:00:00. > :00:07.This is Business Live from BBC News with Ben Thompson
:00:08. > :00:11.You're out - South Korea orders Volkswagen to sling its hook
:00:12. > :00:15.as Asia's fourth largest economy tells the German car-maker
:00:16. > :00:19.it can no longer sell its products in the country.
:00:20. > :00:38.Live from London, that's our top story on Tuesday the 2nd of August.
:00:39. > :00:41.South Korea has suspended sales of eighty Volkswagen vehicle models
:00:42. > :00:43.and fined it millions of dollars, alleging that the German company
:00:44. > :00:49.fabricated documents on emissions and noise levels.
:00:50. > :00:51.Also in the programme - China's state-run news agency says
:00:52. > :00:54.more delays over the Hinkley Point nuclear power station is harming
:00:55. > :00:59.Could it lead to China pulling the plug on tens of billions
:01:00. > :01:12.In the first half-hour, the markets look like this.
:01:13. > :01:14.And after yesterday's poor manufacturing numbers - today's
:01:15. > :01:19.And they're not likely to be too hot, either.
:01:20. > :01:23.That is following what we heard yesterday from manufacturing.
:01:24. > :01:25.Hotels, motels and hostels are hitting back -
:01:26. > :01:27.trying to lure the young lucrative millennial generation away
:01:28. > :01:34.We'll be talking to one company about how they're doing it.
:01:35. > :01:37.And as a new report suggests self-driving cars could give a boost
:01:38. > :01:40.to the bar and restaurant industry, we want to know,
:01:41. > :01:43.would having your own self-driving car encourage you to drink
:01:44. > :02:10.I think it is just working here that encourages us to drink more!
:02:11. > :02:11.Nonetheless, let us know at the hashtag #BBCBizLive.
:02:12. > :02:14.Following Volkswagen's involvement in the diesel emissions scandal,
:02:15. > :02:16.the South Korean government has taken the unprecedented step
:02:17. > :02:19.of suspending sales of certain models of VW cars.
:02:20. > :02:22.The country's Environment Ministry has accused the business of forging
:02:23. > :02:28.documents on emissions and noise-level tests.
:02:29. > :02:30.The move will affect 80 models in total -
:02:31. > :02:33.Volkswagen branded cars, but Audis and Bentleys produced
:02:34. > :02:39.The suspension could prove to be a major setback in one of VW's
:02:40. > :02:44.Group sales in South Korea have increased three-fold over the past
:02:45. > :02:47.five years, and although the country still only forms a small percentage
:02:48. > :02:50.of total Volkswagen sales, the suspension poses a threat
:02:51. > :03:02.to the brand's reputation in neighbouring China.
:03:03. > :03:19.Stephen, great to see you, as always. Simple question, why now,
:03:20. > :03:25.why this action by the South Korean Government now? Because the wheels
:03:26. > :03:31.of the law grind exceedingly slow. Basically, this all goes back to
:03:32. > :03:37.last autumn when the faking of results by Volkswagen emerged. There
:03:38. > :03:43.have been settlements in the US. South Korea got the legal process in
:03:44. > :03:49.place with the investigation of whether import documents, for
:03:50. > :03:53.example, were accurate. It has proceeded to finger the collars of
:03:54. > :03:57.executives for Volkswagen in South Korea. It has been very vigorous.
:03:58. > :04:03.It's now gets to the stage where it feels as if it has had hearings
:04:04. > :04:09.about the whole event and we have not had satisfactorily answers,
:04:10. > :04:14.therefore we are suspending these permits. You might say, sceptics
:04:15. > :04:21.might say that South Korea has got big car companies of its own, the
:04:22. > :04:26.vigour of its response is because of that. Obviously the authorities are
:04:27. > :04:31.not saying that. People in Germany might think that. What the
:04:32. > :04:35.authorities believe is that it is a very serious matter. Volkswagen was
:04:36. > :04:43.caught at it and it should pay a penalty. What do we know about the
:04:44. > :04:51.timing of how long this ban or suspension will go one fall? It is
:04:52. > :04:55.indeterminate. It will depend on when Volkswagen can assure the
:04:56. > :05:02.authorities that the new cars being sold meet the required standard. In
:05:03. > :05:07.terms of that there are disputes with people who bought the car, as
:05:08. > :05:19.there are a new rep and the US, even more particularly. -- as there are
:05:20. > :05:25.in Europe and the US. We simply do not know, that is the tantalising
:05:26. > :05:27.part. We will leave it there, but thank you for joining us.
:05:28. > :05:29.China says it will not tolerate unwanted accusations
:05:30. > :05:32.about its investments in the UK after the delay of the Hinkley
:05:33. > :05:35.Those comments came from the country's state-run news
:05:36. > :05:38.agency which said it could not understand the suspicious approach
:05:39. > :05:44.It follows reports suggesting the UK Prime Minister stepped in to review
:05:45. > :05:46.the deal over concerns for national security given China's
:05:47. > :05:56.Amit Pau is with us, he's a managing director
:05:57. > :06:06.at the investment firm Ariadne Capital.
:06:07. > :06:15.I could not pronounce that, I should have looked at that first! You kind
:06:16. > :06:20.of go, oh, gee, with Brexit around the corner, I just wonder if the
:06:21. > :06:24.British Government needs to tread very carefully with some of their
:06:25. > :06:28.words. When Britain is out of the European Union, surely to goodness
:06:29. > :06:32.Britain will be looking at China going, can you help us, we want to
:06:33. > :06:39.trade with you. You don't want to do the dirty on China now? The decision
:06:40. > :06:44.on Hinkley is really strategic, so it needs to be considered. But
:06:45. > :06:49.changing mind at the last minute has huge ramifications on a global
:06:50. > :06:53.basis. Focusing on China, the golden era of China/ UK relationships is in
:06:54. > :07:00.question. The rhetoric that the UK Government, Mr Timothy, Prime
:07:01. > :07:06.Minister May's Senior adviser, has not been helping. Investment into UK
:07:07. > :07:11.from China has increased tenfold in the last five years. By 2020, the
:07:12. > :07:21.Chinese plans to invest ?101 billion the UK economy. Hinkley alone would
:07:22. > :07:26.have equated 25,000 jobs. Can we afford to make such decisions? Also
:07:27. > :07:31.the way it has been communicated post-Brexit, I would say no. There
:07:32. > :07:35.is no debate about why the investment is needed, I suppose the
:07:36. > :07:39.question is whether it is welcome. Some would say that Theresa May was
:07:40. > :07:42.doing the right thing, the British prime ministers says, this deal was
:07:43. > :07:46.done under the previous leadership, I will simply look down, look at the
:07:47. > :07:51.fine detail and come up with a decision later in the year. You
:07:52. > :07:52.would expect that? Firstly, this is such an important decision it needs
:07:53. > :08:10.to be done in a considered manner, so the new
:08:11. > :08:13.Prime Minister has the right to review it, no doubt. But in her last
:08:14. > :08:15.role as Home Secretary, she raised questions on national security, it
:08:16. > :08:18.is really questionable. If it is correct, when you want to send a
:08:19. > :08:23.message to the global economy, there is language in some of the rhetoric
:08:24. > :08:25.shared by the UK Government. Thank you very much for speaking to us. We
:08:26. > :08:27.appreciate your time. In other news, the Reserve Bank
:08:28. > :08:30.of Australia has cut interest rates Weak wages and a strong currency
:08:31. > :08:34.are causing inflation to fall The central bank hopes the move will
:08:35. > :08:45.boost the country's jobs market. We will talk about this story more
:08:46. > :08:48.later. Here he is. Japan's Prime Minister,
:08:49. > :08:50.Shinzo Abe, is expected to announce further details
:08:51. > :08:52.of the government's It's thought a significant amount
:08:53. > :09:10.will be set aside to build long-term We are talking about 270 billion
:09:11. > :09:13.dollars. It will be the biggest stimulus since the financial crisis
:09:14. > :09:18.of 2009. The Japanese government said in the last 15 or 20 minutes
:09:19. > :09:23.that they hope to boost gross domestic product by about 1.3%. Will
:09:24. > :09:26.it work? We will find out. US electric carmaker Tesla says it's
:09:27. > :09:29.reached a deal to buy solar panel The deal, announced in June,
:09:30. > :09:32.will expand Tesla's Tesla chief executive Elon Musk
:09:33. > :09:37.already owns 22% of SolarCity SolarCity's chief executive
:09:38. > :09:58.and Mr Musk are cousins. Keeping it in the family!
:09:59. > :10:02.Let's look at the life page. You have to be related to do business
:10:03. > :10:09.these days, clearly. I just hope they don't fall out.
:10:10. > :10:12.Lots of families do! Love Tanzer, the German national
:10:13. > :10:25.carrier, its boss says they will pay out, pays dividends. -- Lufthansa,
:10:26. > :10:29.the German national carrier. Like many legacy European carriers,
:10:30. > :10:38.Lufthansa are struggling with the mighty Gulf state carriers, like
:10:39. > :10:43.Emirates, Qatar and Etihad. Lufthansa has had a raft, if you
:10:44. > :10:48.will, of strike action for the past 18 months. It keeps rumbling on.
:10:49. > :10:52.Annual profits will be below the 1.8 billion euros of last year. Weak
:10:53. > :10:57.trends, the terror attacks across Europe are not helping many of those
:10:58. > :10:58.airlines. Good stuff. Let's show you the
:10:59. > :10:59.numbers. Japan's Nikkei down for the first
:11:00. > :11:02.time in three days thanks largely to falling oil prices and a firmer
:11:03. > :11:06.yen that dented investor confidence. Banking shares saw a bit of profit
:11:07. > :11:08.taking after two days This is how Europe
:11:09. > :11:16.looks right now... Ahead of construction data -
:11:17. > :11:19.likely to follow the lead of that weak manufacturing data
:11:20. > :11:27.yesterday across Europe. More on that in a moment,
:11:28. > :11:37.but first Samira has the details We will also talk about the Japanese
:11:38. > :11:44.stimulus later. Samir request an 2015 was a record
:11:45. > :11:49.year for car sales, so analysts will be watching closely when analysts
:11:50. > :11:54.report on vehicle sales for the month of July. Annual sales are on a
:11:55. > :12:00.six-year run of games. The longest ever. Will the numbers show
:12:01. > :12:03.continued strength, or will we start to see a plateau? The commerce
:12:04. > :12:08.Department will release personal spending month -- numbers for the
:12:09. > :12:12.month of June. If there is an increase, as economists expect, that
:12:13. > :12:17.will provide a bigger push for the economy as incomes continue to grow.
:12:18. > :12:22.Finally, some big companies are reporting earnings on Tuesday.
:12:23. > :12:29.Procter and Gamble and Pfizer, both part of the Dow Jones industrial
:12:30. > :12:30.average. They are also reporting -- the American International group,
:12:31. > :12:32.AIG, is also reporting. Joining us is Jane Foley, senior
:12:33. > :12:41.currency strategist at Rabobank. She is a familiar face. Welcome to
:12:42. > :12:46.the programme, as always. Let's start with Japan. Another kitchen
:12:47. > :12:53.sink, basically? The Prime Minister has found another kitchen sink to
:12:54. > :12:58.the tune of $270 billion, I am not even a Japanese expert but it
:12:59. > :13:03.frustrates me to no end. 25 years, this economy has been in the
:13:04. > :13:08.doldrums, 25 years. Why are they so reluctant to do what everybody says
:13:09. > :13:13.they need to, structural economic reform? This is a sense of deja vu.
:13:14. > :13:19.This is a rant about the 26th fiscal stimulus and the early 1990s. Every
:13:20. > :13:23.year we see this. Every year the economists say we will get some
:13:24. > :13:26.spending, that will raise GDP by some degree, can it be sustained
:13:27. > :13:31.without the structural reform. Structural reform is about including
:13:32. > :13:36.more women in the workforce in Japan, that is really important.
:13:37. > :13:41.They have the worst demographics in the developed world, are
:13:42. > :13:45.significantly ageing population, a cultural resistance to import
:13:46. > :13:47.workers. The population is shrinking, the working population is
:13:48. > :13:53.supporting more and more pensioners, so they need those women. There is a
:13:54. > :13:57.cultural resistance to doing that. Shinzo Abe, the Prime Minister, has
:13:58. > :14:02.said he is making steps towards that, but it appears slow. They need
:14:03. > :14:07.to raise productivity. That is output per head. That is something
:14:08. > :14:13.which they don't seem to be doing, certainly not at the pace that Abe
:14:14. > :14:18.be promised when he came into power. As a currency expert, is one of the
:14:19. > :14:23.problems faced by Japan, maybe it is out of hand, its currency is seen as
:14:24. > :14:26.a safe haven, the yen. So when it gets a bit Hegga be around the
:14:27. > :14:31.world, investors take money out of stocks, they will buy began, so they
:14:32. > :14:36.think it is safe, that pushes the value of the yen up, hitting
:14:37. > :14:39.Japanese companies who want to sell things abroad? There is a strong
:14:40. > :14:45.correlation between the McKay and the value of the yen. One of the
:14:46. > :14:49.important things to years that the Japanese yen is currently not overly
:14:50. > :14:52.expensive. It is undervalued against many measures. One problem for them
:14:53. > :14:56.is that whilst we are focusing on the value of the yen versus the US
:14:57. > :15:02.dollar, their biggest trading partner is China. Recently we had
:15:03. > :15:06.seen a weakening in the Chinese currency, which is not very good
:15:07. > :15:10.Japanese exporters. You will take us through the papers later, some great
:15:11. > :15:15.paper stories. Speak to you soon. A line of copy
:15:16. > :15:19.from Volkswagen, related to events in the United States this time. You
:15:20. > :15:23.know that the omission scandal is rumbling on. They have paid money to
:15:24. > :15:27.buy back a number of cars in the United States and rectify the
:15:28. > :15:30.problem. This is a class action lawsuit are taken out against
:15:31. > :15:36.Volkswagen, they are filing for that to be dismissed. Those bringing the
:15:37. > :15:41.case accuse the chief executive of Volkswagen and the current brand
:15:42. > :15:45.chief, they were alleged to be directly involved in the preparation
:15:46. > :15:50.of allegedly misleading statements. DW says that has no merit and they
:15:51. > :15:54.are calling on that to be dismissed. Nonetheless, Volkswagen is accused
:15:55. > :15:56.of deception for failing to inform investors about cheating those
:15:57. > :16:03.emissions tests. Traditional hotels, motels
:16:04. > :16:06.and hostels are hitting back - trying to lure the young
:16:07. > :16:09.lucrative travellers away We'll be talking to one company
:16:10. > :16:16.about how they're doing it. You're with Business Live
:16:17. > :16:22.from BBC News. In the UK, home ownership
:16:23. > :16:28.has fallen to its lowest level since the 1980's,
:16:29. > :16:29.according to new figures. Major English cities -
:16:30. > :16:32.particularly Manchester - have seen the sharpest falls
:16:33. > :16:37.since reaching a peak Our Business Correspondent,
:16:38. > :16:41.Victoria Fritz, reports. After booming in the 1980s,
:16:42. > :16:43.home ownership has But now new analysis shows
:16:44. > :16:48.homeownership in England The Resolution Foundation says
:16:49. > :16:53.the number of people who own their home has dropped
:16:54. > :16:57.to 64%, down 7% from The biggest falls have been
:16:58. > :17:03.in Greater Manchester and outer London, although the West Midlands
:17:04. > :17:06.and West Yorkshire have also Northern Ireland has seen
:17:07. > :17:12.the most dramatic switch The think-tank which carried out
:17:13. > :17:17.this analysis argues that the housing crisis is no longer
:17:18. > :17:21.confined to London. They also warn it's threatening
:17:22. > :17:23.to reduce living standards In response, the Government says
:17:24. > :17:29.policies like Right to Buy and starter homes mean that more
:17:30. > :17:33.than a decade-long decline in home The Prime Minister Theresa May has
:17:34. > :17:40.acknowledged there's more to do, although some experts argue
:17:41. > :17:42.that the move towards renting could also be due to
:17:43. > :18:06.changing lifestyles The pies and pasties have helped to
:18:07. > :18:15.deliver profits. At Greggs, they have risen by 7%. They did not
:18:16. > :18:18.comment on the decision to leave the European Union but said they were
:18:19. > :18:21.alert to any change in consumer demand which may result from the
:18:22. > :18:36.current economic uncertainty. There are demands for the PPI
:18:37. > :18:41.deadline to be enforced. It has been proposed that June 2019 be the final
:18:42. > :18:47.date for claims to be made. They plan to hold an awareness campaign
:18:48. > :18:55.to inform the public the deadline. A quick look on the story about Byron,
:18:56. > :18:58.the burger chain put up details on the live change. -- the burger
:18:59. > :19:20.chain. South Korea has suspended sales on
:19:21. > :19:25.the EW 's. Volkswagen has sold more than 80,000 Volkswagen. It also
:19:26. > :19:31.includes Audi and Bentley. This is on the basis of false information.
:19:32. > :19:33.Hotels, motels and hostels are hitting back -
:19:34. > :19:36.trying to win back the lucrative younger generation away from online
:19:37. > :19:40.Young travellers are an increasingly important market,
:19:41. > :19:43.with the World Tourism Organisation suggesting they spend more
:19:44. > :19:51.And it is a market which is growing quickly.
:19:52. > :19:54.By 2020, it's thought those young people, the so-called "millennials",
:19:55. > :20:01.One firm trying to recapture that market is Generator Hostels -
:20:02. > :20:04.which has 14 properties across Europe - and also has plans
:20:05. > :20:15.With us is Fredrik Korallus, chief executive of Generator Hostels.
:20:16. > :20:23.Great to have you in the studio. Great to be here. Can we start with
:20:24. > :20:27.something we have been talking about the last week or so. We had numbers
:20:28. > :20:32.from airlines and we talked about European tourism. It has taken a bit
:20:33. > :20:42.of a kit with terror attacks and attempted coups, Brexit. -- a hit.
:20:43. > :20:46.If an airline sees a downturn in one area, it can move its planes to an
:20:47. > :20:52.area that is better. You have bricks and mortar, you cannot move those.
:20:53. > :20:56.That is true. Our audience, you spoke about millennial is, they are
:20:57. > :21:03.travelling fast and furious. We are having the busiest summer on record.
:21:04. > :21:08.That said, we are very vigilant to what may happen. Right now it is
:21:09. > :21:15.optimistic. What do you do differently? We talk about the rise
:21:16. > :21:26.in websites like a B and people sorting out their own accommodation.
:21:27. > :21:33.70% of our room stock is hostel stock. That means we can offer
:21:34. > :21:39.affordable accommodation. The product is highly designed and gives
:21:40. > :21:47.a lifestyle experience. How is that different to AirBNB. That can be in
:21:48. > :21:54.the centre of a city" cheap. We see it as complimentary. AirBNB offers
:21:55. > :21:58.an individualistic experience. You are in the sharing economy and
:21:59. > :22:04.experiencing social engagement. Sharing everything nowadays, aren't
:22:05. > :22:10.they? Cars, all those sorts of things. It has been a long time
:22:11. > :22:15.since I've stayed in a youth hostel but I did my fair share, backpacking
:22:16. > :22:22.around the world. I am wondering how they vary compared from the late 80s
:22:23. > :22:27.to now. I am assuming Wi-Fi technology in the kind of thing. I
:22:28. > :22:33.would say the traditional hostel you experienced is still there. At
:22:34. > :22:36.Generator we bring a lifestyle experience which is designed led to
:22:37. > :22:47.this traveller. We offer premium products. We sell bed board between
:22:48. > :22:51.25 and 35 euros. -- we sell bed for between. There is beverage, music,
:22:52. > :22:59.nightclubs and entertainment. All this brings everyone together in the
:23:00. > :23:05.best experience. You have been known to turn hotels around. What do you
:23:06. > :23:09.focus on? What do people want? Not just food and location, it must be
:23:10. > :23:20.power sockets by the bed and goodbye five. I would say relevance. Wi-Fi,
:23:21. > :23:24.efficiency, cleanliness and security does that is fundamental. They are
:23:25. > :23:29.looking for representation of what is local. That is what Generator is
:23:30. > :23:36.about. There is nothing standardised. The local culture, the
:23:37. > :23:40.local arts, the local fashion. One thing we do not have is a lot of
:23:41. > :23:51.time. Good luck with everything. Nice to meet you. A quick reminder
:23:52. > :24:24.of how you can get in touch on the programme.
:24:25. > :24:31.Jane is back with us to talk us through the papers stories.
:24:32. > :24:38.Restaurants, alcohol producers cashing in on self driving cars.
:24:39. > :24:43.Jerry says, I am sure that self driving cars require a sober,
:24:44. > :24:49.accredited driver to take over if difficulties arise. Who knows? In 20
:24:50. > :24:54.years' time, what research is saying if every drinker had one more drink
:24:55. > :25:00.a month, that would expand the beverages market by $31 billion.
:25:01. > :25:05.That is a huge increase. There are expansionary prospects will produce
:25:06. > :25:09.in that environment. That is the big issue. Things like the smoking ban
:25:10. > :25:15.really affected clubs and pubs and nightclubs. There was a time not
:25:16. > :25:20.long ago when UK pubs are closing down at the rate of one a week. Much
:25:21. > :25:26.of that was associated with the smoking ban. There were cultural
:25:27. > :25:29.changes with people eating out or drinking in pubs. Against those
:25:30. > :25:36.headwinds, this could be something to allow a new channel about to open
:25:37. > :25:41.up. Would it work for you? If you knew you had a driverless car at the
:25:42. > :25:48.front, would you like another drink? If I trusted the car, I might do.
:25:49. > :25:54.That is the problem. Only joking. Short and sweet. Sorry about that.
:25:55. > :25:58.We will be back the same time and same place tomorrow. Goodbye.