:00:07. > :00:16.Hello, this is business live. The road to Rio has been fraught with
:00:17. > :00:20.doping scandals and political and economic crises and of course the
:00:21. > :00:22.Zika scare but it is set to be the biggest money games in history. That
:00:23. > :00:46.is our top story. Business bets big on Brazil, we will
:00:47. > :00:49.hear from the big boss Nissan on why spending millions of dollars on
:00:50. > :00:56.sponsoring these games was the right move. Also, if you build it, they
:00:57. > :01:02.will come. One retirement home in London has dug a tunnel to Harrods
:01:03. > :01:09.with all the elements. And a quick with all the elements. And a quick
:01:10. > :01:19.look at the markets, you can see they are up. As well as the big move
:01:20. > :01:22.of the Bank of England yesterday. And two months after the Europeans
:01:23. > :01:28.at the bank started buying corporate bonds, the Bank of England adopts a
:01:29. > :01:34.similar strategy. We will be assessing whether this really
:01:35. > :01:37.tackles the underlying causes of lacklustre growth. Mark Carney is
:01:38. > :01:42.throwing everything but the kitchen sink at the economic future he
:01:43. > :01:47.clearly sees as risky so we want to know if it is as bad as all that or
:01:48. > :02:02.are there any positive benefit from the decision to leave the EU.
:02:03. > :02:06.Welcome to the programme, a lot going on, we have that Friday
:02:07. > :02:08.feeling! We start in Brazil -
:02:09. > :02:12.where as you have been hearing the Rio 2016 Olympic Games will open
:02:13. > :02:17.in just a few hours time. But it's not just a big
:02:18. > :02:20.moment for sport - it's a lucrative
:02:21. > :02:23.money-making operation too. Rio is set to be the biggest
:02:24. > :02:29.money Games on record. Let's put it in some context
:02:30. > :02:32.for you. Back in 2008
:02:33. > :02:33.the Beijing Olympics pulled in broadcast rights and corporate
:02:34. > :02:36.sponsorship worth almost That figure was blown
:02:37. > :02:41.away four years later Now -
:02:42. > :02:51.the final figures for Rio 2016 are not in yet but it looks
:02:52. > :02:53.set to top $9.3 billion in commercial rights -
:02:54. > :02:56.making it the richest Games ever. That's despite a barrage
:02:57. > :02:59.of negative publicity - from political and economic
:03:00. > :03:01.crisis in Brazil - to the Zika virus outbreak -
:03:02. > :03:05.to the doping scandal overshadowing One of the companies investing
:03:06. > :03:13.heavily in Rio 2016 is car It is a major sponsor of the Torch
:03:14. > :03:26.relay, and it's CEO, He has been speaking
:03:27. > :03:35.to our South American business correspondent Daniel Gallas
:03:36. > :03:44.about paying so much Without any doubt it is the right
:03:45. > :03:50.decision because the objective from the beginning was to give more
:03:51. > :03:53.awareness to the Nissan brand. At the moment we are starting our
:03:54. > :03:59.offensive in the country and Latin America. The fact that we took this
:04:00. > :04:03.decision when the market was nearly 3.6 million cars a year and it is
:04:04. > :04:08.now nearer to 2 million cars a year does not change anything that we
:04:09. > :04:12.want to build a much higher awareness of our brand and product
:04:13. > :04:16.in a country which without any doubt will continue to be one of the major
:04:17. > :04:21.markets in the world and where our awareness is still behind some of
:04:22. > :04:26.the top players. It does not change anything, the fact that the market
:04:27. > :04:30.is down and hopefully in two or three years down the road it will be
:04:31. > :04:34.much higher. It is one of the things we were expecting. Awareness is the
:04:35. > :04:38.reason for which we are participating in the Olympics. The
:04:39. > :04:47.Olic it is with tell us why you think this will be
:04:48. > :04:52.the biggest moneyspinner we have seen. The Olympics is a unique
:04:53. > :04:56.product coming round every four years. You get the Winter Olympics
:04:57. > :05:01.in the middle which is an added bonus on that TV package! Is it a
:05:02. > :05:06.sporting festival, people all around the world are watching it, the
:05:07. > :05:10.television audience is something like 3.5 billion and sponsors want
:05:11. > :05:15.to be involved and there are a limited number of positions so they
:05:16. > :05:22.paid top bucks. I don't know if we know yet how much cost Brazil to put
:05:23. > :05:28.it on but if it brings in $9.3 billion, does a lot of that end up
:05:29. > :05:33.in the Brazilian economy or not? Most of it doesn't. What happens to
:05:34. > :05:37.the sponsorship and TV broadcasting rights revenue, they go to the
:05:38. > :05:42.International Olympic Committee. About 10% of that is used to pay for
:05:43. > :05:46.the IOC itself including the nice hotel that the president lives in!
:05:47. > :05:51.The rest goes down to the National sporting federations and
:05:52. > :05:56.international adoration and in theory to the athletes but by then
:05:57. > :06:00.it is quite diluted. As far as the host country is concerned, they are
:06:01. > :06:06.meant to make their money back through local sponsorship like the
:06:07. > :06:09.torch relay and getting tourists in. Rio is a good destination anyway and
:06:10. > :06:13.it is ebbing for a bonanza from the Olympics but the government has to
:06:14. > :06:17.pay a lot of money and in the case of London, the total cost was
:06:18. > :06:21.somewhere in the region of $12 billion which is a lot money to
:06:22. > :06:26.back. We're not sure how much this will have cost them but we note that
:06:27. > :06:29.when they bid for this in the first place, the Brazilian economy was in
:06:30. > :06:35.a completely different place and since then, whatever the cost, we
:06:36. > :06:39.know it has spiralled, up by 50% and construction has been very difficult
:06:40. > :06:43.to get it on time so I wonder if Brazilians might be thinking if we
:06:44. > :06:48.really need this at a time when the economy is in crisis. That is always
:06:49. > :06:54.the risk with in an Olympics, you bid for it with great hope years in
:06:55. > :06:58.advance and everybody is very enthusiastic. It falls in a
:06:59. > :07:04.recession like this, it can be rather unfortunate. You have to look
:07:05. > :07:09.back at Athens 12 years ago to see that a lot of money was spent on
:07:10. > :07:12.infrastructure, it did not seem to benefit their economy very much and
:07:13. > :07:21.many of the venues were left to become derelict. The New York Times
:07:22. > :07:24.has an article about that, whether the spirit has gone and the recent
:07:25. > :07:27.study amongst Brazilians, 60% or study amongst Brazilians, 60% or
:07:28. > :07:37.more don't support it. Thank you. Apple is going to start offering
:07:38. > :07:43.rewards for finding security flaws. It will pay hackers
:07:44. > :07:45.$200,000 if they find They're not the only
:07:46. > :07:48.ones doing this. AT, Facebook, Google, Microsoft,
:07:49. > :07:50.Tesla Motors and Yahoo In fact, in March, Facebook paid
:07:51. > :07:56.$10,000 to a 10-year-old boy in Finland who found a way
:07:57. > :07:59.to delete user comments New York State's financial
:08:00. > :08:07.regulator has requested a meeting with Goldman Sachs
:08:08. > :08:13.about its fundraising for Malaysian That's according to anonymous
:08:14. > :08:16.sources cited by The Wall Street giant's work
:08:17. > :08:21.with 1MDB is under the spotlight after a series of international
:08:22. > :08:35.investigations into the fund. The number of people in the UK
:08:36. > :08:38.being hired for permanent jobs has fallen by the fastest rate
:08:39. > :08:40.for seven years. The BOE forecast this week
:08:41. > :08:46.that the unemployment rate will rise to 5.6% from 4.9% over
:08:47. > :09:06.the next two years. In the last few months we have had a
:09:07. > :09:11.lot of comments about the RBS share price and we will have more on that
:09:12. > :09:17.later but there have been big falls and we have already seen that the
:09:18. > :09:26.share price is falling. And a bit from William Hill, gambling
:09:27. > :09:31.companies are doing well. This is William Hill which is a big gambling
:09:32. > :09:41.house here and its pre-tax profits jumped 28%. I am a bit sensible
:09:42. > :09:42.about it but it was the football, nobody was expecting that result.
:09:43. > :09:45.People made some big money. Yesterday, the Japanese carmaker
:09:46. > :09:47.Toyota reported a 15% The BBC's Tim McDonald has been
:09:48. > :10:09.looking at how investors reacted I don't imagine they liked it. You
:10:10. > :10:14.would think that, a 15% drop in profits does not sound good but
:10:15. > :10:21.their shares went up initially 3.2%. It is all about expectations and
:10:22. > :10:24.this time round to it were predicting $5.4 billion which is
:10:25. > :10:29.more than many people were tipping. They have been softening up
:10:30. > :10:33.investors since the last quarter saying that the land cruiser has
:10:34. > :10:38.left the motorway and things might be bumpier and that is down to a
:10:39. > :10:42.stronger yen which has gained about 16% against the dollar in the first
:10:43. > :10:46.top of the year. A lot of Toyota cars are made in Japan and a lot
:10:47. > :10:49.head overseas where a stronger yen makes them more expensive and cut
:10:50. > :10:54.into the valley of the earnings that come back to Japan. It is still a
:10:55. > :11:00.profitable company and investors today did not think they were
:11:01. > :11:02.looking at a car crash. That is always a surprise! Have a great
:11:03. > :11:08.weekend. Most Asian stock markets rose
:11:09. > :11:11.on Friday after the Bank of England launched a larger-than-expected
:11:12. > :11:13.post-Brexit stimulus package that An overnight rally in crude oil
:11:14. > :11:22.prices also sharpened investors' risk appetite,
:11:23. > :11:43.but caution before those big US jobs We were expecting about 180,000 new
:11:44. > :11:46.jobs to be created for the month of July.
:11:47. > :11:48.The BoE said it would take "whatever action is necessary"
:11:49. > :11:50.to achieve stability in the wake of Britain's vote
:11:51. > :12:01.I mentioned the US. Let's find out what will be making the headlines.
:12:02. > :12:06.about what's ahead on Wall Street Today.
:12:07. > :12:13.From now until November anything that refers to the strength of the
:12:14. > :12:17.US economy, you can expect it will be fodder for the American
:12:18. > :12:22.presidential elections so if Friday's jobs report is weak we can
:12:23. > :12:26.expect that the Republican candidate will say that this country needs
:12:27. > :12:33.change and it needs Donald Trump. If the jobs report is strong, you can
:12:34. > :12:38.expect that Democrats will say that the economy is getting better
:12:39. > :12:43.because of Democrat and you should vote Clinton. So what can we expect?
:12:44. > :12:47.Many economists believe that the jobs report will show that the
:12:48. > :12:52.labour market is healthy and that the unemployed rate may fall even
:12:53. > :12:58.further and that wages will increase ever so slightly. That is what the
:12:59. > :13:02.US Federal Reserve will be looking at when it considers whether it
:13:03. > :13:23.should raise US interest rates. Let's start with this jobs data. In
:13:24. > :13:26.a way, the number is not as important as what happens to wages
:13:27. > :13:32.because that is what they will be looking at. It is very much a
:13:33. > :13:38.combination effect so we have to see what the headline employment number
:13:39. > :13:43.is and the markets assume it will be a bit below 200,000 but if it was
:13:44. > :13:47.above that then it might cause the market to row back a little bit from
:13:48. > :13:57.the post-GDP reaction we saw last Friday. If we see average earnings
:13:58. > :14:02.higher, and a reasonable headline figure, we might see a market coming
:14:03. > :14:08.back to thinking, is the Fed still in play? If we get a good jobs
:14:09. > :14:14.number given what you have mentioned with the weaker growth from the US,
:14:15. > :14:20.we will all still be confused. Will they or won't they? Not long ago
:14:21. > :14:25.they were still saying two rises by the end of the year. We are in a
:14:26. > :14:31.scenario where the Federal Reserve are finding it easy to find reasons
:14:32. > :14:36.not to hike rates. The post-Brexit world has added to the uncertainty.
:14:37. > :14:40.If we see the deployment market remaining relatively robust, which
:14:41. > :14:43.has an impact into consumption over time, that still leaves the
:14:44. > :14:48.possibility of a rate hike before the end of the year, probably after
:14:49. > :14:52.the election. And if that is the case, that might have an impact in
:14:53. > :14:58.terms of how the US dollar trades and also into the broader market
:14:59. > :15:04.actives and risk appetite. Thank you. You will be coming back later
:15:05. > :15:11.to go through the papers. We will be talking the tunnel into Harrods! Not
:15:12. > :15:15.for you and me! Still to come, I was dog moved from the Bank of England,
:15:16. > :15:16.we will assess what the rate cut means for the British and world
:15:17. > :15:27.economies. The you are with Business Live from
:15:28. > :15:31.BBC News. The big story in the UK, the Royal Bank of Scotland, which is
:15:32. > :15:36.largely owned by taxpayers as revealed it has made a huge loss of
:15:37. > :15:41.about ?2 billion of the year. ?2 billion in six months. A bigger loss
:15:42. > :15:46.than the city expected and RBS's chief executive Ross McEwan blamed
:15:47. > :15:51.legacy issues which he said were still being sorted out. Let's go to
:15:52. > :15:59.the news room because Sebastien Crispin joins us. Just how bad? 2
:16:00. > :16:04.billion sounds a lot, but how bad in the grand scheme of the numbers?
:16:05. > :16:07.Fair to say it's a disappointing set of results per Royal Bank of
:16:08. > :16:14.Scotland. The ?2 billion lost the first half of 2016, let's compare to
:16:15. > :16:18.the same period in 2015. The bank reported a ?179 million loss so the
:16:19. > :16:22.difference between then and now is significant. On top of that, the
:16:23. > :16:26.Royal Bank of Scotland is saddled with 1.3 billion of conduct and
:16:27. > :16:32.litigation costs. And it means the bank is spending a lot of money
:16:33. > :16:35.funding of legal actions and says the staff behaved inappropriately.
:16:36. > :16:40.Not a good set of results and the falling share price is a testament
:16:41. > :16:46.to that. The boss, Ross McEwan, is about half way through a big
:16:47. > :16:51.restructuring plan in the company. What now for RBS? How can it
:16:52. > :16:54.progress through the restructure? Important to take a step back and
:16:55. > :16:58.know that this is not a good time for banks in general. We have seen
:16:59. > :17:02.banking stocks rocked over recent weeks and a string of disappointing
:17:03. > :17:07.results coming out the sector. On top of that we had the results from
:17:08. > :17:11.the EU stress test which was an exercise by regulators to test the
:17:12. > :17:16.resilience of the banking sector and a lot of banks, including RBS, did
:17:17. > :17:22.not do well. It's a difficult time generally for banks. RBS is in a
:17:23. > :17:27.difficult situation. In 2008, it was bailed out by the government and is
:17:28. > :17:30.73% owned by the taxpayer, so it's in a particularly tough situation
:17:31. > :17:35.and it's having to rethink the strategy of going forward. Great
:17:36. > :17:41.stuff, we appreciate it. We will talk to you again. His first time
:17:42. > :17:47.with us. He was good, wasn't he? One more story, this is Beltway, the
:17:48. > :17:51.house-builder and it says it expects housing revenue to increase by 27%
:17:52. > :17:56.with a bar saying it's too early to assess the effect of the EU
:17:57. > :17:57.referendum result. But he says it's been encouraging trading. A very
:17:58. > :18:13.robust balance sheet, he says. Go on, I was going to do it. You are
:18:14. > :18:17.watching Business Live, and Rio is said to be the biggest money games
:18:18. > :18:23.in history ever, despite the barrage of negative muscle that publicity.
:18:24. > :18:27.The opening Seredina -- in the opening ceremony is happening at
:18:28. > :18:34.midnight, a great time per us UK. You can go out Friday night, come
:18:35. > :18:40.back and watch it. I might go out and drink and not remember it. Let's
:18:41. > :18:44.have a look at the markets. Reassured, I guess about the Bank of
:18:45. > :18:47.England move in some ways. Yes, a little bit and the falling value of
:18:48. > :18:52.sterling against the dollar will lift the FTSE 100 because so many of
:18:53. > :18:56.those companies are listed there and they make their profits outside of
:18:57. > :19:02.the UK so it boosts the value. When they bring the money back in the UK
:19:03. > :19:09.they get more bang for their buck. OK. In the last 24 hours the boss of
:19:10. > :19:15.the Bank of England Mark Carney launched a huge fiscal programme to
:19:16. > :19:20.stave off a Brexit induced recession, so what have they done?
:19:21. > :19:25.We know interest rates have been cut from 0.5% to a quarter of a percent.
:19:26. > :19:30.It is the lowest interest rate in history, its 322 year history and
:19:31. > :19:39.the first that we have seen in seven years. So to make sure that the cut
:19:40. > :19:43.is passed on, the bank has introduced a funding scheme. You
:19:44. > :19:50.might be asking what that is. With the rates now so low banks are going
:19:51. > :19:54.to find it harder to make money off the difference between the rate at
:19:55. > :19:58.which they offer borrowers and savings, so as we saw in 2008, weak
:19:59. > :20:03.banks are bad news the economy. This scheme will allow banks to borrow
:20:04. > :20:06.money on the Bank of England at a lower rate than they would offer
:20:07. > :20:14.savers for the same cash. One would imagine it will be near 0.25%. You
:20:15. > :20:17.would hope. The central bank will also increase its quantitative
:20:18. > :20:21.easing programme which basically means it's going to be creating this
:20:22. > :20:28.electronic money and will buy up debt to the tune of $70 billion
:20:29. > :20:35.which works out at around ?70 billion, $90 billion. We have Duncan
:20:36. > :20:40.Withers, who is the head of the Resolution group. Good to see you.
:20:41. > :20:45.Let's start with the idea of the new quantitative easing and corporate
:20:46. > :20:49.bonds. It is clearly a favourite tool for the banks to tackle
:20:50. > :20:53.lacklustre growth across the world. There is a lot of scepticism, given
:20:54. > :20:59.the cost of borrowing at the moment that these measures will have any
:21:00. > :21:02.impact. These were new moves from the Bank of England but similar
:21:03. > :21:07.something that the European Central Bank did earlier this year. And this
:21:08. > :21:10.is the global story at the moment. We are seven years into a recovery
:21:11. > :21:14.of recession around the world and it's been a weak recovery and we are
:21:15. > :21:18.relying more on Central banks to keep it going and they are doing
:21:19. > :21:24.more and more extraordinary things. In some central banks you have a
:21:25. > :21:28.negative interest rates. The boss of the Bank of England does not like
:21:29. > :21:31.that. He said that a few times. Here is the thing, with the quantitative
:21:32. > :21:35.easing programmes we've seen here and in other countries, the whole
:21:36. > :21:41.idea is to get the money out in the economy and it ends up to Mary Smith
:21:42. > :21:46.and Joe Bloggs, but it doesn't end up to the right people. It ends up
:21:47. > :21:49.in the stock markets. Some central banks have been open about this.
:21:50. > :21:52.They are saying they are trying to boost the price of financial assets
:21:53. > :21:56.and that helps the economy in two ways. It makes it easier for
:21:57. > :21:59.companies to raise money and that the holders of the assets feel
:22:00. > :22:04.better off and go out and spend more. That's a way of stimulating
:22:05. > :22:09.the economy but boosting asset prices as a distributional
:22:10. > :22:13.consequence and in simple terms, it benefits people who hold assets, who
:22:14. > :22:18.are already richer. They could be holding them in pension funds,
:22:19. > :22:21.stocks and shares, and I want to ask you whether these programmes we are
:22:22. > :22:25.seeing like quantitive easing really go to address the underlying
:22:26. > :22:31.structural issues we have got in the global economy and whether or not
:22:32. > :22:37.instead they make it more attractive to make excessive risks. There is an
:22:38. > :22:40.issue there. Central banks why not also save assets are pushed the
:22:41. > :22:44.price of those up and it means the return on them is low so investors
:22:45. > :22:48.around the world have been forced to buy more risky stuff than normal.
:22:49. > :22:53.That is what central banks are trying to do, push money into risky
:22:54. > :22:55.assets to get the economy moving. There is a potential downside
:22:56. > :22:59.because people are running more risk than they want to be. I think we
:23:00. > :23:03.have relied very heavily on monetary policy and it might start to change.
:23:04. > :23:08.We have seen Canada under a new government spending more. Japan has
:23:09. > :23:13.launched fiscal stimulus. We might get a fiscal stimulus in Britain and
:23:14. > :23:15.there may be a shift under way in the world towards more government
:23:16. > :23:22.spending and less reliance on central banks. Duncan, thank you for
:23:23. > :23:30.coming in and taking us through it. In a moment we will be taking a look
:23:31. > :23:34.at the business but here's a reminder of how to get in touch. The
:23:35. > :23:37.Business Live pages where you can stay ahead with all the breaking
:23:38. > :23:42.business news. We will keep you up-to-date with insight and analysis
:23:43. > :23:47.from the BBC team of editors around the world. And we want to hear from
:23:48. > :23:57.you as well. Get involved on the Business Live web page. On twitter,
:23:58. > :24:00.and you can find us on Facebook at BBC business news. Business Live on
:24:01. > :24:09.TV and online whenever you need to know. Jeremy is back in the chair
:24:10. > :24:13.and we will. -- we will crack on with the story of the retirement
:24:14. > :24:17.home in London which is planning a tunnel from it to the Harrods
:24:18. > :24:20.department store. It shows you where the level of wealth is. In the
:24:21. > :24:25.context of your previous discussion, those with assets benefiting from
:24:26. > :24:32.the QA process, the older generation are those that generally have higher
:24:33. > :24:37.levels of assets. They clearly have greater levels of wealth and are
:24:38. > :24:42.trying to tap into this by the tunnel into the shop. Older
:24:43. > :24:46.generations are also savers, and what we see with a cut in interest
:24:47. > :24:51.rates, already they are dismal and they will be moored dismal, saving
:24:52. > :24:54.rates. They will continue to go down, so the by-product is that
:24:55. > :24:58.hopefully that will encourage to spend because you are getting less
:24:59. > :25:02.of return on your funds but your funds are actually going down in
:25:03. > :25:07.real terms because inflation will go up because of the fall in sterling.
:25:08. > :25:10.The idea is to encourage a bit more spending which just means the
:25:11. > :25:14.economy will be even more unbalanced. We are expecting to hear
:25:15. > :25:20.about the credit rating of Turkey from Moody 's. Extraordinary that
:25:21. > :25:24.investors are rushing to Turkey despite what we heard about what is
:25:25. > :25:26.going on. In the short term, because investors find it difficult to get
:25:27. > :25:31.returns in other markets you have these episodes where you see a great
:25:32. > :25:38.deal of uncertainty and markets move and then you get this rush of
:25:39. > :25:43.investors moving back in. You try and get the returning Turkey and the
:25:44. > :25:46.nominal yields are approaching nine or 10% but that is something we
:25:47. > :25:49.don't see elsewhere. That is true. So a chance to make some money. As
:25:50. > :25:55.long as you get there quickly enough. Thanks, Jeremy, have a great
:25:56. > :25:56.weekend. That is it from Business Live. Plenty more throughout the
:25:57. > :26:13.day. See you soon. Today is looking warm across the
:26:14. > :26:14.board, mainly because we have lost the strong winds of