16/06/2016 BBC Business Live


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President Vladimir Putin and European Commission President


Jean-Claude Juncker hold talks at Russia's economic forum


as sanctions hit trade by tens of billions of dollars a year.


Also in the programme: The Yen rises to a 21-month high as Japan's


central bank decides against expanding its massive


And the Fed has cited uncertainty over the job market there and the UK


referendum on Europe. Here is how it looks on the first hour of trade.


And how to feed a growing global population?


As the cost of growing meat in laboratories falls,


is it really the future for food production?


We'll get the inside track on what's known as cellular agriculture.


So, that's what we want to know - would you eat a burger


Does it send a shiver down your spine?


Absolutely, an interesting debate. Would you eat a burger grown in a


lab? Let us know. We start today in Russia,


where President Putin is set to welcome business and political


leaders from around the world for And his biggest meeting


today is with this man, Jean-Claude Juncker, the president


of the European Commission. It's the first visit by the EU chief


to Russia since the EU imposed sanctions after Russia annexed


Crimea two years ago. The EU's sanctions put


restrictions on investments, the energy sector and export


of military equipment. Russia retaliated and imposed


sanctions on European food exports. Last year, trade continued to shrink


dramatically between Russian exports to the EU fell


by more than $52 billion, But the EU has also been hit


by Russia's retaliatory sanctions, Exports are down $32 billion last


year, just over 28%. The current EU sanctions come


to an end next month but are expected to be


renewed because of ongoing In a speech on Wednesday,


the German Finance Minister explained why the sanctions should


stay in place. This is a non-negotiable


requirement for Russia, There can be no return to normal


relations if Russia behaves contrary Europe must uphold the lesson


from its history that international law is an indispensable tool


for maintaining peace. Lilit Gevorgyan, Russia analyst


at IHS Global Insight, is with me. Lovely to see you. Interesting,


isn't it? This economic Forum is an annual event often used by Russia as


a bit of a tool to get its message out there. Jean-Claude Juncker is


going this time, why do you think that is? I think this is part of the


European Union carrot and stick tactics. On one hand they have


clearly stated that despite disagreements within the European


bloc there will be an extension of sanctions against Russia at least


for another six months. On the other hand when the European Commission


president is visiting this high-level forum, it's basically


for as long as there is a mutual for as long as there is a mutual


understanding why the sanctions have been imposed and what has to be done


for them to be gradually ruled out. Then was outlining some of the


numbers, it is clear these sanctions are biting hard for Russia and the


European Union both. Russia will try to get its message across that as an


economy they are still in an OK place in spite that. Your take on


that? They have two present figures that will support this presentation


of the Russian economy doing OK. Because on paper the figures are


showing that it is not really doing OK. Fair enough it did not contract


as much as some economists were fearing. But there was still


contracting in the first quarter of 2016. And this was a result, as you


mentioned, of sanctions, but also falling and a malingering fall in


crude oil prices. So, double trouble for the Russian economy. Of course


there will be some green shoots. And statistical low base is another


reason that you will see some improvement in numbers but would


disagree that Russia is out of the woods. In terms of the sanctions


themselves from Europe's point of view, they are actually discussing


this issue next week, European leaders. They expire or are renewed


at the end of July. We are assuming they will be renewed. There has been


strong signals from the European Union that they will be continuing


with the sanctions, at least with current sanctions until the end of


the year. However, what we are also seeing is that some of those


European Union members who are against the sanctions because they


have suffered more than others, they argue that perhaps it is time to


start an incremental decrease of these sanctions. I think from a


Russian perspective they would be quite happy with one sector being


released from that, the financial one. Because that has really had an


impact on the Russian economy. I think within six months we will see


some improvement but it will be very slow improvement in EU Russia


relations. As ever we appreciate your insight. Thanks for coming in.


The yen rose to a 21-month high against the dollar


after the Bank of Japan decided to keep its 80 trillion yen


The central bank stuck to its optimistic view


of the economy, even as fears over Britain's future in the EU hit


America's Central Bank kept interest rates on hold


at between 0.25% and 0.5% because of an uncertain jobs market.


Fed Chair Janet Yellen said a possible UK vote to leave


the European Union was one of the factors deterring them


She called it "a decision that could have consequences for economic


and financial conditions in global financial markets".


Chinese taxi hailing app Didi Chuxing says it's raised


$7.3 billion from investors in its latest round of fund raising.


That values the company at more than $25 billion -


according to the Wall Street Journal.


Didi is trying to fend off the arrival of US rival Uber


into the Chinese market, which it currently dominates.


It recently won a billion dollar investment from Apple.


If you are watching in China and I mispronounced that completely, let


me know. If you are watching, do let us know, if you speak Chinese.


Let's look at some of the stories out there, Brexit is dominating, but


there are some other stories. Mulberry has come out with pre-tax


profits last year, ?6.2 million. That's up nearly ?2 million on the


year before, so that's encouraging. Because of course British handbag


brand Mulberry has not had the easiest of times of late, nor have


many other rivals in the luxury goods market. It has seen its


profits grow for the first time in four years. So a bit of good news in


business. We like to give you a little bit of good news, it is not


all doom and gloom. And this is a nice story.


It's taken more than a decade, and $5.5 billion but Disney


is opening its first park in mainland China.


The resort covers nearly four square kilometers,


and is a joint venture with state-owned companies.


Around 900 Communist party officials will attending the opening gala.


I think Pirates of the Caribbean is the theme behind you, or something


of that nature. Tell us more, Robin. Well, it's been open for hours now.


The park is full on day one, fully booked for the next couple of weeks,


we're told. Disney's Hope and Bob Eiger's Hope, the Chief Executive


mouse is that people will keep coming to this park. They have a


seven square kilometres base and already there is talk of this park


expanding. Could there be a Star Wars world here? Who knows. Huge


investment for Disney, seven years in the making. As you said it is a


joint venture as virtually all Western companies have to go into if


they want to come into China. Essentially owned and controlled by


the Shanghai government. Disney alongside the Shanghai local


government. Behind this massive project. And what we have today is a


really big moment for Disney because it is a bit of a gamble. It is big


money but they hope that the 330 million people within a three Hour


Drive of this park will be tempted, persuaded to come here, spend their


money and really imbibed the Disney way. Thanks very much, enjoy the


rights, Robin. I'm sure he'll be trying a few of those out as


Disneyland in Shanghai opens today. It's central bank action -


or inaction to be precise - The Bank of Japan held off


from offering any more monetary stimulus on Thursday


despite the usual headwinds That was enough to send the yen


to a two-year high - casting a shadow over


an already worsening outlook It wasn't a huge surprise


but coupled with a lack The Federal Reserve said it


would keep interest rates unchanged It also cited the UK's referendum


on EU membership as an issue. Now that the US Federal reserve has


spoken, investors will be looking to economic data for signs of strength


in the US economy. On Thursday we will get the consumer Price index


for the month of May. CPI looks at how much prices of certain consumer


goods change month over month. The annual changes are used as a measure


of inflation. Now it's expected that the CPI will have gone up by 0.3%


for the month of May. And a big part of that is because Americans are


paying more for gasoline. And also happening on Thursday, the US


Secretary of State John Kerry will be in Denmark and Finland. Arctic


exploration, climate change and trade are among some of the topics


that will be discussed. Joining us is Tom Stevenson,


Investment Director Good morning. Let's talk about


Japan, we were discussing this earlier in the Green room. It was


quite a big reaction to the fact that there is no action by the


Central bank. Many were predicting there would not be action, either.


Yes, so given that was the case it was a very big reaction in the


currency market. A year ago it took 125 yen to buy a dollar, now it just


takes 103 yen. A massive strengthening in the yen. That is


important for the Japanese stock market. So many companies listed on


the Tokyo stock exchange big exporters, and a strong yen makes


their product less competitive in overseas markets. What we have seen


is a 24% decline in the value of the nick a index. While we have been


watching Brexit and the Fed, quietly the Japanese market has been


deflating. Let's talk about the Fed, although we have heard a lot about


it, deciding to do nothing again yesterday, this is a story we will


follow, clearly they are taking in the impact of events around the


world, not least the potential Brexit? Yes, she mentioned the


Brexit vote. What was interesting about the Fed yesterday and last


night was the fact that the expectations for future interest


rates and the expectations for future growth in the American


economy just keep coming back and coming back. Just chipping away


slowly. It just means that interest rates will stay much lower for


longer. Even further away than September for example? Yes, the Fed


is still expecting to make to rate rises this year, the market is not


expecting that, and there has been that disconnect for some time. Lots


of good stories to discuss later when we look at the business press.


How to feed a growing global population?


Could food grown in laboratories be the answer.


It's called cellular agriculture - and as the cost of technology


falls, could it be coming to a dinner table near you?


You're with Business Live from BBC News.


The Governor of the Bank of England has sent an angry response to one


of the most senior figures in the Vote Leave campaign


after being warned about rules banning "any public comment"


Mark Carney's three-page letter, obtained by the BBC,


says that what senior Bank officials considered


a "threat" contained "numerous and substantial" misconceptions.


Simon, the significance of this letter, talked us through it? It


stems from the significance of the Bank of England Governor Mark


Carney. In the past he has warned that there could be economic


consequences of a vote to leave the European Union. He has admitted we


could see a technical recession after the referendum vote. That of


course angered the vote Leave campaign, they thought he should not


be bandying words around like recession. Bernard Jenkin, the


chairman of the select committee, who looks after constitutional


issues, wrote to him and said I do hope you will keep your mouth shut


between now and the 23rd of June because we wouldn't want you raking


the purdah rules. And he got this angry 3-page letter shooting back to


him singing he really fundamentally misunderstand the bank 's role of


independence. We are obliged to give what he called evidence -based


submissions on what would happen to the UK economy. Bernard Jenkin said,


we know how you feel about the referendum. Mark Carney wrote back


saying, no you don't, all I have done is given evidence base


admissions, as is my duty. A real war of words about whether the


governor of Bank of England can make comments on this. As it happens, in


a few hours' time we will get the minutes of the last monetary policy


committee meeting, and it is inconceivable that they will not


mention what they have mentioned so far, that there could be some


economic impact of a vote to leave. So very angry war letters this


morning. You can read those letters on the


Business Live page now, the 3-page letter from Mark Carney to Mr


Jenkins, and if you scroll up you are then able to see the letter that


was sent to the Governor of the Bank of England from Bernard Jenkin is


that led to that 3-page angry response. Do take a look at those


and read if you are interested. Well worth reading. The life page


will have all of the other stories as well but we have not managed to


squeeze in. A busy day in the business world.


You're watching Business Live - our top story:


Rebuilding bridges - Russia and Europe hold


It is often dubbed Russia's Davos, meeting for the first time in a long


time, sanctions imposed on Russia and Europe as a result of that.


Jean-Claude Juncker has not been for a few years so it is interesting he


is there. By 2050, the world's population


is likely to hit nearly 10-billion. But how will we feed


all those people? One possible answer could be


to 'grow' meat and animal products in laboratories rather than rearing


them on farms. But, ethics aside, can it ever


be financially viable? You might remember the Dutch


scientist Mark Post who unveiled the world's first lab-grown


burger in London in 2013. It came with a hefty


price tag - $330,000. Egg whites can also be made


in the lab using yeast, which produces a protein-based


mixture but without involving It's suggested the technology


could revolutionise the food supply chain -


making food more efficiently and reducing the impact


on the environment. Gilonne d'Origny is chief


development officer at New Harvest. It's a non-profit organisation that


brings together all those working Welcome to the programme. Gilonne,


you may have been watching at the beginning, we asked our viewers to


get involved in the conversation and scanning some of the comments, most


of them saying they are quite up for the idea of eating a manufactured,


that is not quite the right word, a scientifically made hamburger bug.


Cultured hamburger. Tell us more about the process. Cellular


agriculture is making any agricultural project from the


cellular level up, rather than harvesting that product from an


animal, plant, or synthesising a petroleum product. So we are using


the technologies that have been advanced in medicine, tissue


engineering, for instance, to grow hearts all ears, and see if it can


be applied to making food. We touched on the issue of the growing


global population, dealing with things like world hunger, but it is


potentially somewhere down the line, we are not there yet, but it could


help solve some of those problems? Oh, yes. The life-cycle


environmental impact assessments that have been done so far comparing


the production of meat made in an animal and meat made in cultures, it


is in the parable, savings of up to 90% in water consumption, in


greenhouse gas emissions, it allows vertical farming in cities. From the


point of view of the environment the benefits are clearer, but is it


financially viable? First of all we are a long way from the point where


we can buy one of these burgers, so there will be a long road in terms


of research and development which has to be funded, and how will it


work in terms of making it financially viable, could people


afford to buy this meet? We are a research institute precisely to


establish these basic tools, so that we can then bring these products


closer to market. The first computers were prohibitively


expensive, progressively they've become less and less expensive. Same


thing in aviation. You need a concerted effort from Kovtun,


universities, private institutions and foundations and research


institutes like ours to start pushing these technologies said they


are developed sufficiently for entrepreneurs to start picking them


up. But until and unless universities start to develop


specific disciplines where students can start being educated in this


field, just like happened with computer sciences once you had


computer science departments are you started having experts coming out.


We have covered the cost, which is falling, the technology, which is


improving, but there will always be the ethical, moral, perception


issue, Sally said a lot of people have got in touch to say they would


be fine with it, but a lot of said, it is a beer into genetically


modified territory, I don't know where it is from, I would steer


clear of it. How do you get public perception on your side? First of


all the exercises terrible cognitive dissonance to meet today, the vast


majority comes from a factory farm, animals are protein factories. There


are about 60 billion animals that were growing last year for our


conception. 36 billion of those were chicken. It is an efficient protein


factory right now but it is very dangerous, it is a vector of


diseases, it is a reason why we have antibiotic resistant at the scale we


do, and it is not really necessary any more if we manage to develop


these technologies sufficiently that we can take out the animal from this


industrialised system. We are not talking about farms where cows roam,


we are talking about the industrialisation of the animal. It


is absolutely fascinating, and it is all stuff of future years. Thank you


very much for coming game, very happy day year what you are finding


out that. But we have to move on, as ever, and we returned to that big


decision... It's just a week until


voters in Britain decide whether the UK should remain


in the European Union or leave. All this week we are hearing


the views of small business owners In the latest of our special series,


here's one who thinks he's far I am one of the owners of a textile


company, we have been recycling textiles the 26th year. Our main


business partner is Britain, we import 45 trucks a day, I hope


Britain will stay in the EU. There are three main reasons. One of the


reasons is the customs duties, obviously if Britain leaves the


customs duties might be imposed, which makes goods expensive. The


other reasons, things that make the procedure longer, more expensive,


more difficult, sometimes impossible, and also the currency


fluctuations. No-one knows what will happen but if the pound gets


stronger obviously the price will be much more expensive for us. Finally


there is an even bigger problem. If Britain leaves, the whole EU might


break up and that would not be good for anyone.


A lot more views online, of course. Tom is back with us in the studio.


Before we dig into some of the papers, laboratory burgers? Your


guest made a good point about cognitive dissonance, we can put the


reality of factory farming to one side... While we are talking in. But


I still don't really fancy burger made in a laboratory! I think I am


with you on that one! Lets move swiftly on, a great story today,


California is a bigger than France. California the sixth largest economy


in the world. Just explain this, it is crazy. California is beaten only


by the rest of the US, Japan, China, Germany and the UK now in terms of


the size of the economy. What is interesting about this, bigger than


France's economy but the population of California, just 40 million


people, 66 million in France, so it shows the amazing productivity gains


that California has. Is it the technology firms? I think that is


what is driving it, what was interesting about this article was


that the economy grew by 5.7%, emerging markets rate of growth. Not


long ago we were talking about it long ago we were talking about it


being bankrupt. It shows the importance of the technology sector


and silicon valley to the US economy. Nice to see you, thank you


for coming in. And a lovely picture about serve their on that story


about California. Not funny, raining all the time!


Thank you for joining us, we will see using.


Good morning, it will be another day of downpours


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