04/08/2011 World Business Report

Welcome to World Business Report. These are the headlines. At the

mercy of the market. Spain's Finance Minister prepares to

auction off billions of dollars worth of debt. Investors send stock

flying. Another rise and the survey suggests business confidence is

Japan intervenes in the currency market to weaken a strong yen

against the US dollar. A debt crisis spotlight shines on

Spain again this Thursday as the nation auctions of 3.5 billion

euros or $5 billion worth of bonds. Investors have forced the country's

costs to spike and EU stocks to tumble. This has prompted Spain's

PM to cut short his holiday and the finance minister to one of the

risks posed by a volatile August market.

News that the interest Spain pays on its debt was again close to

record levels caused the Spanish leader to interrupt his holiday

plans for the second time in two days. He met with senior Cabinet

colleagues after returning to Madrid from the south of Spain to

discuss the market development. The country's borrowing costs rose to a

fraction of 6.5% on Tuesday and bite back to the same level on

Wednesday, not far off the 7% mark that led to Greece, Ireland and

Portugal or requesting bail out. Under the circumstances, the bond

auction Spain he should draw for Thursday will be under close

scrutiny. The government points to the fact

that all this is an unpredictable month for the markets as a main

cause of the current turmoil. It blames consensus surrounding the US

economy and delays in implementing a second bail-out for Greece. It

once the uncertainty could last several more days. Spain's Prime

Minister -- find the Finance Minister played down fears that it

could soon request help from the European Union. TRANSLATION: I

would not say the situation is serious. This is a reason for all

EU countries to implement procedures as soon as possible.

Spain has been fighting a speculation about its ability to

finance its debt for months due to its high deficits low growth and

21% unemployment rate. Austerity measures aimed at restoring Spain's

credibility in the market have helped spark widespread protests

over the past few months. The most recent of which took place in

Madrid this week. Last week, supper to report for general elections to

November, hoping the announcement would stabilise Spain's economic

situation. For a while, the authorities did manage to clear the

capital's main square about raged protesters this week. They are

struggling to keep at bay talk of a bail-out.

In related news, investors in Italian markets be their first

chance to respond to Silvio Berlusconi's debt crisis speech

this morning. The PM said on Wednesday that the markets had

misjudged the financial strength of his country and promised to step up

economic reforms. He will meet with the unions this Thursday to discuss

changes to employment law and effort to boost competition.

Opposition politicians renewed calls for his resignation saying he

lacks a concrete agenda to tackle Italy's financial woes.

Portugal's finance minister says he plans to tweak this year's budget

for a second time to address a spending gap. The revision will be

made in October to deal with a 3 billion dollar hole caused by the

previous government paying salaries late and leaving bills unpaid. The

move may involve further tax rises and the centre-right coalition seat

to shrink its deficit and qualify for further bail out aid.

The European Central Bank is expected to leave its key interest

rate of 1.5% this Thursday. Inflation is above target but weak

manufacturing data and falling business confidence is expected to

stay its hand. At the press conference, the Bank's president is

likely to be quizzed about whether he has any plans to reactivate a

bond purchased -- purchase scheme, previously used to stabilise the

financial markets. Efforts to combat the weakness of

the dollar continued in the past few hours. Japan's government

concerned that it sold off the end for the first time in five months

to stem the currency's rise. The move follows on from Switzerland's

surprise rate hike on Thursday -- rate cut on Wednesday to offset the

strength of the banks. What kind of difference to Japan's action make?

It has had an impact. On Monday, it was at the lowest, 6.29 yen. The

yen is now trading above the 79 m double due to the intervention. The

Bank of Japan is rumoured to have sold about $1 billion worth of the

end. Intervention has been the talk all week. Finally, Japan made the

move. Financial a authorities said they initiated the move because a

strong yen was hurting the economy and contributed to the slow

recovery from the March earthquake and a tsunami. It is the second

time this year the government has intervened and the finance minister

said Japan acted alone in the market and without the help of

other central banks. It has cut short its two-day meeting to just

one and is expected ease monetary policy further to consolidate the

yen's fall. Despite the retreat of about 79 yen, this is about 5%

stronger than the 82.5 average in private forecast in a Bank of Japan

survey released last month. A strong yen is painful for Japan

because it reduces the belly of earnings for companies. Thank you.

Shaky business confidence expected to be one reason the European

Central Bank and Bank of England leave their interest rates on hold

today. The latest evidence was a survey of over 2000 Chief Executive

by AV young President organisation. It suggested a year business

leaders had become the world's most pessimistic that over 40% of those

quizzed expecting their sales to a decline remain fight over the next

12 months. -- remain a fight. Why do you think business

confidence in Europe is so low? have to compare it principally to

Asia as the high watermark. The US is not overly optimistic. Within

the eurozone, to have members in countries like Greece that are

affected by massive' economic troubles. What are CEO the Roar

worried about? I think they tend to be internal optimists. I would

argue that 40% of people expect sales to increase over the next 12

months. Another 40% fat. I would interpret that as not so bad.

still means 40% are pessimistic. What is behind that? I would argue

that 40% are optimistic. That is imported in the context of sales or

underlying revenue of companies, but they will not invest in people

and they will not invest in capital goods. Those are the results of a

serve way -- survey. The individual companies will outperform. We will

not hire a lot more people are invest in a lot more capital.

you see these times as big opportunity for equity? In the

context of what we do and own, this year, compared to the first half of

last year, away earnings were up 42%. Consistent with the survey,

I'm an optimist and expect that to continue to happen going for it. In

the context of the survey, I'm reticent about authorising a

divisional managers to employ a more people and invest in more

capital unless they can justify we will and superior returns. It is

dangerous out there. My job is to make sure capital goods allocated

appropriately. It is not too indiscriminately invest. Thank you

for joining us. A look at the markets. The Nikkei

is bucking the trend. It is up. The rest of Asia is down. Worries over

the US and eurozone debt crisis playing an investors' minds. We saw

markets closing on a high despite and some difficult service sector

figures. That is the latest business.

Now for more news from the UK. It has emerged that fewer young people

are taking their driving test. The number of 17 to 22-year-old getting

behind the wheel has dropped by 19% since 2005.

20-year-old Chris started driving less than a few years ago but had

to stub because he could not afford it. Living in rural Suffolk, he

says it can be a long way for -- a long way for a bus. It affects work

not being able to drive because it means I can only do a few hours in

a day. I have to time at around the buses. According to a recent

government survey, almost two- thirds of young people who can't

drive said they were put off by the cost of learning. It is not just

the cost of lessons and the test that has increased, running a car

has become more expensive. There are car taxes, petrol, and car

insurance. Five years ago, a 35- year-old would have paid around

�245 for car insurance. That has risen to �325. A 17-year-old would

have paid around �2,500. That is now at least �4,000. Significantly

more if you are male. Have we got to the point where young drivers

are effectively being priced out of the market? The number of people

applying for a provisional licence has dropped by 15 to 20% this year.

There are signs the cost of insurance is starting to fall for

young drivers. For now at least, crews will have to rely on the

buses and his mother to get around. Coming up,Breakfast. They will

discuss smartphones and if they are taking over a wall lines. Nearly

half of all teenagers and a quarter of all adults now have one.

This is BBC World news. The headlines. At the UN Security

Council has condemned a Syria for its ongoing violent crackdown on

protesters. It accuses President Assad's in administration of

committing widespread violations of human rights. The UN Secretary

General called on him to end his use of violence. I urge President

Assad, please listen more attentively. They have been many

calls from the international community's, including from myself,

that to continue like this is not sustainable.. You cannot continue

killing your people. France's Court of Justice is to

rule on whether to open an inquiry into Christine Lagarde over her

handling of a high profile financial scandal.

US enforcement agencies say more than 70 Americans, allegedly part

of a -- and on my child pornography network, have been charged.

Heather Mills, former wife of Sir Paul McCartney, has claimed in a

BBC interview that a senior Mirror Group journalist admitted to