:00:00. > :00:07.This is Business Live from BBC News with Ben Thompson and Sally Bundock.
:00:08. > :00:10.British Prime Minister David Cameron is set to face European leaders -
:00:11. > :00:14.as ratings agencies downgrade the UK following its vote to
:00:15. > :00:41.Live from London, that's our top story on Tuesday 28th June.
:00:42. > :00:47.The long road to Brussels. The British premised is braced for his
:00:48. > :00:49.first talks with the European leaders. What will the reception be
:00:50. > :00:51.like? South Korea unveils a 17-billion
:00:52. > :00:55.dollar spending package - in a bid to weather economic
:00:56. > :01:06.volatility following the UK's vote. And markets in Europe, the only way
:01:07. > :01:12.is up. These are yesterday's closing numbers. They are higher across the
:01:13. > :01:14.board and we will explain why. And what does Brexit
:01:15. > :01:16.mean for business? In our special series this week,
:01:17. > :01:19.we're meeting businesses from both sides of the debate -
:01:20. > :01:21.about what happens next and how Britain's vote to leave
:01:22. > :01:23.will affect them. Today we chat to the man that runs
:01:24. > :01:27.this events firm. And we'll assess how the world's
:01:28. > :01:30.newspapers are following the story - and get the international
:01:31. > :01:32.perspective on what Brexit It's a critical day ahead -
:01:33. > :01:51.a European Union summit gets underway in Brussels in a few hours
:01:52. > :01:55.time and the UK's decision to leave It comes as Britain's economic
:01:56. > :02:00.standing has suffered a fresh blow. Two credit rating agencies have
:02:01. > :02:03.downgraded its prospects. Fitch says fears about the impact
:02:04. > :02:06.on Britain's public finances had Standard and Poor's has also
:02:07. > :02:11.stripped Britain of its last Moritz Kraemer is Chief Ratings
:02:12. > :02:27.Officer at Standard Poor's. We believe the Brexit vote has
:02:28. > :02:34.manifested that the institutional setup and the governance standards
:02:35. > :02:40.of the UK are no longer of the shader that we believed before in
:02:41. > :02:43.terms of predictability, stability, effectiveness of policy-making. It
:02:44. > :02:51.is hard to foresee how governments would react. We really reassessed a
:02:52. > :03:00.review of the institutional capacity of the UK Government to react to a
:03:01. > :03:04.financial crisis. What about the European Union? How will it be
:03:05. > :03:10.affected? Trade is one area that is vitally important. Last year, the UK
:03:11. > :03:15.exported $294 billion of goods to the European Union. Over
:03:16. > :03:22.that time period, it imported $383 billion.
:03:23. > :03:33.difference, there is an $89 billion deficit, a lot more exported to the
:03:34. > :03:36.UK than imported. For Germany, they could be one of the biggest losers,
:03:37. > :03:39.if trade is restricted. Written as Dr Volker Treier is the Chief
:03:40. > :03:47.International Economist at the German Chambers of Industry
:03:48. > :03:51.Commerce. Clear something up for us. There's a
:03:52. > :04:05.lot of about the relationship between the
:04:06. > :04:11.UK and Germany. Suggestion that we need you as much as you need us.
:04:12. > :04:20.Explain the rationale and the feeling.
:04:21. > :04:34.It is true, we both need each other, for German businesses, the UK is the
:04:35. > :04:43.third-largest trading partner, the fifth trading partner, we're running
:04:44. > :04:52.a trade surplus, we export more than we import. That means it's a big
:04:53. > :04:56.market, and we are desperately concerned about the situation. Talk
:04:57. > :05:09.me through the conversations you've had with German businesses. How did
:05:10. > :05:23.this result go down? One thing is the currency, the British pound is
:05:24. > :05:28.now devalue eating -- devalued, that means the power of Britain will go
:05:29. > :05:33.down and it will reduce their ability to import a product from
:05:34. > :05:43.Germany. You can hatch a bit of the currency risk not not all. On the
:05:44. > :05:49.other side, we are even more dependent on the market and we are
:05:50. > :05:54.selling products all over the world, the euro has appreciated. It has
:05:55. > :06:02.evaluated. There might be other opportunities as well. A brief word
:06:03. > :06:09.on the timing. Would you like to see this wrapped up quickly? Would you
:06:10. > :06:18.like a negotiation that ensures it is done in the right way? The UK
:06:19. > :06:27.will Remain an important trading partner. But it is clear that the
:06:28. > :06:37.more delectable and stable the framework is, the quicker the
:06:38. > :06:39.negotiations. It will be better for German
:06:40. > :06:52.business. Thank you for your time.
:06:53. > :06:57.We're getting lots of breaking news, comments from the Chancellor of the
:06:58. > :07:07.Exchequer. He's talking on BBC radio right now. Some of the points. We
:07:08. > :07:14.are absolutely going to have to provide fiscal security, which could
:07:15. > :07:19.mean increasing taxation and a cut in spending. He warned about this
:07:20. > :07:21.prior to the vote last week but when it comes to the timing of that, he
:07:22. > :07:26.would not be pin down. Another line we're getting in, the
:07:27. > :07:36.need to provide fiscal security, he says we are
:07:37. > :07:42.going to need to show the rest of the world that the government can
:07:43. > :07:47.live within its means. Asked if that meant tax rises, you said,
:07:48. > :07:54.absolutely. Tax rises and spending cuts. We will have more on that for
:07:55. > :07:57.you later. Over in Portugal, there's a separate
:07:58. > :08:10.meeting taking place Our correspondent Theo
:08:11. > :08:25.Leggett is there for us. What are listening to you? This
:08:26. > :08:29.meeting takes place on an annual basis in these pleasant
:08:30. > :08:33.surroundings, and is supposed to offer a relaxed occasion to chew
:08:34. > :08:39.over the remains of the day. But things have been overshadowed by the
:08:40. > :08:47.developing situation. The programme is going ahead but behind-the-scenes
:08:48. > :09:01.it is clear the volatility on the markets
:09:02. > :09:04.is a dominant theme. I'm interested in what people are saying to you.
:09:05. > :09:18.Absolutely, it is odd that you have this agenda that is fixed and people
:09:19. > :09:23.are still making speeches on the subject. Behind the scenes, all that
:09:24. > :09:28.anybody is talking about is the British referendum, and people seem
:09:29. > :09:38.genuinely shocked and very concerned. Among the people
:09:39. > :09:44.attending is Trichet, former president of the central bank, he
:09:45. > :09:46.presided over it during the demise of Lehman Brothers. I asked him what
:09:47. > :10:01.he made of it. I am very sad. I was hoping they would not leave. It is a
:10:02. > :10:14.sentiment of all Europeans and it makes the decision of the British
:10:15. > :10:25.people even more appalling. It is very hard to believe. That bought
:10:26. > :10:30.the former president of the European Central Bank. We expect to hear
:10:31. > :10:38.from Dragi, the current man in charge, surely. What will he say?
:10:39. > :10:41.That is a good question. How far will he go to reassure investors? He
:10:42. > :10:44.has tools at his disposal. Interest rate rises, quantitative
:10:45. > :10:51.easing, buying up sovereign debt. here is a message that the European
:10:52. > :11:01.Central Bank is ready to do what it takes to
:11:02. > :11:02.keep the situation under control until the aftermath of the
:11:03. > :11:13.referendum vote. Volkswagen has agreed to pay nearly
:11:14. > :11:17.15 billion dollars to settle claims It would be the largest ever
:11:18. > :11:20.class-action settlement The case involves lawyers
:11:21. > :11:23.and government officials representing 475,000
:11:24. > :11:28.Volkswagen vehicle owners. It also includes just over
:11:29. > :11:31.$10 billion to buy back affected Microsoft has agreed to pay
:11:32. > :11:42.a Californian woman $10,000 after an automatic Windows 10 update
:11:43. > :11:47.left her computer unusable. Teri Goldstein said her Windows 7
:11:48. > :11:50.computer had automatically tried to update itself to Windows 10
:11:51. > :11:54.without her permission. She said the update had
:11:55. > :11:56.made her machine unstable, leaving her unable to use it
:11:57. > :11:58.to run her business. Microsoft said it had dropped
:11:59. > :12:16.its appeal to save on legal costs. There is a story about Hinkley
:12:17. > :12:23.Project, likely to become casualties. This is the nuclear
:12:24. > :12:30.power station slated to be built in the south of England to solve energy
:12:31. > :12:38.problems in the UK. It has been a controversial project. There is some
:12:39. > :12:49.concern about whether this will get the go-ahead.
:12:50. > :12:51.When it comes to dealing with the impact of Britain's
:12:52. > :12:54.decision to leave the EU - you might expect that Europe,
:12:55. > :12:56.maybe even the US would have contingency plans in place.
:12:57. > :13:24.Please explain. The Koreans are pumping $7 billion in stimulus
:13:25. > :13:37.because of these fears. Markets are being lifted on these signs that the
:13:38. > :13:41.fallout is happening, the currency gained 1% along with many other
:13:42. > :13:45.emerging market currencies. The idea is to use this money to stabilise
:13:46. > :13:50.the markets if there is more volatility as well as creating jobs
:13:51. > :14:02.because Korea have been suffering from growth, exports have fallen.
:14:03. > :14:11.The government is taking concrete steps to lift growth.
:14:12. > :14:27.We will look at the European market in more detail in a few moments.
:14:28. > :14:35.Let's look stateside. US markets are reeling. Investors will be drawn to
:14:36. > :14:36.the latest economic data. Investors concerned about the underlying
:14:37. > :14:44.strength of the US economy, after this vote, will get
:14:45. > :14:52.clearer snapshot when they reveal the final growth figures. GDP grew
:14:53. > :14:58.at an annual rate of 0.8% between January and March. The housing
:14:59. > :15:10.market remains steady in April and consumer confidence improved.
:15:11. > :15:13.Fourth-quarter results improved for Nike, or will they say how it has
:15:14. > :15:15.affected them? Joining us is Maike Currie,
:15:16. > :15:23.Investment Director Nice to see you. Good morning.
:15:24. > :15:28.Markets bouncing back up. I'm looking at the numbers, the FTSE 100
:15:29. > :15:36.up 2.2%. We have seen in Frankfurt the DAX is up over 2%. Why? Well,
:15:37. > :15:40.yesterday was a very brutal day for markets. I think what is happening
:15:41. > :15:44.is what Benjamin Graham says in the short-term the market is a voting
:15:45. > :15:48.machine and in the long-term it is a weighing machine and what there
:15:49. > :15:54.really means in the short-term the market acts like a popularity
:15:55. > :15:57.contest with traders moving in and out of stocks and yesterday's
:15:58. > :16:03.unloved stocks become today's loved stocks. The pricing really reflects
:16:04. > :16:07.really interesting because today the really interesting because today the
:16:08. > :16:12.big winners are the banking stocks, Barclays Bank doing well. Barclay's
:16:13. > :16:16.has been hit hard Friday and Monday, as has its peers and energy stocks
:16:17. > :16:21.doing well and pharmaceutical companies out of favour? The banking
:16:22. > :16:24.sector very much reflects what is happening in the real economy and
:16:25. > :16:27.there were a lot of expectations that the banking stocks would
:16:28. > :16:32.eventually start paying income again and there would be a turn around.
:16:33. > :16:38.Now with the uncertainty, banks are unloved again. The same thing with
:16:39. > :16:41.defensives. People go to defensives at certain times. Barclays is one of
:16:42. > :16:46.the few investment banks we have here still. From that point of view,
:16:47. > :16:48.it is affected as well. Thank you. You will be back to talk us through
:16:49. > :16:50.the papers. We'll meet one firm in London
:16:51. > :16:53.that's already planning We'll ask whether there
:16:54. > :16:58.are opportunities as well as risks. You're with Business Live from BBC
:16:59. > :17:06.News. Away from the referendum,
:17:07. > :17:08.business goes on. This morning the online grocery
:17:09. > :17:10.retailer Ocado updated markets. It says profits were up 5.7%
:17:11. > :17:14.for the first half of the year, It's also continuing its push
:17:15. > :17:19.overseas, hoping to sign up other international retailers
:17:20. > :17:33.to use its technology Let's get more detail. Let's cross
:17:34. > :17:38.live to the newsroom and speak to Adam Leyland. Adam, good morning.
:17:39. > :17:42.Just explain the figures for us. On the face of it good, but it is that
:17:43. > :17:45.international push they will be watching closically? Yeah, that's
:17:46. > :17:53.right. The performance continues to be reasonable. 15% growth isn't bad
:17:54. > :17:57.in a market with the supermarkets at each other's throats and profits are
:17:58. > :18:02.up 6%. It is heavy weather for them and that's really weighing on their
:18:03. > :18:11.share price. And then there is the Amazon prospect as well. The
:18:12. > :18:14.inability for them to land one of the international clients is still
:18:15. > :18:17.hurting it. You've got the factors weighing on the share price while
:18:18. > :18:22.the business itself is growing at 15% which is faster than any other
:18:23. > :18:25.of the online grocers. It is quite interesting, isn't it, how you see
:18:26. > :18:29.that disconnect between what the share price is doing and what the
:18:30. > :18:33.company is doing in terms of per fortunateliance. What's the outlook
:18:34. > :18:39.for Ocado? It has to sort of expand. I mean, it is against Amazon sorry,
:18:40. > :18:44.it is growing, you know, it is growing very fast, 15% and that's
:18:45. > :18:48.enough, even if Amazon was to build and fill two depots and it just
:18:49. > :18:52.launched its first, that's the sort of growth it is achieving
:18:53. > :18:56.year-on-year. That's good. What it really needs as a stock to land
:18:57. > :18:59.international clients to service deals such as the one it has with
:19:00. > :19:04.Morrisons elsewhere in the world. So everyone is sort of waiting on that
:19:05. > :19:09.as piece of good news. Its prospects not just in the UK market, but as a
:19:10. > :19:15.software developer that have been crucial to its valuation. Adam thank
:19:16. > :19:17.you for your analysis on that story. Ocado numbers coming in nice and
:19:18. > :19:24.strong. If you want more details as a result
:19:25. > :19:31.of the downgrade of the credit rating, more details on the website:
:19:32. > :19:35.It is interesting a day like this when a downgrade of a credit rating
:19:36. > :19:43.just, our third story, big times. Interesting times.
:19:44. > :19:52.The rating agency are are slashed for the UK economy. All that
:19:53. > :19:56.fall-out as a result of the vote to leave the European Union. But what
:19:57. > :20:00.we'll do now is analyse whether there are some benefits as well as
:20:01. > :20:03.risks and what it means for business because for some smaller firms, now
:20:04. > :20:07.preparing for life outside the European Union, it can be a daunting
:20:08. > :20:11.prospect. It can, particularly for those who have customers across the
:20:12. > :20:16.single market. One of those is a company called EMC3. It is an events
:20:17. > :20:19.firm based in the capital. It is now looking at ways to diversify its
:20:20. > :20:27.business after the result we got last week. Baba Epega Runs EMC3 and
:20:28. > :20:29.it is with us now. We shall be clear, we spoke to you before the
:20:30. > :20:35.vote and you wanted to remain in. Yes. That hasn't happened. So I'm
:20:36. > :20:39.interested in what you do now on a practical level in terms of how
:20:40. > :20:45.you're assessing your options? Well, it broke my heart to be honest that
:20:46. > :20:51.we didn't remain. We have diversified our business, making
:20:52. > :20:55.sure that we have pre-Brexit offices set-up in Boston and Lagos, Nigeria
:20:56. > :20:59.and we're seeing that kind of move actually has helped our business in
:21:00. > :21:05.the way of having different markets to trade in n the way of events and
:21:06. > :21:08.marketing as well. It has been a positive move from our side, but
:21:09. > :21:13.yeah, my head is thinking of course, this is not a bad thing. Tourism
:21:14. > :21:18.coming to London, cheaper pound and everything, but my heart is still
:21:19. > :21:23.broken. So emotionally you say you're in a
:21:24. > :21:27.bad place, but actually ahead of this decision, you diversified
:21:28. > :21:30.anyway and a company that's well diversified in terms of its
:21:31. > :21:35.operations worldwide is key really, isn't it? Yes, it is very important
:21:36. > :21:40.and we should really look at this as a, we are in a strong position. The
:21:41. > :21:45.UK has got a very good, robust economy and we will bounce back, but
:21:46. > :21:48.we do have to work together on this. Let's talk pros and cons, it is easy
:21:49. > :21:55.for businesses to say, "This is terrible." I've got to adjust for
:21:56. > :21:58.this new reality, but there are some benefits and it is about where you
:21:59. > :22:02.position yourself, is it? Tourism is a big thing. People coming to
:22:03. > :22:08.London. The pound will be cheaper. So we have packages for tours in
:22:09. > :22:12.London and across the UK. We hope some of our international clients
:22:13. > :22:15.will be taking up more now the pound is weaker. So what do you want to
:22:16. > :22:20.see next in terms of how this plays out? It is that big cliche, isn't
:22:21. > :22:22.it, business wants certainty. Is it about clarity and transparency and
:22:23. > :22:28.negotiations to get an idea of what is going to happen? I think it is
:22:29. > :22:31.about clarity. And it is about decisive decisions by the
:22:32. > :22:35.Government. We would like to see obviously a Prime Minister, that's
:22:36. > :22:41.always a good start, but also negotiations for UK. Very important
:22:42. > :22:47.that we actually, our representatives actually negotiate
:22:48. > :22:53.for better, for trading for the UK. Has anyone got hold of you and said,
:22:54. > :22:59."The event we wanted you to do for us is off." At the moment, no, but
:23:00. > :23:04.2017, 2018 we're talking about clients about that and it is a bit
:23:05. > :23:11.of a wait and see policy. See what the UK does in the next couple of
:23:12. > :23:15.months. Baba Epega Chairman and founder of EMC3. A Prime Minister
:23:16. > :23:24.would be a start! We will see what we can do!
:23:25. > :23:32.Here is how to keep across information. The Business Live page
:23:33. > :23:37.is where you can stay ahead with the day's breaking business news. We
:23:38. > :23:40.will keep you up-to-date with the latest news with insight and
:23:41. > :23:43.analysis from the BBC's team of editors from around the world. We
:23:44. > :23:47.want to hear from you too, get involved on the BBC Business Live
:23:48. > :23:53.web page at: On Twitter, we're at BBC business
:23:54. > :23:55.and you can find us on Facebook at: Business Live on TV and online
:23:56. > :24:01.whenever you need to know. What other business
:24:02. > :24:03.stories has the media been Joining us again is Maike Currie,
:24:04. > :24:12.Investment Director One article in the Telegraph, the
:24:13. > :24:16.FTSE 250 which represents the UK more in terms of the economy as
:24:17. > :24:21.opposed to the FTSE 100. The 250 is a better reflection of the domestic
:24:22. > :24:25.economy. The FTSE 100, those are doble earners and a lot of these
:24:26. > :24:41.companies earn their revenues in US dollar. So weaker sterling is good
:24:42. > :24:46.news for the FTSE 250. The FTSE 250 has fallen. There is a good quote
:24:47. > :24:51.saying the companies dig up things out of the ground in Africa, price
:24:52. > :24:56.it in dollars and sell it in China and that's the sum total of what the
:24:57. > :25:00.FTSE 100 does. A huge exposure to mining companies and a lot of the
:25:01. > :25:05.companies are gold miners. As investors look for safer investments
:25:06. > :25:19.they move to gold as a safe haven asset. Not known for mincing his
:25:20. > :25:24.words. Let's talk about guilty or not Sorros. He warned about this.
:25:25. > :25:28.What is happening at the moment is that the fall-out has been so
:25:29. > :25:31.extreme that the public is asking the question - can Britain get out
:25:32. > :25:35.of this result? Which is interesting. Also quite interesting
:25:36. > :25:40.when he was asked about whether he played the pound during this
:25:41. > :25:45.referendum he said he didn't. One we will watch closely.
:25:46. > :25:48.Thank you. Thank you to for your company today. Much more. We will
:25:49. > :25:51.stay across the fall-out of that vote over the course of the week,
:25:52. > :25:53.but same time, same place tomorrow, we will see you then. See you soon,
:25:54. > :26:02.bye-bye.