressure building in across the country for friday before more low pressure arrives for the weekend. any early showers will clear away from the far south early through friday, and then it's bright, plenty of sunshine around. a chilly start, mind you. temperatures rising a little bit through the day. a few showers still across northern scotland, but most places dry. 11 to 13 or 1a degrees across the south.
so the weekend is looking unsettled. we've got more low pressure working its way in off the atlantic. that's going to bring rain and gales at times. it looks like one frontal system will cross the country on saturday, though. it will tend to weaken as it pushes towards the eastern side of the country, then it's blustery showers, strong winds into sunday and this front bringing some wet weather once again to the south—east corner, so quite a mixed bag through the weekend. like i mentioned, it's wet in the west, showers further east, and then a little bit drier in the north on sunday. very wet across the south—east.
good morning, welcome to breakfast with naga munchetty and charlie stayt. our headlines today. interest rates are expected to hit their highest level for 1a years, as the bank of england tries to curb soaring inflation. about 1.6 million people have a mortgage is directly tied to today's interest rate announcement. good morning from an estate agent into derby, where i will be looking at the impact on you. the manchester arena bombing — a new report will focus on the response of the emergency services and whether lives could have been saved. good morning from the cooper box