:00:13. > :00:15.This is Business Live from the BBC with Ben Thompson and Sally Bundock.
:00:16. > :00:17.Oil prices jump back above $35 as some call the bottom
:00:18. > :00:22.But it's little comfort to oil giant Shell -
:00:23. > :00:24.the latest to report a big fall in profits.
:00:25. > :00:26.Live from London, that's our top story on Thursday
:00:27. > :00:49.Royal Dutch Shell sees its annual net profit plunge by 87%
:00:50. > :00:54.as the volotile oil price hits profits hard.
:00:55. > :00:59.One of world's biggest ever trade deals has been formally agreed.
:01:00. > :01:01.The Trans-Pacific Partnership will cover 40% of the global economy
:01:02. > :01:05.but critics say it's a recipe for job losses and low pay.
:01:06. > :01:08.A surge in oil prices has helped to lift investor
:01:09. > :01:09.confidence across most markets with energy-related
:01:10. > :01:16.The oil majors are among the big winners.
:01:17. > :01:19.And Ford is revving up to take on the European market -
:01:20. > :01:21.but it could mean heavy job losses and cost cuts.
:01:22. > :01:24.The boss of Ford in Europe will join us live later.
:01:25. > :01:26.So do you have a question for the boss?
:01:27. > :01:34.Let us know, get in touch, use the hashtag BBC BizLive.
:01:35. > :01:50.Shell has reported an 80% drop in full year earnings as the oil
:01:51. > :01:53.producer has been buffeted by falling oil prices.
:01:54. > :01:55.The decline is the company's sharpest fall in
:01:56. > :02:00.Shell is just one oil giant that's had to make major cuts as a result
:02:01. > :02:08.Let's take a quick look at the market as a whole:
:02:09. > :02:10.America's biggest firm Exxon Mobil posted its weakest
:02:11. > :02:14.The company is planning to cut capital and exploration spending
:02:15. > :02:21.Fellow oil giant BP will cut 7,000 jobs around the world
:02:22. > :02:31.It's also planning to sell $5 billion in assets.
:02:32. > :02:33.Shell - which posted those bad numbers this
:02:34. > :02:37.morning - has sold more than $20 billion in assets
:02:38. > :02:41.since the start of 2014 and plans more through 2018.
:02:42. > :02:46.It cut capital investment by $8 billion in 2015.
:02:47. > :02:56.In fact Shell's results come just days after the company sealed
:02:57. > :03:02.a ?47 billion takeover of BG Group Plc.
:03:03. > :03:04.Capital investment for Shell and BG for 2016
:03:05. > :03:07.is expected to be $33 billion, down an eye watering 45% with 10,000
:03:08. > :03:13.jobs confirmed to be cut as part of the takeover.
:03:14. > :03:21.Our economics editor Kamal Ahmed is here.
:03:22. > :03:27.It highlights how difficult it is for the big oil firms to make any
:03:28. > :03:32.sort of plans and predictions based on the oil price which is so
:03:33. > :03:41.volatile. Where are we in terms of where the oil for -- firms are at
:03:42. > :03:45.the moment? Show is less affected, because they produce gas and the gas
:03:46. > :03:51.price has not fallen as badly as the oil price -- Shell is less affected.
:03:52. > :03:57.So they have some protection there, but if you speak to oil chief
:03:58. > :04:00.executives they believe that the oil price will strengthen over the rest
:04:01. > :04:04.of the year, as demand from China and America increases, and all of
:04:05. > :04:10.these companies, the big companies, they are relying on that. Or they
:04:11. > :04:16.will have to go through more cuts in costs, yet more investment decisions
:04:17. > :04:20.which are negative. I was speaking to law John Brown, the former chief
:04:21. > :04:21.executive of BP and I asked in his thoughts about the future of the oil
:04:22. > :04:26.price. -- Lord John Brown. The big thing I think we've learnt
:04:27. > :04:30.in the past is that it takes time for supply to stabilise and allow
:04:31. > :04:32.the gap between supply We're back to a period of lower
:04:33. > :04:47.prices, much as we had from '86 to 2004 - a 17 year period
:04:48. > :04:50.where the price was around about 30 to $35 in real terms
:04:51. > :05:04.which is sort of the price today. You asked about the North Sea? Yes,
:05:05. > :05:06.Shell has said it is pulling out of its exploration in the Arctic and it
:05:07. > :05:09.will have less exploration in Africa. The North Sea is one of
:05:10. > :05:17.those expensive areas and I asked him what he thought the
:05:18. > :05:23.future was for the North Sea. It has some future, clearly there is gas
:05:24. > :05:27.oil, which will continue to be in selective parts, but it is not the
:05:28. > :05:33.same as it used to be, no doubt about that. It is a very diminished
:05:34. > :05:37.part of the global supply equation. Can I say, one of the things which
:05:38. > :05:41.is extraordinary about the UK North Sea, I remember when it started, and
:05:42. > :05:47.we thought it would the over by the year 2000. That we turn off the
:05:48. > :05:51.lights in 2000, but back came and went, and actually, the North Sea
:05:52. > :06:02.was doing very well, and so we have had a lot of extra time here, which
:06:03. > :06:07.we should be very grateful for. There is the merger between Shell
:06:08. > :06:14.and BP, probably the worst time they are thinking about doing this. It is
:06:15. > :06:17.nearly a $50 billion deal, but I think the chief executive of Shell
:06:18. > :06:22.is more concerned with making that deal work than he is the future
:06:23. > :06:27.trajectory of the oil price. One important thing for our pensions and
:06:28. > :06:32.savings, Shell has committed to its dividend, so did BP, they are two of
:06:33. > :06:35.the biggest dividend payers in the UK so at least for investors they
:06:36. > :06:41.will be some reassurance. We will watch that closely. Thanks for
:06:42. > :06:43.joining us. Now some other business stories.
:06:44. > :06:47.Credit Suisse has reported its first full-year loss since 2008 as it set
:06:48. > :06:50.Trading losses also contributed to a slump at the two
:06:51. > :06:53.Switzerland's second-biggest bank posted a net loss of $5.8 billion.
:06:54. > :06:58.The Zurich-based lender is accelerating plans to cut 4,000
:06:59. > :07:11.Sumner Redstone has stepped down as executive chairman to be replaced
:07:12. > :07:14.by president and chief executive Leslie Moonves.
:07:15. > :07:18.There's also speculation that Mr Redstone will also step down
:07:19. > :07:21.as chairman of Viacom, which owns MTV and Nickelodeon.
:07:22. > :07:24.The 92 year-old has been facing questions and legal action over his
:07:25. > :07:31.The former head of the International Monetary Fund,
:07:32. > :07:33.Dominique Strauss-Kahn, is joining the board of a bank owned
:07:34. > :07:36.by Ukranian billionaire Viktor Pinchuk.
:07:37. > :07:41.Mr Strauss-Kahn resigned as IMF managing director in 2011,
:07:42. > :07:46.allegations which were later dismissed.
:07:47. > :07:55.The Trans-Pacific Partnership, one of the world's biggest
:07:56. > :07:58.multinational trade deals, was formally adopted by the 12
:07:59. > :08:02.But the massive trade pact still needs years of tough
:08:03. > :08:06.negotiations before it becomes a reality.
:08:07. > :08:14.Leisha Chi is in Singapore with the details.
:08:15. > :08:21.It has felt like forever, but it has only taken five years. Thousands of
:08:22. > :08:26.hours of negotiations and multiple missed deadlines, this ambitious
:08:27. > :08:31.deal has finally been signed in New Zealand. This is the world's biggest
:08:32. > :08:35.trade deal in two decades and will cover 40% of the global economy.
:08:36. > :08:40.These countries are looking to lower barriers to trade investment, and
:08:41. > :08:45.the signing is important, but this is only the first step in what will
:08:46. > :08:48.be a long process. The pact will require use of tough negotiations
:08:49. > :08:56.before it becomes a reality on the ground. They do so much. -- thank
:08:57. > :09:01.you so much. It is not quite over yet, but we will keep you
:09:02. > :09:08.up-to-date. If you were watching the show yesterday. Tom Stevenson from
:09:09. > :09:14.Fidelity said where the oil price goes, the market goes, and that is
:09:15. > :09:20.very true. Shares in Tokyo were hit hard. We had earnings from Toshiba,
:09:21. > :09:29.they were disappointing. Sharp, disappointing. Elsewhere, though,
:09:30. > :09:34.gains across the board, as the cost of oil goes up, and that is the case
:09:35. > :09:44.in Europe, as well. Credits Wiese shares are being hammered today. --
:09:45. > :09:51.credit Suisse. Shell's shares are down, despite the report they
:09:52. > :09:56.released. We can now go to New York. Some major media companies are
:09:57. > :10:00.reporting this Thursday, News Corporation will turn in its
:10:01. > :10:04.second-quarter results, the owner of the Wall Street Journal has reported
:10:05. > :10:08.three quarters of revenue decline, print sales are partly to blame, and
:10:09. > :10:14.investors want details on how the Rupert Murdoch controlled company is
:10:15. > :10:18.planning to deal with these challenges, and the New York Times
:10:19. > :10:22.is likely to face similar pressures when they release their
:10:23. > :10:26.fourth-quarter results. Another tech company is turning in its
:10:27. > :10:30.fourth-quarter results, this is linked in, the operator of the
:10:31. > :10:35.world's biggest professional networking website. How much revenue
:10:36. > :10:40.has it made from ads and paid membership? And an oil company
:10:41. > :10:47.Conoco Phillips is expected to report a loss. It should not come as
:10:48. > :10:55.too much of a surprise following results from other oil companies.
:10:56. > :10:58.Bronwyn Curtis, Chair of the Society of Business Economists.
:10:59. > :11:06.We can talk about oil once again. We can see a correlation with the
:11:07. > :11:11.equity markets. It is about confidence and optimism. It is. Very
:11:12. > :11:19.interesting, what happened overnight. We have the number of
:11:20. > :11:23.non-manufacturing index in the US yesterday and it was not very good,
:11:24. > :11:30.so the dollar fell and the oil price goes up, then the dollar goes up,
:11:31. > :11:35.the equity markets about and then we have a good day. It shows you how
:11:36. > :11:42.sensitive the markets are two quite small changes. This volatility will
:11:43. > :11:47.go on. All eyes on Mark Carney in the UK, the quarterly inflation
:11:48. > :11:52.report coming out, and decision on interest rates, quite interesting
:11:53. > :11:59.how people are looking to central banks for help, but not so much in
:12:00. > :12:02.the UK as Europe or the US or Japan. They have not got much ammunition
:12:03. > :12:07.left compared to what we had in 2008. We had quantitative easing and
:12:08. > :12:12.putting money in, but the economy has now recovered. The stock market
:12:13. > :12:17.is quite mature, and so is the global recovery. Today I think, from
:12:18. > :12:21.the Bank of England we will have downward revision to growth,
:12:22. > :12:30.inflation, and in wages, and that means that rate hikes will be pushed
:12:31. > :12:32.way into the future, or at least people will expect that, and I think
:12:33. > :12:38.the economy is starting to slow down. Although there was a chance to
:12:39. > :12:43.hike rates year ago, the year before that, when consumer spending was
:12:44. > :12:47.strong, now it looks very difficult, especially with the international
:12:48. > :12:49.situation. Muddy Waters in which to make an interest rate rise. For now,
:12:50. > :12:52.thanks for joining us. Still to come -
:12:53. > :12:54.the future on four wheels. As the global car industry faces
:12:55. > :13:00.unprecendented change - we'll chat to the head
:13:01. > :13:03.of Ford Europe. You're with Business
:13:04. > :13:09.Live from BBC News. The Bank of England will issue
:13:10. > :13:12.its latest quarterly It's also expected to leave interest
:13:13. > :13:17.rates on hold at their record low. But just a matter of weeks ago,
:13:18. > :13:20.Governor Mark Carney was preparing us all for higher borrowing costs,
:13:21. > :13:23.and a first rate rise Dominic Rossi is Chief Investment
:13:24. > :13:29.Officer of Fidelity, one of the world's
:13:30. > :13:31.biggest fund managers. He says it's not just the Bank
:13:32. > :13:34.of England that has failed in its communication,
:13:35. > :13:46.but all the major central banks. Part of that criticism is about the
:13:47. > :13:51.whole case for forward guidance and another part of the criticism is the
:13:52. > :13:57.fact that the Bank of England's inflation forecast has been poor,
:13:58. > :14:02.and the guidance towards interest rates has been too aggressive at
:14:03. > :14:09.times, but the essence of communication, they have
:14:10. > :14:16.consistently understated the disinflationary forces in the world
:14:17. > :14:25.economy, and if you look at the ECB, the Bank of England, the Chinese and
:14:26. > :14:28.the Federal market, they have all consistently, over the inflation
:14:29. > :14:32.forecast, and subsequently they have been too aggressive in their
:14:33. > :14:36.communication strategy about future interest rate hikes. They are
:14:37. > :14:45.constantly rowing back. Talking about the frustration that
:14:46. > :14:52.many have with this so-called forward guidance which is the new
:14:53. > :14:56.thing. That central banks in the US and the UK are very much into this.
:14:57. > :15:07.The two and is, it is designed to give everyone an indication of what
:15:08. > :15:12.the tank is going to do next -- the two are designed. I remember when
:15:13. > :15:12.Mark Carney first got the job in the UK, he said when unemployment is at
:15:13. > :15:22.7%, that is when rates will go up, but he had to change that, as
:15:23. > :15:26.well. The goalposts keep on moving. You can keep an eye on everything on
:15:27. > :15:32.the business pages on the website. the business pages on the website.
:15:33. > :15:37.We are looking ahead to the quarterly inflation report, we will
:15:38. > :15:43.have plenty of coverage on that on BBC News.
:15:44. > :15:48.The oil giant Shell has reported a sharp fall in annual profits.
:15:49. > :15:50.It made nearly $2 billion, compared with almost
:15:51. > :16:06.The latest big firm to suffer that fall in the price of oil. But its
:16:07. > :16:14.deal with British Gas and still on track so we keep an eye on that in a
:16:15. > :16:16.new era of low oil prices. Shot I start? You start!
:16:17. > :16:19.Now, the woes of the global car industry have been well documented.
:16:20. > :16:21.It's only thanks to heavy layoffs, closures and bailouts that
:16:22. > :16:23.many of the world's big car makers survived the downturn.
:16:24. > :16:26.But on the whole, they've come out the other side much stronger.
:16:27. > :16:29.Ford's operation in Europe returned to profit for the first time in four
:16:30. > :16:34.The firm closed a number of plants, which helped propel it to a profit
:16:35. > :16:36.of $259 million in Europe, compared to a loss of nearly
:16:37. > :16:42.And the European market is important.
:16:43. > :16:46.But whilst lucrative, it's only expected to
:16:47. > :16:57.To stay profitable, the company plans to cut costs by $200 million
:16:58. > :16:59.a year in Europe over the next few years.
:17:00. > :17:02.It will do that by voluntary layoffs and improving efficiency.
:17:03. > :17:05.But what about the rapidly growing market for hybrid vehicles?
:17:06. > :17:08.In 2014, Ford had only 12% of the market share in the US,
:17:09. > :17:13.compared to nearly 56% for all the Toyota models.
:17:14. > :17:16.And then there are the unexpected competitors, the likes of Apple
:17:17. > :17:19.and Google, that are actively developing driverless
:17:20. > :17:32.James Farley Jr is President for Europe, the Middle East
:17:33. > :17:48.Good morning. First, how did you get involved in this industry? A crazy
:17:49. > :17:50.industry, it is fair to say. Ops and styles, lay-offs, closures, all
:17:51. > :17:56.sorts of trouble is the industry has faced. Did you see that coming in
:17:57. > :18:01.this job? Not really, it was a mature industry. Like many of my
:18:02. > :18:08.colleagues, we love cars. I always have done and it is still in magical
:18:09. > :18:11.industry. Moving people from point a to point B, giving them personal
:18:12. > :18:18.transport, now it means something different with software and
:18:19. > :18:22.autonomous driving. New technology. So this is a whole new reality, but
:18:23. > :18:30.so exciting. I understand you were working for Toyota and Bill Ford
:18:31. > :18:37.phone due at a critical time for Ford to say, please join us. As a
:18:38. > :18:42.leader at Toyota in the US, we loved our life in Santa Monica and we
:18:43. > :18:50.decided to join Ford. My grandfather started their in 1911, a chance to
:18:51. > :18:56.join this iconic company in a time of need. And six months later,
:18:57. > :19:01.everything changed! After the car industry changed. We pulled
:19:02. > :19:07.ourselves up at Ford and we did not need any help from the government.
:19:08. > :19:12.We have been repairing our own business, Europe is very much like
:19:13. > :19:17.that. We need to keep our costs in line, to be that thriving business
:19:18. > :19:24.even in bad times. A lot of topical things I would love your take on,
:19:25. > :19:29.not least that trade deal, five years in the making and not a done
:19:30. > :19:33.deal. What would it mean? Ford is a free trader and it is a big deal to
:19:34. > :19:39.have access to markets all around the world. The biggest concern is to
:19:40. > :19:44.make sure the currency environment is fair for everyone. This is a
:19:45. > :19:48.great development. Let's talk about Europe. We have mentioned in the
:19:49. > :19:52.introduction Europe is going to have another very tough year. You
:19:53. > :19:58.announced yesterday cutbacks and restructuring in Europe. What is
:19:59. > :20:03.your plan for making the most of what little growth there is? First,
:20:04. > :20:08.we have a very important operation. We sell 1.5 million vehicles and we
:20:09. > :20:12.have manufacturing facilities across Europe including in the UK. The
:20:13. > :20:17.operation is very important and we have a lot of lives at stake as well
:20:18. > :20:23.for employees. We have seen modest growth in Europe but we are really
:20:24. > :20:26.well positioned. We have made increases two years in a row, the
:20:27. > :20:31.cost structure is competitive, we see the automotive industry
:20:32. > :20:36.recovering nicely in Europe and we are committing to making more money
:20:37. > :20:41.this year than last year. On that issue of Europe, it is interesting
:20:42. > :20:45.when it comes to the debate about the UK's continued membership of the
:20:46. > :20:51.European Union. What would it mean for you as a company whether the UK
:20:52. > :20:54.remained in left the European Union? We have been on record many times
:20:55. > :21:02.because of the importance of the EU as an open market, we have 14,000
:21:03. > :21:05.employees in the UK, we build nearly 2 million engines, we have 3,000
:21:06. > :21:11.engineers working on global engineering here in Europe, the UK
:21:12. > :21:17.is the second-largest engineering centre for the -- for the automotive
:21:18. > :21:25.industry. And having that free available in the UK and Europe is
:21:26. > :21:29.critical. We export 85% engines, most of them, to Europe. Any
:21:30. > :21:34.interruption and uncertainty would be a risk for employees. If we talk
:21:35. > :21:42.about the future and driverless cars and that kind of thing, many argue
:21:43. > :21:47.you at Ford are in first gear and your competitor is in fifth. We
:21:48. > :21:52.announced a $5 billion investment in electrification which will be key
:21:53. > :21:59.for compliance and that the new reality of an autonomous car and
:22:00. > :22:05.software. We have experiments, some in London, running our own driver
:22:06. > :22:11.mobility service. It is really interesting learning. We will invest
:22:12. > :22:16.happily in smart mobility. We think there are three areas in Europe
:22:17. > :22:20.difference to North America. Difficult to get the balance right,
:22:21. > :22:23.investing in that while laying people off in Europe. Absolutely,
:22:24. > :22:28.but it is critical because our industry is in the forefront of
:22:29. > :22:34.another disruption. And we absolutely welcome the opportunity
:22:35. > :22:39.for new competitors and for transport is a paid service. We
:22:40. > :22:46.absolutely see that as a growth opportunity for our company. Ford
:22:47. > :22:51.founded the company based on mobility and that idea is different
:22:52. > :22:55.in the next 100 years. And Ford wants to be part of that. And
:22:56. > :23:03.talking of technology, a word on the industry that has been damaged by
:23:04. > :23:07.the reputation of VW when it comes to cheat devices, what is your
:23:08. > :23:13.position? We were very clear up we do not have any devices on our
:23:14. > :23:16.vehicles and we support for the real world emissions driving standards
:23:17. > :23:21.for our industry. Customers need to know how their vehicles will perform
:23:22. > :23:25.in the real world. Our employees, especially in the UK, as the market
:23:26. > :23:29.leader, we are thankful that we reassured them. Good to hear from
:23:30. > :23:34.you. Thank you. Good to meet you.
:23:35. > :23:37.Let's take a quick look at what's making the news
:23:38. > :23:39.Reuters reports that The Trans Pacific Partnership,
:23:40. > :23:45.one of the biggest multinational trade deals ever, has been signed
:23:46. > :23:48.by ministers from its 12 member nations in New Zealand.
:23:49. > :23:50.The New York Times has an interesting report on toxic debt,
:23:51. > :23:52.with research on trillions of dollars of toxic loans
:23:53. > :23:59.While the Washington Post has been looking into coffee pods.
:24:00. > :24:11.Namely, that sales of them are starting to fall in the US.
:24:12. > :24:14.Of the booming for so many years, those machines.
:24:15. > :24:19.And finally, The Telegraph says that Luxembourg has announced ambitious
:24:20. > :24:21.plans to become a hub for asteroid mining.
:24:22. > :24:26.Bronwyn is back to look at the papers.
:24:27. > :24:34.Nice to see you. First of all, toxic doubt, we thought a lot of this had
:24:35. > :24:41.gone away in the sub-prime era but it is back. It never really went
:24:42. > :24:48.away! -- toxic debt. Just clever marketing! That is not true, in the
:24:49. > :24:51.US, we did see them letting banks go bust, other financial institutions,
:24:52. > :24:58.and writing off that debt. In Europe, they fudged it and we saw
:24:59. > :25:02.recently that the Italian banks are in trouble and may need bailing out
:25:03. > :25:11.and there is 1 trillion in debt in Europe alone. It is the China
:25:12. > :25:14.concern and the unknown. It is absolutely the China concern. These
:25:15. > :25:18.estimates, we do not really know. They say in loans and financial
:25:19. > :25:27.assets, it has gone up from seven years ago, nine Chilean has gone.
:25:28. > :25:31.That is staggering. -- nine Chilean. Up to 30 trillion. That is a huge
:25:32. > :25:37.number. And it is half the amount of output in a year. If these numbers
:25:38. > :25:43.are to commit this is very worrying. Time is against us but quick way,
:25:44. > :25:48.that story, Luxembourg mining asteroids, they say it is the way to
:25:49. > :25:52.do it because it has all sorts of natural resources we have run out on
:25:53. > :25:56.Earth including things going in the mobile phones of all things.
:25:57. > :26:08.You heard it here first! We have to go, nice to see you.
:26:09. > :26:14.Good morning. The weather today looks very different from yesterday.
:26:15. > :26:18.Instead of the sunshine and showers, today is milder, accompanied by a
:26:19. > :26:20.lot of