04/08/2016 BBC Business Live


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This is Business Live. Mark Carney, take to the stage, he warned we


could see a slow down if we voted to leave the EU. Will he cut rates for


the first time since 2009? Live from London, that our top story


today on Thursday the 4th of August. -- that is.


It is shelter from the Brexit storm, the Bank of England weighs up action


as the economy teeters possibly on the brink of recession. It is


expected that Mark Carney will press that rate cut button and reduce


rates by a quarter of 1%. It will be the first interest rate cut in


Britain since 2009. Also in the programme, Toyota in a spin. Asia's


largest car-maker says profits tumbled by almost 15%. This is as


the car giant contends with falling sales in the United States and


increasingly stronger yen. A busy day on the markets. Europe very keen


to see the interest rate cut. But everything is up because of that job


market news. A glitzy fundraising dinner is set


speak to the boss of a company that speak to the boss of a company that


hopes to revolutionise the way charities raise money. Also,


ditching your digital devices to detox the mind, body and soul.


Logging out and signing off seemed to be the new trend, but are you


ready to disconnect? Or are you addicted? Let us know.


Lots of messages coming in already. We've been bombarded by the


technology question. The will they won't they


merry-go-round over a possible UK rate cut is in full swing today


as the country looks to stave off The bank disappointed a lot of


people. economic data since then has led


many to believe that they will be As you can see here rates haven't


moved much for quite a while now 0.5% a year after year, almost eight


years we've seen that. We haven't seen a rise since 2007.


Leading economists now fear that there's a 50/50 chance of the UK


falling into recession as a result of the Brexit vote and lower


interest rates are one of the ways to reduce that risk.


The theory goes that lower rates make saving money less


attractive while reducing the cost of borrowing.


This in turn drives people to borrow and spend more,


That all sounds great but unfortunately there are also


With rates already so low there are fewer levers to pull


if things get worse for the central bank.


Japan and the EU have both tried negative rates but many economists


argue that this has done more harm than good.


Prolonged ultra-low rates also tend to encourage unsustainable debt


With borrowing so cheap people and businesses are far more likely


to pay over the odds for things they can't really afford.


Our Economics Editor Kamal Ahmed joins us on the programme.


Welcome and good morning. This isn't an easy job. How do you signal that


you will do whatever it takes to support an economy, but at the same


time not exacerbate the problems of faltering confidence which we've


seen from some of the data from the past few weeks? The Bank of England


has marched us up the hill of we are going to cut rates. We were here a


month ago when the monetary policy committee, the committee that takes


the decision of nine economists of interest rates, we thought in July


they would cut rates. The bank didn't. I think that was mostly down


to the lack of data after the 23rd of June vote on leaving the European


Union. There has been a lot of data since then. I think the chance of a


cut, which will be announced at midday today in London, is far


higher than it was in July. I think Mark Carney has said that he wants


to see more monetary easing. He has been supporting that by two very


significant members of the NCP. -- supported. I think we mustn't forget


that cutting rates isn't all they could do. They also could introduce


more quantitative easing, the buying of government debt, that increases


the money supply in the economy. Or they could announce that they want


to support bank lending, that is producing more money, more cheap


money for banks to lend into the economy. There are other levers. But


the big issue for Britain at the moment is the monetary policy, it


isn't the interest rate, it is fiscal policy. What will the new


government do, the new Chancellor, Philip Hammond, when they announce


their first sort of Budget, the Autumn Statement, in November,


December? It isn't just a British thing at the moment. We have the


global picture. If we see a move from the Bank of England that will


just replicate what we'd seen the Australian central bank do, they


have cut down to a record rate, and the bank of Japan. Central banks


are, once again, getting very active. Central banks have been


trying to take the weight, or do the heavy lifting of economic growth.


Probably they would argue, and Mark Carney has said this in the past,


almost too much has been expected from central banks. To the point of


which now the responsibility is moving much more sharply towards


governments. You said in your intro to our discussion that negative


interest rates haven't done a huge amount. There is some truth in that.


But interestingly, if you take Britain out of the equation, and


Britain has been suffering economically since the referendum,


the Eurozone is doing better now, China is doing better now. There is


some evidence Japan is doing better. The American economy has been


struggling. Overall this monetary commerce hugely loose monetary


policy, around the globe does appear to be feeding through to the


Eurozone, at least to slightly stronger growth. -- this monetary


policy, this hugely loose monetary policy. When you look at some of the


data, particularly around lending, it does not seem to be the case that


banks are not willing to lend. It seems to be the case that people are


not willing to borrow. They just don't want it. You are right. This


is not just a supply problem it is a demand problem. Already in the


aftermath of a referendum the Bank of England actually reduced capital


requirement on banks to encourage them to lend. Banks are already in a


position where they are able to lend far more than demand is in the


system. I think that is around, again, fiscal policy. It's around


businesses feeling they will borrow money for a reason. There will be


big infrastructure projects that could support the economy. At the


moment businesses are hoarding cash because they don't feel confident


about the future. Clearly that uncertainty has grown now Britain


has voted to leave the European Union. Because it is unclear what


our relationship will be with the rest of the EU. Those are the areas


where uncertainty is an issue for businesses. They are not shouting


that they cannot borrow at low enough rates, borrowing is


incredibly come historically cheap. What businesses need to invest is


certainty around the political situation, the economic policies of


the new UK Government, and what it's going to do on taxing, spending, and


borrowing. Its moves on that, I think, will increase the demand


issue, which you have struck upon, rather than the supply issue. Thanks


very much. I am glad you agree with me.


CHUCKLES Let's talk about Japan now.


Toyota has just published financial results for the first


It is almost building up to a perfect storm, right? US car sales


falling and the Japanese currency has been a bit strong.


That's right. It is essentially the strong currency which has hit


earnings for Toyota. It's the world's guest auto-maker. They are


blaming the strong yen for the nearly 15% fall in its profits over


the April to June quarter. It also said sales in the US are down. That


strong yen means the profits it brings home from markets like the US


are lower. It is only really worth more when the yen is weak. It also


makes them more competitive overseas. But the yen has been


rallying since the start of the year rallying since the start of the year


because of those volatile equity market and Britain's vote to leave


the European Union. That prompted many investors to buy it because


they see it as a safe haven investment. We also saw other


factors like the earthquake earlier this year. That hit one of Toyota's


the production centres. It hit sales of about 60,000 vehicles. We also


saw Toyota cutting for profits. We are seeing it slide to a four year


low. A perfect storm. Not looking good. But there were still profits,


$5.4 billion, and the shares closed today before the results were out at


nearly 2% higher. Thanks very much. Electric car maker Tesla lost


$293 million in the three That's the 13th


quarterly loss in a row. It also missed analyst's


expectations for sales forecasts and fell short


of production targets. The company insists however


that it is on track to deliver 50,000 Model S and Model X vehicles


in the second half of the year. The world's biggest


sports-maker, Nike, has announced that it will stop


selling golf equipment. Last year sales at Nike's golf unit


fell by 8% to $706 million, it's the third year


in a row of declines. Earlier this year Nike's rival,


Adidas, also announced its intention Who is going to make the golf stuff?


Hopefully nobody will be playing any golf.


Atlantic City's Trump Taj Mahal will close at the end of the summer.


The casino owned by billionaire investor Carl Icahn, is the latest


in a string of casino closures for the New Jersey Beach resort.


Four of its 12 casinos remain shut after closing in 2014.


The magic of television, I'm on my legs.


Japan's main market the Nikkei recovering some of that


It has had a heck of a right of late. -- ride.


A bit of a rebound in oil prices from four month lows also supporting


We will get the big jobs figures on Friday from the US, remember.


In Europe - and the big news will be at midday -


will the Bank of England cut rates to the lowest level in the central


Currency dealers are a bit uncertain how sterling would react


to a rate cut, as it has been largely factored in already.


and find out what'll be making the biz headlines in the US.


On Wednesday we heard from media companies Time Warner


On Thursday, Viacom, the owner of Nickelodeon,


Comedy Central and the film studio Paramount Pictures,


The legal drama over control of the $40 billion media empire,


as well as disappointing results at American box offices, means that


investors will have lots of questions for company executives.


And as the job market in the US picks up, the professional social


networking site Linkedin expects its earnings to do the same


Investors will be looking for more details on its $26 billion


acquisition by Microsoft which was announced last month.


And, of course, investors will want to know if they expect any


impact of the Brexit vote on the company.


Let's have a quick look at some other stories that


This is about twitter. Twitter shares surged by about 17% on a


rumour that this guy here, he is the former boss of Microsoft, might be


interested in buying the entire site. There have been lots of


reports. Him and somebody else, right?


Yes. Him and another investor are getting ready to buy Twitter.


Ballmer Last year announced a 4% stake in the company. Worth about


$12 billion. The problem with Twitter is it is a


company that has never made a profit. Its last numbers that came


back, the biggest problem is building the monthly users, the


active users, I should say. It was only a few weeks ago where we had


the latest numbers and they built them in the last few months by about


3% only. Experts are saying it just is not enough, and then you have the


competition from Snapchat. And lots of people deciding they


don't want their devices. They are putting down their Magri devices and


having a digital detox. We will talk about that later. --


their devices. Still to come - are glitzy


fundraising dinners set to become Later in the programme,


we speak to the boss of one company which hopes to revolutionise the way


charities raise money. You're with Business


Live from BBC News. British bookmaker Ladbrokes has just


released financial results The BBC's Theo Leggett


joins us now. He has been going through some of


the numbers. Tell us more. This time last year, the first six months of


2015, Ladbrokes racked up a more than ?15 million loss, but this time


it's turned it around on the pre-tax figure is ?25.2 million worth of


profit. It's all about football. There have been some problems with


Leicester City winning the Premier League costing the company ?3


million. But on the other side of the coin, the European Championship,


where England, Northern Ireland and the Republic of Ireland, not doing


terribly well. Not great for fans but good for the bookies. The only


one bucking the trend was Wales. The overall picture from the European


Championships was that the number of bets was up and it was very


profitable for Ladbrokes and other bookies. Ladbrokes in the process of


merging with Coral, a big strategy change, try to sell off a number of


shops, but at the moment the strategy seems to be working. There


is lots of competition in the sector at the moment with a lot of


consolidation and regulatory changes as well. An interesting space to


follow. It has been for some time. What Ladbrokes is doing with its


merger with Corel is bringing together two of the big players on


the high street. Some are suggesting high street bookmakers have had


their day and it's going all on the Internet but Ladbrokes are saying


that isn't necessarily true. Yes, a lot of betting happens on the


Internet but high Street bookmakers are doing well as well. To prove the


point, they will sell 400 shops, and they reckon they have found a buyer,


currently unnamed, but they think the buyer will purchase sometime in


the second half of the year. We are talking about detoxing from digital


devices, could you live without your smartphone and devices for a few


days? Absolutely not, I need to keep up with your Twitter feed! You are


so diplomatic, a cheeky man. Thank you so much. Look up the hashtag


sockwars. Private health care firm Bupa says


it's profits have fallen 45% because of the oil price slide in the first


half of the year. Our top story - The Bank of England


is today expected to announce that it's cutting interest rates


to a 0.25%. If that happens, it'll be


the first change in the rate It will also be the lowest level of


interest rates in the bank's 322 years of history. We've been waiting


for something to happen for 88 months, so we are quite excited


there might be a rate cut today. Most economists believe the Bank


will act, with data showing a significant fall in economic


activity since Britain voted That happened in construction and


manufacturing ants as well as the service industry.


Charity auctions have long been associated with the super-wealthy,


There's now one company which hopes to make fundraising a less


Similar to eBay, E-Solidar is an online marketplace


However, all sales that take place on the platform must go


The company also sources memorabilia for charities,


meaning you don't necessarily need to meet someone famous


in order to auction off a signed football shirt.


Despite serving the charity sector, E-Solidar does aim to turn a profit.


Last year, E-Solidar received $600,000 from venture


Marco Barbosa is the founder of E-Solidar.


Great to have you with us. I guess we will start with that, the


600,000, you have to make money, so how do you? Everything we raise we


send to charity, so we cannot make money without impacting on charity


and vice versa. You must have spotted a gap in the market to set


up this business, so what were the structural issues you saw with big


charities? Big charities, about 90% of the income for charities goes to


5% of the charities, and 81% of charities are struggling to raise


funds to survive. The other side, from the consumer perspective and


the corporate sector, they struggle to navigate the charity world and


the complexity. Some charities have yet to fully grasp the technology,


so we want to make the bridge between the companies and the people


that want to support charities and the charities themselves. In


something like this, transparency is so important, it's important for


everybody, but for a charity, how do you go about making sure? We explain


very clearly on the website what we do, and the fee that we take. It's


about improving technology, bettering tools, owing to the market


and understand the pain from the charities and also for the


consumers, how they are struggling to help the charities and also the


corporate sector. What's the endgame for the company? As far as I can


think or remember, there isn't a big listed company out there in the


charity space. Will that be you? We hope so. In maybe 8-10 years, if we


manage to keep growing, we would like to be made an IPO, and show the


world it's possible to have the profitability and the capitalist


world, together with the social impact of the charity giving. At the


same time we are supporting great causes and making a better bridge


between the for-profit and nonprofit markets. Is that realistic? Seeing


the nonprofit sector be as profitable as the profit sector.


Surely by definition they are not. We have that visceral reaction of


people making a lot of money to help people. We strongly believe it's


possible to help people. We know it's very hard, but if we work with


and for charities, attracting venture capital is very tough, but


we think we can show to other entrepreneurs that it's possible. So


we can open this mentality and show that it's possible. What's on the


site just now, what do you have listed? A shirt from the cycling


athletes. A shirt from the Portuguese team. We have the glasses


from Elton John. Just go back to the question, we are a company that


supports communities and we hope everyone can invest. Great stuff, so


sorry, but thank you for coming in. Internet overload has led


millions of people in the UK to take a digital detox,


according to research The survey found more than 30%


of internet users have taken between a day


and a month away from the web. Almost 60% of those surveyed


considered themselves BBC's Emma Simpson has this


report... Nothing beats getting


away from it all. If I Google that, we will be


able to look today. I find it totally impossible just


to put it away and not I like to keep in touch


with everybody and I like to be able to post all my photos to Facebook


so my friends can see where we are. We are now spending the equivalent


of just over a day a week online A third of adults have taken


a "digital detox" or break to strike For instance, 16% of us have made


a point of going somewhere with no Many parents are making their kids


take an online break. Nearly two thirds have been digitally grounded,


but this lot say they know when to stop. I don't find it something you


need every day. Because I'm more than happy biking up and down, I


don't have to be on the Internet. We are better connected


than ever before. But the challenge is to not let


technology take over our lives. There will be more business news


throughout the day on the BBC Live webpage and on World Business




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