27/06/2016 World Business Report

Those are the latest headlines from BBC World News.

Now for the latest financial news with the World Business Report.

The Brexit aftershocks, the pounds slump escalates as China

steps in to weaken its currency, the Japanese government is closely

Britain's Chancellor of the Exchequer, George Osborne,

will seek to bring some calm before the European trading day begins

setting out his actions to protect the UK economy.

Welcome to World Business Report, I'm Sally Bundock.

Also in the programme: As the big banks prepare to shift their staff

from the City of London, we take a closer look at what Brexit

But first, China, Japan and South Korea have all expressed

concern about the impact on the global economy of Britain's

The pound is falling further today adding to Friday's

Britain's Chancellor of the Exchequer, George Osbourne,

is expected to address market unease before trading gets under way

And over the weekend the head of the International Monetary Fund,

Christine Lagarde, said financial markets had vastly underestimated

the outcome of the British vote, but so far there was no panic.

Financial markets in Asia are regaining some of

The stock market in Tokyo has recovered from a battering that saw

more than $2 trillion wiped off global financial markets.

The Japanese Prime Minister Shinzo Abe has held an emergency meeting

with the Bank of Japan to ensure the markets remain calm.

Mariko Oi is in Tokyo for us outside the Stock Exchange,

and there are concerns about the strength of the Yen?

The pound is losing ground, but gold is a safe haven. Shinzo Abe has held

an emergency meeting to assess the situation. We cross live to Tokyo.

We were thinking there could be some possible manoeuvring from the

authorities in Japan, but not as yet? Not yet. As you said, Japan's

stock market has managed to stay in the positive territory. That is

after falling from 8% on Friday. That fall was a bigger than the

global financial crisis and the earthquake in 2011. It is difficult

to guess whether investors are bargain hunting or whether they

thought that the panic sell on Friday was too much, or if the Prime

Minister's repeated promise that the government is ready to intervene if

necessary has come to the market. The yen seems to have stabilised, it

is strengthening against the US dollar. We are still seen around 101

against the US dollar, which is OK from the government's point of view.

It helps exporters because it makes their products cheaper and more

competitive abroad. The government is monitoring the situation, but so

far no intervention. The fallout from Brexit could have

serious implications The BBC understands HSBC is expected

to move up to 1,000 staff from London to Paris,

following Britain's President Francois Hollande

of France has said his country, together with Germany,

should take the initiative. Tanya Beckett is in

Frankfurt for us. You've been out since Friday, tell

us what the mood is at the moment? The initial reaction was one of

shock. I have spoken to plenty of Germans over the weekend who express

some Euroscepticism. It is mostly around the functioning of the EU and

Russells appears to have felt that of late, that they are more

therefore the purpose of the EU than for the purpose of the people --

Brussels. -- there for. It is damaging to the block, it was

Britain has been a very strong ally of Germany. -- bloc -- because. In

the meantime, we are all aware of the rivalry between Frankfurt and

London when it comes to financial services and staffing. Frank that

could be viewed as a winner from this outcome? Yes, although it might

have economic concerns in the broader picture. But Frankfurt is

dwarfed by friends in London in terms of the number of people

employed here. That has improved enormously in recent years. I lived

here in the 90s, working as an investment banker. I had a look

around over the weekend to see how things had changed. When I lived in

Frankfurt in the 1990s, it was impossible to buy anything after

lunchtime on Saturday, because everything was shut. Look at it now!

German Labour market reform has changed everything. The centre of

Frankfurt is awash with consumers. And with a more global outlook, the

city celebrates not just German but international culture. This is

Frank's iconic square and an absolute tourist magnet. --

Frankfurt's. Behind the traditional facade, Germany's financial hub has

a modern agenda. It might be too soon to celebrate a windfall for

Frankfurt's banks, but this is a city that has long coveted a bigger

future. The skyline has grown enormously in stature in the last 20

years, but as a financial centre it is still dwarfed by a European

rivals such as Paris and London. It is about to find out whether it has

built an appeal to capitalise on Britain's departure from the

European Union. We will hear from Frankfurt again

later in the show. We've heard a lot about the market

reaction from around the world, but what about the challenges facing

the British government over Brexit? Chancellor George Osborne

is due to speak shortly, Will he announce

an emergency budget? With me is David Owen,

Chief European Financial Economist, We don't know if it will be a press

conference or just a statement, what do you think he will say? Well, he

has been in constant contact with the Bank of England, they will be

trying to keep everything afloat and try to stress that things are not

quite so bad on the economic front. Hopefully the economy will get

through it. There will be no emergency budget, that is clear.

Tell us about that. It was very clear from him and other ministers

prior to last Thursday that that was going to happen quickly after a vote

to Leave? Some people called it a punishment of budget? It won't

happen immediately. If the UK does slip back into a recession and we

have lower growth as we have to engineer our exit from the EU, then

the position will be much worse. We know that when it comes to next

March, they are going to have to address these issues and possibly

delay how long it takes to get back to balance. There may be some

additional austerity. What they are trying to do is make sure the

economy doesn't slide back into a serious recession. What do you think

will happen to the UK economy? On Friday, one of the main economic

agencies downgraded the UK? I think we will fight back to a temporary

recession in the later quarters of the year. It will be a slow

recovery. We have the process of negotiation to exit, it will

heighten uncertainty. It will be October at the earliest before

Article 50 is enacted. And what about Europe? In some ways, the

fallout for the rest of Europe could be much more serious. What a lot of

economists have argued is that they may need to close the union. But

that is a long way out. Buying bonds as it were on Friday will continue.

The banking sector in some countries is quite exposed in this situation.

Thank you for your time. A lot more detail on this story on our website.

In other news: A giant Chinese container ship has become the first

vessel to move from the Atlantic to the Pacific Ocean

The ship was greeted with fireworks and cheers from a crowd that had

gathered at the Cocoli locks to celebrate.

The Panamanian President, Juan Carlos Varela, described

the waterway as a route that would unite the world.

Britain is likely to enter a recession within the year

as a result of last week's vote to Leave the European Union,

according to Goldman Sachs' economists.

They bank also says that the decision could stunt global

Goldman Sachs estimates that the Leave outcome will chop

a cumulative 2.75% off UK gross domestic product in

There will also be knock-on effects in the US and European economies.

We will talk some more about this in a moment when we look at the papers.

Stay with us. Eight children and two adults have

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