15/03/2017 BBC Business Live


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15/03/2017

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

:00:00.:00:08.

Federal Reserve Chief Janet Yellen is expected to announce another rise

:00:09.:00:14.

But the question is how many more and when?

:00:15.:00:19.

Live from London, that's our top story on Wednesday, 15th March.

:00:20.:00:35.

Will the US dollar continue it's onward march as the central bank

:00:36.:00:44.

Also in the programme, headwinds for Hong Kong's national carrier.

:00:45.:00:51.

Cathay Pacific makes its first loss since the financial crisis.

:00:52.:00:58.

All eyes will be on the Fed, but this is how European markets opened.

:00:59.:01:02.

We'll get the details later. And we'll be getting the inside

:01:03.:01:06.

track on all that glitters. The man behind gold mining firm

:01:07.:01:08.

Petro Pav Lovsk is here to tell us how the firm came close to collapse

:01:09.:01:12.

and how he managed to put the shine And here in the UK the top ten

:01:13.:01:15.

weirdest jobs have been revealed, we will talk you through them

:01:16.:01:20.

and we want to know what weird Keep your comments coming in. Some

:01:21.:01:45.

days I think this is the weirdest job in the world.

:01:46.:01:47.

It's the day global markets have been waiting for.

:01:48.:01:55.

The US Federal Reserve is widely expected to raise interest

:01:56.:01:57.

Fed policymakers are tipped to raise interest rates by a quarter point -

:01:58.:02:02.

It's what Janet Yellen says after the meeting that

:02:03.:02:14.

They'll be looking for clues about future rate rises,

:02:15.:02:22.

when and how quickly they might come?

:02:23.:02:24.

And the Fed may talk about undoing some of the measures it

:02:25.:02:27.

introduced at the height of the financial crisis.

:02:28.:02:31.

It bought up over $1.75 trillion worth of mortgage-backed

:02:32.:02:37.

securities, but now it wants to offload them.

:02:38.:02:42.

Janet Yellen is also having to weigh up an improving US economy but

:02:43.:02:45.

at the same time as President Trump's policy of building,

:02:46.:02:47.

infrastructure spending and tax cuts - all of which could

:02:48.:02:50.

Andrew Walker is here. So just fill us in. The rate rises is priced in.

:02:51.:03:06.

We're expecting that. The question is what is she going to say in the

:03:07.:03:10.

press conference? She will be talking about how the US economy is

:03:11.:03:15.

growing reasonably well. It's strong and the labour market is

:03:16.:03:18.

particularly strong and we've got unemployment, the latest figures are

:03:19.:03:22.

4.7%, the Fed's policy makers think that's about the minimum level that

:03:23.:03:26.

it can get without generating, accelerating inflation. It's worth

:03:27.:03:31.

saying it has been at 5% or below for 18 months now, but there are

:03:32.:03:34.

wider measures of weakness, of slack, if you like in the labour

:03:35.:03:38.

market that have also improved, that's looking at people who aren't

:03:39.:03:42.

officially counted as unemployed, but want to get jobs, but aren't

:03:43.:03:46.

actively looking and people who are working shorter hours than they

:03:47.:03:49.

want. If you look at those factors, the labour market has continued to

:03:50.:03:53.

strengthen in a way that's not fully reflected in the headline figure and

:03:54.:03:57.

that's an important consideration for Fed policy makers. What is

:03:58.:04:00.

interesting because I was grilling you before we came on air about the

:04:01.:04:06.

fact that wage growth is good in the States as well? The most recent

:04:07.:04:11.

figure for hourly earning is a 2.8% increase. That's comfortably above

:04:12.:04:18.

inflation. The Fed's target is 1.9% and that's another factor, the Fed

:04:19.:04:22.

has a target of 2%. If you look at their figure they're close to

:04:23.:04:25.

target. If you take out the food and energy prices, it is lower, but it

:04:26.:04:29.

is clearly getting there. So I think the Fed is very much wanting to

:04:30.:04:33.

ensure that inflation stays within its target range, concerned that if

:04:34.:04:37.

it doesn't move soon then it could have a problem down the line of

:04:38.:04:42.

excessive inflation. So with that in mind and also within mind President

:04:43.:04:46.

Trump's plans that he keeps telling us about, although we have little

:04:47.:04:49.

detail on infrastructure spending and tax cuts, what are we expecting

:04:50.:04:53.

the Fed to do the rest of this year, do you think? The general

:04:54.:04:56.

expectation is perhaps two, maybe three more rate rises, but it will

:04:57.:05:02.

very much depend on how the data unfolds and how the issues unfold.

:05:03.:05:06.

We don't really know what he's going to do, what President Trump is going

:05:07.:05:09.

to do by way of tax cuts. Infrastructure spending. The

:05:10.:05:15.

preliminarications for that for demand depend on how he's proposing

:05:16.:05:19.

to finance that. There might be a lot of private sector money coming,

:05:20.:05:24.

if it boosts the deficit that has the potential for being inflationary

:05:25.:05:28.

and they will be important factors that the Fed will take into

:05:29.:05:32.

consideration in the months ahead. Thank you very much indeed, Andrew

:05:33.:05:36.

Walker. And we will be across the news from Washington when it breaks

:05:37.:05:37.

later today. Lorry drivers moving goods

:05:38.:05:45.

in Western Europe for Ikea and other retailers,

:05:46.:05:48.

are living out of their cabs for months at a time

:05:49.:05:50.

as they cannot afford to live According to a BBC

:05:51.:05:52.

report, some drivers - brought over from poorer countries

:05:53.:06:01.

by lorry firms based in Eastern Europe, say

:06:02.:06:04.

their salary is less than three Ikea has said it is

:06:05.:06:07.

"saddened" by the report. The Australian Transport

:06:08.:06:13.

Safety Bureau has warned against using battery-powered

:06:14.:06:15.

devices on flights after a passenger's headphones caught

:06:16.:06:17.

fire during a flight It says the phone's lithium-ion

:06:18.:06:19.

battery was the likely cause. The incident follows several

:06:20.:06:25.

incidents of Samsung Galaxy phones and hoverboards exploding

:06:26.:06:28.

and being banned on planes. Cathay Pacific has reported its

:06:29.:06:36.

first full-year loss since the 2008 The Hong Kong based airline,

:06:37.:06:39.

like many of its peers has been struggling with overcapacity and hot

:06:40.:06:48.

competition from carriers Simon, tell us more about Cathay

:06:49.:07:09.

Pacific. It is a very tough environment for this company? This

:07:10.:07:12.

is Asia's biggest international airline. 2016 was a very difficult

:07:13.:07:16.

year and today it revealed how difficult. It lost $74 million last

:07:17.:07:25.

year. That compares to the profit of ?6 billion the year before. It is

:07:26.:07:31.

struggling to fill space on its planes, but in the holds of its

:07:32.:07:34.

cargo planes and there is competition from mainland China.

:07:35.:07:37.

These are airlines who are flying direct to the US and to Europe. So

:07:38.:07:43.

they're hovering up the Chinese passengers who might have flown via

:07:44.:07:47.

Hong Kong. It no longer makes sense for many of them to do so Cathay

:07:48.:07:53.

Pacific is losing out. What are they going to do about it? They said they

:07:54.:08:00.

would make job cuts. And there were no more details. Today, no more

:08:01.:08:03.

information and that's one of the reasons why the shares have fallen

:08:04.:08:07.

sharply in Hong Kong. Simon, good stuff, it is always good to see you.

:08:08.:08:14.

Stocks in Tokyo fell with energy firms down on weak oil prices

:08:15.:08:23.

and investors are waiting for news from the Fed meeting.

:08:24.:08:28.

Shares in Toshiba also down sharply on fears over its future.

:08:29.:08:35.

While the US Central Bank is considered odds-on

:08:36.:08:39.

to tighten borrowing costs, traders are most interested

:08:40.:08:42.

in what its plans are for future hikes, with boss Janet Yellen's

:08:43.:08:44.

post-meeting comments the main focus.

:08:45.:08:46.

In Europe, here's how the numbers are looking.

:08:47.:08:53.

In the UK, unemployment rate expected to rise to 5% from 4.8%

:08:54.:08:56.

We'll also get eurozone jobs numbers too.

:08:57.:09:08.

In the corporate world, the UK Government has reduced its stake

:09:09.:09:15.

in Lloyds to just below 3%, putting the lender on track to be

:09:16.:09:18.

back in private ownership within the next few months.

:09:19.:09:24.

But over in the US, the headlines are dominated by the tax

:09:25.:09:27.

The American TV network, MSNBC, has shown two pages,

:09:28.:09:34.

of what it says, are Donald Trump's federal tax returns for 2005.

:09:35.:09:38.

Mr Trump has always refused to release his returns.

:09:39.:09:56.

The Pulitzer prize winning journalist David Cay Johnston

:09:57.:09:59.

told MSNBC he'd received the documents in the post,

:10:00.:10:01.

The White House response - is that the documents

:10:02.:10:05.

demonstrate Mr Trump paid - $38 million in taxes.

:10:06.:10:11.

On an income of more than $150 million.

:10:12.:10:17.

Our correspondent Tulip Mazumdar in Washington says there

:10:18.:10:19.

is still massive interest in President Trump's tax returns.

:10:20.:10:23.

These are just summary pages from his 2005 tax returns with two main

:10:24.:10:33.

headline figures. He earned $150 million in 2005 and paid $38 million

:10:34.:10:40.

in taxes, around 25%. So nothing hugely controversial or revelatory

:10:41.:10:43.

there, but this is significant because Donald Trump has been asked

:10:44.:10:47.

for many months now both as a candidate and now as president to

:10:48.:10:51.

release his tax returns and he has so far refused to do saying he can't

:10:52.:10:56.

because the internal revenue service is currently auditing him and that

:10:57.:11:01.

prevents him from doing that. Now tax experts say that's not

:11:02.:11:04.

necessarily true and if he wanted to, he could release them, but all

:11:05.:11:08.

this caused a lot of anger at the White House. They sent out a

:11:09.:11:12.

statement shortly before all this information came out on American TV

:11:13.:11:17.

over here and they said, "It is totally illegal to steal unpublished

:11:18.:11:22.

tax returns. The dishonest media can continue to make this part of their

:11:23.:11:25.

agenda while the president will focus on his which includes tax

:11:26.:11:30.

reform and will benefit all Americans."

:11:31.:11:37.

Joining us is Jane Sydenham, Investment Director,

:11:38.:11:41.

Give us your take on the Fed? The markets are expecting a rate rise

:11:42.:11:52.

and if there wasn't one, we would see surprise, but what we're

:11:53.:11:55.

expecting is rate rises in the second, perhaps the second quarter

:11:56.:11:58.

and maybe the third quarter. As Andrew was saying, you know, it is

:11:59.:12:02.

that look ahead that really matters, but I think today's move is

:12:03.:12:06.

certainly priced in. So that priced, a bit of certainty there, but there

:12:07.:12:11.

is a lot of political uncertainty in Europe right now, we talked about it

:12:12.:12:16.

at the start of the week. We've got the Dutch elections and the French

:12:17.:12:19.

elections later in the spring and obviously the German elections in

:12:20.:12:24.

the autumn and the issue actually, what is interesting is the way that

:12:25.:12:28.

risk manifests itself for investors is through Government bonds and

:12:29.:12:32.

actually at the moment, they're calm. Yields are very low. There is

:12:33.:12:36.

no expectation in markets... That's always worrying, is it not? It is.

:12:37.:12:41.

When you say investors reaction to risk, just explain how that works

:12:42.:12:45.

because we assume, OK, bonds are seen as a safer investment Yes. But

:12:46.:12:50.

if there is political risk in certain countries presumably their

:12:51.:12:52.

bonds are not as attractive? That's right. How does it work? The way

:12:53.:12:56.

that investors look at this, they actually look at a country and say

:12:57.:13:01.

I'd rather not have French bonds because I'm worried about the

:13:02.:13:04.

election so I'll sell them so the yields on those bonds will rise, it

:13:05.:13:09.

is a view on that country and its credit worthiness. It is all about

:13:10.:13:14.

the bond market. Jane, we'll return soon because we're going to talk

:13:15.:13:18.

about the UK's top ten weirdest jobs! Yes. So, Jane have a think.

:13:19.:13:26.

Maybe she had one in her career. The comments are coming in. I'll save

:13:27.:13:29.

them for later because some are great. What is your weirdest moment?

:13:30.:13:35.

It didn't have a title. I just had to water hanging baskets for weeks.

:13:36.:13:39.

I worked in a pie factory. I was at a conveyor-belt and I did this for

:13:40.:13:42.

eight hours. Pies from there, over to there. Wow. I was very good at

:13:43.:13:48.

it. Where they good pies? I can't eat pies. It put me off for life. It

:13:49.:13:53.

is a well-known retailer, but I won't reveal.

:13:54.:14:03.

We'll talk about that and we'll talk about digging gold.

:14:04.:14:10.

You're with Business Live from BBC News.

:14:11.:14:15.

The owner of fashion chain Zara has reported its full

:14:16.:14:18.

Inditex is the world's biggest clothing retailer and also owns high

:14:19.:14:26.

street brands such as Bershka and Pull and Bear, it said that

:14:27.:14:29.

sales were helped by new store openings and online growth.

:14:30.:14:32.

Theo Leggett has more from the Business Newsroom.

:14:33.:14:36.

Nice to see you, Theo. This is the company that seemingly can do no

:14:37.:14:42.

wrong, but what's going on today? I'm looking at that graph behind you

:14:43.:14:47.

and I see a drop. This is, I think, managing expectations. Inditix, its

:14:48.:14:57.

profits were up 10%. Sales up 10%, dividend increased by 13 percent,

:14:58.:15:00.

you'd think investors would welcome that. What we saw was a brief spike

:15:01.:15:04.

this morning and then the share price dropped very rapidly. It is

:15:05.:15:09.

nudging back up again. I think that is because this particular company

:15:10.:15:13.

expectations are always very, very high so even if it does well,

:15:14.:15:16.

sometimes people are selling off shares, maybe taking a bit of profit

:15:17.:15:20.

if the share price has been rising recently. So you don't always get an

:15:21.:15:23.

automatic bounce, but it is creeping back up a bit.

:15:24.:15:29.

This company has an unusual business model producing small amounts of

:15:30.:15:38.

clothes quickly, not bulk producing. It waits to see what consumers are

:15:39.:15:42.

buying and then starts to produce and distribute them which allows

:15:43.:15:46.

them to react quickly to what people on the street actually want to buy.

:15:47.:15:51.

If you compare what is happening with them with French connection

:15:52.:15:57.

which a result of yesterday it is doing better. It is also growing

:15:58.:16:04.

rapidly. It has 7300 stores around the world, give or take a few, and

:16:05.:16:09.

it is growing. It has opened several hundred new stores this year and is

:16:10.:16:13.

opening stores in 56 markets. Bent on expansion. Thank you. There is

:16:14.:16:25.

lots more in terms of the corporate stories on the Business Life page.

:16:26.:16:37.

Lorry drivers moving goods in Western Europe for IKEA and other

:16:38.:16:40.

retailers living out of their caps for months at a time.

:16:41.:16:49.

The European Council president Donald Tusk has been commenting on

:16:50.:17:04.

Brexit saying Britain would mostly hugged itself if it left the

:17:05.:17:10.

European Union without agreement -- hurt. He has been tweaking we will

:17:11.:17:15.

not be intimidated by threats that now Brexit deal is bad for everyone

:17:16.:17:25.

above the UK. Interesting the rhetoric fighting back and forth

:17:26.:17:29.

between London and Brussels. Expect more of that as we approach

:17:30.:17:33.

Article 50 and two years of negotiations. We will watch it. .

:17:34.:17:40.

Now, let's talk gold, because the man behind gold mining

:17:41.:17:42.

The firm, formerly called Peter Hambro Mining,

:17:43.:17:45.

has been operating in the far east of Russia since 1994.

:17:46.:17:48.

But it has been on a bit of a journey over the past few years.

:17:49.:17:53.

The falling price of gold nearly pushed the company

:17:54.:17:55.

But the firm's boss and founder, Peter Hambro, says the company has

:17:56.:18:01.

gone through a transformation since then, and come

:18:02.:18:03.

Joining us now is Peter Hambro, chairman of Petropavlovsk.

:18:04.:18:15.

first met you in 2002. You were a tiny company and you have gone from

:18:16.:18:25.

strength to strength, five men in Russia. You have a bullion in your

:18:26.:18:42.

pocket. -- mines. And I hold it? You may. I am not taking this home.

:18:43.:18:52.

Worth $38,000. If I drop that it bounces. Give us a sense of the

:18:53.:18:59.

story of your company because it has gone from something very small to

:19:00.:19:03.

wear back it is today but on the verge of collapse two years ago. You

:19:04.:19:08.

are at the mercy of what their cells for in global markets. We started

:19:09.:19:14.

the company in 1994. Me and my partner. We built it up into a major

:19:15.:19:19.

operation and have produced 7.5 million and Susan Gold, $8 billion

:19:20.:19:26.

worth of gold in 23 years, just a little bit more. One of the largest

:19:27.:19:31.

taxpayers in the Russian Far East where we operate on the borders with

:19:32.:19:36.

China. Very popular because we have created huge amounts of jobs there

:19:37.:19:41.

where there are not any other jobs. Get on very well with the

:19:42.:19:43.

administration who have been helpful to rise. The Russian state? Yes. I

:19:44.:19:53.

am thrilled to have done it. I started my training career in the

:19:54.:20:00.

Soviet Union. When I was a gold trader. It was a natural progression

:20:01.:20:04.

to go and join that side of the world in production. You touched on

:20:05.:20:09.

the roller-coaster ride. We saw the show pros on the screen. Shares went

:20:10.:20:16.

down to about 8p. Talk me through how you cope with that. And how you

:20:17.:20:23.

get the business by contract. Talk me three how my wife got through it!

:20:24.:20:33.

It was a horrid thing to happen. We decided to process the new and

:20:34.:20:39.

harder to process called which exists in larger quantities in

:20:40.:20:49.

Russia. We did not finance that properly. We borrowed money to do it

:20:50.:20:52.

and the back to place well before we could get it into production. That

:20:53.:20:59.

has changed again and we will be in production from 2018. How hard is it

:21:00.:21:04.

not to focus on the share price? You basically want to carry on running

:21:05.:21:07.

your business and do what you do every day and you also have an eye

:21:08.:21:11.

on the share price and you think investors do not like what we are

:21:12.:21:15.

doing, I going to have to do it differently? It is certainly a

:21:16.:21:20.

factor. When I was interviewed by you years ago and the share price

:21:21.:21:23.

had fallen she asked what I was going to do about it and I said

:21:24.:21:27.

there's nothing I can do because my job is to produce this. You have

:21:28.:21:31.

been operating in Russia for many years. We have reported on the

:21:32.:21:36.

difficulties that companies have trying to operate in Russia, BPB in

:21:37.:21:41.

one of those. I've have Ukip the state on board? -- how have you

:21:42.:21:51.

kept. How does it work? With sanctions on Russia how has that

:21:52.:21:59.

affected your business? One of their main players has become a friend,

:22:00.:22:05.

one of the few British companies who have succeeded in Russia. The

:22:06.:22:07.

problems they faced and we faced problems they faced and we faced

:22:08.:22:14.

occasionally was a low level of interference not by the state but by

:22:15.:22:18.

competitors effectively which we have overcome. We have paid our

:22:19.:22:23.

taxes, worked at the highest level of environmental, very good health

:22:24.:22:29.

and safety, done it how you have to do it. Russia is a very well-managed

:22:30.:22:36.

country now. We are going to have to leave it there but there is so much

:22:37.:22:39.

more to discuss. I know you will keep in touch with us. We will make

:22:40.:22:45.

sure he takes that, him. There is security as well. I was

:22:46.:22:48.

going to suggest he leaves it. In a moment we'll take a look

:22:49.:22:56.

through the Business Pages but first here's a quick reminder of how

:22:57.:23:00.

to get in touch with us. You can stay ahead with the business

:23:01.:23:07.

live page. We will keep you up-to-date with details with insight

:23:08.:23:11.

and analysis from the BBC's team of editors around the world and we want

:23:12.:23:16.

to hear from you. Get involved on the BBC Business Live page. You can

:23:17.:23:29.

find us on Twitter and Facebook. Whenever you need to know.

:23:30.:23:35.

Jane Sydenham is joining us again to discuss.

:23:36.:23:39.

A report in the Independent about people who have very strange job

:23:40.:23:50.

titles. Some of then I cannot mention because of the connotations.

:23:51.:23:56.

I definitely fits into the customer happiness hear bracket because I

:23:57.:24:00.

used to work in the management complaints department in a store so

:24:01.:24:03.

complaints only reached this department of someone had not had

:24:04.:24:07.

their goods after six months. They were really happy. On the verge of

:24:08.:24:16.

litigation. A handbag stuffer who had to roll up to shoot paper and

:24:17.:24:25.

put them in the bags -- tissue. Watching ants in and colony. After

:24:26.:24:36.

A-levels, artificial insemination of goats. I should have taken a

:24:37.:24:41.

checkout job in hindsight. He needs counselling, I am sure. Acoustics

:24:42.:24:50.

consultant. I have no idea. Air cartographer. Brexit, the Irish are

:24:51.:25:01.

complaining about rivals in the Brexit race. Different countries

:25:02.:25:04.

vying for the top spot of London loses out. Luxembourg seems to be

:25:05.:25:11.

the place that ARG seem to assign itself to have a reserve position as

:25:12.:25:16.

a result of Brexit and the Irish are unhappy about that. You are going to

:25:17.:25:21.

see these areas vying for business effectively. They will be staffing

:25:22.:25:26.

up banks and operations. Dublin has done very well. Since June's result

:25:27.:25:36.

last year, lots of banks, sorry businesses, some banks, businesses

:25:37.:25:39.

have registered places in Dublin. Yes. Not necessarily moved anyone

:25:40.:25:47.

but have registered. Yes, and they have infrastructure and capital

:25:48.:25:51.

adequacy and all the things that businesses need. Thank you.

:25:52.:25:56.

I pressure is dominating the weather is so largely fine and dry before

:25:57.:26:17.

things turn more unsettled later in the week and into the weekend.

:26:18.:26:20.

Bringing wetter and windy weather and feeling

:26:21.:26:22.