08/07/2016 World Business Report

Melting away: Brexit threatens rescue plans for Tata's UK steel

Paris rolls out the red carpet for financial high flyers forced

Also in the programme: All eyes on the US jobs report out later,

what will it tell us about the world's biggest economy?

We start in the Indian business capital Mumbai,

with a story that is being closely watched here in the UK.

Britain's Business Secretary Sajid Javid will be meeting the board

He's there for talks on the UK's future trading relationship

with India following its vote to leave the European Union.

High on the agenda, the fate of Tata Steel's struggling

UK business and the thousands of workers it employs.

Plans to find buyers to rescue the plants have been thrown

According to Bloomberg, four out of the seven potential

bidders have backed out since the referendum.

Let's give you some of the background: Tata

put its struggling UK business up for sale in March.

It employs some 11,000 people at plants across the UK,

including its huge Port Talbot plant in South Wales.

But it's currently losing a million pounds -

And here's one of the key reasons why.

The price of steel has slumped since its peak in 2011 -

So global demand has been dropping whilst there's been an oversupply

of steel particularly, a lot of it coming from China.

And this problem is having an impact across Europe where 320,000

The European Steel Association says thousands of jobs have been lost due

to the low price, which they blame on China flooding

Now the UK's referendum vote has added further uncertainty.

Yogita Limaye is outside the Tata Steel headquarters

Now that Britain has voted to leave the European Union explain what this

We are expecting the board meeting to start in about two hours in the

building behind me. This meeting is significant because it is the first

time the board is coming together since the vote to leave the EU. It

is a big deal for Tata Steel, because about 25% of this deal they

produce in the UK is sold to Europe, so it is also a key market. Access

to that market would be a big concern, for the company and its

potential buyers. What we are hearing is that Tata Steel is likely

to press pause on the ongoing sale process of its wreckage factories,

until some clarity is gained on what this means the business is. In terms

of Sajid Javid, the business Secretary, he has been talking to

these board members for months and months, and I wonder what he is

hoping to hear from them today in terms of what they are thinking.

Well, he has made a trip here every single time Tata Steel has held a

board meeting, until they made the announcement to sell off the

operation of the end of March, partly to show the British people

that the government wants to do everything it can to save the steel

industry. Each time the talks have been about different things,

sometimes things that could be potential roadblocks in a deal that

they could strike the sell-off the company. Today, there will be a lot

of questions about the implications of the UK voting to leave the

European Union, and what that would mean for a steel manufacturer in the

UK. Also, he is expected to talk to Indian authorities in general about

trade, but that is quite an interesting scenario, isn't it?

Given that we are still part of the EU at the moment. That is right. He

is expect it to meet the finance minister of the country as well as

the commerce and industry ministers in Delhi, to initiate discussions on

a potential trade deal, or what trade could look like for the UK

outside the EU. India has been trying to renegotiate a free trade

agreement with the EU for many years, and that has been stalled

over several things, so Indian companies are now hoping the UK will

perhaps be free to decide its own trade deal with India. I know we

will talk to you later today. A jiffy your time. -- thank you for.

Let's stay with the impact of Britain's vote to leave

the European Union, but move to Paris.

The French capital is eager to capitalise on a possible Brexodus

of bankers if they are forced to leave London.

The Socialist government has had a rocky relationship with big money

So it's promising tax reforms to lure them back, and hoping

a string of violent protests in Paris won't prove a turn off.

They say the property market is the first to get a whiff of change. This

luxury flat near the Arc de Triomphe purchase, prof sale, and agents say

London bankers are starting to make enquiries. In the past week we

received a lot of calls, essentially to discuss about the pricing,

commissions, and for different people. French people living in

London was also international people living in London, because as you can

imagine, Brexit will certainly ask some corporate is to make decisions

and relocate people outside the UK. That is music to the ears of the

Paris financial sector, who have gathered for their annual convention

this week, with government leaders in attendance. Suddenly, the idea of

making France and attractive place the capital has come to the top of

the political agenda. A few years ago at the height of the scares

around French levels of taxation, it was the mayor of London, Boris

Johnson, who famously rolled out the red carpet for French companies who

wanted to relocate in London. Now, in a highly ironic twist of fate, it

is the French who are doing exactly the reverse. Among those addressing

the convention was the president of the Paris region. She is from the

opposition centre-right, which hopes to take back power from the

Socialists next year. So why does she think Paris has more to offer

the financial sector than Frankfurt or Amsterdam? We are the only

comprehensive location in Europe. We are a financial centre but also a

centre of innovation. We have an entrepreneurial initiative, and

dynamism. So, we want all firms based in London to think that France

is the next big thing. Even the most deciduous promoters of Paris agree

there were problems. The image of France was badly damaged by recent

protests over labour reform. And there is an idea that the country

does not quite approve of capital. But what Paris does have is

international clout and economic size. Plus, many thousands of

financial workers in London who might be seeking to move are in fact

French. Could they be tempted back home with the new redcarpet?

We are coming to the end of the second trading week since the Brexit

decision, and it has been another volatile week for markets.

Let's go to Asia now where all eyes are on the monthly US jobs report.

Ali Moore is watching the markets for us in Singapore.

With all this uncertainty in the post Brexit world, investors are

looking for any tangible good news and say there is a bit of

anticipation ahead of this. Numbers are down, Australia treading water.

The movements are not great, Hong Kong probably the greatest. But they

are weaker. I should point out that there is quite a bit of wariness

about today's numbers, it was there was that unexpected negative supply

in payrolls in May. US payroll inflation fell to its lowest level

in five years, giving markets a jolt, and the question for today's

numbers is whether that was a temporary weak patch. The consensus

forecast for today is a gain of 175,000 jobs in June. Certainly any

good news would be welcomed right now

London's position as a global financial hub after the UK leaves

In a statement the banks and Chancellor George Osborne said

they would work to ensure London "retains its position".

It was signed by JPMorgan, Goldman Sachs, Bank

of America Merrill Lynch and Morgan Stanley,

as well as the UK's Standard Chartered.

Since the referendum vote there have been concerns that banks

would reduce their staff and offices in the UK

Consumer confidence in Britain has seen its biggest slump in 22 years

following the referendum on June 23rd.

That's according to market research company GfK.

The survey tracks peoples' willingness to make big purchases

as well as worries about their own personal finances

It found a marked deterioration in confidence across