24/11/2016 BBC Business Live

This is Business Live from BBC News with Ben Thompson and Sally Bundock.

European governments are spending big to boost growth

Live from London, that's our top story on the 24th of November.

Britain's national debt set to hit almost ?2 trillion in the biggest

jump in borrowing since the financial crisis.

We look at Europe's deteriorating public finances.

Also in the programme: Flying high in China.

Skyscanner, the travel search business, has been sold to a Chinese

And as US markets rise, they fall in Europe.

The weak pound has boosted tourism in the UK.

So we hear from one hotel developer about plans to expand in Britain

But if you are planning a trip to London and you are eating out, it

could be costly. As a new list names and shames

the most expensive restaurants in the UK capital, we want to know

what's the most you've A very warm welcome to the

programme. Yesterday Britain's finance minister Philip Hammond gave

the autumn budget statement. He warned that after the vote

to leave the EU, the UK is on track for the biggest deterioration

in public finances since the '60s. Mr Hammond said that government debt

will hit 90 percent In other words, Britain will owe

almost as much as the whole Greece also hit the headlines

with its own debt crisis and its national debt is approaching

twice the size of its economy. But Italy and Portugal now also have

debts far bigger than their GDP And France is also more indebted

than the UK at 97.5 percent. It leaves governments very

vulnerable if borrowing costs start The group of developed nations,

the OECD, says governments should With me is Linda Yueh,

professor of economics A familiar face. Good to see you.

Everybody is die testing the news about the Autumn Statement, whether

it is good, bad or ugly. -- digesting the news. What is your

take on it? It is the job of the OBR to slow growth, and that is related

to the UK's decision to leave the European Union, and they think that

will add ?59 billion of debt, and the remaining ?122 billion will be

added to the national British debt because of decisions by the

Chancellor to invest more, which helps a bit. But what we should

probably take away from it is that you need growth to bring debt down,

and his investment in infrastructure and others is intended to boost

growth. Hopefully in his view that will be coming down eventually and

by the OBR's estimate it will peak in the next couple of years and then

come down again. To be clear you are talking about the JAMs, the just

about managing. Hard-working families not quite earning enough to

get through. In terms of the context that Ben outlined with Europe and

other economies, I know in the US for example, the debt to GDP ratio

is over 100%. And in Japan it is skyrocketing. Put it in perspective

for us. If you look across advanced nations, and obviously Japan is an

outlier, but the US and other European nations, debt levels since

the 2008 banking crisis have more than doubled, public debt. One of

the reasons for that is that when you have a financial crisis you have

a huge amount of debt, so the debate now is how to bring that debt down

nearly a decade after the crisis. In Europe they are talking about

boosting growth, investing in infrastructure, and the plan is to

invest 600 billion euros of infrastructure over the next few

years, and increasingly that is what Britain is doing and Japan has done

that for some time. President-elect Trump in America, that is what he is

intending to do as well. In terms of the risk that this debt poses for

the UK economy and for the US, it is not the same as Greece or Portugal

by any means, is it? No, it isn't. In the US and here, we control our

own currency, so we don't have to coordinate what we do. If you want

to spend more on infrastructure. Eurozone decides that for Greece,

for instance. They are different kettle of fish. The debate around

Greece is somewhat more striking because they clearly have had not

just about crisis but they have deep organs. Output is down since 2008 at

an implement is up 25% since then. Debt level is 125% of GDP. The

debate about to do with Greece's debt is about forgiveness. Debt

relief? Yes, writing off the debt, which is what you do for developing

countries, and that is a different kettle of fish for what we are doing

for developed economies. Thank you for that perspective. That will be

of interest to viewers around the world in terms of where we are with

the debt mountain, as it were. We will keep putting that into context

for you. In other business news: A strike by Lufthansa pilots is set

to continue for a third day after their union called

for the action to be Germany's flagship airline cancelled

900 flights yesterday and another 912 today,

affecting around 200,000 passengers. It's the 14th strike

since April by the union. Weak export figures have put

the brakes on German economic The German economy halved its growth

rate to 0.2 percent in the quarter despite rising private consumption

and higher state spending. Exports from the country fell by

0.4 percent on the quarter The Indian rupee has hit a record

low of 68.86 to the US dollar. The dollar has strengthened

on expectations of a rate hike next month following Donald Trump's shock

presidential election victory. There have also been concerns

about India's process of demonetisation as all 500

and 1000 rupee notes are removed from the economy,

prompting long queues outside It is a very busy day for business

news and there are lots of stories on the website, so dig deep. This

one about Airbnb. There are reports that Airbnb is in talks to buy

China's second biggest accommodation service, which I probably can't

pronounce. So far the Airbnb China focus has been on persuading

outbound travellers to book places around the world through them and

now it looks like they are looking to expand significantly in mainland

China, which is interesting. Keep your comments coming in about the

most expensive dinner you have had. The brilliant ones coming in. Lots

of grumpy comments. People not happy about spending money on food! Keep

them coming. Skyscanner, the UK-based

travel search business, has been bought by Ctrip,

China's biggest online travel Skyscanner is an Edinburgh-based

company. Nice to see you. This is an

interesting manoeuvre. Tell us more. Indeed. It is fair to say that we

have been hearing about Chinese companies going on a shopping spree

for quite some time, but unlike other deals that we have seen in

Hollywood entertainment or nuclear infrastructure, this deal has been

described by both bosses as win-win. Skyscanner allows users to compare

prices from different travel sites when searching for flights and

hotels. It is available in more than 30 languages with about 16 million

monthly active users. Ctrip is quite keen to get this global reach that

Skyscanner has got. Meanwhile Ctrip has quite a lot of money. It is one

of the best-known companies in China. Skyscanner just last year

looked for funding for expansion. Skyscanner has said it will continue

to operate independently of Ctrip's shares which are listed in the US.

They rose by 9% on the news. Thank you. An interesting story. This is

what is happening as far as the numbers are concerned. Shares in

Japan closing high up because of what is happening with the yen and

also expectations of what is happening in Europe. Europe is

funny. In the US, markets are rising with what the drum presidency will

mean for business, business friendly policies that he has proposed on the

campaign trail. -- Trump presidency. But in Europe there is the election

in Italy and in Holland and France and Germany early next year, all

weighing on the minds of investors. That is the current state of play in

Europe and more on that in just a moment.

Kathleen Brooks, research director at City Index, is here.

No action in the US because it is thanks giving and they are tapping

into the turkey. We had fed minutes out late last night. We have got the

reaction to the Autumn Statement happening at the moment. Certainly

from a currency perspective the more your government is willing to spend,

that is very good news for currencies. The dollar is doing

incredibly well and it is at a multi-year high events in various

currencies and the pound is doing well. -- against various currencies.

Austerity Europe is bad news for the Euro. And the stock market has

reached record highs. There are reports out there about the

divergences in the US and Europe in terms of where the money is going.

Europe is out of favour. The markets are not diving or anything, clearly,

but there is a different feel compared to the US. Definitely,

rocket has been put up the markets in the US and that is because

election risk has gone away. But how long will the Trump free lunch last?

He is talking about spending which is opposed to boost growth but it is

a temporary measure because at the end of the day you have got to pay

for it at somewhat. And what about the other anti-economic views he put

forward? People are taking an optimistic view in the stock market

that might not deliver. Autumn Statement yesterday from the UK

finance minister. Markets not very excited. All that attention is still

on the US? Definitely. It depends which market you are looking at. The

bond market did move with yields higher in the US and the UK. There

is a divergences. Overall it was a Loki Autumn Statement but it did

have a strong message behind it. -- low key. That is Philip Hammond's

style. Borrowing is back and it will be good for our economy, he says.

Watch this space. Looking ahead to December, everyone is looking to be

on the same page, with a rate hike in the US. The markets are

predicting a 100% chance of a hike, which I have never seen before. But

they could be wrong! If it doesn't happen there will be a tsunami! We

need some certainty! We are talking about expensive restaurants and you

are sending in your thoughts thick and fast. Keep them coming.

Still to come: How London is cashing in on China.

With a slump in the value of the pound after the Brexit vote,

we meet the hotel chain that says it's tapping into the Chinese

tourism trend with big expansion plans in the UK.

You're with Business Live from BBC News.

They make the toy trains, planes and automobiles that have

delighted children for decades but in a world of smartphones

and computer games, revenue has taken a hit.

We're talking about Hornby and they've just reported

Theo Leggett has been looking at them for us.

What do they show? On the face of it they don't look great. Hornby makes

toy trains like this one I prepared earlier. Also I fix kits, model

planes, Scalextric racing cars, but unfortunately they are not as

popular as they used to be, even though people like myself and my

cameraman Peter art enthusiasts. The underlying profit has gone down over

the last six months. It is making a loss. ?3.6 million in the six months

to the end of September against 4.3 million in the same period last

year. But there is more to this than meets the eye. Their debt has gone

down substantially. Why? That is because Hornby came close to

collapse earlier. They went cap in hand to shareholders, launched a

restructuring programme, have closed down unprofitable product lines,

getting rid of unprofitable concessions and so on, and at the

moment they say the recovery plan is an track. Did they use that pun?

They could be running out of steam! Because of Brexit Dahmer presumably

and the strength of the pound? Out of steam? Awful. There is a

potential Brexit problem for Hornby. They have had to raise their prices

because they saw as most of their products overseas. They pay for them

in dollars and much of what it sells is sold in pound sterling in the UK

and it books its profits in pounds sterling in the UK. The sum total of

that is if the pound goes down, the profits are eroded further, which is

something they have got to content with. They have had to raise their

prices 10% since October and there could be further price rises in the

pipeline, which is a potential headwind for the company.

Ben and I had a chat. We think you were a Hornby kind of a boy, did you

have them? My kids have a Scalextric and I play with it! I did have

trains but not Hornby. I said that! Dominos is going to open more stores

in the UK, it now wants 1600 up from the previous 1200.

You're watching Business Live - our top story.

The Office for Budget Responsibility has forecast a substantial rise

National debt as a proportion of GDP will rise to 90.2% in 2017-18.

80% is recommended as a working figure. That is in reaction to the

autumn state out yesterday. A quick look at how

markets are faring. We had some poor news from Germany

about exports, imports for the previous month. That hasn't damp

dampened trade there. The DAX is up by just under 0.4 of a percent.

Now - what impact will Brexit have on business in the UK?

It's the question everyone is asking, but few have answers.

Well, the immediate winners have been tourists travelling to the UK.

They've cashed in on the weak pound - making their money go further.

Sterling fell sharply after the vote to leave the EU and it's meant UK

One tour operator specialising in Chinese travel to Europe,

says it saw a 20% increase in inquiries and bookings for the UK

this summer compared to the same time last year.

And last year was already a record-breaking year for visits

from China to the UK with almost 270,000 visits.

And it's why Dorsett Hospitality International is choosing

the capital to expand its hotel network It's one of Asia's fastest

growing hotel groups, and run by Winnie Chiu.

She is now according to Forbes magazine one of Asia's most

Victoria sat down with her and asked why the company is pursuing

I think in terms of why, it's really because the company started in Hong

Kong and Hong Kong is one of the most favourite sort of destinations

of Chinese going overseas. It's still one of their preferred areas,

the city to go to, and therefore it's very natural for us to make a

China wallet strategy. Currently the hotel have 12 hotels in Hong Kong

and we are opening one more. And so our focus is out bound Chinese

travellers. To give you another example about the Chinese consumer,

I think another thing which is very important to them is connectivity.

In terms of if you look at the cellphone penetration, China is

probably the highest in the world, so in all our Dorsett Hotels, we

give you a phone, whichever category room you check into, we give you a

phone, you can call countries for free, we have done research in terms

of where our favourite customers go to, you can call eight countries for

free, it also works as a pocket Wi-Fi so you bring the phone out and

give yourself your own Wi-Fi. Our customers really benefitted from

that and really love it. Shouldn't you be developing shopping malls and

not hotels? I love the people development and my father is a

property developer so I know it. Whatever business you choose, you

have to choose something that you are very passionate about. I'm very

passionate about hotels. You are absolutely right, according to

statistics I when Chinese go overseas, they spend 73% on hop

shopping and only 12% on lodging. But you can see the statistics

actually moving, so again it's like when travellers started travelling,

you want to, because to have visa, suddenly feel refreshed like oh wow

I need to buy this for my family. The Chinese travellers are moving,

getting more experimental and experienced travel so it's not just

purely shopping, they would want to sight-see. Again, I think as the

nations develop their travelling behaviour, it gets more developed.

So from shopping in the beginning, it will move to others. And you are

not concerned about the impact of Brexit on the attractiveness of

London for example as a destination. Because of the weaker pound, it

brings more tourists. So if you look at the number of tourists, there's

been an increase. The lower sterling heralds higher sales, I think

currency plays a big part when it comes to tourism. I still find the

UK very competitive amongst a lot of other destinations. I think the

reason being the heritage, there's so much to it. Also I think another

really important element to that making the UK attractive is the

schooling system, the education system. From a long time ago that's

always been the Asians coming here to study and again while you feel

more related to the city, the UK is still then a preferred destination.

That was the boss of Dorsett Hospitality International.

It was 20 years ago yesterday that the original Tamagotchis

They're small egg-shaped computers that were like a digital pet.

The original launch sparked a short-lived cyber-pet craze.

Here's a look back at what was getting everyone excited in 1996.

20 years ago! LAUGHTER.

The memories are flooding back! What was yourses called? I can't

remember. What happened to it, him, her? I think I took the battery out

because it was annoying me. So you killed your pet, is that what you

are saying? No, I put it down. Right. Kathleen has returned and we

are going to discuss several stories in the papers. Also one is in

business Insider about the 35 most expensive tasting menus on the

planet. Many are in London. No big surprise there at all. We asked

viewers to get in touch. Your thoughts, have you eaten somewhere

so expensive that that's all you think about is the money and not the

quality of the food? I have to say, I'm not the biggest fan of a tasting

menu, too many things going on. Too many types? Too many different types

of food in one go, but my husband has a few stories to tell through

work, he spent ?650 once on some sea urchin. Your face says it all! It

wriggled on the plate. And paid ?650 for the privilege.

Someone did, it was a business thing. Harry paid ?150 a head in

Edinburgh in one of the TV chef's restaurants, he doesn't name names,

but says all I did was eat bread so he paid ?150 to eat bread. Our

colleague Jamie Robertson said, if you remember the food it was worth

it, if you remember the price it wasn't, which is a superb comment.

Well done, Jamie. Washington Post, Donald Trump is selling a $149 gold

finished Christmas ornament. It's classic. A picture here, you can

that can go on your tree. The red hat he wore throughout the

campaign's turned into the working class hero, as you mentioned. $150

for this Christmas bauble, I don't know how many of us will buy it, not

quite sure where the money is going to, is it to pay down the debt of

his campaign which I know they amass a huge amount during the

presidential election. 14 carat gold baseball cap, what more do you need?

! A nice dinner out perhaps. Thank you. That's all from us for another

day. See you very soon, bye. Good morning. Once again, we have

seen some big