:00:09. > :00:15.Hello this is business live from the BBC. The world's top central bank
:00:16. > :00:19.and the world's biggest economy, the US Fed takes centre stage again as
:00:20. > :00:23.it wraps up its interest rate meeting. Live from London, it is our
:00:24. > :00:39.top story on Wednesday the 16th of March.
:00:40. > :00:45.It is the big one, the US Federal reserve meeting wraps up, with
:00:46. > :00:49.insight into the health of the biggest economy and global growth.
:00:50. > :00:55.Also in the programme, balancing the books, it is budget day in the UK
:00:56. > :01:02.cuts and tax rises over worrying cuts and tax rises over worrying
:01:03. > :01:08.over the global economy. This is the London stock exchange, and Deutsche
:01:09. > :01:13.Post, agreeing to a merger, we will look at what they call a merger of
:01:14. > :01:18.equals. And it has got a cult following, so we will look at the
:01:19. > :01:23.man behind the Brompton foldable bike, but will the man behind the
:01:24. > :01:29.expansion plan reap the rewards? We will talk to him very soon. Also do
:01:30. > :01:41.get in touch with us, use the hashtag.
:01:42. > :01:48.Hello to you, a warm welcome. We are starting the day in America where
:01:49. > :01:52.the world's largest central bank, the US Federal reserve NZ stay
:01:53. > :01:55.meeting. Investors will be looking at that very closely for insights
:01:56. > :02:00.into the health of the world's biggest economy and for grow ball
:02:01. > :02:05.growth. He, we will scrutinise every word used by Janet Yellen, for the
:02:06. > :02:12.path of interest rates, known as a. Plot. And for the American economy.
:02:13. > :02:16.The Fed raised the cost of borrowing in December for the first time in a
:02:17. > :02:21.decade. For the first time it hinted that rates could go up four more
:02:22. > :02:26.times this year but many economists are now predicting, that two or
:02:27. > :02:30.three in 2016. Recent data has shown that the US economy is in pretty
:02:31. > :02:36.good health with inflation and jobs figures continuing to get stronger.
:02:37. > :02:41.I am joined by Professor Richard Portis who is an economist at the
:02:42. > :02:45.London business School. Welcome to the programme. You are with the vast
:02:46. > :02:51.majority who believes in no interest rate change today, what will Janet
:02:52. > :02:55.Yellen say? I'm with the consensus on that, I think that she will say
:02:56. > :03:00.that there is probably no balance of risk statement which they omitted in
:03:01. > :03:05.January which was quite significant. And that suggests that there is a
:03:06. > :03:11.real disagreement within the Federal open market committee. I will
:03:12. > :03:16.elaborate on that in the moment. She will also communicate, they will
:03:17. > :03:20.communicate what their plot is, their projections by the market
:03:21. > :03:24.community members of where they think interest rates will be in
:03:25. > :03:30.three months, in six months, in nine months and so forth. It is not the
:03:31. > :03:37.same as the market but it gives us an insight into how they are
:03:38. > :03:42.evaluating the risks. What is the disagreement? The disagreement is
:03:43. > :03:45.really about substantively, it is about inflation expectations, and
:03:46. > :03:53.the state of the labour market and there are disagreements partly
:03:54. > :03:56.arising from the date. There is real confusion on the data about
:03:57. > :04:03.inflation expectations, and different measures and so forth. But
:04:04. > :04:08.the labour market, again we don't know how much slack there is in the
:04:09. > :04:12.US labour market. You can say goodness, unemployment is very low,
:04:13. > :04:17.but then there is still a lot of people out of the labour force who
:04:18. > :04:22.were there, before the crisis. So it is quite hard to read how healthy
:04:23. > :04:27.the US economy is, so for that reason patients will be the message
:04:28. > :04:31.that we will get today? Not just for that reason, it is hard to read and
:04:32. > :04:35.there is substantive disagreement among members of the committee. On
:04:36. > :04:39.the one side you might say is Stanley Fischer and several others
:04:40. > :04:46.who I can name if you wish, and on the other side, is Lionel braid, who
:04:47. > :04:50.will be making the case for great caution, because she is concerned
:04:51. > :04:55.about the inflation expectations. And the state of the global economy.
:04:56. > :05:01.You might member that if you weeks ago, the IMF just before the G20's
:05:02. > :05:06.summit, the IMF warned about the risks, the major risks in the global
:05:07. > :05:08.economy. The T20 did nothing. Team might still think there is cause for
:05:09. > :05:13.concern. Thank you so much for sharing your
:05:14. > :05:17.thoughts on that. As soon as we do get any news, from the federal
:05:18. > :05:26.reserve we will bring it to you. Deutsche Boerse says it has
:05:27. > :05:28.reached a merger agreement It says it sees additional potential
:05:29. > :05:32.cost savings of almost 500-million dollars a year
:05:33. > :05:34.for the combined company. The german exchange said its saw
:05:35. > :05:36.potential cost savings of 450 million euros
:05:37. > :05:38.($499 million) per year Unemployment in South Korea hit
:05:39. > :05:50.a five-year high in February It was higher than economist
:05:51. > :05:53.expected, due to shrinking manufacturing and construction
:05:54. > :05:57.sectors. Apple has said the Founding Fathers
:05:58. > :06:00.of the US would 'be appalled' by the ongoing battle
:06:01. > :06:02.between the technology giant and the US government over access
:06:03. > :06:04.to an encrypted mobile phone. The FBI wants Apple to develop
:06:05. > :06:07.software so it can unlock the iPhone which belonged to one of the gunmen
:06:08. > :06:17.involved in the San Bernadino Plenty more stories on the business
:06:18. > :06:23.line website, it is dominated by the UK budget as you can see, that is
:06:24. > :06:26.our Chancellor or finance minister if you prefer Chancellor George
:06:27. > :06:32.Osborne of course. You can see plenty more about that. Other
:06:33. > :06:36.stories feature China backing a new five-year economic plan, we will
:06:37. > :06:43.have more details about that. Also, Amazon is investigated for alleged
:06:44. > :06:48.tax evasion in Italy, and Spain. Amazon responding to a statement
:06:49. > :06:53.saying that it pays all applicable taxes in every juror sticks and were
:06:54. > :06:54.it operates including Italy. Once again, Amazon hitting the headlines
:06:55. > :06:59.for all of the wrong reasons. In Asia, China's annual
:07:00. > :07:01.National People's Congress has ended, with the country's leader
:07:02. > :07:12.pledging to keep the country's What else did we learn? We have
:07:13. > :07:17.heard the sort of statements before and they have pledged some ambitious
:07:18. > :07:22.targets, flesh this out, what did we hear? Guillem act you can probably
:07:23. > :07:27.see the dreadful smog behind me, that is one issue on the minds of
:07:28. > :07:34.China's leader. As they close the session. But it is the economy that
:07:35. > :07:37.has dominated proceedings, and it dominated the closing press
:07:38. > :07:41.conference of the Premier, he spoke about the challenges and
:07:42. > :07:47.opportunities. He insisted that it was possible for China to both carry
:07:48. > :07:49.out difficult reforms, reduce overcapacity, reformed those
:07:50. > :07:55.inefficient state-owned enterprises and at the same time as all of that,
:07:56. > :07:59.keep hitting that growth target of 6.5% every year for the next five
:08:00. > :08:03.years. That is an extraordinary ambitious plan, there are many
:08:04. > :08:07.people who have their doubts and their is one thing that you are left
:08:08. > :08:12.with at the end of the session, that is the lack of scrutiny. Those in
:08:13. > :08:17.the parliament but also in the press conference, in which all questions
:08:18. > :08:25.were vetted in advance. So we heard him arguing in that very same event,
:08:26. > :08:29.for more media scrutiny. John, thank you for the details of what we have
:08:30. > :08:32.heard in what is always an interesting statement, the question
:08:33. > :08:37.is whether the market will believe what they have heard. You can see
:08:38. > :08:41.the nick a ending down on the day, and a similar picture in Hong Kong.
:08:42. > :08:48.But there are only one or two stories in town, it is the US
:08:49. > :08:54.Federal reserve, that investors will be keeping an eye on. In the UK,
:08:55. > :08:59.there is budget day, so it will have big imprecations for the equity
:09:00. > :09:02.markets, particularly the FTSE, in terms of spending and taxation. We
:09:03. > :09:07.will talk about that in a bit more detail but let us head to Wall
:09:08. > :09:13.Street, and speak to Michele Ferrari who will be talking about what is
:09:14. > :09:17.happening ahead. All eyes are on the Federal reserve, at least on Wall
:09:18. > :09:23.Street, they are on autopilot until the result of the US central bank
:09:24. > :09:30.lost a policy meeting are out, cute expect any changes in the rates,
:09:31. > :09:33.they will be scaring Janet Yellen's comments for clues, about how likely
:09:34. > :09:38.a move in June is. Rising prices would lay a foundation for that and
:09:39. > :09:42.an uptake in one measure of inflation is expected this
:09:43. > :09:46.Wednesday. But a second report on industrial production may paint a
:09:47. > :09:52.gloomy picture of the economy. In terms. To keep an eye on, watch out
:09:53. > :09:57.for Valiant shares, the embattled maker plunged more than 20% after it
:09:58. > :10:02.said that it might default on its debt, and cut its revenue forecast.
:10:03. > :10:07.That prompted an activist investor to say that his hedge fund would
:10:08. > :10:14.take a much more proactive role to try and protect its loss-making
:10:15. > :10:24.investment that is Michele in New York, Amy is with us, he is a
:10:25. > :10:28.manager at PIMCO. Guillem act two things that are focusing investor's
:10:29. > :10:32.mind, one, which will have more of an impact on weight UK market will
:10:33. > :10:38.go, which is the Fed that we were talking about earlier. For us, as
:10:39. > :10:43.individuals the budget is key. So on the one hand, you have got the Fed
:10:44. > :10:46.who will try and talk up the US economy and hopefully the global
:10:47. > :10:51.economy and will say that hopefully things are still OK and they look to
:10:52. > :10:55.raise rates in the months ahead ideally, an George Osborne will say,
:10:56. > :11:00.that things are a bit trickier from my seat so I will worry about the
:11:01. > :11:04.global outlook. A little bit of a balancing act. Our senses that
:11:05. > :11:11.things are generally OK but a bit of both. Budget day in the UK, clearly
:11:12. > :11:14.we will be live to gnat that pretty closely, it is about the direct
:11:15. > :11:17.coronation that will have on the stock markets because there are
:11:18. > :11:21.certain firms that will benefit on it very well. Spending on
:11:22. > :11:27.infrastructure, others can suffer if there is a rise on tax, things like
:11:28. > :11:30.petrol in the spotlight, cigarettes, syntaxes as they are called.
:11:31. > :11:33.Different parts of industry like insurance could be hit? That is
:11:34. > :11:36.right, you have really hit the nail right, you have really hit the nail
:11:37. > :11:40.on the head with the budget, the budget will know the broad brush
:11:41. > :11:45.approach, to try and keep spending down and to try and keep the deficit
:11:46. > :11:48.down so it will be about individual sectors, and I suspect, things like
:11:49. > :11:54.petrol duty, it does look like quite a popular one. OK, you will return
:11:55. > :12:00.in five-minute time to talk about some other stories in business. In
:12:01. > :12:05.the meantime, a folding fortune, we meet the man behind the cult folding
:12:06. > :12:11.bike, the Brompton. We will try and do that live. The firm has big plans
:12:12. > :12:21.overseas so the question is, can it keep the wheels turning? First more
:12:22. > :12:24.on the budget and down unusual look ahead from Steph McGovern.
:12:25. > :12:30.Come rain or shine, every spring the chance presents Britain with a
:12:31. > :12:34.budget, a plan for the country's future which involves a fair bit of
:12:35. > :12:39.forecasting. This time last year, the outlook was pretty sunny for our
:12:40. > :12:44.economy, but it seems that the forecasts were off the mark and in
:12:45. > :12:50.the Chancellor 's own words, there are storm clouds gathering. Growth
:12:51. > :12:57.this year, is cooling, with a 2.5% predicted, more likely to be 2.2%.
:12:58. > :13:03.One of the pressure is bringing in those storm clouds is coming from
:13:04. > :13:07.the East. China is like the sun, it has been relied on for its warmth to
:13:08. > :13:13.warm up the world, it has not been as hot as it would have been like so
:13:14. > :13:18.we have not grown as much, it has also caused turmoil in the financial
:13:19. > :13:21.markets, so we have not sold off our stake in Lloyds because we didn't
:13:22. > :13:26.think we would have a good enough price. If the economy is not growing
:13:27. > :13:31.as fast, the economy will be taking as much money as it hoped from tax,
:13:32. > :13:36.making it tougher for the Chancellor to balance the books by 2020. The
:13:37. > :13:41.calls of this we are expecting to hear today about more spending cuts,
:13:42. > :13:46.it is not all gloom though, and there are some warm fronts. One ray
:13:47. > :13:51.of sunshine has come from changes to the interest that the government
:13:52. > :13:58.pays on its debts, giving us an extra ?27 billion. Also there are
:13:59. > :14:03.more people on work than ever before, 31 million and fewer people
:14:04. > :14:06.claiming benefits. But critics argue that the employment statistics are
:14:07. > :14:09.not as sunny as they look with some of the growth coming from part-time
:14:10. > :14:14.work and wages are not growing as fast as expected. It is likely to
:14:15. > :14:21.mean that we will see some tax rises to make up that shortfalls such as
:14:22. > :14:25.some possible rises in fuel duty, and more so-called syntaxes. But
:14:26. > :14:30.like a lot of forecast it is a mixed picture. Either way the Chancellor
:14:31. > :14:36.has said that there will be more austerity, so unprotected government
:14:37. > :14:39.departments are likely to have to make more savings. That brings you
:14:40. > :14:46.up to date with the weather on budget day. What is this? And Q.
:14:47. > :14:49.And you can keep abreast of the budget as it happens
:14:50. > :14:51.in our special programme with Huw Edwards at 11:30 on this
:14:52. > :14:53.channel and BBC2 and of course BBC online.
:14:54. > :14:58.Our top story: The world's top central bank and the world biggest
:14:59. > :15:01.economy - no wonder the US Fed takes centre stage today as it wraps
:15:02. > :15:07.And we'll see what Fed boss Janet Yellen has to say
:15:08. > :15:10.about the path of interest rates, the health of the US economy
:15:11. > :15:26.And now let's get the inside track on a British company that's cornered
:15:27. > :15:34.the market for upscale commuter bikes.
:15:35. > :15:38.Brompton's folding bike has a bit of a cult following,
:15:39. > :15:40.its a familiar sight in the capital's streets and tucked
:15:41. > :15:51.It was designed and built by Andrew Ritchie in 1975
:15:52. > :16:02.The bikes are British made - Brompton is the UK's largest bike
:16:03. > :16:08.manufacturer, churning out more than 45,000 per year.
:16:09. > :16:11.With a headcount of 240, the firm sells its bikes all over
:16:12. > :16:18.Now, more than three-quarters of sales are overseas.
:16:19. > :16:20.Here with us in the studio is Will Butler-Adams,
:16:21. > :16:25.Chief Executive of Brompton Bicycle.
:16:26. > :16:34.Now, you started out, your career, you are an engineer and you were
:16:35. > :16:42.working in the chemicals industry, how did you become the boss of
:16:43. > :16:46.Brompton? I was looking after chemical plants in Middlesbrough and
:16:47. > :16:52.I thought I was going go and be trendy and do an M BA and go to
:16:53. > :16:57.consultancy and in the midst of that I sat on a bus when I was visiting
:16:58. > :17:04.London and it turned out that the man I sat next door to was the best
:17:05. > :17:11.friend at university of the inventor of the Brompton. I got chatted and I
:17:12. > :17:18.sounded interesting. I wept to the factory and saw a very cool product
:17:19. > :17:25.and I whizzed around on and I saw the factory that was like something
:17:26. > :17:33.stuck in the 50s and I thought this looks loads more fun and I got stuck
:17:34. > :17:38.into making bikes. It is the design that is iconic and one that people
:17:39. > :17:42.who don't have the space to store it and you can carry it around with
:17:43. > :17:48.you. There is a hefty price tag, but it is the fact you can carry it
:17:49. > :17:53.around and I'm going to try and assemble this bike. That is the bit
:17:54. > :18:01.that people struggle with. Ben will try and unfold the bike. It is not
:18:02. > :18:09.cheap. You're looking at ?750 to ?1,000. Yes The unique selling point
:18:10. > :18:12.is you can carry it around. Yes, what is happening, we are moving
:18:13. > :18:17.into cities and people are moving into cities and we are not that
:18:18. > :18:22.happy. We are getting shoved down a little hole and going on tube and
:18:23. > :18:27.not doing enough exercise and once you start getting on a bike, and
:18:28. > :18:33.exploring your city, you find there is wonderful things to do and you
:18:34. > :18:38.get fitter, but you need a bike that is flexible. Oh, my Lord, here he
:18:39. > :18:44.goes. Not looking bad. I have got the handlebars. It is meant to be
:18:45. > :18:56.less than 10 seconds. This is the kind of bike we see. He is six foot
:18:57. > :19:03.7! Here we go. Nearly! Very good. That is it. Yes. There is a hinge
:19:04. > :19:08.that you have forgotten to clamp, so you will probably fall off. But now
:19:09. > :19:12.you're ready to go. How much research and development went into
:19:13. > :19:17.this? A lot of work is involved to get it to this stage and once you
:19:18. > :19:26.have that design you can replicate it around the world. To a point, the
:19:27. > :19:31.bike is different to what Andrew built, but the design has changed.
:19:32. > :19:38.If you look at great iconic design, the design doesn't change, but
:19:39. > :19:46.material, science, engineering allows us to optimise it. It is
:19:47. > :19:51.lighter and more efficient. The original design is still there. Yes.
:19:52. > :19:58.That is what makes it so poop you already. -- popular. But the last
:19:59. > :20:04.year, you didn't sell as many and your profits fell yet, you're
:20:05. > :20:09.investing in a massive way on further expansion and new ideas for
:20:10. > :20:14.the bike becoming an electric version. Just talk us through that.
:20:15. > :20:22.There is a worry that you're investing a lot, spending a lot when
:20:23. > :20:27.you're getting less in. We have grown for the last three to five
:20:28. > :20:32.years, but we are investing for the future. There are two main strands.
:20:33. > :20:39.One is that in northern Europe in particular there is a movement in
:20:40. > :20:46.the urban area to electric. They're not motor cycles, most of the time
:20:47. > :20:53.it does nothing and it you hit Notting Hill as it gives you help.
:20:54. > :20:57.You don't sweat. Now the image, you mentioned Notting Hill. It is a
:20:58. > :21:04.feeling that it is a very London bike. BBC manager bike! It featured
:21:05. > :21:13.in that spoof doctmentry. -- documentary. How do you deal with
:21:14. > :21:19.that image, it is expensive and used in cities. We want to make a product
:21:20. > :21:25.that works. Doesn't work just the day you buy it, by five, ten, 15
:21:26. > :21:29.years later. We are not spending millions nurturing our image. We
:21:30. > :21:36.just make a flipping good product. If it works it will be useful for
:21:37. > :21:42.this, that and the other person. In most major cities, it is very
:21:43. > :21:46.dangerous to get on a bicycle. Well it isn't. Well it is, I know people
:21:47. > :21:50.who have been knocked off. But we know people who have had accidents
:21:51. > :21:55.in their cars. The perception is worse than the reality. If you talk
:21:56. > :21:59.to people about burglaries and all sorts of things, they think it is
:22:00. > :22:04.worse than it is, BP it is getting better. In London safety is going
:22:05. > :22:07.up, because more people are cycling. It has been a pleasure to have you
:22:08. > :22:15.on the programme. Is that your bike? Yes. And my aim is not to break it.
:22:16. > :22:21.I'm feeling smug I did that, people say it is difficult to put up and
:22:22. > :22:26.you see people struggling with them. Less than #10shgs maybe 15 seconds,
:22:27. > :22:32.I think there is a market here. Do I get a badge? Ben got that job not
:22:33. > :22:37.me. It would have taking me half an hour. We have more comment on the
:22:38. > :22:49.elections in the United States this morning. It is the morning after
:22:50. > :22:51.super Tuesday two. Trump and Hillary Clinton boosted their chances in the
:22:52. > :22:56.White House race. It's early days yet,
:22:57. > :22:58.so we've not heard much yet on the economic plans
:22:59. > :23:00.from the presidential hopefuls. But there has been some debate
:23:01. > :23:02.about the vast powers That was a question I put
:23:03. > :23:06.to Ted Roosevelt Malloch, Fellow in Management Practice
:23:07. > :23:14.at the Said Business School. There is animosity on some extreme
:23:15. > :23:17.sides of Republican Party and the Democratic Party about the Fed and
:23:18. > :23:22.its power and control over the economy. I don't think that it is
:23:23. > :23:27.very likely that one would challenge that independence. But they do
:23:28. > :23:38.operate in a politicised environment and it is an election year I would
:23:39. > :23:47.think there would be caution on part of FMOC, they won't be moving
:23:48. > :23:52.quickly. Sorry we were still chatting between ousts. Mike is
:23:53. > :24:00.back. To talk through some of the paper storieses. We were going to
:24:01. > :24:08.talk about the budget but we have talked about it a lot. Now Forex.
:24:09. > :24:14.The big inquiry that has been going on with the Serious Fraud Office no
:24:15. > :24:19.longer happening. No, the challenge here and they have dropped the case
:24:20. > :24:24.if they think, in the article they say, they think there is wrong-doing
:24:25. > :24:30.that has been done, but they can't get enough evidence to pursue the
:24:31. > :24:34.case. That is bad news. The good news is that there have been some
:24:35. > :24:40.significant fines for the banking industry on that. If wrong-doing was
:24:41. > :24:46.done, it is not like the banks have off got free. It will be a
:24:47. > :24:53.perception issue. There is that debate among the public about
:24:54. > :24:58.whether banks got off Scott free during the banking crisis. I
:24:59. > :25:01.wouldn't underestimate the discussion in the city, you have the
:25:02. > :25:06.Bank of England and the Government, with a massive review of market
:25:07. > :25:13.behaviour led by one of deputy governors. The city is aware of it,
:25:14. > :25:18.but the perception is not good. Businesses insider is looking at
:25:19. > :25:24.that investors in Iran are looking to London property to add to their
:25:25. > :25:27.assets. Yes as the sanctions come down, Iranian investors will want to
:25:28. > :25:32.diversify and there is speculation they will put money into London.
:25:33. > :25:38.That I suspect is good news if you look along the London skyline. There
:25:39. > :25:47.not a shortage of property for sale. Thank you. We appreciate you coming
:25:48. > :25:51.in on such a busy day. We will be following the budget. Full coverage
:25:52. > :26:10.across the BBC today. We will see you soon. Goodbye.
:26:11. > :26:18.For some a day of gloomy skies, but for many after a grey start, more
:26:19. > :26:22.sunshine than yesterday. That sunshine comes in the wake of this
:26:23. > :26:24.cold front that has