:00:11. > :00:18.Hello everybody, this is business live, good to have you with us.
:00:19. > :00:22.Markets around the world are heading higher following the most expected
:00:23. > :00:26.move from the Federal reserve. If you did not know, they did go up. We
:00:27. > :00:36.will pump out what that means for the global economy. This is live
:00:37. > :00:49.from London. Thursday the 17th of December. Yes, we have liftoff, the
:00:50. > :00:54.US has raised interest rates for the first time in almost a decade, a
:00:55. > :00:57.move that is likely to cause ripples around the world and could increase
:00:58. > :01:04.pressure on other countries to raise their rates. Also in the programme.
:01:05. > :01:10.As if Facebook was not already a big part of our lives, the tech giant is
:01:11. > :01:13.now teamed up with Bluebird to enter the transport business. As always we
:01:14. > :01:20.will show you the markets in Asia and all around the world, that is
:01:21. > :01:25.following the news, that the Fed has raised rates for the first time in a
:01:26. > :01:30.very long time, since 2006. And we will be getting the inside track on
:01:31. > :01:33.what it takes to make money in the music business that is increasingly
:01:34. > :01:39.based around streaming platforms. We will be speaking with the head of
:01:40. > :01:44.PRS music. And we want to know whether you back that US Fed rate
:01:45. > :01:48.rise or not? Is it too early? Should they have done it a long time ago,
:01:49. > :02:02.should they have waited until next year? Get us know. -- let us know.
:02:03. > :02:06.OK welcome to the programme, lots going on, we start of course with
:02:07. > :02:11.the big news affecting the markets and businesses and people, all of us
:02:12. > :02:15.around the world, the American central bank, the US Federal reserve
:02:16. > :02:19.has raised the cost of borrowing for the first time in almost a decade.
:02:20. > :02:27.The Fed increased its benchmark interest rate by a quarter of 1%. It
:02:28. > :02:35.is a small step but is it the first of many rises? Our US interest rates
:02:36. > :02:39.about to skyrocket? What has really should investors is the tone of the
:02:40. > :02:45.big boss, Janet Yellen who has said that the progress is likely to
:02:46. > :02:49.proceed gradually. They say that the cost of borrowing is likely to be
:02:50. > :02:55.about just under 1.4% by the end of next year. That implies for more
:02:56. > :02:59.rate rises next year. Traders are betting that the next move will be
:03:00. > :03:06.in April but that is assuming, that the US economy remains in good
:03:07. > :03:12.health. I am joined by Stephanie Flanders, the chief market
:03:13. > :03:17.strategist, for Europe JP Morgan. It has happened, it is the morning
:03:18. > :03:18.after, give us your thoughts? I think it is funny because there has
:03:19. > :03:26.been this feeling that we would have this
:03:27. > :03:30.great moment certainty. One of the arguments for this rate rise would
:03:31. > :03:35.be that it gave a sense that we were on this path to normality, of course
:03:36. > :03:39.we have just got more things to be uncertain about. Now a lots of the
:03:40. > :03:43.focus will be on what the pace of those further rate rises will be,
:03:44. > :03:47.how the US responds to them, what inflation looks like in the US, does
:03:48. > :03:52.it do what the Federal reserve is expecting? The further path is one
:03:53. > :03:56.thing, but also we are testing the water on how the rest of the world
:03:57. > :04:02.reacts, addictive illegal emerging market economies. We know that the
:04:03. > :04:08.end of super cheap money, has caused a lot of adjustment problems for
:04:09. > :04:11.them because they had a lot of benefits from money flowing into
:04:12. > :04:14.their economies, this could be the high watermark for their problems
:04:15. > :04:18.because people know what they are doing now they could say. That is
:04:19. > :04:26.what a lot of people in the central banks will thing, or it could be the
:04:27. > :04:30.start their trouble. The big focus where we are is on Mark Carney, the
:04:31. > :04:34.big boss of the Bank of England, but how much pressure is put on other
:04:35. > :04:41.central banks in developed economies because they watch very closely? The
:04:42. > :04:45.UK is widely considered to be next in line, probably the only country
:04:46. > :04:50.that you put in the same category of the US, quite far wrong with even a
:04:51. > :04:54.little bit of upward wage pressure. Inflation is far below the target.
:04:55. > :05:00.You have seen Mark Carney acts like he's completely oblivious to what
:05:01. > :05:05.goes on in Washington, of course, they are affected by the fact that
:05:06. > :05:09.the US now has made this rate rise, if that could stick and it looks
:05:10. > :05:13.like it will stick, that is an environment in which it is a bit
:05:14. > :05:18.easier for the Bank of England to go second. But with all of the question
:05:19. > :05:26.marks over Brexit and the EU referendum, we are not sure. It
:05:27. > :05:30.could be later in the year. In terms of the effect on the global economy,
:05:31. > :05:34.we have talked a lot about looking at various countries and the impact
:05:35. > :05:41.of various individuals, because the dollar is changing in value, give us
:05:42. > :05:46.your take on that response because many watching us in Asia, or in
:05:47. > :05:52.Latin America, are thinking OK this will have a real impact on me, when
:05:53. > :05:55.I am painful things in US dollars? The thing about markets is that they
:05:56. > :06:00.should be forward-looking so we should have had most of the response
:06:01. > :06:04.to high rates, this is the most anticipated, if there was anybody in
:06:05. > :06:09.the financial markets, thinking, I am going to buy dollars, you would
:06:10. > :06:16.think they were a bit behind the curve, so the hope would be, most of
:06:17. > :06:20.the adjustment of higher rates at least on a slow path, has already
:06:21. > :06:23.happened because it is so were anticipated, does that mean we will
:06:24. > :06:30.get a view more months of dollar strength? As we factor in a higher
:06:31. > :06:36.and faster rate rises, possibly, but I think the hope would be, that
:06:37. > :06:43.there wouldn't be another big leg up in the dollar and that would be good
:06:44. > :06:48.news for the rest of the world. Time to squeeze in some other stories.
:06:49. > :06:53.Facebook has entered the transportation business.
:06:54. > :06:56.The firm has agreed to work with Uber to allow users to hail
:06:57. > :06:57.Uber cabs directly from the Messenger app.
:06:58. > :07:00.The new service means Messenger users will be able to ask
:07:01. > :07:02.for an Uber vehicle without leaving the Facebook software.
:07:03. > :07:05."Uber on Messenger" began in parts of the US this week,
:07:06. > :07:11.Argentina is to scrap foreign exchange restrictions,
:07:12. > :07:13.allowing individuals and companies to buy dollars freely
:07:14. > :07:19.The move comes six days after pro-business President
:07:20. > :07:23.Mauricio Macri took office promising deep economic reforms.
:07:24. > :07:26.The controls were set up by former president Cristina Kirchner to stop
:07:27. > :07:28.capital leaving the country - but critics say they have hurt
:07:29. > :07:35.The value of the peso is now expected to slump from less
:07:36. > :07:38.than 10 to the dollar - the official exchange rate -
:07:39. > :07:46.to as low as 15 in line with the black market.
:07:47. > :07:49.Hong Kong's central bank has also raised the base rate it charges
:07:50. > :07:52.to a seven-year high of 0.75%, tracking the decision by the US
:07:53. > :08:03.The Hong Kong dollar's peg to the US Dollar means the city's monetary
:08:04. > :08:14.Let's take a look round the world at what's business stories
:08:15. > :08:22.Heathrow is making headlines again. The chairman is
:08:23. > :08:29.stepping down. We have got some tablet problem so this is controlled
:08:30. > :08:35.elsewhere, he throws hugely in the spotlight in the UK, it is the
:08:36. > :08:40.busiest airport, the second busiest airport in the world. In terms of
:08:41. > :08:50.passenger numbers. A huge debate just continues over the third
:08:51. > :08:55.runway. I am still talking. Third runway, or will it go to Gatwick?
:08:56. > :09:07.Yes fine, now little talk about Ted Baker. Ted Baker is to buy property
:09:08. > :09:11.for ?55 million, many will say that it is not the nicest looking
:09:12. > :09:17.building. They have agreed to purchase the freehold for that
:09:18. > :09:23.amount, plus costs ?3 million. The acquisition will be financed by ?60
:09:24. > :09:29.million secured term loans. Costing quite a bit of money in the process,
:09:30. > :09:34.new headquarters for that company. Are you finished? I am. Let us look
:09:35. > :09:40.at some of the other business stories. We are going straight over
:09:41. > :09:45.to the offices, we are going to talk to the reaction, the big Fed
:09:46. > :09:48.decision. Winners and losers in Asia, those that export to the
:09:49. > :09:52.United States could benefit because it will be cheaper to export to the
:09:53. > :09:58.US with a higher dollar, but those sitting on dollar debt, that is more
:09:59. > :10:02.expensive for them? Absolutely although across Asia we saw markets
:10:03. > :10:05.finishing broadly higher this Thursday, despite the fact when you
:10:06. > :10:10.break down what the US Fed move is going to mean for them as you just
:10:11. > :10:13.referred to it going forward, the future rate rises is what many in
:10:14. > :10:15.the region will still be vulnerable to. Asia was the first to respond
:10:16. > :10:25.from the news. Any rate rises will be
:10:26. > :10:30.gradual but higher interest rates will cause problems for economies
:10:31. > :10:33.that are far too exposed to US dollar-denominated debt, and Asian
:10:34. > :10:38.central bankers are caught between a rock and a hard place. They need to
:10:39. > :10:42.cut rates to boost growth, many of the countries in the region of
:10:43. > :10:46.Basingstoke growth but if they do that, they risk sending more money
:10:47. > :10:50.out of their financial systems which will weaken their currencies
:10:51. > :10:54.further. It is a tough position to beat him. With slower growth
:10:55. > :10:59.expected to hit the region even further in 2016, it is becoming a
:11:00. > :11:03.real dilemma for policymakers. Thank you very much.
:11:04. > :11:05.Staying with markets - not much more to add really.
:11:06. > :11:08.As you can see the markets around the world embracing that FED
:11:09. > :11:12.decision to lift rates for the first time in donkeys years...
:11:13. > :11:21.The uncertainty over will they or won't they -
:11:22. > :11:29.now obviously gone and the markets have certainty...
:11:30. > :11:33.This was seen as a mark of confidence. It is also piling on the
:11:34. > :11:37.painful oil prices. Oil prices have fallen again -
:11:38. > :11:41.more supplies into the already In fact keep your eye on US
:11:42. > :11:52.lawmakers who could be voting tomorrow to lift a four decade US
:11:53. > :11:55.ban on crude oil exports. Joining us is Tom Stevenson,
:11:56. > :12:09.Investment Director Nice to see you. Looking at those
:12:10. > :12:14.numbers, France and Germany, 2%, I mean, I wouldn't expect a bounce to
:12:15. > :12:22.that degree given the fact that on Tuesday night they all closed up 3%,
:12:23. > :12:27.it has been quite a week? Markets tend to move on things they don't
:12:28. > :12:34.expect. Surely this was the most overran a light, over speculated
:12:35. > :12:37.rate ever. No surprise. But it has cleared the uncertainty, that is why
:12:38. > :12:42.the markets are buoyant this morning. Something we didn't get
:12:43. > :12:50.time to ask Steph, many are betting that April is the next move up. Your
:12:51. > :12:54.thoughts? That is the interesting gap between what the Fed is saying
:12:55. > :12:58.and what the markets are saying. The Fed is clearly saying that they
:12:59. > :13:04.expect full quarter point races next year, and the same in 2017, the
:13:05. > :13:07.market is more cautious. It is expecting a couple of quarter point
:13:08. > :13:13.rise is. I think that if we do get signs that the Fed is pushing for
:13:14. > :13:19.four rises next year, that actually will be taken badly. That is clearly
:13:20. > :13:24.not priced in at the moment. Briefly, I want to talk about oil,
:13:25. > :13:29.the Fed made the move, the oil price drops further but it is interesting
:13:30. > :13:34.about this move, possibly by lawmakers tomorrow? Yes, if the US
:13:35. > :13:39.does exporting, that is another source of oil, we have got Iran
:13:40. > :13:42.coming on stream. Things may be clearing up in Libya, oil coming
:13:43. > :13:47.from there, if the US starts exporting oil,
:13:48. > :13:55.the oversupply will get worse and it will keep the price is low for the
:13:56. > :13:57.considerable future. More stories to discuss, but we have more to do
:13:58. > :13:58.right now. We're going to be talking music
:13:59. > :14:01.and in particular how people make Later in the show we will be
:14:02. > :14:05.speaking to the man behind the group which makes sure songwriters,
:14:06. > :14:06.composers publishers all get what they are owed
:14:07. > :14:09.in an increasingly digital world. You're with Business
:14:10. > :14:15.Live from BBC News. How will the UK be affected
:14:16. > :14:18.by the US interest rates decision? Ben's in central London
:14:19. > :14:36.to tell us more. We've heard about the impact of that
:14:37. > :14:40.rate rise in America, around the world, but what does it mean in the
:14:41. > :14:47.UK and will the Bank of England follow suit in raising the cost of
:14:48. > :14:52.borrowing? Monica is with me, and Jeremy. Monica, what does it tell us
:14:53. > :14:58.here in the UK about America thinking America is on the mend?
:14:59. > :15:02.Will the UK follow suit? I think so. Both economies are seeming to be
:15:03. > :15:06.back on track, in terms of lower unemployment numbers, steeper GDP
:15:07. > :15:10.growth, so I think we are expecting the Bank of England to follow suit
:15:11. > :15:13.with an interest rate rise later next year, but I think both are
:15:14. > :15:25.going to be quite cautious, in the pace of the rises to make sure we
:15:26. > :15:30.are on firm footing. Away from these emergency measures, arranged to
:15:31. > :15:34.kickstart the economy, getting back to something like normality? I don't
:15:35. > :15:40.think anyone knows what normality still is. This was the 1st rays in
:15:41. > :15:45.10 years. We are starting to see... The word they use last night was
:15:46. > :15:49.gradual, the emphasis is on how slow these rises will be. The 1st step on
:15:50. > :15:52.a very long road. The last thing the federal bank or the central bank of
:15:53. > :15:57.England want to do is scare the horses. We are looking at the
:15:58. > :16:03.International picture, what does it mean for investors and business? It
:16:04. > :16:09.is the start of a long process of rates rising, how would you start to
:16:10. > :16:14.prepare? So far we have seen a positive reaction from markets.
:16:15. > :16:21.Tokyo and Hong Kong opened up. Investors should be feeling pretty
:16:22. > :16:26.positive. Different effects on other assets, but overall anything that is
:16:27. > :16:31.positive overall for the economy is positive for investors. Thank you
:16:32. > :16:35.very much. That is the view from here in London. The big question is
:16:36. > :16:39.if the bank of England will follow suit, what will it look at when it
:16:40. > :16:44.looks at the cost of borrowing in the UK? America has fired that
:16:45. > :16:54.starting gun. Will UK follow suit is the question?
:16:55. > :17:04.This is business to live. Our top story: the American central bank
:17:05. > :17:08.announced that rise in the interest rate. Seen as a powerful statement
:17:09. > :17:14.about the improving health of the US economy. Markets in Europe and Asia
:17:15. > :17:22.are bouncing on that news, as we have been discussing.
:17:23. > :17:30.The music industry hasn't exactly had the easiest time
:17:31. > :17:33.Illegal downloading and low cost streaming services have led
:17:34. > :17:36.to a steady decline in music sales, forcing artists to look at more
:17:37. > :17:44.One of the companies at the vanguard of that effort is 'PRS for Music'.
:17:45. > :17:47.Formed in 1997, they look after the usage rights of over 10
:17:48. > :17:50.million songs - representing everyone from blockbuster
:17:51. > :17:53.songwriters like Adele, to classical composers.
:17:54. > :17:56.Their role is to ensure songwriters, composers and music publishers
:17:57. > :18:05.are paid whenever their content is played, performed or reproduced.
:18:06. > :18:08.In total the firm collected almost a billion dollars in music rights
:18:09. > :18:10.in 2014, a 1% increase on the year before.
:18:11. > :18:16.If we break that down though we can see that only 12% of that amount
:18:17. > :18:20.came from online sources with half of their collected revenues coming
:18:21. > :18:22.from live performances and the broadcasting of music.
:18:23. > :18:25.Robert Ashcroft, is the firms Chief Executive and is with us
:18:26. > :18:39.Great to have you with us. I was just going to say, it all sounds so
:18:40. > :18:44.complicated to me. I am a Luddite, I still use CDs. I have to look to my
:18:45. > :18:49.kids to download things for me if I cannot get it on a CD. But it is
:18:50. > :18:54.huge business, and it is something developing over a very long time for
:18:55. > :18:58.both artists and users of the songs you are representing the lot?
:18:59. > :19:06.Absolutely. We have been in business for 101 years now. It has changed
:19:07. > :19:09.enormously since the advent of the Internet. We had seen recorded media
:19:10. > :19:12.sales going down. We've seen downloads replacing sales of CDs.
:19:13. > :19:17.Now we are into the streaming era. Last year our streaming revenues
:19:18. > :19:25.were higher than our download revenues. For the first time? Yes,
:19:26. > :19:30.we cross the threshold in 2014. That makes sense because it seems to be
:19:31. > :19:34.the way... People don't want to own that necessarily, but just to stream
:19:35. > :19:42.it. I wonder, I guess it is easy to keeps track of streamers and
:19:43. > :19:47.downloads, but how do you do it in all quarters of the world of people
:19:48. > :19:51.using one of the songs and somebody not realising they have to pay for
:19:52. > :19:56.it. There is a network of societies around the world. We have reciprocal
:19:57. > :20:00.arrangements with 150 countries. We represent their musicians in the UK.
:20:01. > :20:04.If you are running a pub and you get a license, you automatically have
:20:05. > :20:08.that license with us to play Argentinian music, Filipino music,
:20:09. > :20:14.music from all around the world. We have the same arrangements. Funnily
:20:15. > :20:18.enough, in parts of our business we are monopoly in the UK. I thought
:20:19. > :20:22.when I joined it was the end of my travel. I used to work for Sony and
:20:23. > :20:26.travelled all around the world, suddenly I found myself travelling
:20:27. > :20:29.to Argentina, Japan, Hong Kong, China, all around the world,
:20:30. > :20:33.developing relationships and understanding how they work, to
:20:34. > :20:38.track that usage. For the artist, how does it work, in terms of what
:20:39. > :20:46.he or she actually gets paid? If you find somebody is using a Dell's new
:20:47. > :20:51.hit single Hello in the backwaters of Shanghai and they have not had
:20:52. > :20:57.proper authority or paid, talk us through the logistics? There is the
:20:58. > :21:01.music copyright Society of China and they copyright all the hotels and
:21:02. > :21:05.businesses. They are not as well penetrated in their market as we
:21:06. > :21:08.are. It is a developing market for copyright, so we cannot be sure
:21:09. > :21:13.everything is captured, but we are in dialogue with them. We see who
:21:14. > :21:16.they have licensed, how they license them and check how they collect the
:21:17. > :21:21.money. We are going through business dialogue to make sure we are being
:21:22. > :21:28.paid for our members. And then you pay Adele? Yes. We have spoken on
:21:29. > :21:33.other programmes, you and I, about the difference in what the artist
:21:34. > :21:36.would receive from a download, to streaming. There were a lot of
:21:37. > :21:41.artist two were not happy about what they were receiving, what they were
:21:42. > :21:46.getting back? Absolutely so. In the old days you could say I have a song
:21:47. > :21:51.and a CD, CD sales are ?10 and I get my share. But it doesn't really
:21:52. > :21:55.matter if your song is really popular song... If somebody bought
:21:56. > :22:03.the CD for a particular song, then you get into the download era, you
:22:04. > :22:06.are getting about 5p per download. Then you get into the streaming era,
:22:07. > :22:11.where it gets very compensated because you have the free streaming
:22:12. > :22:15.services, advert supported ones, you Tube, sound cloud, Facebook, all
:22:16. > :22:22.these places where you can listen to music. We can take the example of
:22:23. > :22:27.Spotify. The leading subscription service, it works out on premium
:22:28. > :22:30.about 50 streams, the equivalent of a download. As we talked about last
:22:31. > :22:35.time, you can see that working over the long-term. The challenge now is
:22:36. > :22:44.that most people are listening to their music on the YouTube and sound
:22:45. > :22:48.cloud. We are trying to get it onto a level playing field, to make sure
:22:49. > :22:51.songwriters can make their money, regardless of where their music is
:22:52. > :22:56.played on the Internet. We have to leave it there. It is fascinating to
:22:57. > :22:57.stop Robert Ashcroft, thank you for coming in. Chief Executive of PRS
:22:58. > :22:59.for Music. Let's now take a quick look at some
:23:00. > :23:09.of the best business news out A story is dominating... Do we have
:23:10. > :23:15.to do it again? The front page of the Financial Times, about the Fed
:23:16. > :23:22.impact, what it means, the of cheap money, by raising the cost of
:23:23. > :23:27.borrowing by 0.25%. The Japan Times is reporting in
:23:28. > :23:31.spite of that big deal on climate struck in Paris last weekend, Japan
:23:32. > :23:35.and South Korea are both still planning an opening 60 new coal
:23:36. > :23:41.fired plants in the next ten years. And if you like using Uber
:23:42. > :23:44.and Facebook this story in the UK Apparently the two companies
:23:45. > :23:48.are teaming up to allow you to book taxi's via the social networks
:23:49. > :23:59.messaging app. Tom Stephenson is with us again in
:24:00. > :24:03.the studio. Let's start with Facebook and Uber. What does it
:24:04. > :24:09.mean, then teaming up together? Others out there will be thinking
:24:10. > :24:12.two big disrupters. You could see why Uber would want to get into
:24:13. > :24:19.Facebook messenger, it has 700 million monthly users. Uber gets
:24:20. > :24:23.access to them. If you live in that I environment you want to be able to
:24:24. > :24:27.order your taxi whilst you are in that environment. The Facebook it is
:24:28. > :24:30.good news as well. They will get the payment details from Uber, which
:24:31. > :24:36.they will be able to use for other things. Is quite a scary thought.
:24:37. > :24:41.It is scary, I have no more to add on that. LAUGHTER
:24:42. > :24:47.OK! Can we move on... We talked about
:24:48. > :24:50.and talked about it, that two week Hague climate summit, finally got a
:24:51. > :24:54.deal after many, many years. The world got this deal and now we hear
:24:55. > :25:00.Japan and South Korea are going to build these coal powered plants. We
:25:01. > :25:07.didn't focus on Japan and South Korea, there was a lot of pressure
:25:08. > :25:10.on China. Japan? That is where the attention was on, the big emerging
:25:11. > :25:13.markets and how to get them into the fold so we could get this landmark
:25:14. > :25:16.deal announced. But there was or is going to be a gap between the
:25:17. > :25:22.aspiration and the reality of pushing it through. This story
:25:23. > :25:26.really underlines that. That between them, Japan and South Korea are
:25:27. > :25:34.going to build 60 new coal fire plants in the next ten years.
:25:35. > :25:39.Japan's aspirations for cutting CO2 emissions over the next 40 years,
:25:40. > :25:44.very modest. The reality is we may be looking at a 2% degree cap but
:25:45. > :25:48.the reality is the measures already signed up to not going to deliver
:25:49. > :25:54.it. Thank you for coming in. You got it in! That is it from us
:25:55. > :26:05.today, see you soon. See you tomorrow. The by. -- goodbye.
:26:06. > :26:11.Hello. It has been a fairly cloudy and breezy start the day for most
:26:12. > :26:15.places. A bit of sunshine on the cards, but equally some rain. This
:26:16. > :26:18.was the view yesterday across Inverness. You can see some blue
:26:19. > :26:19.sky. There will be more in