Browse content similar to 15/01/2016. Check below for episodes and series from the same categories and more!
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This is Business Live from BBC News with Sally Bundock and | :00:00. | :00:07. | |
Balancing the books in Russia - a budget cut is planned | :00:08. | :00:13. | |
as the Kremlin copes with those oil prices falling off a cliff. | :00:14. | :00:17. | |
Live from London, that's our top story on Friday the 15th of January. | :00:18. | :00:39. | |
As oil prices languish near 30 dollars a barrel, | :00:40. | :00:40. | |
the Russian government prepares for a year of austerity. | :00:41. | :00:42. | |
China's answer to the World Bank, the AIIB, prepares for its official | :00:43. | :00:49. | |
But will the new lender really shift the balance of power | :00:50. | :01:02. | |
And we are 30 minutes into the European trading day - | :01:03. | :01:04. | |
most of the main markets are headed lower as investors digest the latest | :01:05. | :01:08. | |
swings in the oil price and Chinese stocks enter a bear market this | :01:09. | :01:14. | |
And we'll be getting the inside track on the future of cars. | :01:15. | :01:15. | |
Will they hover above the ground - well, the last one, probably not. | :01:16. | :01:21. | |
Our technology correspondent Rory Cellan-Jones will be | :01:22. | :01:23. | |
Today, we want to know - would you trust your car | :01:24. | :01:26. | |
It's been another roller-coaster week for the price of oil - | :01:27. | :01:46. | |
it's sinking again today after Thursday's brief rebound | :01:47. | :01:50. | |
but earlier in the week, crude fell below 30 dollars a barrel | :01:51. | :01:54. | |
- a level not seen since 2004. | :01:55. | :01:55. | |
Countries dependent on the black stuff to keep their coffers | :01:56. | :02:00. | |
lubricated are certainly feeling the strain, | :02:01. | :02:01. | |
Today, the Kremlin is expected to announce a 10% cut in its annual | :02:02. | :02:06. | |
Over half of the overall revenues for the government comes from oil, | :02:07. | :02:13. | |
so as the price drops, there's a direct knock-on effect | :02:14. | :02:15. | |
Last year's budget was based on an oil price of $50 a barrel - | :02:16. | :02:25. | |
a price that is rapidly becoming a distant memory for oil producers. | :02:26. | :02:26. | |
Russia had hoped this year would see a change in fortunes and for it | :02:27. | :02:30. | |
to see a return to economic growth, having slipped | :02:31. | :02:33. | |
But that is looking increasingly unlikely. | :02:34. | :02:45. | |
10%, probably not enough. I was looking at the sums here. The | :02:46. | :03:05. | |
Kremlin apparently will need oil to rise to $82 a barrel. | :03:06. | :03:10. | |
To meet its current budget. You and I know that is not going to happen. | :03:11. | :03:16. | |
10% is payment on account, if you like. It will not be the last and is | :03:17. | :03:22. | |
not the first. This is a serious situation for Russia. Again, looking | :03:23. | :03:30. | |
at numbers, estimates say if oil stays at $30 a barrel for the | :03:31. | :03:33. | |
remainder of this year, it is likely to go even lower, but if it | :03:34. | :03:40. | |
$30, it wipes Russia's currency reserves gone. Yes. Give us some | :03:41. | :03:48. | |
more! The trouble for Russia is they have locked themselves into a | :03:49. | :03:56. | |
situation where distributing this is the basis for the economy. I had the | :03:57. | :04:01. | |
reform, they have had it for a long reform, they have had it for a long | :04:02. | :04:06. | |
time but it was rejected by Putin when he returned in 2012. They are | :04:07. | :04:10. | |
now reaping the consequences. They have nowhere to turn to except | :04:11. | :04:15. | |
hoping the price will rise, somehow something will happen, or reform, | :04:16. | :04:19. | |
which is dangerous for the regime. Just wonder if the economic action | :04:20. | :04:26. | |
at the moment which is ritzy bleak could force Putin's hand to reform. | :04:27. | :04:33. | |
-- pretty. To stop the sanctions and stop the Russian retaliatory | :04:34. | :04:37. | |
sanctions which are crippling things like the financial services. That is | :04:38. | :04:42. | |
good logic but it is improbable. His primary objective is for Russia to | :04:43. | :04:50. | |
be a great power. It is significant the military budget is being | :04:51. | :04:52. | |
protected and it is very large and growing. It would mean him stepping | :04:53. | :04:59. | |
back from Ukraine which he is going to find it very hard to do. It would | :05:00. | :05:02. | |
mean his finding some way to get out mean his finding some way | :05:03. | :05:07. | |
of the mess he has made going into Syria in the first place and that is | :05:08. | :05:10. | |
especially him. If the worst case especially him. If the worst case | :05:11. | :05:15. | |
scenario plays out this year and oil continues to go down, some predict | :05:16. | :05:21. | |
as low as $10 a barrel, that was the case for Russia and the people of | :05:22. | :05:27. | |
Russia, how will that play out? If things become more chronic economic | :05:28. | :05:30. | |
league, is that going to have a knock-on effect on Putin's | :05:31. | :05:35. | |
popularity and any dissension? They have got the television and media | :05:36. | :05:37. | |
locked down. They locked down for life. They have | :05:38. | :05:46. | |
recently given their police the right to fire in crowds should they | :05:47. | :05:52. | |
wish to do so, including women and children. How is the general public | :05:53. | :05:56. | |
coping and is it tough? It is tough. The polls show they are not hopeful | :05:57. | :06:02. | |
about the future. That is not the same thing as them saying, Putin has | :06:03. | :06:05. | |
made a mess of things and replaced. To do that, you would need | :06:06. | :06:13. | |
an idea of who and how might replace him, there is non-. Such a man or | :06:14. | :06:17. | |
woman would need a programme. There woman would need a programme. There | :06:18. | :06:23. | |
is no way to articulate a programme. So he is in a position where events | :06:24. | :06:28. | |
have taken control. And he and we will have to see how it plays out. | :06:29. | :06:35. | |
We appreciate your time, as always. And no doubt we will speak to you | :06:36. | :06:42. | |
soon. Fruit and vegetable in Russia, inflation, 30%. | :06:43. | :06:42. | |
It is difficult. announcement about budget cuts, we | :06:43. | :06:48. | |
will update you. Goldman Sachs says it's struck | :06:49. | :06:52. | |
a deal with the US Department of Justice to pay a $5.1 billion | :06:53. | :06:55. | |
settlement over its marketing US banks have taken much | :06:56. | :06:58. | |
of the blame for the 2008 crisis after granting mortgages | :06:59. | :07:02. | |
to unqualified borrowers, then repackaging those loans as safe | :07:03. | :07:03. | |
investments and selling The settlement comes | :07:04. | :07:05. | |
after Wall Street rival JP Morgan reported better than expected | :07:06. | :07:09. | |
profits for the three recovering to close 10.3% lower, | :07:10. | :07:11. | |
after it confirmed there had been police raids on the company's | :07:12. | :07:21. | |
facilities to investigate Investors are worried Renault might | :07:22. | :07:23. | |
also be involved in cheating emissions tests, following | :07:24. | :07:32. | |
the Volkswagen scandal last year. However, Renault stressed that tests | :07:33. | :07:42. | |
have shown "no evidence" of devices designed to cheat tests, | :07:43. | :07:43. | |
comments backed up by Fiat Chrysler Automobiles is denying | :07:44. | :07:46. | |
allegations that it encouraged The car company is being sued | :07:47. | :07:50. | |
by the owner of two US dealerships, who says it offered financial | :07:51. | :07:58. | |
incentives to dealers to report unsold vehicles as sold and then | :07:59. | :08:01. | |
cancel those sales Fiat Chrysler says it has carried | :08:02. | :08:03. | |
out an investigation and found Check out our website. BHP, $7.2 | :08:04. | :08:25. | |
billion write-down on its onshore oil wrecks. That is another part of | :08:26. | :08:31. | |
the falling oil price story. That is a lot of money. They are talking | :08:32. | :08:38. | |
year ago, it had 26 and it had five year ago, it had 26 | :08:39. | :08:42. | |
by the end of the first three months of the year. | :08:43. | :08:48. | |
Markets showing signs of being on the case. Let's talk about China | :08:49. | :08:49. | |
now. Now, China's answer | :08:50. | :08:51. | |
to the World Bank will be officially What is going on is much today is a | :08:52. | :08:54. | |
Infrastructure Investment Bank - What is going on is much today is a | :08:55. | :09:02. | |
big day for the Chinese. Hello. The AIIB as it is known will | :09:03. | :09:10. | |
be launched officially in Beijing. The headquarters this weekend. It | :09:11. | :09:13. | |
will hold its first board of directors meeting. This is a bank | :09:14. | :09:18. | |
which focuses clearly on providing loans for Asia -based infrastructure | :09:19. | :09:23. | |
projects including the likes of roads, health, education and energy | :09:24. | :09:28. | |
projects designed to grow the economy is of the recipient | :09:29. | :09:33. | |
countries getting the loans. China is the AIIB's largest shareholder | :09:34. | :09:38. | |
but India and Russia are also big players and all 57 countries have | :09:39. | :09:41. | |
signed up to the bank including many in Europe, controversially, like the | :09:42. | :09:47. | |
UK, France and Germany who joined in spite of opposition from Washington. | :09:48. | :09:51. | |
The US sees this as an attempt by China to come to Washington's | :09:52. | :09:54. | |
efforts to increase its influence in Asia and it is seen as a challenge | :09:55. | :09:59. | |
to existing institutions like the World Bank and the IMF. The AIIB has | :10:00. | :10:04. | |
tens of billions of dollars to spend and is expected to make its first | :10:05. | :10:07. | |
loans available in the second half of this year. Thank you so much. | :10:08. | :10:12. | |
So that is in Beijing this weekend. A mixed picture on the markets. A | :10:13. | :10:19. | |
Mini bounce back in Wall Street yesterday but that did not help | :10:20. | :10:24. | |
Asia. China entering a bear market, stocks in Shanghai at 3.5%. That is | :10:25. | :10:27. | |
Japan. This is Europe. Corporate Japan. This is Europe. Corporate | :10:28. | :10:34. | |
stories making the headlines. The merger of British Telecom with EE | :10:35. | :10:40. | |
has been given the Green light by authorities in the UK. That is | :10:41. | :10:46. | |
affecting trade in London. We have mentioned BHP, listed in London as | :10:47. | :10:50. | |
well. A lot going on and we will discuss the winners and losers. | :10:51. | :10:51. | |
Let's look ahead now to Wall Street. Citigroup and Wells Fargo have | :10:52. | :11:04. | |
reported fourth-quarter earnings. Citigroup makes up a substantial | :11:05. | :11:08. | |
part of its revenue from Asia and America -- emerging markets, has it | :11:09. | :11:13. | |
been affected by the slowdown in China? It is still expected to make | :11:14. | :11:18. | |
a growth in earnings. The biggest presidential mortgage lender WeFargo | :11:19. | :11:25. | |
experienced a big growth but with the exfoliate -- portfolio exposed | :11:26. | :11:32. | |
to the oil sector, watchers will be interested to see how it affects the | :11:33. | :11:36. | |
bottom line. Retail sales grew in December showing Americans are still | :11:37. | :11:40. | |
spending and we will get businesses on business in the entries for | :11:41. | :11:43. | |
November and manufacturing and business output for November. | :11:44. | :11:49. | |
Good on you. Let's stay with the markets. | :11:50. | :11:49. | |
Jeremy Stretch, Head of Foreign Exchange Strategy | :11:50. | :11:51. | |
Good to see you. Let's talk about the connection, audio and the | :11:52. | :12:01. | |
markets. We have seen a horrible two weeks of the trading year. Can you | :12:02. | :12:08. | |
explain, oil continues to tumble, markets react. They reacting to $30 | :12:09. | :12:14. | |
oil or to the reason we have got $30 oil? It is $30 oil particularly for | :12:15. | :12:20. | |
those economies reliant on oil your conversation about Russia was | :12:21. | :12:25. | |
pertinent and Canada, under significant pressure, it has lost | :12:26. | :12:29. | |
more than 10% of its value because of the correlation with oil. So | :12:30. | :12:34. | |
direct economic relationships in oil producing companies -- countries but | :12:35. | :12:40. | |
why is the price falling? Slower global growth and fears and eating | :12:41. | :12:44. | |
from China as the big swing demand variable in terms of both -- growth | :12:45. | :12:51. | |
projection causes the price to foil along with an excess of supply. | :12:52. | :12:54. | |
Interesting to see how the day progresses. A lot of news coming out | :12:55. | :13:00. | |
of the States. News from China about its money supply and its debt levels | :13:01. | :13:05. | |
which was worrying today. Asia closing at a 3.5 year low for the | :13:06. | :13:10. | |
week today. Angela Merkel is meeting with Mario Draghi in Berlin today. | :13:11. | :13:15. | |
They are having a chat. I would love to be a fly on the wall! | :13:16. | :13:19. | |
It is interesting because there is a degree of pressure in Germany | :13:20. | :13:24. | |
have seen this in the comments from the Central Bank regarding the | :13:25. | :13:30. | |
problems the German system has with negative deposit rates. The printing | :13:31. | :13:34. | |
of money. It seems to be the case Mario Draghi is going to be facing | :13:35. | :13:38. | |
relative criticism from Angela Merkel about the perception because | :13:39. | :13:42. | |
of the legacy that brings. Generally when you find money printing, it | :13:43. | :13:49. | |
boosts asset markets. But the Dax is down" and it is. It has created a | :13:50. | :13:57. | |
degree of a bubble in the asset markets and Germany is mindful this | :13:58. | :14:01. | |
policy could store up Rob Evans for the future. So it will be | :14:02. | :14:06. | |
interesting to hear not an official version but unofficial versions of | :14:07. | :14:11. | |
the conversations -- problems. You know the routine, right? You are | :14:12. | :14:14. | |
You will take through the papers shortly. | :14:15. | :14:17. | |
Most of us have one - and many of us use them daily. | :14:18. | :14:24. | |
Will you trust your car to drive itself? | :14:25. | :14:28. | |
We'll be discussing all that and more in just a few minutes. | :14:29. | :14:31. | |
You're with Business Live from BBC News. | :14:32. | :14:32. | |
A mega-merger in the UK's telecoms industry is likely to get | :14:33. | :14:35. | |
To find out more about what this means, let's talk to Matthew Howett, | :14:36. | :14:43. | |
So talk us through where we are at the moment, the competitions | :14:44. | :14:59. | |
authority has said these companies can tie up. How will they have to | :15:00. | :15:04. | |
change in terms of which bits BT might have to get rid of or anything | :15:05. | :15:05. | |
like that, do we know anything? Essentially, the competition markets | :15:06. | :15:19. | |
authority has said these companies are fine to join together. They are | :15:20. | :15:24. | |
bringing together two fairly separate businesses. BT has a | :15:25. | :15:26. | |
business around broadband and BT business around broadband and BT | :15:27. | :15:34. | |
primarily. EE on the mobile side fairly complimentary. There should | :15:35. | :15:36. | |
not need to be any changes to that business. Over time BT may look to | :15:37. | :15:47. | |
further integrate the division. These are the things we will find | :15:48. | :15:52. | |
out about in the coming months. Matthew, just briefly. What | :15:53. | :15:56. | |
this mean for customers? Will base much of a difference in terms of | :15:57. | :16:00. | |
pricing and customer service? At the end of the day, this is all about | :16:01. | :16:05. | |
the customer. What BT is doing by buying EE, they are gambling on the | :16:06. | :16:12. | |
fact that people want to take all of the services from one provider, | :16:13. | :16:16. | |
something we call quad play, they will take TV, broadband, landline | :16:17. | :16:22. | |
and mobile from one operator. It could lead to a form of cost saving. | :16:23. | :16:26. | |
This is something that will be pursued in the coming months. | :16:27. | :16:32. | |
Thank you for your time. There is so much more information about that | :16:33. | :16:37. | |
British Telecom EE tie-up on our website. There is also the ode to | :16:38. | :16:45. | |
deal with three to agree on -- 02. We will hear about that in the | :16:46. | :16:54. | |
spring. You have interviewed Jimmy Wales, | :16:55. | :17:00. | |
the founder of Wikipedia. Wikipedia is 15 years old this week. | :17:01. | :17:06. | |
What would we do without it? It has enriched my life, Sally! | :17:07. | :17:12. | |
balancing the books in Russia - as a new era of low oil prices begins, | :17:13. | :17:18. | |
so the Kremlin looks to cut its budget by up to 10 %. | :17:19. | :17:23. | |
And now let's get the inside track on the future of the car industry - | :17:24. | :17:26. | |
one of the biggest money makers in the world at the end of a week | :17:27. | :17:30. | |
where the big names in the business have been showing off their latest | :17:31. | :17:35. | |
It's a market worth a whopping $800 billion a year - | :17:36. | :17:41. | |
And big changes are in the works - to keep customers buying | :17:42. | :17:48. | |
as well as address environmental concerns. | :17:49. | :17:52. | |
Electric is gaining steam with brands like Tesla, | :17:53. | :17:56. | |
that offer luxury and 4x4 all electric vehicles. | :17:57. | :18:00. | |
We've seen prototypes for driverless cars from the likes | :18:01. | :18:05. | |
of Google and others - but is that technology about to be | :18:06. | :18:08. | |
Apple is thought to be developing prototypes as we speak. | :18:09. | :18:18. | |
So could the traditional players soon be facing | :18:19. | :18:20. | |
Lots of questions - and hopefully some answers. | :18:21. | :18:25. | |
Our technology correspondent Rory Cellan-Jones is here. | :18:26. | :18:31. | |
You had the pleasure of meeting Elon Musk. I drove to meet him in a car | :18:32. | :18:49. | |
which was an exciting, slightly terrifying experience. Tesla make | :18:50. | :18:59. | |
electric cars sexy. It is a electric and it accelerates like nothing on | :19:00. | :19:04. | |
earth. It has a range of about 250 miles. | :19:05. | :19:08. | |
features in it. You can switch on Lane control. You can sit there on | :19:09. | :19:14. | |
the freeway, it will stay in Lane. You can keep a certain speed. You do | :19:15. | :19:19. | |
keep your hands close to the wheel. It will even change Lane, indicate | :19:20. | :19:28. | |
and automatically move out into the next lane. I am fascinated by this! | :19:29. | :19:37. | |
It will do this. There is an extraordinary vision that this will | :19:38. | :19:41. | |
be commonplace, in fact it will be the norm in about ten years' time. | :19:42. | :19:46. | |
You will only dry if you want to dry. It will be like owning a car | :19:47. | :19:51. | |
which is not self driving in the long-term will be like owning a | :19:52. | :20:01. | |
horse, you will have it for sentimental reasons but not for | :20:02. | :20:09. | |
daily use -- you will dry. I do not have a car for sentimental reasons! | :20:10. | :20:16. | |
The point he's making is your car will completely automatically. You | :20:17. | :20:23. | |
might dry a Europcar, you won't need to. It will come to you without much | :20:24. | :20:37. | |
intervention. This man is an inspiring, brilliant thinker. What | :20:38. | :20:42. | |
he's saying is a bit too extraordinary for | :20:43. | :20:46. | |
when he said you will be able to pick up your car, if your car is in | :20:47. | :20:51. | |
Los Angeles it will drive to New York to meet you, I said, maybe that | :20:52. | :20:58. | |
that is a long time away. He said about two years. I think that is | :20:59. | :21:03. | |
slightly mad. Think about the regulatory changes you need. The | :21:04. | :21:07. | |
technology is evolving very fast, the regulation less so. Allowing | :21:08. | :21:10. | |
driverless cars onto the road will be huge decision and will need a | :21:11. | :21:17. | |
huge change in the structure. That is always the case of | :21:18. | :21:23. | |
the regulation struggles to keep up. Thanks, Rory. | :21:24. | :21:27. | |
To Switzerland now because exactly a year ago, the financial world | :21:28. | :21:29. | |
was buzzing with a new word: Francogeddon. | :21:30. | :21:31. | |
The Swiss National Bank shocked markets by abandoning its peg | :21:32. | :21:33. | |
to the euro - causing the Swiss franc to soar in value. | :21:34. | :21:36. | |
The policy, in place for three years, was designed to keep | :21:37. | :21:39. | |
the franc low, and Swiss exports competitive. | :21:40. | :21:46. | |
The move caught traders by surprise and even bankrupted one brokerage - | :21:47. | :21:47. | |
but how much long term damage has it done to the Swiss economy? | :21:48. | :21:50. | |
It was called Francogeddon, market mayhem one year ago. The Euro peg | :21:51. | :22:09. | |
abandoned, the Swiss franc sword. Swiss exports and Swiss | :22:10. | :22:16. | |
more expensive overnight. Disaster was predicted for Switzerland's | :22:17. | :22:22. | |
economy but what did happen? Fortunately, the situation has been | :22:23. | :22:26. | |
challenging but not dramatic. Many empathises could deal with the | :22:27. | :22:31. | |
situation, without having some severe difficulties -- many | :22:32. | :22:34. | |
enterprises could deal with the situation. How has Switzerland's | :22:35. | :22:38. | |
economy avoided disaster? costs and increasing productivity is | :22:39. | :22:46. | |
one way. Many workers here are now putting in a 45 hour week instead of | :22:47. | :22:50. | |
the usual 40 at no extra pay. And more painful measures could follow. | :22:51. | :22:55. | |
50% of all Swiss exports are sold in the euro zone. One measures firm | :22:56. | :23:06. | |
take is to relocate their production because based on a currency rate of | :23:07. | :23:13. | |
1.08 per euro now, the Swiss franc is still overvalued. Surveys show | :23:14. | :23:19. | |
one in five Swiss manufacturers want to outsource, but that is not an | :23:20. | :23:22. | |
option for the hard-pressed tourist industry. It hopes Switzerland's | :23:23. | :23:27. | |
questionably stunning landscapes will push price back into the | :23:28. | :23:35. | |
background. We have to concentrate on those experiences which are | :23:36. | :23:39. | |
unique to our country. I think we have to sell Switzerland through the | :23:40. | :23:44. | |
emotions, three something which you cannot buy. No Francogeddon yet | :23:45. | :23:49. | |
then, but huge challenges ahead. Swiss businesses feeling the cold, | :23:50. | :23:55. | |
and everyone agrees 2016 will not beat you seek, even for this usually | :23:56. | :24:02. | |
resilient economy. It looks pretty. | :24:03. | :24:04. | |
Jeremy Stretch is back to look at the papers. | :24:05. | :24:09. | |
This treat from a regular James Newman, he says I don't trust my | :24:10. | :24:17. | |
car's parking sensor. I trust driverless cars but not the people | :24:18. | :24:21. | |
in them. Hermione says Mike are drives itself. | :24:22. | :24:32. | |
I understand you have your own experience of this situation? I have | :24:33. | :24:36. | |
a self parking mechanism on my car and the first time I used it it | :24:37. | :24:40. | |
drove the car into the curb and damaged the wheels so I think there | :24:41. | :24:44. | |
are teething problems! Did you have are teething problems! Did you have | :24:45. | :24:49. | |
any recourse? Was based on the fact that the car in front was part badly | :24:50. | :24:53. | |
so it was lining itself up with that. It is always the small print. | :24:54. | :25:01. | |
On the subject of small print, a teenager, a 19-year-old UK teenager | :25:02. | :25:04. | |
who is studying at Stanford University in the US, has come up | :25:05. | :25:11. | |
with a robot lawyer to help bypass the massive fees. I | :25:12. | :25:16. | |
interesting that he is studying in the US rather than the UK so he has | :25:17. | :25:21. | |
perhaps decided the US situation is better. He has designed an algorithm | :25:22. | :25:26. | |
to look at parking issues and provided an opportunity to come back | :25:27. | :25:30. | |
with advice to deal with parking fines which are very easy to pick up | :25:31. | :25:37. | |
as we all know. It is an attempt to revolutionise the sector and provide | :25:38. | :25:43. | |
an opportunity for recourse. I think we should name him, Joshua Browder, | :25:44. | :25:48. | |
studying computer science in the US. That is a name we should remember. | :25:49. | :25:54. | |
Studying at Stamford, try harder, Josh, that is what | :25:55. | :25:56. | |
There will be more business news throughout the day on the BBC Live | :25:57. | :26:03. | |
webpage and on World Business Report. | :26:04. | :26:08. | |
It is a cold, frosty start across the country that lovely and bright | :26:09. | :26:17. | |
with some sunshine around. | :26:18. | :26:19. |