14/07/2016 BBC Business Live


Similar Content

Browse content similar to 14/07/2016. Check below for episodes and series from the same categories and more!



Could it be the first cut in seven years?


The Bank of England says it is ready for action to stave off


a Brexit recession - so will it slash interest


Live from London, that's our top story on Thursday 14th July.


Rates have been at a record low since March 2009, but they could be


And after a reshuffle of the top team in government,


the UK's new finance minister says there's no need for


Also in the programme: China's appetite for chicken is back,


as the owner of KFC and Pizza Hut gives an upbeat assessment


And as well as news of a rate cut, could there also be


But are Central Banks running out of tools?


And we meet the London teenager who ditched university,


launched his own business and now runs a tech firm in the heart


Entrepreneur James Proud tells us his story - and how building


websites at the age of 12 set him up for a lucrative career in tech.


And doom and gloom or great new opportunity?


Are you sick of the warnings about Brexit, or are


And we meet the London teenager who ditched university,


Are you sick of the warnings about Brexit, or are


they necessary reminders of uncertain times?


Get in touch, use the hashtag BBC Biz Live.


We start here in London, where in a few hours' time the Bank


of England will decide what action it can take to shore up the UK


economy in the wake of last month's vote to leave the EU.


And first on the cards is a likely cut


Well, before the vote, bank governor Mark Carney warned


of the risks Brexit would pose to the economy.


Last week - after the vote - he said those risks had already


One survey of consumer confidence has seen its biggest ever fall.


It's a similar picture for the service and


Interest rates are already at a record low of half a per cent -


where they have been for the past seven years.


They were initially slashed at the height of the global


Most are predicting another cut today - by a quarter of a percent.


And it's thought the cost of borrowing could be ultimately


Since the referendum the Bank of England has already eased capital


requirements for Banks - basically how much they have


It hopes that will free up $200 billion for lending.


But many economists think that won't be enough to stave off


recession and suggest more Quantitative Easing or QE -


printing billions of pounds of new money might be needed.


Give us your take on what might happen. Most of the market thinks


there will be a rate cut. Most of those people think it will be 0.25%.


Mark Carney has said before the referendum vote that he wasn't keen


on a negative interest rate, so I don't think the bank will be


hurrying to follow the bank of Japan, the European Central Bank in


the central bank of Sweden, who have all played with negative interest


rates, but that cut, I think, is in direct response to the EU


referendum. It is not that long ago that Mark Carney was suggesting that


the next rate change would be upward. That has completely changed


since the referendum. There are fears here, held by lots of


economist, not all but some, that Britain could be facing a referendum


because of... Sorry, a recession, because of the uncertainty created


by the referendum. The bank is responding to that. I spoke to an


American economist who used to be a member of the monetary policy


committee, and he thought there should be shock and awe. He thought


they should go straight to zero to show that they are there to provide


stability. I don't think they will go that far this time.


The idea of central banks running out of tools - if they cut too soon,


they get to appoint quickly where they have nothing else to offer.


Some critics are saying it is too soon today because we don't know the


Economists believe that the bank has Economists believe that the bank has


to get ahead of the curve. If you cut into a recession, you are too


late. Once the economy has reached that tipping point, cutting at that


point may be too late. Lots of economists feel there should be now.


The notion that they are running out of ammunition needs to be dealt with


carefully. They have more asset -- asset purchasing they could do. They


can do monetary easing for banks to provide credit, so there are stumps


on -- spills some bullets left in Mark Carney's armoury.


Let's hear what Filippo Hammond had his aid. We will have meetings


today. We have two distinguished the short-term from the longer term. In


the short-term, the decision to exit the EU came out a surprise to the


markets. It came out a surprise to a lot of people. Therefore, it has


rattled confidence and caused people to put plans on hold while they wait


to see how things clarify. The fact we have moved quickly to resolve the


question of the leadership of the Conservative Party and get a new


Prime Minister installed I think will help to restore business and


consumer confidence. What we have to do now is show, as a team, how we're


going to bring negotiations with the EU forward, how we will support and


stabilise the economy in the coming months in order to help that


confidence to be restored as quickly as possible. Filippo Hammond,


speaking on the first day of his new job. He will meet with -- Filippo


Hammond... -- Philip Hammond. Fiscal policy,


what the Government does on tax and spending, on borrowing, these are


all big decisions that will really affect whether -- where the British


economy goes. A busy day for you and us. For now,


thank you very much. He is hotfooting it to the Bank of


England. Do take a look at our website. You can follow us online. I


will be there for the interest rate decision at midday. Stay with us for


that, we will keep you up-to-date. In other news, the number of homes


being put up for sale in the UK has seen its biggest fall in almost two


decades - and demand from buyers has hit an eight year low -


according to the Royal Institution It's the first survey


of the UK housing market Surveyors expect house prices


to fall across the UK Shares of Nintendo have


continued to soar - up more than 16 per cent in Asia


today - on the runaway success of Players have to track down virtual


characters by moving Experts say the technology


could also be used for marketing and that's what's got


investors so excited. Nintendo's stock market value


is up almost 60 per cent The coffee giant Starbucks has


bought a stake in the premium The artisan Italian brand


will become the exclusive food provider at all of the new luxury


Starbucks outlets. This means that Starbucks will bake


fresh goods onsite for the first Just reading that has made me


hungry. But that looks nothing like a


Starbucks. You are so cynical! Fresh pastry is


awesome, whatever the source! Fast Retailing has cut its forecast.


There is a bit of a glitch in Singapore. The stock market stock


trading because of a technical glitch. The deadline passed and it


did not restart. Our colleagues in Singapore will keep you up-to-date


online. Not the first technical glitch.


We are having a few here, actually. You would never know!


She's in Singapore, where Yum Brands -


the company behind Pizza Hut and FKC - has announced strong results.


You might remember the company making the headlines after a series


of food scandal several years ago in China. The company has recovered


from that quite well, sales rising 6% in the second quarter, coming in


at $3 billion. They raised their profit for grass, up 14%. -- their


profit forecast. Consumer preference is shifting from fast food to


healthier options, and the company has been localising their menu at


KFC and Pizza Hut might well. Analysts say they are only appealing


to people looking for cheaper options in smaller cities, so later


this year, the company plans to split off its China business in


order to make business decisions more quickly locally.


Thank you. A quick look at the numbers. Shares in Japan ended


higher for the fourth straight session. That is largely down to a


weaker yen. That quick reshuffle of the Government and the promise of


interest rate cuts have meant that the markets have started up.


Stability is the one thing they crave at times like this. That


interest rate decision is due at midday. I will be live in the City


of London. All of our team are across that for you. Remember,


America has been trying to raise the cost of borrowing and increase


interest rates. At the start of the earnings season for the big


investment bank, they will watch events here very closely indeed,


because while low interest rates are good for some people, they are bad


banks because they make less profitable.


Low interest rates are here to stay, at least for a lot longer than


anyone expected, but that means revenues for banks like JP Morgan


will suffer. Ultralow interest rate make money mending not a very


lucrative business. Banks need to make money elsewhere, but the


China's economy slowing and with the price of oil and gas remaining low,


markets are volatile. It means investors are more likely to wait on


the sidelines and watch the storm pass. It also means banks will make


less revenue from trading. JP Morgan has another problem - it employs


some 16,000 people in Britain and makes around $8 billion in the UK,


which means investors will be looking very closely to see just how


the bank will be affected by Britain's impending exit from the


EU. It is a question that investors will ask of all Brown 's -- of all


banks. Simon Derrick is currency analyst at


the bank of New York. Before we talk about helicopter money, which will


explain, your prediction for today, the Bank of England? 0.25% down. I


think they are going to cut. There has been clear guidance from Mr


Carney. For him not to do that, the risk is that you get an astonishing


rally of the pound. Shock and awe? I think he wants to give himself a


second run. He is looking at this meeting and the one in August as


being a package. He wants to give himself space, why do everything at


once? When it comes to what everyone else is looking at, for everyone


apart from the banks, it might mean there is more money in our pockets,


that borrowing is cheaper? help exporters. You have seen that


in the FTSE in the last couple of days out. Helicopter money is


something people might believe might happen in Japan, the anchored by


bonds, put them back into the market bonds, put them back into the market


and never sell them back. Printing money and injecting it in. If you


look at what has happened in Japan, the currency has weakened


dramatically, it has a huge positive impact on the Japanese stock market.


We will return soon, we will see you in five minutes.


Don't say you don't learn anything on this programme, helicopter money.


Skipping university and going straight to Silicon Valley.


We'll be hearing from the London-born tech


You're with Business Live from BBC News.


Where will the UK property market go next?


UK property investors are waiting to see how


Today the Royal Institution of Chartered Surveyors published


It is a pretty downbeat assessment of the state of the housing market,


or what will become of it in the run-up to Brexit. It was largely to


political shock, you would expect political shock, you would expect


some uncertainty, and when you are making a major capital purchase like


buying a home, you are going to become much more cautious. But we do


need to consider this against the context that it is a short-term


response, and it will be interesting to see what happens now, especially


if we see the cut in base rates, and given that we have more political


issue around the Conservative Party issue around the Conservative Party


has been resolved. When you look at the detail of the survey, is it a


nationwide issue, or does London nationwide issue, or does London


dominate again? It is pretty much nationwide, that is what you would


have expected. London is slightly different because it has had a


prolonged period of very strong price growth. What we have seen in


previous months is some indicators of a softening within the market,


which is about the right time, and I expect this will be the catalyst for


that. Everybody talks about Brexit being a risk, but prices will not


change unless supply or demand changes. Neither of those seem to


change any time soon. There will be a short-term impact on demand,


people's position to be able to buy, that will create a short-term


disconnect, which will mean that transaction levels will fall and


price growth will soften, it may fall into some of the weaker


markets. But beyond that, we have to look at the fundamentals, the supply


and demand, what will happen to the cost of borrowing, slightly offset


by Access ability to the market. We have heard from David Davis, he


is the new Secretary of State for Brexit, a new job in the Cabinet.


You can read his thoughts on our page.


The Bank of England says it is ready for action to stave


off a Brexit recession, so will it slash interest rates


We expect a decision at mid-day, full coverage across the BBC.


A quick look at how markets are faring.


Europe are keeping an eye on Mark Europe are keeping an eye on Mark


Carney and his team. All higher by quite a margin at the moment.


Now, here's a story that you'll either love or hate.


The story of a young British tech entrepreneur who's made it big


and now runs his firm in America's Silicon Valley.


Not bad for a kid who skipped university.


James Proud was raised in south London and started building


In his late teens he was spotted by US billionaire investor


Peter Thiel and awarded a fellowship as part of an entrepreneur


He's now the chief executive of a firm called Hello


in Silicon Valley which makes a sleep-tracking


When I was nine years old I discovered that


you could build websites for yourself, and so if you have


a nine-year-old with the internet, he can build his own websites,


When I was 12 I figured out I could get paid to do that stuff


as well, so I started building websites for other people,


My mum thought I was a drug dealer, but I explained that they don't get


I kept doing that, then when I was finishing sixth form


in the UK I had this online side project at 17 that I launched.


I took a gap year between then and university so I could


At the end of that year it was a case of, "If I go


to university now, I will not be able to spend 18 hours a day doing


The first thing I want to do is what I am doing, so I won't go."


Peter Thiel put together a programme, the Thiel Fellowship,


20 Under 20, which was 20 young people under the age of 20,


and he gave them $100,000 not to go to university.


I was the first one in the first class.


The only one that was not from the US.


I was the only one that went out there, "How do


They said, "We have not thought about this yet!"


I had the fun of, "How do I not get deported?"


19, no job, no degree, it is a bit harder.


"Here's money each month, and go figure it out."


Sense is a sleep device which is three things.


It helps you to fall asleep, it helps you to improve your sleep,


and it helps you to wake up each morning feeling great and not groggy


The way it does that is inside it is a sound machine,


so we play sounds like white noise, rainfall, meditative sounds


It is packed full of not just senses to see how you are sleeping,


but the environmental conditions, light, sound, temperature,


humidity, air quality, the things that affect sleep.


You don't have to wear anything, there is no plugging things in,


pressing buttons, putting things on your head.


It can collect all of this information and say,


here are your patterns, here is how you can improve it,


here are those things that are not great, maybe


lower the temperature, make it darker.


The third piece is it is the best alarm clock,


because we know your sleep cycle, we know when you are


You will say, "I want to be up at 9am," but maybe at 8:52am


You know when your alarm goes off and you can get out of bed


That is James proud there. Rachel was talking! I told you we


had technical issues, that one you noticed! Do you need a machine to


help you get to sleep? It is difficult to stay awake during the


evening, never mind at night! Getting up is my problem. But let's


talk about Brexit, we ask for viewers' responses. An issue we have


One person says, so much negativity, One person says, so much negativity,


talk about the positives that it can have, it is our fault, the BBC seems


to look for the bad. Ray says, we are cowering in anticipation. Abby


says, fed up of the bad news from the BBC. Keep pushing doom and


gloom. Others point out, it is important to keep a close eye on it.


James says, in the run-up to the referendum, there were problems


about getting the real story. Keep your comments coming in.


It is all over the papers. In the Independent, everything could still


be OK, says a small group of economists. We had one on our


programme, talking about the economy. There is a danger we


talk ourselves into a recession. If talk ourselves into a recession. If


you look at what we do know so far, markets are performing as they


should, equity markets have stabilised, it makes UK assets on


competitive. We just have to wait competitive. We just have to wait


and see. It is too early to be either wildly optimistic or hugely


negative. For the moment, all of the negative. For the moment, all of the


claims about unemployment soaring... Yes, credits these say it is May


Day, half a million jobs could go in the UK. Say we had a movement on


compare it to Continental Europe, compare it to Continental Europe,


fantastic youth unemployment in fantastic youth unemployment in


we have to look at it in those we have to look at it in those


terms. Don't get overly negative or positive, wait for the market. The


voice of reason! But is it from us. Stay June for all


of the news on the potential interest rate cut.


Hello. I suspect that Thursday is the pick of the day is across the


British Isles, a lot of dry weather, there will be sunshine, and it


Download Subtitles