04/12/2015 BBC Business Live


04/12/2015

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This is Business Live from BBC News, with Aaron Heslehurst and

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The Organization of the Petroleum Exporting Countries gather

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in the hope of answering the big question - will they, or rather,

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can they, do anything to reverse the slump in the price of oil?

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Live from London, that's our top story on Friday the 4th of December.

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With oil prices at record lows, all eyes are on Opec king-pin Saudi

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Arabia, under huge pressure to cut production and revive crude prices.

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So far, the oil-rich nation has refused to budge.

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Is Yahoo on the brink of breaking up?

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Bosses have been locked in talks over the future of the

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The Asian markets were tracking south, we will explain why.

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And it's Friday, so we are joined by our guru of all

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He's going to be taking us through hugely important US jobs numbers.

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They are the last piece in the puzzle that economists have

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been waiting for, ahead of perhaps the biggest central bank

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Will December 2015 be the time the Federal Reserve starts raising

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We always like to know what you think of the stories we're covering.

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We start in Vienna, where ministers from the oil cartel Opec are holding

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The big question - will they, or rather can they,

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do anything to reverse the slump in the price of crude?

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Here's perhaps the key person around that table,

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Saudi Arabia's Oil Minister Ali al-Nieemi.

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He was mobbed by journalists yesterday as he arrived at the

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meeting, after a report that Saudi was proposing a cut in production to

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Let's take a look at the background to all this.

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Here's what has happened to the price of US crude over

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The graph tells the story - it has more than halved in value.

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Because there is a massive worldwide glut of oil.

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Demand has gone down, but Saudi and others have still been

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The theory is they want to hang on to market share, and force those

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newcomers to the market, US shale producers, out of business.

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The result - the lowest oil prices in more than six years -

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Smaller Opec members like Venezuela are now really struggling

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They have been putting pressure on Saudi Arabia, the world's

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biggest oil exporter, and its Gulf allies to cut production.

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Saudi Arabia may at last be willing to cut production, but only if Iran,

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Iraq and other non-Opec members like Russia agree to cut as well.

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So, is there any possibility of a deal?

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International Oil and Energy Consultant Dr. Manouchehr

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I know it's Fiona, I realise it's December, but there is a real chill

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in the air -- it's FENA. There is a real disquiet. Can they agree today?

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I don't think so. I think the argument that the Saudi minister

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will so, this strategy is already working and has started to be

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effective. US oil production, shale, is coming down and so on. Because of

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the low price, demand is picking up. They will say, wait another six

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months or another year. But of course others cannot afford that,

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because they are under pressure in this one last year. Even Saudi

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Arabia, there are some of the high authorities, printers, complaining.

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The 700 reserves have gone down to 600 or so -- Princes. They are in

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the open market. They want to get their bonds and loans and so on. So

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there is pressure. But overall, I don't know what is happening in the

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discussions, but I think they will not budge. I think they will

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continue this strategy, in spite of so much pressure, Venezuelan,

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Nigeria, they are really suffering, they have had enough. The Saudis are

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saying, we will cut if Iran, they put pressure on Iran and Iraq, Iran

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will just enter the market after being locked out last year. Iran

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doesn't want to cut, they want to get the stuff and sell it. Iraq say

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that for 20 years they were under sanctions, they deserve to trade.

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Let me add something, there are pressures from within Opec, on

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previous occasions, in the 1980s, there was also pressure from the US.

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George Bush, the vice president, President Clinton, they went and put

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pressure on Saudi Arabia to cut. This time, there is no US pressure,

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it is only within the internal Opec pressure on Saudi Arabia. And I

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don't think they will budge, I think they will wait six months or one

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year, that is their demand. There is already an effect of this policy.

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But of course it is long-term. It is two or three years before they

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actually see this 12 million barrel cut in investment for expulsion

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production in the industry -- expulsion. Can I ask you one more

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question? Given the disagreements between members of Opec and of

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course the Shell gas production, is in your future Opec still a really

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relevant player in the oil industry? Of course, it is more than

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35% of the market, and the oil is theirs, they have been through this

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and they see the fate of other producers, so they want to be in

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charge of their own. They don't want to be left at the mercy of the

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so-called market, and there are people in the US campaigning for

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fair trade, price, to purchase and so on, priced that somebody else

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will defend fair price. But they know that. In spite of all of this,

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the ministers are responsible, they know that they have something to

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do,. Thank you very much for coming in and taking us through that.

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Let's take a look at some other news for you.

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A US judge has rejected a bid by the airbag maker Takata

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and the car maker Honda to end a class action lawsuit.

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The case had been brought on behalf of millions of owners of cars with

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Over 19 million US cars have been recalled

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Takata and Honda have already agreed to settlements for six of the eight

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deaths linked to ruptured Takata airbag inflators in Honda vehicles.

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And South Korea's financial regulator says it is investigating

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possible insider trading by Samsung executives.

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It is being reported that nine Samsung executives purchased

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as much as $43 million of stock in a takeover target before Samsung

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announced a deal to combine with the company in May.

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You've got the tablet! I do. Let's have a quick look.

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Let's take a look at the Business Live page.

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This story took our fancy, handbags at dawn at Avon. They are a huge

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provider of cosmetics, particularly in the US. They are looking to sell

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their North American division, but there are investors are claiming it

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is significantly undervalued, and they have spoken to the chairman and

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told them that they do not have to be selling, but they have in fact

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lost confidence in the leadership. You a handbag lady? No, I'm not, you

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never see me come in with a handbag. I have deep pockets! This is called

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filling time by the way, ladies and gentlemen!

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Let's take a look round the world at what's business stories are

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We'll start in Asia, where Leisha Chi is in Singapore for us

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with news that Toshiba is planning to spin off its PC business.

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Does Toshiba want to get rid of its PC business? That's right, there are

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rumours that Toshiba is looking to split off its arm unprofitable PC

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business, because it is losing money but also because the Japanese

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company has been embroiled in one of the country's biggest accounting

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scandals in years. The firm needs to raise cash and reassure investors

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about its finances. It has been reporting inflated profits after

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nearly seven years of improper accounting. Toshiba has been selling

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off businesses and losing money. It has merged with former rivals.

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Toshiba used to be a pretty big brand name back on the day. But fast

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forward now, it only holds about 2% of the global PC market. Apple holds

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20%. It is going to be hard for them to catch up on the road. Talking of

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catch up, have a great weekend and we will talk to you soon. Thanks for

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that. Let's stay with the markets. Asian markets joined the global

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market slump this Friday, and all to Yes, it acted,

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and this is the result. The long-awaited announcement

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from Mario Draghi, the ECB boss, was seen as a huge let-down, as the

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bank crucially failed to increase the size of the stimulus while the

:10:51.:10:53.

rate cut was less than hoped for. Although I will tell you

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the euro jumped by more than 3% late yesterday

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because of the ECB announcement. In fact, the euro posted

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its biggest single day gain against Talking of dollars,

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let's find out what will be making All eyes will be

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on November's job report. It's the last one before the Fed's

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highly anticipated interest-rate It is expected to show that

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non-farm payrolls increased Now, that would be less than gains

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seen in October, but still healthy and in line with

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an unemployment rate of The report is also predicted

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to show that wages grew. Another piece

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of economic data out is US trade-deficit figures

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for October. The Commerce Department will likely

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report that the trade gap shrank And after markets reacted negatively

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Thursday to the European Central Bank's stimulus plans,

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we'll hear from the man himself, He'll be in New York to participate

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in a meeting of the Economic Club. We'll hear him react to criticisms

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that the European Central Bank That is of course the big issue that

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faced the markets yesterday. We have a guest with us.

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is co-founder and director of Seven Investment Management.

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Can the ECB fix the Eurozone's problems? The Eurozone is actually

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doing quite well, I know what the headlines say, but we have seen

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confidence indicators rising and better corporate results. Generally

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we have seen an improvement. Yesterday the euro jumped

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dramatically. Overall it has been considerably weaker. What we saw

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yesterday was a market showing a certain level of addiction to

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quantitative easing. Somebody is not giving them their drugs any more,

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what happens? The market goes down like that. This will come back the

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other way. What you will see I suspect is about is back from that.

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This was completely overdone, it may not be done today, but really that

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form did not represent any logic at all because we were using

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extending, the deposit rate going negative further, he was providing

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more things to buy, extending the period by which it would operate,

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all of the things, he just didn't give them any more methadone, that

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is what the market was looking for, then it went into his. I want to

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talk about miners and commodities, but the bullies in our ears are

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saying there is no more time. You will come back and take as through

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some of the papers. Thanks, Justin. from the world's biggest economy,

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US jobs data - the last bit of the economic jigsaw

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for the Fed before it decides

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on where interest rates will go. You're with Business Live

:13:54.:13:57.

from BBC News. It's time for us to look at some

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of the stories from around the UK. Rail fares for 2016 have been

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announced, and our very own Ben Thompson is at King's Cross

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station in Central London. And the lowest rise in fares

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for six years. Yes, good morning, guys, welcome to

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King's Cross, one of the busiest stations here in London. 30 million

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passengers will travel through here during the course of the year. This

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morning they have been keeping a close eye on the news that rail

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fares will go up in January. They will go up by 1.1%, that is the

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lowest increase in six years. Now, it's based on what are called

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regulated and unregulated fares. The regulated ones, ones that are

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limited by the government, they are pegged to the inflation rate in

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July, they go up by 1%. Unregulated fares are set by the companies

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themselves, they can vary, but on average they will go up by 1.1%

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across the country. We have been speaking to passengers here this

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morning who said, we see the need for prices to rise, but in they

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wanted improvement in the service, they want to see fewer delays are

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better trained and less overcrowding. I've also been

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speaking to the rail delivery group, responsible for the rail

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companies themselves, and also Network Rail. They pointed out that

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more and more money is now being invested in the railways, more of

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every pound spent on the services themselves.

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I think the increase of 1.1%, in return they want to see the service

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improved. Ben, great stuff, thank you! Every Friday year somewhere

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else! He has got a very busy weekend

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ahead, he is moving house. We will give you the address a bit

:16:10.:16:14.

later! Weatherspoon say an old website belonging to them has been

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hacked, personal details including e-mail addresses may have been

:16:21.:16:27.

stolen. They say a tiny minority of customers with extremely limited

:16:28.:16:32.

details were accessed, plenty more on the website.

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our top story - a crucial meeting in Vienna.

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meets in the hope of answering the big question -

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can they do anything to reverse the slump in the price of oil?

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That is kicking off at nine o'clock, so plenty more throughout the day.

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Later today, the US will release its latest unemployment numbers

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Today's numbers are significant because since October,

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Fed policymakers have signalled they're likely

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to raise interest rates at their meeting that starts on the 15th.

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of significant economic data they'll review.

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So what kind of number could raise doubts about a Fed move?

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Our economics correspondent Andrew Walker is with us.

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Good to see you, Andrew. We are expecting a good number, but if it

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is anything over 200,000 for the month of November, jobs created,

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Janet Yellen, a couple of days ago, very positive with their comments,

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they are going to raise rates, surely? It certainly looks like they

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are going to do it at that meeting later this month. The US jobs market

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is pretty robust, we have unemployment at 5%, we are expecting

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no change later, and we are expecting something of the order of

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200,000 as an increase in the number of people who do have employment.

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Over the course of the last 12 months, we have seen the number of

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people in work raising by about 2.8 million, so no question that the US

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jobs situation is moving in the right direction. Not quite as robust

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as the headline figures suggest, however, an awful lot of people are

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not looking for work because they feel it will be a struggle to find

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it, and a lot of people working pastime would like to work longer

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hours. If you look at the overall participation rate, it is quite a

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bit down from where it was before the recession. That is partly about

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the ageing population, but not the whole story. The kind of figures

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that the United States has would be the envy of folks on continental

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Europe, the eurozone we were talking about before. There is this issue of

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wage growth, not particularly strong in the US, I wonder how much that

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plays into their thoughts. It is an important factor, because the key

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thing that will lead the Fed to raise rates is concerned that maybe

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there might eventually be an inflation problem. There certainly

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is not one at the moment, even when you take out the effect of very low

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oil prices and the effect that has had on what it costs motorists to

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fill their cars. Core inflation is still pretty low in the United

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States, about 1.3% is one of the key figures that the Fed likes to look

:19:47.:19:50.

at, and they have a target of 2%. But nonetheless wage growth, yes, I

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mean, it is not very robust, but there is enough going on to suggest

:19:57.:20:01.

that, with these very low-level is of unemployment, that there could

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conceivably be a problem in due course. So I think the Fed does

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think now is the time to start very gradually raising interest rates. If

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we do see a rate rise, it is going to be a small one. A little mini

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one, a quarter of a percent? It is a tale of two very different

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economies, so to the eurozone, we saw the action by Mario Draghi, the

:20:28.:20:32.

ECB yesterday, but is there still too much expectation that it is the

:20:33.:20:38.

job of the European Central Bank to fix the eurozone problems? It is

:20:39.:20:43.

not, is it? They have got a role in ensuring that there is sufficient

:20:44.:20:47.

demand in the economy, but it is not entirely down to them by any means.

:20:48.:20:52.

There is still, if you ask Mario Draghi himself, he will tell you

:20:53.:20:56.

there is still an enormous agenda of structural reform in labour markets,

:20:57.:21:02.

in promoting more competition in services and industries. He will

:21:03.:21:05.

tell you there is still an enormous job to be done there on the part of

:21:06.:21:10.

eurozone governments. He also, I think, probably takes the view that

:21:11.:21:14.

some of them could do a little bit more by way of fiscal policy,

:21:15.:21:18.

spending and taxes to stimulator economic growth. But that has become

:21:19.:21:24.

a rather heretical idea, the eurozone is still very much consumed

:21:25.:21:31.

by this idea that you do need to maintain very fierce discipline over

:21:32.:21:35.

government finances. Some have serious problems with that, most

:21:36.:21:38.

obviously Greece, but there are probably some that could go a little

:21:39.:21:42.

easier without doing any great damage, and I think Mario Draghi

:21:43.:21:48.

thinks Germany could do that without any great danger. Very briefly, we

:21:49.:21:52.

have seen persistent strength when it comes to the euro, a real problem

:21:53.:21:58.

for lots of the countries across the eurozone, particularly Germany,

:21:59.:22:02.

difficult for exporting nations, and what we saw yesterday with Mario

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Draghi disappearing gait disappointing the markets, it was

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strengthening again. Yes, but the medium term trend has been a

:22:12.:22:18.

weakening euro. One of the things they want to see is the euro

:22:19.:22:24.

remaining relatively weak, so as long as Justin was right to say that

:22:25.:22:30.

that strengthening is a temporary affair, an overreaction, I think

:22:31.:22:33.

they can probably live with it, but we will be watching it carefully.

:22:34.:22:39.

Thank you very much for coming in. We got a tweet from Alexander, he

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says all oil economies are hurting, often not mentioned, Norway. You can

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get in touch with us as well, this is how you can get in touch with us.

:22:51.:22:54.

The Business Live page is where you stay ahead with all

:22:55.:22:56.

We'll keep you up to date with all the latest details with insight

:22:57.:23:01.

and analysis from the BBC's team of editors right around the world.

:23:02.:23:05.

get involved on the BBC Business Live web page at bbc.com/business,

:23:06.:23:14.

and you can find us on Facebook at BBC Business News.

:23:15.:23:19.

Business Live on TV and online, whenever you need to know.

:23:20.:23:29.

Justin is back, he will be taking us through some of the papers, in the

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Economist they are talking about Yahoo and what now for the boss?

:23:39.:23:43.

This was a great brand 15 years ago, completely overtaken by Google, so

:23:44.:23:49.

as a search engine it is almost irrelevant, and its biggest asset is

:23:50.:23:55.

its investment in Ali baba. There is a private equity firm involved in

:23:56.:23:59.

that, and we know what they are like, nice reasonable people! No,

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they want to get their money out of this. Unfortunately, we have got the

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dear lady running it, Marissa Mayer, and she has joined to try to revive

:24:10.:24:15.

the business, has not been able to, so I would not be surprised if they

:24:16.:24:19.

sell off some of the assets and probably you will end up with this

:24:20.:24:22.

rump of the Alibaba business which would give them an awful lot of

:24:23.:24:30.

value. In the New York Times, is there a

:24:31.:24:38.

shortage of Secret Service men?! So it would appear, I know all about

:24:39.:24:44.

the US Secret Service, I have seen those Harrison Ford films, they

:24:45.:24:49.

worked really well, they are highly efficient, and this is someone

:24:50.:24:55.

called Mr Chavez, I thought he used to run Venezuela... I assume it is

:24:56.:25:00.

not the same man! Misconduct continues, security breaches

:25:01.:25:04.

persist, this is not what you expect from the US Secret Service, guarding

:25:05.:25:07.

the president, but we had a breach of White House fences last week with

:25:08.:25:11.

strangers getting into it. This would seem like amateur week at a

:25:12.:25:15.

time when everyone else is spending a lot of money on extra security,

:25:16.:25:20.

this sort of story. Very strange indeed. Yeah, I wonder what sort of

:25:21.:25:26.

misconduct they get into. Who knows?! Probably a state secret.

:25:27.:25:33.

I think that is it, I'm afraid, sorry, Justin, that is it from

:25:34.:25:35.

business life. There will be more business news

:25:36.:25:36.

throughout the day on the BBC Live web page

:25:37.:25:38.

and on World Business Report. See you later, have a great weekend,

:25:39.:25:43.

cheers!

:25:44.:25:48.

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