22/12/2015 BBC Business Live


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This is Business Live from BBC News,


with Sally Bundock and Ben Thompson.


Oil hovers near 11 year lows as the slump in global


Live from London, that's our top story


An end of year rally looks like a distant hope as supply


outstrips demand across the commodities world.


Space X launches and lands the Falcon-9 rocket for the first


for the future of the space industry.


And why everything isn't rosy in the flower business -


the florist to the stars,


Paul Thomas, will join us later in the programme


to give us the inside track on his latest creations.


And as one influential advisor calls on the US government to tax


greenhouse gas emissions from big business,


we want to know, what's the best incentive to go green?


Fines, charges, punishments or persuasion?


Let us know - use the hashtag, #BBCBizLive.


We start with the continuing pressure on commodity prices.


It is good news if you're having to pay for commodities,


but bad news if your economy or company


Oil is still hovering around 11 year lows.


In fact, it's fallen by around a third since the start of the year.


Oil production is running close to record highs,


and there's just not enough demand to mop it all up.


Slower growth in China - the world's second


is now using less copper, and that's helped to push down


weaker industrial production in China has helped


depress the price - which has fallen


Gold hasn't escaped either - its price is down by around 10%


This time, it's the strong US dollar to blame.


Gold is priced in dollars - so the stronger the greenback,


And with interest rates rising in the US,


investors may be drawn to investments on the other side


of the Atlantic, where returns are more attractive.


Amrita Sen, Chief Oil Analyst at Energy Aspects is with me.


If you look at Brent, down 42% lower than this time last year. It is hard


to judge who this is good and bad for all stop initially, drivers are


doing well out of this, of course, but less so for the oil firms


themselves. Their response has been to lay off staff and cut investment.


That is going to continue, isn't it? Pressure. We have seen oil companies


cut huge amount of workforce. And capital expenditure is down around


$110 billion this year and another 100 billion next year. If these


prices persist for another few months, that could go up another


20%. We have talked about US shale producers and whether this is just


the Opec members tried to put them out of business, but they


managed to withstand the storm better than many expected. The


question is how long this can go on before someone has to blink. That is


exactly the question. The industry of $30 oil is not sustainable, but


it is a survival game at the moment. The amount of assets you have seen


in the US, it is at record levels. Moody 's has pledged another 29


companies on review for further downgrades. These are big


some of the biggest in the shale business in the US. They are


literally selling every asset possible to survive, in the hope


that prices will go up. So looking in your crystal ball, what are we


talking about in 2016? First, it will be a struggle. The warm winter


is not helping. It has been very warm here, and also in the US, Japan


and Korea. And because of the cutbacks, they should start feeding


through to lower production. Probably not until the fourth


quarter of 2016. There has also been the shale and BG merger. That is in


the spotlight, because it was predicated on a price of about $70


per barrel. It is fed to say that prices will go back up. If anything,


the lower the prices stay today, the higher they will be in a couple of


years. The question is how long we stay in this low price environment,


which is adding to the jitters of a lot of investors.


Apple has raised concerns about the UK Government's proposals


The proposed law aims to overhaul rules governing the way


the authorities can access people's communications.


Apple says the bill would give police and security services access


to the records of every UK citizen's internet use,


without the need for authorisation from a judge.


Martin Shkreli - known to many as the man who raised the price


of a lifesaving HIV drug by 5,000% - has been fired as chief executive


It comes just days after his arrest by the FBI for securities fraud.


In a short statement, the company said he had also stepped


The mood among German consumers is improving as the year


Despite an increase in terrorism threat levels, the latest survey


of sentiment by GfK showed a slight improvement,


ending four months of decline. Consumers' expectations


for the German economy and their own levels of income have


both improved according to GfK, while their propensity to splash out


and buy goods is at an "extremely high level".


Music to the ears of German retailers. Speaking of Christmas,


how to complain is a story from BBC 5 Live this morning. If you are


still waiting for gifts to arrive in the post or you have had bad


service, the way to do it is to personalise the complaint. You


are a person waiting for this package, not an address or a


reference number. That is the advice from BBC 5 Live this morning. Let me


take you through some of the other stories. Fred Thompson, chief


executive of Chapel down English wines, spoke to us previously. He


has some competition on his doorstep, because the champagne


group have moved in. They are buying next door


spent 14 years being called a lunatic for growing English grapes


and making English wine. But apparently, the champagne lot have


arrived and suddenly, everything is fantastic. Though he says he was


their first, and therefore, it is good news, competition for sparkling


English wine. It will not be called champagne, though. We need to be


clear about that. and look at what else


is making business headlines. Those forest fires in


Indonesia are costing When this was going on, even that


view behind you, we could see the haze. That's right. It has been


particularly bad this year, so the view behind this wasn't even


visible. You could just see a thick, white smoke behind us. This happens


almost every year. This year was particularly bad, but each year,


farmers in Indonesia deliberately clear land, mostly on palm oil


plantations, and that causes this thick haze that covers most of


south-east Asia. More than 50 companies are being punished for


their role either by starting the fire is all


for not stopping the fires when it happens on their land. This has been


done by the Indonesian government, which is revoking or freezing the


licenses of the companies found responsible. This is significant,


because after all these years, it is the first time people are being held


to account. But they have not released the names of the firms,


only the general locations of the companies, so we had to do some


detective work. This costs billions of dollars to the Indonesian economy


each year and that is something they are looking to stop. A very


interesting development. Markets were pretty mixed today. A few


elements are affecting trade in Asia.


Toshiba shares are down today another 7%. They closed nearly 10%


lower on Monday. Let's look at Europe we flee before we move on. --


briefly. Let's talk through what is expected in the United States.


Michelle Fleury is there for us. The Jordan Brand is the perennial


favourite, as long Strong sales of women's archive and the online


business will generally. Nike has set a target of boosting annual


revenues by more than half to $50 billion by 2020. Also on Tuesday,


investors will be looking out for the latest revision to US growth


stats. Data from the commerce department are likely to show that


US GDP expanded at an annual rate of 1.9% in the third quarter.


That is two tenths of a percent slower than was previously


estimated. Joining us is Mike Amey,


managing director and portfolio Let's start with the UK. Borrowing


figures are out later today. November is not a particularly good


month anywhere, but where are we? At the moment, we are obviously a long


way down from where we were a few years ago. The deficit for this year


is projected to be around ?75 billion, unfortunately still a very


large number, about 4% of our annual output. So there is still a way to


go. The challenge is revenues, which are coming in a bit lower than


expected. As we know, wage growth is pretty low, and if wage growth is


low, the government offers do not get replenished as quickly as we


hope. And with falling oil prices, I suppose VAT revenue from petrol will


be lower, That's right. We hope people spend


some of that windfall in other areas. If they do, hopefully you get


the money back somewhere else. But at the moment, a bit of a challenge


on the revenues. As the year draws to a close, today we have the


Chinese leadership saying they will do more to stimulate growth in China


which is what we want to hear. Then which is what we want to hear. Then


you have the interest rate situation in Europe and the US, and oil, we


have mentioned. Lots of moving parts. When we look forward to the


next 12 months, we are relatively optimistic that in aggregate, things


will be OK. China is probably through the worst, and if that is


the case, it should give us hope for 2016. But there is an interesting


divergence between the Federal the European Central Bank try to


keep pumping cash into the system. 2016 should be OK, but a lot of


moving parts. If you look at where we were this time last year, on the


one hand, a very different picture, but still always the same issues.


But they have moved ever so slightly. That's right. The last 12


months have told us, as you have seen with the


numbers, consumer spending in a lot of Western countries is holding up


well, including here. That is what gives us cause for to miss. That has


been the story for this year. We have had these bouts of volatility,


but overall both has been OK. We will get more bumps in 2016, but we


think consumer spending will hold. From my point of view, I feel like I


have been watching central banks all over the place - Japan, the European


Central Bank, the Fed, the UK to a degree, and China. Six interest rate


cuts this year. It has been about what central banks have been doing


that has led the way in terms of how we are reacting. And the central


banks start to do different things, which affects currency markets a


lot. So you go volatility through currency markets.


renminbi voting has created some uncertainty. Everybody wants to see


a slightly higher inflation number, believe it or not. We have spent a


lot of time worrying about deflation. The focus for all central


banks will be a hope to see inflation numbers edged up a bit. We


will be back, but thanks for now, Mike.


- about winning the royal seal florist to the stars and to royalty


You're with Business Live from BBC News.


More people are expected to work Christmas Day this year. Research


suggests the number is at its highest level in three years, with


nurses, doctors and chefs and police officers among those who will be on


duty as normal. As will some of our colleagues here at the BBC. Steph


McGovern is at a Christmas market in York.


The New York Brass Band will be playing for us. But we are here to


talk about how important it is to the economy. Give us a tune.


tell you, but there is over 100 tell you, but there is over 100


stalls here dotted around this city. They are selling all kinds of dimp


things. It is important for small business. ?250 million to the


economy. Here it added something like ?50 million extra to York's


money that they're making. We can talk to Rupert, one of the


for you? We sell woolly hats and for you? We sell woolly hats and


jackets and gloves and we're having a ball at the moment.


It is still mild and you'd like to see it colder... We need some frost.


Please, can we have some frost? There is people who would like snow


full-time on this business, don't full-time on this business, don't


business. Where are you when you're business. Where are you when you're


not here? We're in York Market normally four days a week. Is this a


big part of your business? It is a hugely important time of year for


us. If we didn't have them, we us. If we didn't have them, we


wouldn't be in business, I don't think. That was Steph McGovern


setting a sense of how the people feel about the festive season ahead.


We are talking about interest rates again when they will rise. We talked


the Bank of England has signalled the Bank of England has signalled


that a rate rise in the UK could be further away than we expect. He says


it is downward pressure on inflation that could push back a rate rise


below the record level of 0.5% which it has been at since March 2009.


Our top story, global commodities fail to gain ground as the year


draws to a close as supply outstrips demand around the world.


We will be following that story for you.


Whether it's Christmas, Valentine's Day or Mothers day,


there's a chance flowers will feature somewhere


Buying and selling flowers is big business.


In the UK alone the florist industry is worth ?1 billion a year -


But the future is not so rosy for the traditional florist,


its goods are perceived as a luxury when compared to what's


However, the industry of events and party flowers has ballooned.


For the rich and famous - they're actually buying more


and more flowers for sophisticated creations and elaborate looks.


He arranged the flowers for Prince Charles' wedding in 2005


and the flowers for the wedding of his niece, Zara Philips.


He has also just completed the Christmas Transformation


at the Ritz Hotel in London, a job he's done for ten years.


Paul Thomas is the founder of Paul Thomas Flowers.


You have brought some. It is a shame you can't smell that we can smell.


They smell incredible. It smells Christmassy here today. Paul welcome


to the programme. Let's start with how you got into this. You have been


doing this 25 years or longer? Over 30 years, yes. How did you begin?


What was the initial impetus to start doing this, to become a


florist? I wanted to be a florist since I was ten years old. I saw


episode of Upstairs Downstairs and episode of Upstairs


saw the table decorated in an saw the table decorated in an


elaborate way and just loved it and that's, "That's what I want to do. I


want to create wonderful tables and transform rooms and make magic."


What was your path? You're a ten-year-old boy at school and you


want to be a florist, how do you get there? I'm fortunate. I felt very


clear vocation of what I wanted to do. You follow that course. I went


the best florist in London. I went the best florist in London. I went


to them for advice. They directed me to a man called Kennet Turner who


was transforming the flower industry, a genius. And I was so


fortunate to work for him for a few years and that just unlocked what


was within me. He is still your mentor, isn't he? He is. Even now?


Very much so. Zblurp telling me some Very much so. Zblurp telling me some


fascinating stories -- you were telling me some fascinating stories


when you were a young man and you had Jacqui Onassis ringing in and


you cut her off the phone by accident. Yes. Tell us what that was


like. I imagine tantrums the stars coming in and wanting something, it


is not what they desire, how do you manage those emotions? It was a


baptism of fire. I came from a nice family in Reigate and suddenly it is


into London and this remarkable man I worked with and it was quite


traumatic. But I remained focussed on what I was doing and I think we


all shared the love of flowers together and I think that's what


gets you through it and you just continue on that path really. How do


you divide your time? What you love doing is clearly the creative part


you have got to make money, it is a you have got to make money, it is a


business? So you're going to have to business? So you're going to have to


spend your time on the accounting and the admin and the hiring and the


firing and all the boring stuff, but you'd rather spend your time on the


creative stuff. How do you divide your time? These days it is too much


on the administration side of things and meetings and I never when I


started thought I'd ever spend time started thought I'd ever spend time


at a computer, you know, now you at a computer, you know, now you


spend so much time doing your buying lists and ordering and designing and


of course, just generally running a business. I'm fortunate, I have an


amazing team that support me a great deal which does give me the


it is very, very important to me to it is very, very important to me to


be present and take part and be part of it. That's why I got into the


industry and I don't want to stop making things, you know, and it


lucky. You are Paul Thomas, thank lucky. You are Paul Thomas, thank


you very much for coming in and your florist is in Mayfair.


New ideas being launched in the New Year.


You can leave those because they smell amazing!


No problem. The American firm, Space X,


has successfully landed a Falcon-Nine booster rocket back


in an upright position at Cape Canaveral


after it successfully The firm which was founded


by Elon Musk has a $1.6 billion contract with NASA to send supplies


to the International Space Station. It's a major step forward


in the company's effort to develop reusable rockets and reduce the cost


of private space operations. A huge breakthrough for them as you


say and this is the company, Space X. It was founded in 2002. Space X


is based in California. According to is based in California.


their website they employ over 3,000 their website they employ over 3,000


people. What they did was with this unmanned rocket, launch it from


Florida. When it got to 200 kilometres up, the booster part then


took 11 satellites up into orbit into space and the tall white bit of


the rocket, which they call the first stage, then came back safely


down-to-earthment they landed it on a giant X, in Cape Canaveral, ten


minutes after it had taken off. They minutes after it had taken off.


have tried three similar missions have tried three similar missions


before, in those ones they tried to land it on a platform in the ocean


and they failed. This time, it was the first time they aimed for dry


land and it worked. They have got ?1.6 billion contract with Nasa to


take supplies up to the International Space Station and just


six months ago they had a failed mission which destroyed millions of


dollars worth of cargo so there was a lot riding on this one.


That was Ben Bland. Mike Amey is joining


us again to discuss. How to get investors to save the


planet? We have seen the discussions in Paris theically mate change


talks. One way is to tax companies. It seems controversial? There is a


controversy in there and the point of the commentary which is fair is


there is much more uncertainty with green energy and the price you


receive for it. There is two-ways you can approach that, you can


the green output or you can tax the the green output or you can tax the


so-called cheaper, but more polluting route in the meantime.


This is one route. It is one of the more controversial ways of doing it,


but we are going to have to do something along those lines. It is


the carrot and the stick argument. It is persuasion or penalty.


There will be more business news throughout the day on the BBC Live


webpage and on World Business Report.


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