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Britain's national debt set to hit almost ?2 trillion in the biggest | :00:00. | :00:23. | |
jump in borrowing since the financial crisis. | :00:24. | :00:25. | |
We look at Europe's deteriorating public finances. | :00:26. | :00:27. | |
Plus, billionaire and Commander in Chief. | :00:28. | :00:28. | |
Can Donald Trump juggle the presidency and his | :00:29. | :00:31. | |
Also, flying high. A 1.75 billion dollar takeover for the flight | :00:32. | :00:55. | |
booking websites Skyscanner. We are talking debt this Thursday, | :00:56. | :00:59. | |
because across Europe, governments are getting | :01:00. | :01:02. | |
deeper and deeper in it. On Wednesday Britain's | :01:03. | :01:04. | |
finance minister, Chancellor of the Exchequer | :01:05. | :01:05. | |
Philip Hammond, gave his | :01:06. | :01:07. | |
Autumn budget statement. He warned that following the Brexit | :01:08. | :01:08. | |
vote, the UK's on track for the biggest deterioration | :01:09. | :01:11. | |
in public finances in years and will ramp up borrowing | :01:12. | :01:14. | |
by the most since the 2008 financial Mr Hammond said that government debt | :01:15. | :01:17. | |
will hit 90% of GDP next year. In other words Britain will owe | :01:18. | :01:26. | |
almost as much as the whole Britain's not alone in facing | :01:27. | :01:31. | |
a growing debt burden We all know about Greece - | :01:32. | :01:38. | |
its national debt is approaching twice the size | :01:39. | :01:41. | |
of its annual economy. But Italy and Portugal now also have | :01:42. | :01:44. | |
debts far bigger than their GDP - And France is also more indebted | :01:45. | :01:48. | |
than the UK at 97.5%. Put simply - it leaves governments | :01:49. | :01:59. | |
very vulnerable if borrowing costs start to rise on the bond markets - | :02:00. | :02:07. | |
as has been happening recently. The club of developed nations - | :02:08. | :02:11. | |
the OECD - says governments should As far as the UK is concerned - | :02:12. | :02:15. | |
the Chancellor vowed the situation The forecast is that debt will rise | :02:16. | :02:44. | |
to 87.3% this year, peaking at 90 .2% in 2017, 2018 as the monetary | :02:45. | :02:48. | |
policy interventions approach their full effect. In 2018, 2019, debt is | :02:49. | :02:56. | |
projected to fall, the first fall in the national debt as a sharer of GDP | :02:57. | :03:03. | |
since 2001 and it is forecast to continue falling thereafter. | :03:04. | :03:06. | |
Lorenzo Codogno is Visiting Professor at the London School | :03:07. | :03:09. | |
of Economics - and former Chief Economist of the Italian | :03:10. | :03:11. | |
Good to see you again. I would imagine you are listening to that | :03:12. | :03:22. | |
budget statement yesterday. He described the situation with regard | :03:23. | :03:27. | |
to the debt as eye watering. How worrying is it? The statement was | :03:28. | :03:33. | |
balanced, to be honest. The United Kingdom is facing an unprecedented | :03:34. | :03:37. | |
uncertainty due to Brexit. It is reasonable to have some kind of | :03:38. | :03:45. | |
leeway. The office revised downwards all economic projections which is | :03:46. | :03:49. | |
reasonable in my view. I think there is a risk that economic growth could | :03:50. | :03:55. | |
be even weaker. In that situation I think you need to have some | :03:56. | :04:00. | |
flexibility. I think it is good to have the potential to extend a | :04:01. | :04:06. | |
little bit of a win, at least in the near term. I think it is a balanced | :04:07. | :04:11. | |
statement. It gives the right signals on public investment it | :04:12. | :04:15. | |
provides some support to the economy in the near term and at the same | :04:16. | :04:21. | |
term, yes, the debt is growing but is still within, you know, an area | :04:22. | :04:27. | |
that is comfortable for financial markets. OK. Comfortable now, but | :04:28. | :04:32. | |
how about in the coming year? Thinking more generally about | :04:33. | :04:36. | |
Europe, there is a lot of political risk hanging over Europe and the | :04:37. | :04:40. | |
next few months. An Italian referendum next month, no election | :04:41. | :04:45. | |
in France, Germany and Holland and then Article 50, the button will be | :04:46. | :04:49. | |
fired possibly in March next year which will begin Brexit | :04:50. | :04:54. | |
negotiations. There is a lot of uncertainty ahead. Absolutely. There | :04:55. | :04:58. | |
is plenty of uncertainty ahead. Interest rates will start moving | :04:59. | :05:04. | |
higher. Because of that? Yes. That will not happen tomorrow and, again, | :05:05. | :05:11. | |
it is an unprecedented period for the UK economy. It deserves | :05:12. | :05:15. | |
flexibility. My take is that it was the right decision. Clearly the | :05:16. | :05:18. | |
higher the debt the riskier the situation. How about other European | :05:19. | :05:25. | |
economies. Greece needs to brokerage next tranche of financial help in | :05:26. | :05:32. | |
December. It is being asked for more difficult austerity measures which | :05:33. | :05:35. | |
it does not want to do. And the other economies with exposure to | :05:36. | :05:39. | |
debt, if their interest rates go up how will that play out? There is a | :05:40. | :05:43. | |
big debate amongst economists these days because we are living in | :05:44. | :05:52. | |
unprecedented times with unconstrained monetary policy. All | :05:53. | :05:54. | |
about interest rates in some countries in some areas, those | :05:55. | :05:58. | |
interest rates are below zero. There is a need for some support coming | :05:59. | :06:03. | |
from fiscal policy. I think in the situation of the United Kingdom it | :06:04. | :06:07. | |
is good that there is some flexibility. In other countries, | :06:08. | :06:12. | |
there is no such workability, unfortunately, and therefore these | :06:13. | :06:16. | |
countries have no choice but to have a more disciplined approach. It is | :06:17. | :06:22. | |
always good to get your take on this. Thank you very much for coming | :06:23. | :06:26. | |
in. What is more analysis on that on our website. -- plenty more analysis | :06:27. | :06:31. | |
on that on our website. We are also looking | :06:32. | :06:32. | |
at President-elect Donald Trump. He is being urged to separate | :06:33. | :06:35. | |
himself from the Trump organisation There is no law forcing him to do | :06:36. | :06:38. | |
so - but it has been the past practise of other Presidents | :06:39. | :06:44. | |
for the last 40 years. But if this election campaign has | :06:45. | :06:46. | |
shown us anything, it's that the soon-to-be leader | :06:47. | :06:49. | |
of the United States - These are the most visible parts | :06:50. | :06:51. | |
of the President-elect's empire. Mr Trump says he can | :06:52. | :06:57. | |
be both businessman There is nothing in | :06:58. | :06:59. | |
the Constitution that There are implicit concerns | :07:00. | :07:02. | |
in the Constitution about the corruption | :07:03. | :07:05. | |
possibility but there's nothing that at this | :07:06. | :07:08. | |
level of specificity. This is a practice that has emerged | :07:09. | :07:11. | |
in the United States This weekend meeting | :07:12. | :07:14. | |
with Indian real estate developers already raises | :07:15. | :07:22. | |
questions about Mr Trump's ability to separate his business | :07:23. | :07:26. | |
from the presidency. Donald Trump the businessman | :07:27. | :07:29. | |
has seen conflicts. Casino bankruptcies, | :07:30. | :07:33. | |
fraud at Trump University and even tussles over hiring practices | :07:34. | :07:35. | |
at one of his hotel. If he does nothing | :07:36. | :07:40. | |
come January 20, these entanglements will be with | :07:41. | :07:43. | |
the President of the United States. The challenge of course | :07:44. | :07:47. | |
is Mr Trump is his business. And so is his family which makes | :07:48. | :07:51. | |
claims that his children will now control the Trump organisation | :07:52. | :07:55. | |
ludicrous to many. There's no need to | :07:56. | :07:57. | |
dismantle his business empire but certainly to simply say, | :07:58. | :08:03. | |
"I'm going to let my children You know, if we in the States | :08:04. | :08:07. | |
would hear something like this, we would associate this | :08:08. | :08:15. | |
kind of intermingling of government and business as something a feature | :08:16. | :08:18. | |
of a banana republic. The Constitution does say | :08:19. | :08:23. | |
that the President cannot accept any foreign money or gifts | :08:24. | :08:26. | |
without the consent of Congress. Which makes Mr Trump's | :08:27. | :08:32. | |
International business dealings We should expect there | :08:33. | :08:35. | |
to be continual concerns, maybe scandals, maybe | :08:36. | :08:41. | |
hearings in Congress, about the President's | :08:42. | :08:45. | |
business interests, America's foreign policy | :08:46. | :08:49. | |
and even domestic policy. It's all going to be in one big knot | :08:50. | :08:52. | |
and it's going to be difficult For now, Mr Trump seems intent | :08:53. | :08:57. | |
on mixing his business with his presidency | :08:58. | :09:03. | |
but it's hard to see how that approach will keep | :09:04. | :09:08. | |
in compliance with US And it also seems long way away | :09:09. | :09:12. | |
from his campaign promise to drain If you fly frequently you may have | :09:13. | :09:17. | |
used the flight booking website It's based in Scotland - | :09:18. | :09:33. | |
but now has a new Asian owner. Sharanjit Leyl has | :09:34. | :09:38. | |
the story in Singapore. Nice to see you. Who is purchasing? | :09:39. | :09:52. | |
It is none either than the biggest online travel company in China, | :09:53. | :10:00. | |
ctrip.comp which does the same thing for the Chinese market. We saw | :10:01. | :10:07. | |
shares rising as much as 9.2% in extended trading. We said that | :10:08. | :10:14. | |
Skyscanner helps users compare prices across travel sites as well | :10:15. | :10:20. | |
as for flights, hotels and rental cars. The CEO is frustrated with | :10:21. | :10:25. | |
finding cheap flights online and that is why he started this up. It | :10:26. | :10:30. | |
is available in over 30 different languages and we know that this is | :10:31. | :10:33. | |
among the many Chinese overseas purchasers this year in the first | :10:34. | :10:38. | |
nine months of this year. In fact $191 billion and all were announced | :10:39. | :10:43. | |
and a lot of those deals are taking place in the travel and | :10:44. | :10:44. | |
entertainment industries. And very quickly, the markets are | :10:45. | :10:54. | |
still going up in anticipation that rates will be rising in December in | :10:55. | :10:58. | |
December. I will see you shortly. | :10:59. | :11:05. |