22/07/2016 BBC Business Live


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This is Business Live from BBC News with Victoria


G20 policymakers from leading market economies will meet in Chengdu,


And their talks are expected to be dominated by Britain's


Live from London, that's our top story on Friday the 22nd July.


Policymakers from 20 of the world's largest economies


They'll be discussing the thorny issue of trade and protectionism.


We'll cross over live to Asia for the latest.


Pokemon Go launches in Japan - a day later than expected.


Shares in Nintendo have nearly doubled since the game was first


We will bring you the latest from the markets with equity landing on a


downbeat no -- low towards the end of the week.


It's not just Pokemon making the headlines in the world of tech.


It's also been a busy week for the social media giant Facebook.


We'll get the Inside Track with our very own Rory-Cellan Jones.


Later in the programme, we'll also be talking


about bosses and the big payouts they often


Companies argue that golden handshakes are well deserved.


Or should they be scrapped altogether?


Let us know, just use the hashtag #BBCBizLive.


This weekend something momentous is happening in the world


China will be hosting the G20 summit for the very first time.


China's presidency of the G20 is greatly anticipated,


as it is both the world's second-largest economy and also


the largest trading partner of several significant members.


One significant memories the UK and its new Chancellor, Philip Hammond


has kicked things off by outlining his economic response to the British


decision to leave the EU -- one of the significant members is. We


understand the significance and unexpected nature of the decision on


June has caused turbulence in the markets and we have the tools


necessary to respond to that in the short term. The colleagues at the


Bank of England will be using the monetary tools at their disposal


over the medium-term, giving us the opportunity with our Autumn


Statement, our regular late year fiscal event, to reset fiscal policy


if we deem it necessary to do so. We can talk to Steven McDonald in


Beijing. We just heard from the new UK Chancellor, Philip Hammond,


saying he may need to reset fiscal policy. What does it mean? It's a


bit of a surprise. The interesting thing is that Philip Hammond is not


the only one concerned about the impact of Brexit on the global


economy because today we heard the head of the IMF coming out at a


press conference and saying that I was really hoping to come along here


with a happier outlook for world growth because Japan, China and


Europe have actually been doing better than expected given the


global economy as it is. I was hoping to do that, but then the UK


had to go and Brexit and wreck everything, basically. The IMF has


had to downgrade its forecast and off the back of that, the number two


leader in China responded by saying that at least China has upped the


forecast slightly and he joked that China has a lot of hurdles but we


will keep trying to maintain the growth we are driving for the world


out of China. He sort of said we could not burden this for ever but


we will try our best. Another key global player we have heard from,


Donald Trump, speaking overnight in Cleveland, Ohio, while accepting the


Republican nomination. The issue of protectionism rearing its head. He


said he would get rid of trade deals that destroyed the middle class and


that American is not globalism would be the tenant of his foreign policy


if he were elected as president. One assumes this is a reference to the


TTIP that Barack Obama has tried to negotiate with ten countries around


the Pacific Rim. How much will that be on the G20 agenda? This is a


nightmare message in terms of the G20 finance ministers because their


whole message is one of multilateralism. They are saying


that this meeting over the weekend should get world trade back on track


to try and bring down barriers, not to build up barriers. Funnily


enough, in China, people see the message from Donald Trump as within


the framework of a political campaign. I'm not sure that


policymakers really believe Donald Trump when he says this, at least


through the state media, that's not the message coming out. Funnily


enough, in China there isn't really the level of concern over Donald


Trump that you might expect, but the G20 finance ministers meeting I can


definitely say that people will talk about this over the weekend and


wonder how they can promote multilateral is in a world climate


when it seems to be going exactly the other way. So much on the


agenda. Stephen, thanks. A quick look at some of the other stories.


General Motors may be forced to recall another 4.3 million


vehicles for potentially defective Takata air bag inflators -


It has already recalled nearly two million cars with the defective


airbags following instructions from US regulators.


The carmaker said it does not believe there is a safety defect


Roger Ailes resigned yesterday as chairman and chief executive


of Fox News following allegations


Mr Ailes did not give a reason


for stepping down, saying only that "he'd become a distraction".


He's likely to leave with a $40 million pay package


and Rupert Murdoch, who owns parent company 21st Century Fox,


will take over as acting Chief Executive and Chairman.


Nintendo's Pokemon Go has launched in Japan.


The unexpected hit has doubled Nintendo's value since its US


First released in the US, Australia and New Zealand,


the game is now available in more than 30 countries.


Have you played? I haven't yet. No, but I have watched people chase


around the office and we have footage that later. I will talk


about that a bit more with Rory later. Before we go to the markets,


a look at the live page. We have had the boss of Heathrow talking this


morning, the chief executive, and there will be a lot of debate about


what happens to the expansion of Heathrow in the light of Brexit and


the new cabinet. He says he's been on the Today programme and says it's


too early to say what the impact of leaving the EU will be, but he says


that the majority of MPs in Parliament support the building of a


new runway at Heathrow and there is good support in the Cabinet for


Heathrow to get the go-ahead. Plenty more on the live page. We've also


seen a rise in passenger numbers as well. It normally runs at 97%


capacity. The issue of needing more airspace is a huge issue in the UK


for a while. We'll start by crossing over


Michelle Fleury in New York. No slowdown in the earnings parade.


This Friday, big names in corporate America turning their report card.


Despite tough conditions in its oil and gas company General Electric is


expected to turn on a solid performance. The industrial


conglomerate is often seen as good barometer of the broader economy


because it has a hand in so many businesses from health care to


commodities. Wall Street is also predicting a dip in second-quarter


revenue for American Airlines. Brexit has hurt the world's largest


airline lowing the value of sterling sales after converting back into


dollars. Another cloud hanging over the airline is how the Brexit bow to


leave the EU will impact its lucrative London route. And for


those interested in the health of the US oil industry, the latest


drilling rig count numbers are due out. Michelle therein New York.


Joining us is Jane Sydenham, Investment Director,


Great to see you. Is the dust beginning to settle? Do we begin to


understand what the economy is looking like both here, in the UK


and for those countries that trade heavily with us, since the vote to


leave the EU? We've only had a few scraps of data in a short period of


time because most of them are up to the end of June, but what they


indicate is that with the economy it hasn't fallen off a cliff. Life goes


on and that is beginning to stabilise sterling. We had some


reasonable statistics from Europe and obviously the European Central


Bank has decided not to add further stimulus to the system at the


moment. They are keeping the firepower back and the UK have done


the same, so at the moment we seem to be watching and waiting and


things looked like they might be deteriorating a bit. Those are the


expectations but it's not disastrous. It's not bad by any


sense. We seem to be in a holding pattern in terms of central bank


action at the moment. I did protect -- detect a note of irritation from


Christine Lingard, the head of the IMF about what Brexit has done to


the forecast. Yes. Pre-Brexit economies were settling down from a


rough early part of the year. We were settling down, and then


suddenly this flight comes into the ointment in the form of Brexit and


everything is thrown off track and we have do pull back and make sure


it's not going to derail any growth. There was a bit of irritation. Of


course, a key driver in all of the market jitters we saw lately has


been the fluctuations we saw in some of the currencies, particularly


sterling. Are we beginning to see that find a holding pattern? It


seems to be settling down at around 1.3 two. That is quite an


adjustment. A 10% adjustment is a big adjustment in foreign currency


terms. We have to wait and see what happens from here. How much of that


is to do with the strength of the dollar and the fact we are seeing


some fairly robust growth in the US and, dare I say it, decoupling from


what is going on with the rest of the world? It seems fairly isolated.


Yes, I think there is a general weakness in sterling but if you step


away from the UK then the dollar has strengthened against the euro and we


have had good corporate results and the employment numbers are good and


manufacturing is looking better. So, yes there is strength there and of


course the stock market in the US has continued to power up. And here


in the UK we have the PMI data coming out later, a further


indication as to how the economy is doing.


Still to come: We have our technology editor Rory Cellan-Jones


You're with Business Live from BBC News.


MPs are calling for Sports Direct to review the way the business


is run after accusing it of failing to treat its workers


A report has concluded that the founder Mike Ashley,


may have turned a blind eye to what were described


Theo Leggett joins us in our Business Newsroom.


Some pretty damning comments in here, including some comparisons to


Victorian workhouses. Absolutely. This is a scathing report. It says


appalling working conditions and practices both in the shops and at


its main warehouse in Derbyshire. Closer to a Victorian workouts than


a modern, reputable high street retailer. It goes on to say that the


Sports Direct business model involves treating workers as


commodities rather than human beings. It says low-cost products


for customers and shareholders came at the cost of working conditions


which fell way below acceptable standards, Mike Ashley, the founder


and majority shareholder, must be held accountable. There are hearings


last month when Mike Ashley appeared before MPs and we heard a number of


accusations about what was going on. This included staff being penalised


for taking breaks to drink water, serious health and safety breaches


and ambulances having to be called frequently, including in one case


per woman who gave birth in a company toilet.


MPs now say it's incredible that Mike Ashley, who visits the


warehouse weekly, was unaware of the practices. The biggest criticism


comes in the two agencies working on behalf of Sports Direct unemployed


workers. MPs say they did not seem to have a basic understanding of


employment law. The committee does say that although Mr Ashley, as they


put it, had to be dragged kicking and screaming before the committee,


once there he was open and willing to engage. Briefly, what happens


now? The committee says it will hold his feet to the fire and visit the


where Brett -- warehouse to see what is going on and other government


agencies may be involved. HM RCR already looking at the company.


Theo, good to talk to you. One quick story, it looks like


the Competition and Markets Authority is not going to get in the


way of the merger between the home retail group and Sainsbury's, so a


relief for the retailer. You are watching the business Live.


Finance ministers and central bank governors from G20 nations will meet


in China this weekend. It's the last minister level meeting before the


G20 Summit kicks off in September and top of the agenda will be trade,


protectionism and what Brexit means for the rest of the world. Brexit is


never far from our thoughts. It has been dominating peoples thoughts,


one thing,. It really has. Probably the biggest deal of the year in the


industry, one that sees Japan take control of a prized British asset.


Speaking of Japan, Pokemon Go launched in the last 24 hours in


Japan, and by all accounts the country has gone crazy along with


the rest of the world. We were talking about two of the US tech


giants who were buying to take control, so it's all going on. We


are talking with our technology guru, Rory Selin Jones. Great to see


you. Before we get onto Pokemon Go and world domination, can I talked


about what is happening with ARM? It's an extraordinary company, the


UK's most successful in Tech over the last 25 years but even in the UK


people are not that familiar but it makes the chips that go in these


smartphones, your tablet, just about every mobile device. It doesn't


manufacture them, it designs them. The design is the key.


That has caused big debate in the UK. The government says it is a vote


of confidence in the UK. Big debate abound Japan's Softbank. Softbank


has made bold bets on a number of businesses. It bought a robotics


business in France and has done well with that. It bought a mobile firm


in the US. That is not going so well. Heavily indebted. Its leader


is incredibly bold. He likes to make these big bets. He says this is a


big bet on the future. The rest of his investors are not so sure.


Shares fell 10% this week. He believes in the singularity, where


the machines take control. Maybe he is trying to by some of those


machines first. Talking of machines, you cannot walk through London at


the moment without bumping into people doing what you are doing, on


the smartphones. I can't do it in the studio because there is no GPS


signal. Yes, Pokemon Go, we can't stop talking about it. An


extraordinary phenomenon in mobile gaming. And of course, Pokemon is a


huge ebony 's cultural phenomenon and now it is launching in Japan. --


a huge Japanese cultural and Manon. They had a bit of a whit. These


pictures are not in Japan. These are backed people in our office! That is


Tom, our producer. He needs to put the phone down and do some work! I


am in no position to criticise. I took the dog out for a walk this


morning and the dog was not impressed to see me pointing the


phone at the Pokemon. But it can be such a lucrative business. In the


short term, one of the features of the Japanese deal is that it has


done a deal with the American company -- McDonald's has done a


deal with the American company that started it, an illustration of how


lucrative it can be. And I heard that there is a new Pokemon dating


site, where you can find the love of your life! Where will it end? And it


has done well for the Nintendo share price, which has doubled. That may


be a slight overreaction. I think things were quiet and down on that


front. Talking of the titans of tech, Mark Zuckerberg, of course in


charge of Facebook, and Elon musk, the real-life iron man, some might


say the boss of Tesla, are vying for control? These are two random


events, but they tell a tale of tech titans with huge ambitions. Facebook


has revealed that it has flown its first drone, aimed at beaming the


internet and to developing countries. This is painted as a big


philanthropic gesture. These drones will fly at 60,000 to 90,000 feet


above villages in sub-Saharan Africa for three months at a time. It is an


extraordinary feat if it happens. It is still some years away. We have


only had a test flight so far over Arizona. It sounds a wonderful


gesture, but of course, Mark Zuckerberg is vying with Google, who


are trying to do the same thing. They are flying balloons over


developing countries. So that is his bid for global domination of the


internet. Don't forget, in lots of places, Facebook almost equals the


internet in people's minds, so he will be reinforcing the impression.


Elon Musk twitted the other day, I am pulling an all nighter to finish


off my master plan. What will it be this time? He has talked about


becoming an interplanetary species. Is he going to fly us all to Mars?


He is a serial opener. In the end, it was bold, but not crazy. He is


going to put a lot more into solar power. He wants us all to have solar


roofs that power our batteries. He wants to make electric cars


affordable for all across a range of vehicles, and he has this idea that


we may not need to own one, we will just be able to summon one to drive


up to us and take us away. So he will wipe out over at the same time.


He is doing it all, Elon Musk. Thanks, Rory. That story we


mentioned earlier, Roger Earls has resigned as the Fox News Channel's


chairman and chief executive following accusations of sexual


harassment. Earlier today, we spoke to Joe Flint from the Wall Street


Journal about this. His departure will be a huge blow for the channel.


The organisation is all about him, and he put it together and knows


where all the bodies are buried. It will be tough to replace him, to win


over the loyalty of the people he has in place. There are going to be


seismic changes at this channel over the next few years. Rupert Murdoch's


decision to take the acting chairman role, I think, is smart. He is


trying to send a message to the Fox News team of how important this


channel is to him, that he is aware of what a big deal it is for Roger


not to be there, and that his hand is still on the steering wheel. The


channel has been doing so well, I don't want to suggest it runs on


automatic pilot, it is accommodated operation, with Roger there,


everyone knew their role and how to execute it, and I think Rupert hopes


to keep that stability there, while at the same time try to determine


who is best to run its going forward. . We will have to see what


happens. Jane is here to talk through the business pages. Let's


begin with this story that picked our interest in the Telegraph. It is


entitled huge investor revolt at Babcock over bonuses for retiring


bosses. It raises the question of golden handshakes. Are they ever


well-deserved? Well, the performance of the Babcock share price has been


phenomenal since the management team or the individuals concerned joined


the company. That is the engineering services and support services for


the defence industry. So support has been tremendous. The worry is, are


they being involved in an incentive scheme in which they are not


participating actively, that they are not working and contributing to


the performance over the coming two or three years this year? It is a


question of, is it a reward for current effort or just historic


performance? It is difficult, because what is it that shareholders


want her? If you have a 12,000% returned since the guy has been in


tenure since 2003, what more could you want? Surely you should be


rewarding performance. But the issue is, are you rewarding performance


currently for someone who is in work, or are you awarding it


posthumously? There has been a move to reward chief executives for


current work and current incentivising, rather than a track


record. So there has been a shift during the period when they have


been working for Babcock. Another story we noticed was this one in


Bloomberg, talking about Denmark's housing market. This is about the


largest mortgage back in Denmark, saying the housing market is out of


control? This is due to negative interest rates. Rates have been


negative in Denmark for the last four years, which means it costs


practically nothing to borrow money, so people will borrow as much as


they can. And of course, if the housing market then starts to fall


later, there will be negative consequences. Really good to talk to


you. That is it from Business Live today. Plenty more on the website


and world business report. See you soon.


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