21/07/2016 BBC Business Live

This is Business Live from BBC News with Ben Thompson

The European Central Bank is set to give its first policy decision

after Britain took the decision to leave the European Union.

Markets are awaiting any news to changes to the ECB's

quantitative easing progamme- as reports suggest Japan is about to

The US Department of Justice alleges that

$1 billion has been "misappropriated" from the Malaysian

government fund founded by the country's Prime Minister.

The DOJ claims that stolen money has been used to help fund

the Hollywood blockbuster The Wolf of Wall Street.

We are not making that up and that is what the markets are doing.

Also in the programme - riding the currency markets.

We'll get the Inside Track on how businesses cope with big swings

And the world officially has gone mad as Pokemon fever sweeps the

globe. A software programmer has combined an app with dating dating.

We want to know which apps you would like to see crated.

-- created. There are unnamed presenters at the

BBC who have caught Pokemon in this studio. We say no more.

We start today in Europe - because the European Central Bank

lays out its latest policy action later -

the first meeting since the UK voted to leave the EU.

So what's weighing on the mind of the ECB?

Well, as well as Brexit, the collapse in oil prices saw

the Eurozone slip into deflation in April and May.The ECB's job

is to maintain price stability - and that means preventing both

inflation and deflation - and stopping either gaining

In recent weeks, political uncertainty - especially surrounding

Brexit - has put a squeeze on bank lending as businesses

and individuals hold off from taking decisions on investment

In March, the ECB launched a landmark stimulus package

It has an aggressive bond-buying scheme, but it can only buy certain

types of bonds and now some economists suggest those constraints

are tying the hands of the central bank.

With me now is Kallum Pickering, senior economist at Berenberg Bank.

What Ben was saying is giving us an idea of the problems injected into

the eurozone economy, as a result of that what state is that economy in

at the moment? Eurozone economy has been growing at modest rates.

Nothing vigorous since 2012 but it has been growing at a stable base.

Balance sheets are improving and there are employment gains we have

enjoyed. You say generally growing but within that average growth,

there are some real basket case, Greece and Italy which have not

grown at all. That is right. France and Italy have real issues with

their labour market, they need reform to help increase employment

but Germany has been grow, unemployment is low. Spain and

Ireland the two basket cases during the crisis year have been having the

strongest rates of growth. OK, so given that situation, what does the

ECB do now? What it needs to do is off set the confidence shock that

has happened since Brexit. It needs to preserve the positive trends.

Just pick you up on that, the confidence shock from Brexit, how

big has that been in Europe itself? The eurozone? We only have a few

breadcrumbs of data so far. The index for the eurozone fell earlier

this week to the lowest level since 2012, but these sentiments can often

overreact to what is happening in the real economy, so we will

probably see a dent to growth in the second half of the year but I am not

sure, given the existing aggressive stimulus the ECB will ratchet up its

programme. Go back to what it can do. You think it hasn't got enough

data do do anything but it can say things that will make a difference

It, it can. They Couch their phrases when they say OK this is the way we

see the economy, there are some risks to inflation, remember all

central banks need to immediate a target. The ECB's is 2%. If they say

we won't meet our target, that send a signal to financial markets they

could increase or extend its monastery stimulus. And Mario Draghi

will say something about European Governments doing more to help out

the heavy lifting that the central bank has been doing all these years?

He is right to do so central banks cannot increase the size of the

engine in an economy. They can only provide the fuel, so it is the

reforms in the labour markets fiscal policy in the surplus countries,

that will raise the rate of growth in the eurozone.

Lufthansa has cut its full-year profit target after a big fall

Germany's biggest airline blamed "terrorist attacks in Europe"

and "greater political and economic uncertainty".

British Airways owner IAG and Easyjet have also issued profits

Shares in online retailer eBay jumped 6.5% in after hours trading

after the company reported better-than-expected

They were up 5.7% compared to the year before.

The online retailer also raised sales forecasts for the year ahead

Elon Musk has unveiled his "master plan" for the future of Tesla.

He said the electric car maker is working on several new vehicles,

including heavy trucks and buses that could be launched

Musk also used the speech to defend the company's autopilot system,

after an autonomous car crashed earlier this year,

The online retailer also raised sales forecasts for the year ahead

Jet jet's cost which have gone up as a result of the falling pound, the

investigation into sports direct but there is one other story I

desperately wanted to get hold of. Commercial property. I can't find.

Standard Chartered. I have got it. They are all linked, this is the

first time we have heard about this, linked to this probe going into one

MDB, this fund in Malaysia, which has been accused by the US yautsties

of money-laundering, or at least Simoning off money to pay for

movies. It is interesting and we will

Let's head to Asia now where the US Justice Department has launched

a billion dollar lawsuit as part of its investigation

The fund was set up and overseen by the country's Prime Minister.

But, the US claims money from the fund was misused -

even though the Prime Minister is not directly

Our Asia business correspondent Karishma Vaswani has the details -

Yes, MDB. The to help develop Malaysia 's infrastructure. The

The heat is sticking round in the south-east,

but elsewhere it is a

We could have that insight into their thoughts life after Brexit but

it does mean investors remain cautious. It was slightly better

yesterday, thanks to good corporate results, so that is the state of

play so far in Europe, that is how markets are looking, we will talk

about that more in a moment. Let us head to New York.

The coffee giant is focussed on more lunch offers, to get more people

through its doors, and low borrowing costs have made it cheaper to buy a

car, but how much has that helped General Motors? We should find out

when it reports second quarter earnings, strong demand for trucks

and SUVs are expected to drive sales at home. With other companies also

scheduled to turn in their accounts investors hope the message is bun

that suggests the US consumer is in good shape.

That was Michelle in New York. Joining us is Bronwyn Curtis,

an independent economist and governor at the London School

of Economics. What are the markets telling us

about post Brexit Britain? They are not really telling us anything at

all. The surprising thing we have had Turkey, we have had all sorts

of, every time get a hit you expect the markets to go down and it is not

happening, in fact, they are going up, and I think they are just

waiting, they have had so many hits they have become blase. You said

they are going up. Looking at the UK market it readjusted. The pound went

down, shares went up, we readjusted. Certainly in the UK, that is true,

they just readjusted prices because if you look at the smaller companies

in the UK, they haven't really gone up, but elsewhere, you know, they

have done pretty well. One indication we might get tomorrow is

the market, the flash data, we get it for the UK and the eurozone, that

will give us an early indication of what is happening in the real

economy. That is the important thing isn't it. In the real world what is

happening, away from the market, away from the numbers. Numbers. This

will be the first time we have had any real world data. This is an

early flash PMI for the UK. It has been especially early, that will

give us a good indication of well, the first indication of really what

is happening to companies and PMIs are about the expectations of

purchasing managers in companies, and we expect that you know, they

will have put their investment on hold, they will put their hiring on

hold and so on, we don't think it will be a good number.

Nice to see you. Briton win will be back to talk us through some of the

Selling sterling or ditching dollars?

We get the inside track of life on the currency markets.

As the Uk's vote to leave the European Union sent shockwaves

through the foreign exchange markets, we'll assess what it

means in the long term - and why a fall in the value

of the pound is good news - and bad news - for investors.

Stay with us, you're watching Business

Now - one of the first casualties of the UK's vote to leave the EU

A number of funds suspended operations, as investors

Well, a new report by surveyors across the UK shows investment

demand is falling and the market could be taking

But does that stack up with evidence on the ground?

Just this week Wells Fargo struck a ?300m deal to buy new European

headquarters in London, while China's largest property

developer has been given the go ahead for a hugely ambitious project

Theo Leggett is in our Business Newsroom.

is the question, what is going on? Who do believe the the surveyors on

the data on the ground? You have to drish between individual property

deals and generalised sentiment. What we have seen with the Wells

Fargo deal is a single company deciding it has extensive business

interests in the UK and it is in its own interests to set up its European

headquarters here. Likewise with the investment by a Chinese firm, they

are coming in to invest in real estate in the London, market because

they think it's a good deal for them. With the pound at its current

level they may think they are getting good value. The broader

picture is that sentiment across the country is fall, this is a survey

that is carried out according to interviews with several hundred

chartered surveyia yours and they are reporting that interest in

future investment in the London property market is declining. Also

across the rest of the country, it is falling but the biggest effects

are in London. I do think you have to distinguish between those

individual deals, and the situation across the country, where surveyors

are being asked not only what is happening but their own opinions,

what people are saying to them, and that shows that sentiment as a whole

is falling, that expectations are, that in London, the property prices

are going to fall, in the rest of the country it depends which market

you are looking at, but the sentiment is also going downwards

and rents are expected to fall as well. A couple of seconds but what

has happened to the property funds? People were investing in them,

difficult to get their money out because property is Ilicic wed. Are

they still in trouble? People with money in those funds

can't get money out quickly because if you want to sell money it takes

time, particularly in the current market, it will take longer than

usual. Thanks very much indeed for that.

Bank is set to give its first policy decision after Britain took

the decision to leave the European Union.

Markets are awaiting any news to changes to the ECB's

quantitative easing progamme - as reports suggest Japan is about to

That is of course designed to kick-start ailing economies.

A quick look at how markets are faring...

There you go. The FTSE is one third of 1% down. It is not a big moving

day. The pound against the dollar, remember, the strongest was 1.30

three. The weakest was 1.28 after breaks it. -- after Brexit.

Now - for most of us - when we think of foreign exchange,

we think about holiday money before a trip overseas.

But playing the currency markets is one of the fastest

Small movements in the value of the pound or dollar can have huge

The UK's decision to leave the European Union sent shockwaves

Today, nearly a month after the vote - the pound

is still around 10% weaker against the dollar.

for British tourists visiting abroad, everything becomes

But for foreign investors looking to buy shares

or indeed whole companies in Britain, it costs less.

It also makes UK-made goods cheaper abroad.

Western Union Business Solutions helps companies transfer

currency overseas and manage their foreign exchange risk.

Did I pronounce that correctly? Well done. Talk us through what happened,

it is still about 10% lower, the pound versus the dollar as a result

of Brexit. What happened when you woke up? It was a bit chaotic to be

honest, it was obviously an expected result and for most organisations,

the world turned for them overnight, think about the cost of goods for a

typical organisation, that immediately went up close to 10%

which has a significant impact for the type of company we serve, a

small, medium-size enterprise. If you are exporting the exports become

cheaper for buyers and therefore you benefit. Did you get any idea what

the net result was for most customers? I think everyone was

concerned coming off this, there were some winners and losers from a

currency standpoint but the reality is that it brings a fair amount of

certainty to businesses within Britain. So that was the prevailing

sentiment. Obviously right up front people were concerned about their

financial situation. Largely those organisations that were exposed to

international costs, they were concerned about that because it has

a flow on effect. It is great for exporters. You make it easier for

people to movement here around the world and we know that that is a

global business and people need to be able to move near round but it

strikes me there has always been a lot of middle man, someone creaming

off profit at every stage and you have tried to remove some of that?

We have. To contextualise it as playing the markets, that is the

core of what we are advising businesses not to be doing. Too few

businesses really care about this and actively manage it. Corporate

stew a great job at the bus majority of businesses, 99%... You are

talking about managing exposure? Yes, and the risk. They shouldn't be

doing that? They should be doing that. You were talking about playing

currencies. They should not be playing currencies, they should be

actively managing it. How should they be doing it in this

environment? It is important to understand their cost base and make

sure they are securing that first, if you understand that then you can

build from that and you know what your prices are, how to contract,

ensure you are meeting prize points to be competitive. Understanding

costs and setting cost rates is important. Very briefly, do they

have some certainty now about where the pound is going? It is down, but

it's not going anywhere else? They do have a bit of certainty? The

certainty is that it will continue to move and that is what businesses

should be expecting. They need to proactively manage against

volatility. We are helping businesses to do that through

platforms and products. Going back to your earlier point, the new

platform does help to do that, cut out the middleman and make

transactions easier and faster but also help them to manage their cash

flow better, especially if they are impacted by foreign currencies. It

is good to see you and I wish we could talk more but as always in

this programme time is against us. Thank you or explaining all of that.

It is nice to meet you both. EasyJet has just reported a fall in

profits following a profit warning that was issued at the end of the

month. The British carrier was affected by political instability,

terror attacks, and now the UK voting to leave the EU. The

investment director of AJ Bell says it is still unclear how it will

affect easyJet. The long-term issue is the economic slowdown, we don't

know if there is yet, but a lot of statistics were showing signs of

weakness even before the referendum vote. As the industry added too much

capacity? There was a ?25 million hit from oil increases and the pound

going down. It is priced in dollars. The long-term impact, the company

has expressed concern about consumer sentiment in the UK and Europe

because it is not just flying in and out of the UK. It flies all around

the continent. We don't know about the long-term impact but the fourth

quarter, the most profitable of the year, it is around 65%. They are

worried about consumer confidence but business travel was up 9% and

they have been working hard on that and it has paid off. Brian is back

to take us through the stories. -- Bronwen. Elon Musk does not shy away

from headlines, he says they will create electric cars, trucks, buses

and this sort of thing. We expected this but it's a big ask because an

electric bus takes a lot of power. Yes. He has put this out on the

company blog. He bought or merged a solar panel installation company, so

maybe he is thinking of using solar panels on the tops of buses but I

don't know how many you can get on the top of a bus. It would be a very

big one. The big thing with all of this is that he's talking about all

of this but he hasn't said when the company will be profitable which is

quite important to people. You know, it's all about what we can do, but

what about the battery technology? That is the big thing. Batteries

will change and everything. If we get that right everything would be

sold? That is the big thing if you can do that but no one has so far.

Lots of talk and lots of things in production but he can do all of this

if he gets the battery is right. He is a great dreamer with big

ambitions. Speeding people across the deserts of America. Getting them

from A to B in a couple of seconds. Does he deliver? He has delivered an

electric car and one that had an accident of course as we know. But I

think he has pushed out the barriers, other people follow him,

and electric cars, it's not gas powered cars or other power, other

cheap means of energy, it is electric cars we are looking at.

Let's talk about Pokemon Go. It has now launched a dating service! We

asked viewers about which app they would like that does not currently

exist. One person said he would like one to find peace. A lovely thought

on a Thursday morning. Any morning! David in Florida wants to see an app

called message in a bottle, delivering a message to a random

person years later! Carol would like to see an app which debunks lies

from politicians. Lie detector, I like that. Let's talk about Pokemon

Go is a dating service. It connects, dare I say, like-minded nerds. You

fill out a little questionnaire. I think you have to be on Pokemon Go

first. That counts me out! Exactly right! Then you fill in a

questionnaire, they tried to put people together and they sent

e-mails off to each of them, and the idea is that apparently it is called

Project Six Up. -- Fix Up. The idea is that it is more fun to play with

a friend. Thank you for your company today. Same time, same place

tomorrow. Goodbye, we will see you later.