19/02/2016 BBC Business Live


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This is Business Live from BBC News with Victoria Fritz and


Will a deal be done to keep Britain in the European Union?


After the first day of a summit in Brussels ended without agreement,


to be done. Council says much work remains


Live from London, that's our top story Friday 19th February.


Would Britain's exports really suffer if it left the EU?


We continue the business debate over Brexit.


Also in the programme, the car-hire app Uber is losing


a billion dollars a year in China, so says the CEO.


And as always, we'll bring you all the latest


from the financial markets with a mixed.


And we'll be getting the inside track on the fluctuations


in the oil market, we're also going to be talking


about Norway having to dip into its savings pot.


Joining the ranks of Saudi Arabia and Russia all because they ain't


making as much money from oil nowadays.


And as HSBC unveils its new voice and fingerprint technology,


What do you think about the potential demise


Would you miss it or be overjoyed at its demise?


We start once again with the big debate over Brexit,


is Britain's future inside or outside the European Union?


As negotiations continue in Brussels we are focusing


Among the many thorny issues, it's perhaps the one that affects


businesses the most and it's been the subject


Pro-EU campaigners say leaving the EU would be catastrophic,


But the pro-Brexit lobby says that is mere scaremongering.


Let's show you some of the numbers involved.


At the moment, as a bloc, the EU represents Britain's biggest


trading partner, accounting for around half


EU membership gives Britain easy access to the markets of the 27


But also to 68 other nations via free trade deals they hold


In all, that trade is worth a total of 670 billion dollars to the UK,


according to research compiled for the pro-EU lobby.


Now, pro-Brexit campaigners argue that of course,


Britain will continue to do business with all of those countries


and will negotiate new and even better trade terms with them.


To avoid losing out though it would have to agree at least 35


separate trade agreements in a short space of time.


Uwe Combuchen is the Director-General of


the Brussels-based manufacturers' association CEEMET.


We're also joined by John Elliott, founder and chairman of the white


If Britain leaves the EU, is that it? Is that a catastrophe for


British business? Thank you very much for inviting us. CEEMET Is in


the technology based industry. Yes, to reply, it would be a catastrophe,


lose, lose not only for EU manufacturers that manufacturers in


the UK. There is a lot of talk and a lot of emotions floated at the


moment. A lot of myth created. It would be an unfortunate situation if


we took this decision, if we took this decision to make it fit for the


future it would take this decision on the basis of such assumptions.


That is why we commissioned a study, academic research, work which shows


that the effect of the Brexit would be lose -lose situation for


manufacturers in all countries. Negative effect on trade, foreign


direct investment and extremely on productivity particularly for small


and medium-size businesses. I have your point, Uwe. There is a lot of


uncertainty. Nobody really knows. You are a business that contributes


to this X hundred and $70 billion that probably comes into the UK,


John. When we lose that kind of money? -- this $270 billion. I agree


totally. If you give two politicians and economists exactly the same


stats, they will prove something different. Look at it conceptually?


Is it a good idea? It does not make us better off, it is a failed


experiment. It adds cost, bureaucracy and more politicians. It


hasn't worked so far. It will never work. The best thing to do is


negotiate our way out of it. Uwe, Victoria here, in the UK, small


businesses account for about 80% of all economic growth, they are tired


and frustrated and disappointed and immobilised at a system that doesn't


work for them, they say. Isn't it reform within the EU rather than


Britain's relationship with it that is needed? I totally agree. The UK


should be needing this reform in the European Union. We have seen that


competitiveness should be at the top of the argument and here we see also


some positive sites and concrete signs from the European Commission,


for example, that they nominated a first vice president in regulation


response about this issue. In May, last year, he presented an important


and promising better regulation package and a refit agenda. A


stakeholder platform where stakeholders have the opportunity to


contribute to showing where legislation is adding red that has


to be cut. Also, how to improve forthcoming legislation. Is there a


need? Should we simplify existing legislation. S M Es are affected by


this and we invite you to contribute to this discussion and do it from


within the European Union rather than outside the European Union. In


the introduction, you mentioned the effects, positive points of


membership of the European Union from a business perspective, which


is a single market, vast single market. Also, leveraging trade


negotiations currently underway with regard to China. There are massive


positive signs from inside. Finally... Uwe sorry, we will have


to jump in there, we are running out of time. John, if Britain is out,


you will have to make all of these agreements, I know you don't like


the numbers but some suggest you need to make agreement with 35


other... Fine what other organisation needs to make an


agreement with 27 other countries? Should we sell French wine or Scotch


whiskey? How can one organisation to side for 27 different economies, we


will do better ourselves. Most country in the world are outside the


EEA and have done better -- most countries. We would be better off


looking at the world globally -- outside the EU. We did talk about


this, as you both know, for a lot longer. The clock is ticking. Uwe


And John, thank you very much for joining us on business life.


Today is the deadline for US drone owners to register


with the Federal Aviation Administration.


In 2015, more than four million drones were sold around the world,


forcing regulators to take measures to protect safety and privacy.


That's just Aaron. That number of drones going on around the worlds.


Italian luxury brand Gucci reported a 5% increase in sales for the last


Results for the company came in above analysts' expectations,


despite fears that a slowdown in China would hurt


A quick look at the tablets, Uwe could talk, couldn't he? I thought I


did a good job! Uwe Can really talk. Talking about a man talking, Mario


Monti says leave the EU and become a big island. Former Italian Prime


Minister. Some of the comments coming out from our colleagues in


radio this morning, the debate radio this morning, the debate


really is whether or not we should protect producers or consumers.


Seems to be a debate opening up. This will go on and on. We just


mentioned Gucci sales, somewhat vague good news story for the luxury


market, so much concern among those luxury providers or producers, that


they would take big hits with the Chinese slowdown. Less spending.


There you go. Let's find out what is happening with Uber. Making big


losses Uber. , very careless of them. $1 billion per year. Hello,


Tim, he is in Singapore. I was expecting a female. How is Uber


losing money when Uber really doesn't own any thing? It is


interesting, we are so used to hear how much money investors have tipped


into Uber and how it is the world's most valuable start up. In some


markets it is the Redditch it issues or tax opposition but in China it is


competition that is posing the challenge. Guba operates in 40


Chinese cities -- Uber operates. It is losing $1 billion per year


because of a really fierce local rival. Uber Says it is unprofitable


and it is trying to elbow out competition. They say it is bigger


and it has a better network in China. It is now past the break even


point in more than half of the 400 cities it operates in, in China.


There will be fierce competition for some time to come in that market.


The end of a three-day win streak for Wall Street and a slide in oil


prices sent Asian markets into retreat, but not by enough


Japanese shares were the hardest hit as the yen strengthened


Over in Europe, this is how markets have opened this morning.


Not great. The FTSE 100 Anita down a fraction. Let's head over to the US.


Let's head over to the US and hear from Michelle Fleury


about what will making the headlines in the business world


One sign that has been elusive so far and would show the economy is


returning to health is inflation. The US Labor Department releases its


latest consumer price index for January on Friday. The big drop in


energy prices, the data could show a slight decline in overall prices.


The call number which strips out volatile food and energy prices


should show moderate increases. Good news with the consumer Price index


eking out a modest 0.1% gain, the Fed may want to see further progress


but Ford continues to raise rates. Also out this Friday, first-quarter


earnings from agriculture and construction equipment making.


Joining us is Justin Urquhart-Stewart, Co-Founder


Director of Seven Investment Management.


Let's start on something you have been working on, little birdie tells


us. Negative interest rates. I knew there were a handful of central


banks but a bit more than that at the moment. About 25 countries would


seem to have, in terms of value, the economy is negative interest rate in


some form or another in some of their bronze. Negative interest


rate, at its most illogical, but ?1000 into a bank and you get less


coming back out. For the uninitiated watching around the world, the


central banks are saying don't give us your money, we will charge you if


you do this can be reflected in certain kinds of government bonds.


Why would you buy a negative government bond? You don't think it


will get worse, at least you will get something back, you think. The


other issue, central banks trying to say, here we are, trying to get the


economy moving again, we will make the rates even cheaper. The theory


is that it will work but that is not always the case. If it is as cheap


as this, I won't spend anything at all. People aren't buying government


bonds, the only people who benefit from this are good mattress


producers. Before you go, we are seeing a lot of volatility in the


pound. Also falls in the FTSE 100 and big banks like Goldman Sachs


backing the campaign to stay in the EU, how much concern is that in the


financial markets of the threat of Brexit? There is concern that


separate out. Will it affect the main stock markets? No, the FTSE 100


is a global market as much as anything else.


Sterling is likely to be hurt by that or adjusted by that. Maybe


considerably. Then with that you then have Government debt, as well.


If sterling weakens, therefore, you find imports getting more expensive.


Some exports probably better value. There we go. Justin, you will come


back to take us through the newspapers. See you shortly. Still


to come, our economics correspondent is going to take us through the


latest turmoil in the oil markets. You are with Business Live from BBC


News. Millions of UK bank customers


will soon be able to access their accounts using voice


recognition and fingerprint technology in a major rollout


of biometric banking. HSBC says the development means


people will no longer have to remember a password


when they log on online, First Direct customers will be


offered the service within the next few weeks, while those who bank


with HSBC will be able to use it It means customers -


if they choose to use it - will no longer have


to use passwords. All our voices are unique and there


are about 100 characteristics, half are physical, the other half are


behavioural characteristics. So by measuring all those characteristics


the system can determine your voice is really yours. Great, let's do it.


So how would it fare in somewhere like this, a busy office maybe or


how about the BBC newsroom? Let's find out. Hello, this is Ben


Thompson. Hopefully this is going to verify my voice for the test of the


voice recognition system and will let me into my bank account. That


worked. How about somewhere with this with background noise that


could distort my voice. This is Ben... The really noisy one worked,


as well. What if someone is trying to get access to my bank account who


isn't me? Look who I have run into. Simon, let's see if you can get into


my bank account. My name is Ben than son. I would like to transfer all


funds in my account to the account of Simon McCoy. Not sure it's going


very well. It seems to work. Let's move on to other stories. ASDA has


seen its biggest drop in sales ever as the UK supermarket price war


rages on. ASDA says sales have dropped by 5. 8% in the final


quarter of last year after it was hit by rivals' heavy promotions on


beer and wine and fresh produce. The rise of the likes of Lidl and Aldi


continues to be a major problem for traditional high street names.


Looking at some numbers, it's staggering what's going on at the


moment. Some of the comments. I guess, lots of the analysts saying


the strategy for ASDA isn't working at the moment. They're saying that


the option not to go into things like the black Friday sales, for


example, have really come back to bite them. Compared to the year


before. When people went crazy for a telly. Unbelievable.


Our top story: In or out. Discussions in Brussels continue,


kind of going to the wire. We are looking at the question would


British trade suffer if it did come to a Brexit? In the meantime, let's


get the inside track on the oil markets. It's been a busy week for


the oil markets. In recent months we have seen the plunging price of


crude taking a heavy toll on governments and oil companies around


the world. This week there's been developments which suggest that the


slide in wholesale prices might be coming to an end.


Russia and Saudi Arabia have formed plans to freeze their supply to


global markets while an industry report has shown a surprise drop in


US inventories. Let's go straight to Andrew now and


can explain it better than some of that.


Andrew, good to see you, our economics correspondent.


At the beginning we had the meeting. Before the meeting oil price went up


because... Then it went down. Everybody was not going to come on


board. When the markets saw the conclusion of the meeting they took


the view it might not come to anything very much. The conclusion


was we freeze at January levels, don't cut. Freeze, provided others


do like Wise. Others being mainly Iran and Iraq? Those are the really


big ones, especially an issue with Iran. Iraq has already ramped


production up substantially, producing something in excess of


four million barrels a day. Historically Iran has tended to see


itself as a kind of - on a par with Iraq at least. They're producing a


good deal less. Something like more than a quarter below what Iraq is


producing. Of course, as Iran emerges from sanctions it's been an


absolute given that they would want to take advantage and start


producing more oil, selling more oil. The Iranian finance Minister


has been saying things that are vaguely supportive of the initiative


taken by the Saudis, the Russians and Venezuelans, but no commitment


Iran would take part. It's safe to assume Iran is going to take


advantage. OK. An agreement without all is in this case not an agreement


at all? It is striking in this episode of falling oil prices, which


really began back in June 2014, this is the first real tentative stirring


we have seen by producers at trying to take some co-ordinated action. We


have had meetings where you might have expected them to do something,


they have not. Norway, we have seen they have not. Norway, we have seen


Russia, and Saudi Arabia with oil price dipping into - Norway might be


dipping. It's worth about $800 billion. The Central Bank governor,


they're the ones who manage the fund, has been saying he reckon the


value might have peaked now. And he expects the Government to dip into


the tune of something like nine, ten billion dollars this year. They do


say they don't think at this stage they're going to have to sell assets


to generate this cash flow because asset sales by other Sovereign well


funds has been one of the things contributing to the volatility in


stock markets. They reckon in Norway they'll probably be able to do it by


finding cash out of dividends and so forth. Still it's a striking


development. We knew they would dip into it at some stage but it's been


sooner than we expected. Andrew, thank you very much. Now starting


with a few things, here is how to contact us.


We will keep you up to date with all the latest details with insight and


analysis from the BBC's team of editors right around the world.


We want to hear from you too. Get involved on the BBC business


live web page. We are on Twitter and Facebook.


Business Live on TV and online, whenever you need to know.


We have Justin back and we will have a quick look at some stories making


the business headlines. I want to talk to you again about what's going


on with HSBC and this voice recognition. We saw this story about


Ben showing us that it tuz work. I am sceptical about this. Because


most voice recognition technology, you end up with people being angry


shouting at devices. You will have to test it on Jon Culshaw, an


impersonator and see if he can test it. It's whether it is fingerprints,


whether it's the voice. We have bad enough trouble with the supermarket,


at least I do. Unexpected item in the bagging area. I have an argument


with an inanimate object and expect it to speak to me. I get worked up


with it. I am sure it will work most of the time, except when you really


want it to work and you are under pressure. You are probably trying to


do something else at the same time and it's not working. At that stage


what do you want to do? Speak to somebody. It will be like one of


those, when voice recognition, find me Victoria's address and find me


Bob's address? No! It makes you wonder what he does in his spare


time! Let's move on, shall we. A story in the FT, this is the art


market. Apparently the big auction houses are facing a shortage of


masterpieces and it's a real problem for them. I have offered them all I


possibly can, I have none left! The walls are empty. It wasn't too long


ago when we had both Sothebies and Christies were being convicted for


illegally fixing the prices and so I am always suspicious. They make


money on the way in and the way out. Now you have a competition called


online. People can find commissions are cheaper and it's easy to use and


you don't go through the show. So also there is a change going on. In


China they don't want all these smart western goods, they want


Chinese goods and so the demand for these really is beginning to come


off and people realise I am not spending that fee for that sort of


service. As an investment, it has waned a little. It was big in the


financial crisis. People like a solid asset to deal with. It's not


very liquid. Therefore No time for the third money. Doesn't


Have a great weekend. Always a pleasure. That's it from us today.


More business news throughout the day and the web page and World News.


See you soon. Have a lovely weekend. Hello. We start the morning on a


cold, frosty start and bright with sunshine but gradually clouds


increasing across western areas and will bring wet and windy weather


across the UK. We could see gales across coastal areas


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