19/02/2016 BBC Business Live


19/02/2016

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This is Business Live from BBC News with Victoria Fritz and

:00:08.:00:09.

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

:00:10.:00:16.

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

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to be done. Council says much work remains

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

:00:25.:00:41.

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

:00:42.:00:46.

We continue the business debate over Brexit.

:00:47.:00:49.

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

:00:50.:00:57.

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

:00:58.:01:00.

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

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from the financial markets with a mixed.

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

:01:09.:01:13.

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

:01:14.:01:15.

about Norway having to dip into its savings pot.

:01:16.:01:17.

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

:01:18.:01:20.

making as much money from oil nowadays.

:01:21.:01:29.

And as HSBC unveils its new voice and fingerprint technology,

:01:30.:01:31.

What do you think about the potential demise

:01:32.:01:35.

Would you miss it or be overjoyed at its demise?

:01:36.:01:38.

We start once again with the big debate over Brexit,

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

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As negotiations continue in Brussels we are focusing

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

:01:59.:02:02.

businesses the most and it's been the subject

:02:03.:02:04.

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

:02:05.:02:12.

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

:02:13.:02:18.

Let's show you some of the numbers involved.

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

:02:23.:02:26.

trading partner, accounting for around half

:02:27.:02:27.

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

:02:28.:02:32.

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

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

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according to research compiled for the pro-EU lobby.

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Now, pro-Brexit campaigners argue that of course,

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Britain will continue to do business with all of those countries

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

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

:03:03.:03:05.

separate trade agreements in a short space of time.

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Uwe Combuchen is the Director-General of

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the Brussels-based manufacturers' association CEEMET.

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

:03:20.:03:24.

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

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

:03:53.:04:01.

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

:04:02.:04:07.

lose, lose not only for EU manufacturers that manufacturers in

:04:08.:04:14.

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

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

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

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

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

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

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manufacturers in all countries. Negative effect on trade, foreign

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direct investment and extremely on productivity particularly for small

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

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

:05:09.:05:13.

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

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

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

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

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

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

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

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

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

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

:06:02.:06:07.

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

:06:08.:06:11.

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

:06:12.:06:17.

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

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

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some positive sites and concrete signs from the European Commission,

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

:06:32.:06:36.

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

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and promising better regulation package and a refit agenda. A

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stakeholder platform where stakeholders have the opportunity to

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contribute to showing where legislation is adding red that has

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

:07:00.:07:04.

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

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

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

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the introduction, you mentioned the effects, positive points of

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membership of the European Union from a business perspective, which

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

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negotiations currently underway with regard to China. There are massive

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

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

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

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

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

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

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

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

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

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

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

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

:08:42.:08:45.

Today is the deadline for US drone owners to register

:08:46.:08:49.

with the Federal Aviation Administration.

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

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forcing regulators to take measures to protect safety and privacy.

:08:57.:09:01.

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

:09:02.:09:13.

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

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Results for the company came in above analysts' expectations,

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despite fears that a slowdown in China would hurt

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

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

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

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

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

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

:10:00.:10:03.

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

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

:10:13.:10:18.

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

:10:19.:10:21.

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

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

:10:29.:10:37.

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

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

:10:46.:10:51.

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

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

:10:59.:11:01.

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

:11:02.:11:08.

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

:11:09.:11:12.

competition that is posing the challenge. Guba operates in 40

:11:13.:11:18.

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

:11:19.:11:23.

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

:11:24.:11:29.

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

:11:30.:11:36.

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

:11:37.:11:41.

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

:11:42.:11:47.

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

:11:48.:11:52.

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

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prices sent Asian markets into retreat, but not by enough

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Japanese shares were the hardest hit as the yen strengthened

:11:59.:12:02.

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

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

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

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about what will making the headlines in the business world

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

:12:25.:12:34.

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

:12:35.:12:36.

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

:12:37.:12:41.

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

:12:42.:12:47.

The call number which strips out volatile food and energy prices

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

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

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

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earnings from agriculture and construction equipment making.

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Joining us is Justin Urquhart-Stewart, Co-Founder

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Director of Seven Investment Management.

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

:13:21.:13:29.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

:14:53.:14:56.

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

:14:57.:15:01.

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

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

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is a global market as much as anything else.

:15:10.:15:14.

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

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

:15:22.:15:26.

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

:15:27.:15:30.

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

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

:15:35.:15:40.

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

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

:15:45.:15:45.

News. Millions of UK bank customers

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will soon be able to access their accounts using voice

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recognition and fingerprint technology in a major rollout

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of biometric banking. HSBC says the development means

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people will no longer have to remember a password

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when they log on online, First Direct customers will be

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

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

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if they choose to use it - will no longer have

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to use passwords. All our voices are unique and there

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

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behavioural characteristics. So by measuring all those characteristics

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

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

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

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

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

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worked. How about somewhere with this with background noise that

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

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

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

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

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

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

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

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

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

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

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

:17:57.:18:00.

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

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

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

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

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

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

:18:21.:18:31.

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

:18:32.:18:37.

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

:18:38.:18:40.

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

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

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

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crude taking a heavy toll on governments and oil companies around

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

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slide in wholesale prices might be coming to an end.

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

:19:07.:19:11.

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

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

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can explain it better than some of that.

:19:24.:19:27.

Andrew, good to see you, our economics correspondent.

:19:28.:19:32.

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

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

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

:19:42.:19:44.

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

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

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

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

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production up substantially, producing something in excess of

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

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

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

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

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absolute given that they would want to take advantage and start

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

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has been saying things that are vaguely supportive of the initiative

:20:41.:20:50.

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

:20:51.:20:53.

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

:20:54.:20:59.

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

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

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

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

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

:21:20.:21:23.

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

:21:24.:21:32.

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

:21:33.:21:39.

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

:21:40.:21:43.

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

:21:44.:21:48.

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

:21:49.:21:55.

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

:21:56.:22:00.

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

:22:01.:22:06.

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

:22:07.:22:10.

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

:22:11.:22:13.

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

:22:14.:22:17.

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

:22:18.:22:20.

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

:22:21.:22:27.

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

:22:28.:22:35.

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

:22:36.:22:40.

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

:22:41.:22:43.

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

:22:44.:22:49.

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

:22:50.:22:58.

live web page. We are on Twitter and Facebook.

:22:59.:23:02.

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

:23:03.:23:09.

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

:23:10.:23:15.

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

:23:16.:23:20.

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

:23:21.:23:27.

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

:23:28.:23:31.

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

:23:32.:23:35.

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

:23:36.:23:42.

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

:23:43.:23:47.

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

:23:48.:23:51.

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

:23:52.:23:56.

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

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

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

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

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

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

:24:22.:24:27.

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

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

:24:33.:24:38.

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

:24:39.:24:41.

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

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

:24:48.:24:55.

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

:24:56.:25:00.

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

:25:01.:25:05.

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

:25:06.:25:09.

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

:25:10.:25:14.

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

:25:15.:25:19.

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

:25:20.:25:23.

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

:25:24.:25:26.

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

:25:27.:25:31.

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

:25:32.:25:35.

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

:25:36.:25:43.

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

:25:44.:25:47.

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

:25:48.:25:55.

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

:25:56.:25:57.

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

:25:58.:26:13.

cold, frosty start and bright with sunshine but gradually clouds

:26:14.:26:15.

increasing across western areas and will bring wet and windy weather

:26:16.:26:20.

across the UK. We could see gales across coastal areas

:26:21.:26:21.

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