29/07/2016 BBC Business Live

This is Business Live from BBC News with Victoria Fritz

The future of the Hinkley Point nuclear power

plant is up in the air after the British

Government unexpectedly put the decision on hold.

It's a big shock, not least to all those companies

who were expecting a boost from the $24 billion project.

Live from London, that's our top story

It's going to cost tens of billions of dollars and take

almost a decade to build, that is if it goes ahead at all.

So is Hinkley point, the UK's first Nuclear power plant

We'll be live at the site - where work is already underway

on the project which the government is yet to sign off on.

The man responsible for delivering billons of parcels to our

door just added a few billion to his net worth.

Jeff Bezos, the man behind Amazon, has just become the world's third

richest man after his company announced a bumper set of results.

And Asian shares slip after touching a one

And Japanese stocks tumbled and the yen strengthened as the Bank

of Japan's fresh stimulus measures disappointed markets.

And we'll be getting the inside track on what Brexit

means for one of the biggest airline groups in Europe.

Later in the show, we'll be speaking to the boss of IAG -

that's the company that owns British Airways.

Following the UK Government's shock decision NOT to sign off just yet

on the building of that $24 billion nuclear power project

we want to hear your best stories of getting cold feet?

It was a big shcok and those companies involved with

the Hinkley Point C Project in Europe are waking up this morning

scratching their heads and wondering what the delay is all about.

Less than 24 hours ago, the British Nuclear Association,

and umbrella group for the companies involved, said it was delighted that

EDF the French company building the plant, had decided to go ahead -

only for the Governemnt to pull back only a few hours later.

This is a hugely controversial project - not least because of some

The cost of the power plant is likely to be

around ?18 billion - close to $24 billion.

Due to the vast cost, Chinese investors, via the CGN

group, have agreed to pay for one-third of the project -

The power plant would provide around 3,200

megawatts of power - about 7% of the UK's total

So what does that mean in every day terms?

Our producers have been doing the maths and it's enough

to make 85.3 million cups of tea at once.

Or alternatively it's enough to keep all the lights

on at the same time in 48.5 million houses.

Oh, and if you've got a smartphone that needs charging,

good news, because this power station can charge 640

While the French and the Chinese are expecting to pay

for the project, they have previously been promised something

in return - a guaranteed price for the electricity it produces.

The UK Government agreed to pay them a price of ?92.50 or $121 dollars 68

cents per megawatt hour of electricity - more than twice

Ben Thompson is down at Hinkley Point where the new plant

Good to see you. Apparently late yesterday a VIP party tent was

erected there, where they were going to do the signing and the VIPs are

not there. What is change heart, is it Brexit or just a new government?

It is funny, welcome to Hinkley Point. You can see the work well

under way and you might be surprised the diggers are moving, although the

plans are on hold. They're doing the ground work and preparing this vast

site for the plant that they still hope will get the go ahead. To show

you where we are, this will be the third nuclear plant on this site.

The blue ones in the background are Hinkley Point A, that is closed and

decommissioned. The one on the right is Hinkley Point B. That is fully

operational, but will be decommissioned in 2023. So they have

to come up with an alternative and that was going to be Hinkley Point

C. But a spanner thrown in the works, the Government in the UK said

it will reconsider that plan and make a final decision in the autumn.

Why? Well I think the main reason will be down to the cost. Building

this site will cost ?18 billion. The big question over whether it could

get higher. Some estimates say 37 billion. So a significant amount and

how much the Government has promised to say EDF for that money. It is

double what the wholesale price is and the fears are that us as

consumers could end up picking up the bill. So much more controversy,

the rate a big issue, the current rate they were going to sign up for

35 years was the twice, more than twice the rate that you pay for the

same electricity now. But the fact that the Chinese were going to own a

third. And worries about is the UK giving away energy security to the

French and to the Chinese. Yes, look, we talk about this a lot on

the programme, international business and getting ex-per seize --

expertise from wherever. The Chinese would fund a third of the cost and

EDF would pick up the rest. From a business point of view the risk is

on them. The government signing a 35 year deal and guaranteeing the

price. But the price on energy can fluctuate wildly. At the moment it

is half what it was. I have been speaking to the nuclear industry

association and they have said over the past five years it has been

higher and lower. It is a gamble and it is taking an education guess on

the way the price will go. Some suggest by the time the plant comes

on line it could be more and it may mean we have a bargain. If it is

lower we may feel we are out-of-pocket and paying more to

compensate for that. It is a calculated gamble. But they're

looking at where the expertise is coming from. There is a concern

about the technology. There are two similar plants like this one that

would be built here. One in Finland and one in France. The one in France

is way over schedule and costing about 7 billion euros more than it

should have done. But they say we know the technology works and we

have a consortium ready to build it and we hope we can build it. EDF

signed off on it last night. It is now down the British Government to

decide in the autumn. Thank you. Gosh, you can talk, can't you. I

thought I could talk. I'm joking! He is done. Thankfully they cut the

sound! Amazon shares are set

to open at a record high, after strong earnings

from the online retail giant. Second quarter revenue

was up 31% on last year Amazon stock is up about

50% since February - that means founder Jeff Bezos has

now overtaken Warren Buffett to become the world's third richest

man, according to Forbes magazine. The company behind Google has

continued to see its earnings boosted by advertising on mobile

devices, like its rival Facebook. Alphabet says revenue

in the April-to-June The results put to rest lingering

concerns about how the rise of mobile might impact Google,

which has a strong mobile presence with its Android

smartphone operating system, but has long relied on desktop

search traffic to power its profits. Switzerland's biggest bank has

posted a big drop this profit. Net profit doped to 14.5%. The firm has

been hit by weak performance in its wealth management and investment

banking. Clients were also spooked about Brexit.

Japan has been throwing money at its economy -

Following its two day meeting, the country's central bank announced

stimulus which fell way short of investors expectations.

And it held interest rates at minus 0.15.

The yen jumped 2.5%, and Japanese shares fell

Karishma Vaswani is in Singapore and has been

These measures weren't audacious enough for investors.

The experts say they need structural reforms? Yes you're right. It

wouldn't be remiss of me to say that the Prime Minister can do with that

kind of advice now from you. Perhaps that is the next trip you should

take to tell him that. The Prime Minister has talked about structural

reforms as part of big plan and monetary policy, structural economic

reforms were part of agenda. Today, we were expecting to see from the

central bank governor a major similar Lues announcement. --

stimulus announcement. That didn't happen. Instead he tweaked policy

slightly. He disappointed the market and investors and in fact he didn't

push interest rates further below zero, as many expected. So there is

a great sense of anxiety about the current economic situation in Japan,

whether any of this is going to help. Thank you. And the markets.

Japan's Nikkei has spent the session swinging

between gains and losses right, after the announcement that the Bank

of Japan maintained its base money target at 80 trillion yen -

as well as the pace of purchases of other assets.

There's a mixed picture opening up across Europe.

Markets here are awaiting the release of the stress

test results on European banks on Friday night.

Michelle Fleury has the details about what's ahead

The US commerce department releases second quarter growth figures. That

could be significant in the election. Both campaigns have talked

about what the two US presidential hopefuls would do for the economy.

This report will offer a clearer picture of the state it is in. The

pace of growth is expected to have picked up with increased consumer

spending. There are still corporate reports for investors to sift

through from oil joints to drug makers and UPS. Their accounts will

not just shed light on how America is doing, but how the global economy

looks. Good on you, Michelle. Sorry. Joining us is David Buik,

Market analyst, Panmure Gordon. You want to talk about UBS. Good

morning, interesting comments, the results were so bad, but very

bearish comments from the Swiss bank, they're worried about the

Swiss franc and about client risk aversion and that sort of thing. But

they're after the Italian bank. What is going on? I think the boss is a

shrewd character. He is basically an investment banker, he has had a

terrible job since they lost 56 billion dollars during that crash

eight years ago. He has been changing the emphasis of the bank

away from general banking to wealth management and it takes time. What

he is still very good at it doing deals. And I don't think necessarily

that UBS will want to invest in the Italian bank. But what I do think is

he probably submitting a good package of who might invest and on

what terms. I think that is exciting. Because this 46 hole in

the banking sector that Italy has got has to be found somewhere. We

will talk about that later when we go through the papers. Shrewd or

crude? I think shrewd. I get called crude. She is shrewd. Shares on that

the Italian bank rose about 6%. Very strongly on the news that we might

get some rescue deal for that bank. Still to come -

we hear from the boss of International Airlines Group,

Willie Walsh, about the impact of Brexit, and what he makes

of drinking in airports. You're with Business

Live from BBC News. Pre-tax profits at Barclays have

tumbled 21% to just a shade over 2 billion in the first half

of the year. And with the increased risk

of recession with lower growth, higher unemployment and falling UK

house prices, the bank is warning that Britain's decision

to quit the European Union could have a detrimental

effect on the Bank. Are the results as bad

as they look? Rob Young is in our

Business Newsroom. Take us through them that. This

essentially is a story of two banks, the core part of Barclays, personal

banking business, that have done all right in the first six months of the

year. But non-core banking, things like French retail banking for

example, bits of the business they are trying to flog off, they have

not done so well. That is why we've seen this fall in pre-tax profits in

the first six months of this year. Barclays has also had to set aside

millions of pounds bra old friend PPI. The scandal continues to hit

the banks. What we did not get from Barclays today is the kind of

language we got from Lloyd's yesterday on the impact of Britain's

decision heard about them cutting jobs, but

they did say Brexit could hit the economy and hit them. Another

company reporting its results today, Foxtons, a South East property

-based company, 42% fall in profits. Is that the Brexit effect? Very much

so. The company has been clear Britain's decision to leave the EU

and the uncertainty caused in the lead up to the referendum has hit

their profits. They said in the first three months of this year,

ahead of a new buy to let stamp duty charge being introduced, property

charges in London were surging. But once that got out of the way, there

was a sharp decline in the number of houses being bought and sold in the

capital. They say that is likely to last for the rest of the year. When

you talk to anybody in the property game or experts, they say the

watchword here is uncertainty, that nobody has a clue what will happen

in the property market in the next few months. To be honest, they never

do! We would be far richer, wouldn't we? We would. The pharmacies in

Sainsbury's supermarkets could soon be wearing the Lloyds logo, not

Lloyds bank, Lloyds pharmacy. You're watching Business

Live - our top story: The UK government has

delayed its decision on the new Hinkley Point

power plant until autumn. This despite French Energy

company EDF approving A quick look at how

markets are faring. European markets, some pretty mixed

earnings out today from lots of the big companies. I want to point you

towards the world's biggest brewer. It said today there were fairly

disappointing volumes in some of its key markets, places like the US.

Places that Mexico has seen strong growth, but in Brazil it is falling

a lot because of a fall in disposable income. That is one of

the big things. It says the SAB-Miller is going to go ahead.

You just had all of that stuff floating around your head. That's

because she likes a drink by the way!

British Airways owner IAG has reported a weaker than expected

operating profit of 555 million euros - or $615 million -

The firm says it is operating in what it has described as

You spoke to IAG CEO Willie Walsh just after the results came out

and asked him about the current headwinds IAG - and the airline

I said, running a European airline at this timeous be like facing a

perfect storm. It is an interesting time and challenging time for us.

One of the biggest impacts, as you will see from the results are

announced today, is the affects of the referendum vote, which has

significantly weakened the pound against the euro and the dollar.

That has had a very noticeable impact on our second-quarter

results. 148 million euros negative, I had never seen that sort of

impact. When you lay on top of that all the issues you mentioned, yes,

it is a challenging environment. But I think we are performing very well,

we have managed these challenges as well as can be expected and are

confident about the performance of the business going forward. Very

briefly, for the uninitiated out there, you talk about the drop in

the pound, it has lost about 10% of its value to the dollar. As you say,

that has an impact because airlines, you have to buy fuel in dollars and

aeroplanes in dollars? That is right and it has an additional impact on

us. Because we report accounts in Europe but we have significant

sterling profits space, when we take that profit in Stirling and

translate into your rose it is at a much lower exchange rate. That has a

reduction in the reported profitability in Europe. We have a

lot of dollar costs, principally fuel costs. When we see a weak pound

and euro against the dollar, those costs increase for us. A big impact

as a result of the weakness of the pound, but also some weakness of the

euro against the dollar. How far and how deep can you keep cost-cutting?

Correct me if I'm wrong, across the group you have a load factor. That

is bottoms on seats, about 72%, and a lot of new big birds coming into

the fleet that need to be filled up. How long can you keep going with the

cost-cutting programmes? It is a 80%, so we have done quite a good

bit of work to improve the number of people flying with us. There is

always opportunity to address the cost base, particularly through new

technology. As we seek technological advances we can see opportunities to

adjust our cost base. That's what we doing. Looking to see if we can

become more efficient, looking for smart things other things are doing,

looking at other industries to see if we can capitalise on some of the

changes they have made. I am confident we can adjust our cost

base. We can't always adjust it as fast as we'd like, so when we get

these short-term shocks it difficult for us to offset the impact on

revenue with a reduction in costs. But over time, we are an industry

that has shown remarkable resilience and a fantastic ability to be able

to adjust. In December last year you were quoted as saying, to the

British government, stop dithering about this decision for a third

runway at London's Heathrow Airport, which is fall to the brim. You said

stop dithering, otherwise I will take British Airways elsewhere. This

has Brexit or possibly the changing government, does that ramp up the

move towards a third runway? I would like to think the government will

address this. Theresa May has demonstrated very clear

determination as Prime Minister. I determination as Prime Minister. I

think we are looking at a different style of government in the UK at the

moment, one that is more decisive and probably one a bit braver than

the previous government. I should say, I didn't say take British are

those elsewhere but that we would look at growing our business

elsewhere. We have the opportunity to grow elsewhere and that is what

we're doing. We are growing Aer Lingus about 10% per annum where

British Airways is growing about 2.5%. We see growth opportunities

out there, but it will principally be outside the UK, unless we see

critical issues of infrastructure is being addressed. There is news

around today in some of the newspaper suggesting UK ministers

are calling for restrictions on the amount of booze being sold in

departure lounge areas, to stop at Al prevent passengers being unruly

in the air. What is your take on that? Would you support it? It is an

issue, we can't deny we have seen issues of unruly passengers

increase, not as much with our airlines as others have reported. I

think it is an issue. It is sensible to look at it, but I think the issue

needs to be examined carefully. The vast majority of 99.9% of passengers

actually enjoy themselves, don't go overboard. This is a very, very

small minority. While it has increased, I think we need to be

sensible about how we deal with these issues. Talking to the big

boss Willie Walsh a little earlier. A creek about... I asked people

about cold feet on something. John Murphy said he spent ?1000 on a tent

for a camping holiday only to give up that idea and book a holiday

home. Chickened out of camping! Terrible expense. Let's talk to

David, back to discuss some of the papers. This story in the Telegraph,

this is about the IMF and a scathing report that came out yesterday,

saying staff were misled by their own board, made a series of real

misjudgements about Greece and became euphoric cheerleaders for the

euro project, when perhaps they could have done with a bit of

distance? I think the remit of the IMF is

ridiculously large. If the IMF help struggling countries, emerging

nations, they do a fabulous job, but when they start thinking they are

the international political springboard, you are bound to get a

trip on a banana skin. This is what I think has happened. The trumpeting

of the euro was ill thought out by a lot of people, because it was or is

going to be a very decent currency within the framework of the European

Union. But as I said before, I went to Tokyo and I said it has two

syllables, otherwise people can't spell it. Of no value whatsoever

over there. Reverting an Greece, that was pretty disgraceful, because

they signed off on that bailout package in 2011 and they were far

from convinced it was really what the doctor ordered and basically we

should have let Greece go and be done with it. And they would now

probably be a very happy nation, with lots of production, in terms of

the value of the drachma. Ten seconds on Amazon, what do you

think? I think he is a top bloke, 15 years of no profit and you are

making $30 billion. Fantastic. I don't know why I am clapping!

Thank you. Plenty more business news available on the website, have a