13/09/2016 BBC Business Live


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This is Business Live from BBC News, with Rachel Horne and Sally Bundock.


The world's most-powerful central bank unsettles


the markets with mixed messages over interest rates.


Live from London, that's our top story on Tuesday 13th September.


The prospect of more-expensive borrowing in the world's biggest


economy is dominating market movements.


Transport of delight or an uncomfortable ride?


Our reporter Michelle Fleury takes a trip in Ford's new driverless car.


And the European trading day is now underway and most markets recover


following Monday's losses as investors get over the fear


Many of us are put off owning a car because of congestion


We'll be hearing from the boss of EasyCar.


We'll also be asking him about the sharing economy on wheels.


Would you be happy renting your car to stranger?


A fog of uncertainty has descended over the future


of the world's largest economy, with those pulling the economic


An influential member of the board that sets US interest rates has


suggested a rate rise might damage the economy.


Her comments directly contradict several Fed officials,


who have recently suggested the economic conditions justified


considering another increase in rates this month.


Speaking in Chigaco, Lael Brainard said the US central


bank should avoid moves to "tighten policy pre-emptively".


This seemed to clash with Federal Reserve Bank


of Boston President Eric Rosengren's comments on Friday.


He said "a reasonable case can be made" for raising rates


And if you're wondering how much words matter,


just look at the last three trading days on the Dow.


The main stock market in the US reacted swiftly to those


That's because raising the cost of borrowing in the US will mean


higher debt repayments for many emerging market governments


and businesses around the world as the amount owed is denominated


And with the prospect of higher interest rates in America,


this is attractive to international investors who are hungry for better


returns on their investment capital, so money will be headed to the US


I have got a real expert to pick it apart. Nice to see you again. What


will happen next week? The greatest probability is we don't get an


increase, the odds are 40% in favour of an increase. But that is still a


reasonable probability. The economy is doing reasonably well, the


hesitation may be something to do with the forthcoming election. And


the possibility that if we get a result, markets are unhappy and can


tackle it at that point in time. The adverse reaction on Friday, markets


reacting to the comments of the one Fed member, now we are in the quiet


period they cannot say anything until next week's meeting, what do


you make of the mixed views? It is not surprising and it is healthy


that there are contrasting views. We are at the low point for interest


rate. We have had one injuries -- increase, but it is quite low. The


economy is growing slowly, inflation is furtively low, so the point at


which you make the next increase is a hard judgment. It is not that


clear that the economy is growing that strongly and that inflation is


growing that much. But there is also a sense, and I think this is where


the comments came from last week, that we want to start to move


towards a more normalised environment less emergency ward


interest-rate policy and more progressive. When will they make the


next move? The greatest odds seem to be for the end of the year. That


would be after the election, when there is clarity. It would be a year


after the first move. Very slow and gradual, which is what markets are


expecting. Jane will return later when we talked with the papers.


Reid Hoffman, the co-founder of the internet-based


networking site LinkedIn, says he will donate up to $5 million


to a veterans' charity if Donald Trump releases his tax


returns before the US Presidential election in November.


Mr Trump, who has released a self-reported financial disclosure


form, says he will not make his tax returns public until


the Internal Revenue Service completes audits of them.


China's industrial output and retail-sales growth


accelerated in August, with both of them exceeding


expectations, in encouraging signs for the world's second-largest


Industrial output rose by 6.3% in August from a year earlier,


surprising analysts, who had expected it to pick up


Retail sales, a key measure of consumer spending,


also rose 10.6% in August, also ahead of expectations


Samsung Electronics and LG Electronics were accused of agreeing


not to poach each other's US employees, according to a US civil


The proposed class action, filed in a California court


by a former LG sales manager, accuses the two firms of antitrust


violations and driving down employee wages.


The case is similar to one against Apple, Google


and other tech companies, which settled last


Have you ever been in that place where you have bought your flatpack


furniture and do have got to put it together?


Yes, but we have a division of Labour in our house, I'd buy it, he


constructs it. I don't put it together, because it


would be a total disaster. Ikea are doing very well, the wealth's


biggest furniture retailer, and sales have jumped 7% to a record


34.2 billion euros. It says that China remains one of its


fastest-growing markets. They are putting shelves together like there


is no tomorrow in China. Ikea is almost worldwide domination.


I remember before one opened in Northern Ireland, people would get


the ferry to Scotland to stock up. Those candles, things you don't


intend to buy it. You can tell we have been there!


In China, there has been an enormous market flotation. Tell us more. It


is called Postal Savings Bank of China, it has been called a monster


size IPO. They are looking to raise $8.1 billion, making it the world's


largest since Ali Baba went public two years ago. The bank is


well-known in all of China's small towns, I had never heard of it


before, but it has more outlets than any other Chinese lender. It has a


pretty strong deposit base, giving it a reputation among investors as a


sleepy but safe investment. But there are questions over this bank's


exposure to shadow lending, which is unregulated activity. It will list


in Hong Kong, more than 12 billion new shares will be sold, it begins


today and will run for a week, and the shares are due to list and trade


on September 28. The markets are bouncing back.


Coming back following heavy losses at the start of the week, thanks to


the comments we were talking about which gave the impression that we


will not see increased rates in the US next week. In Europe, the markets


are up, ending a three-day losing streak. Chasing those comments from


the Federal reserve. What is happening on Wall Street today?


The monthly budget report for August will come out, expected to show a


budget deficit of $108 billion. Compare that with the month earlier


in July, whether deficit was 113 billion. The Chief Executive of


valiant pharmaceuticals will be at an investor conference in New York.


Not surprisingly, he will be asked about interest from potential buyers


of some of their assets of the company tries to dig itself out of a


mountain of debt. Finally, the International energy agency will


release its monthly oil report. Earlier this month they suggested


that the current oversupply on oil markets will eventually ease by


2017. But analysts and traders have become increasingly sceptical that


the world's major producers will be able to agree to cap their output.


Keep an eye on oil. We mentioned earlier in the programme some nice


data out of China, which normally would grab our attention, but we are


a test with the Federal reserve, but it is looking good. Yes, we were


worrying about China and its rate of growth and whether or not it could


manage the slowdown, and as you say our attention has been elsewhere,


but the Chinese monetary authorities appear to be managing the balance


between producing the amount of borrowing and credit in the economy


and slowing it, but also maintaining a reasonable rate of growth in terms


of retail sales and manufacturing and investment and so on. This was a


good set of data, and slightly reassuring. UK if inflation figures


out this morning for August, what are we expecting? We should start to


see a pick-up in producer prices. That means imports and the raw


materials that companies use for manufacturing and so on. Sterling's


for means that goods coming from overseas are more expensive. In


terms of the CPI, the inflation rate for the economy as a whole, that


should also take up a little bit, but not as much. Is it about


sterling being weaker? To a large extent, but having said that,


employment is relatively full now, wages are ticking up a little bit,


but not run away numbers, but we are seeing some upward pressure on


inflation. She is not finished yet, we are making her work for her money


this morning! We'll be talking to the boss


of EasyCar and asking him if flexible hire really


is a substitute for the convenience You're with Business


Live from BBC News. JD Sports has just posted record


half-year profits as they cash What can you tell us? Big contrast


with Sports Direct, who we heard about last week, their profits are


expected to fall, not doing too well. Contrasted with JD sports,


pre-tax profits of 66%, ?77.4 million. Overall revenues up 20%,


just under ?1 billion. I would like to draw your attention to the share


price. This is the past six months. The middle of June it felt


dramatically, just after the EU referendum. There was a reason, it


was because JD Sports has been expanding heavily in Europe. In


Germany, France, Belgium, the Netherlands, and so on. It bought


eight chain in logical. Since then, the share price has been recovering.


After these results, the market welcomed them, up 6%. This is a


chain that is doing extremely well, it has a diversify strategy, and a


lot of brands. It is worth remembering these results are up to


the end of July, so only a month or so after the referendum vote. The


company say so far it has seen positive reaction from the vote,


because of the strength of the Euro, its European businesses gained their


revenues in Europe, that has been a bonus for them. Further afield, the


operations in Malaysia, for example, there are possible headwinds in the


future, because of the weakness of sterling, but the first half of the


year has gone well, we will have to see what happens in the second-half


of the year, the peak period in run-up to Christmas.


I am not going to burst into song. This is in the music, Esure is


spinning off go compare into a separate business. A whole new


advertising campaign should be lodged.


I don't want them to change it! The chairman of Esure has said that


the companies are distinct businesses which are owed


underpinned by strong brands are but a demerger would allow separate


management teams to focus them more independently. That is management


speak for, we are splitting up. It sounds good.


Our top story, mixed messages from the US Federal Reserve


Leading members of the world's most powerful central bank have issued


conflicting statements over interest rates.


A quick look at how markets are faring.


So far so good, but yesterday we saw alt the markets in Europe down by


over, well over 1% on Monday. So as the week progresses we will see how


it goes. Are the days of owning


your own car numbered? Congestion, rising insurance charges


and road pricing mean that many of us only


use cars occasionally. And having such an expensive item


gathering dust on the driveway means ownership doesn't make much economic


sense for some people. Our next guest thinks all this means


a real opportunity for flexible car rental companies


like his - Easy car. Launched in 2000 as an extension


of the EasyGroup, EasyCar is now operating in more than 160


countries worldwide. Primarily offering a traditional car


rental service, the company has revenues of over


?20 million and rising. It's recent branching


into the UK sharing economy saw them launch peer-to-peer


EasyCar Club in Britain. But with London accounting for over


85% of its activity and the rest of its customers based in cities,


what scope is there Here to tell us more


about the company's inception and ambitions in the sharing economy


is Richard Laughton, Welcome to Business Live. We asked


our viewers to get involved in this conversation a thief done. We will


introduce their tweets later on. Tell us about you. How did you end


up in the world of EasyCar? You were not within this sharing economy


world at all, were you, you started off in banking in the City? I


started trading at the start of my career before going through consul


tans why and in house venturing. I set-up my own first venture around


2000 which was a wine trading company. Wine not compatible with


driving your car? Best not to be done at the same time. That venture


was interesting. It was early for that particular one, but I got


involved in other early stage ventures before being approached to


join EasyCar and given my interest in markets, experience in the


peer-to-peer world and you know the opportunity to work with a group


which has disrupted a market, I thought it would be a challenge to


accept. Now, we were discussing upstairs and one of the main things


we were talking about is how would it work when it comes to insurance?


If I've got my car on the driveway, I have got my insurance and maybe my


partner is named on it. If I was to rent my car out, and if something


happened to it, would it be covered by EasyCar EasyCar, would my


insurance become invalid because I'm renting it out? We've partnered with


Admiral, the car insurance provider to make sure we have got the car


insurance covered up. When anyone signs up as a aren'tal with EasyCar


Club, we make sure that Admiral is happy to cover them. If anything


happens, it will be covered by Admiral. EasyCar Club is happening


in the UK and it has been for a few years, but not the UK, but EasyCar


is global, isn't it? It is, yes. Through EasyCar, you can book a car


in 160 different territories around the world. EasyCar Club we focussed


on the UK to start with because it is a new modelment the model does


exist elsewhere, but we will be looking to expand that. Some users


said they used EasyCar every time years ago because it was cheaper,


but you're no longer cheaper. There is a lot of competition out there,


why would we choose EasyCar? We have a best price guarantee. What we find


with the peer-to-peer side is we tend to price below standard rental


and because the cars are much closer to your house, if you are looking at


the peer-to-peer business, it tends to be cheaper and more convenient.


Within the brokerage, we aim to be price competitive. You talk about


being a disruptor, a couple of years ago when it started, it was a


disruptor, but the whole sharing economy is something that's become


the norm now. Now that it is more established, what new challenges are


you facing? Well, I think, so the sharing economy is much, it features


larger in the public consciousness. There is still a hell of a long way


to go in terms of growing it out. I think as technology changes, and we


have been talking about the internet of things for many years, but now we


are starting to see sensors placed not only in holes, but in cars and


as that technology rolls out, it will make sharing easy. Does it only


work in big cities? I don't think so. We do, as you said, most of our


members are in London. And that's where we launched originally because


had it had good demographics for this service, we have members over


the country who don't rent their cars out every day, but have


opportunities to rent their cars out from time to time. So we have, you


know, someone who runs a B in the Orkney Islands who rents her car


three or four times a year. It is an opportunity to make money from an


asset which would otherwise be gathering dust. We have had a tweet


from a viewer saying, "If the stranger will care for the car as I


do and I can track its every move" Then he would be happy to do it. Is


there any way that you can track where the car is going or do you set


a maximum mileage? We let owners set that if they want to. There are


technologies that allow you to track cars. We don't install the


technology that allows you to do that or on board diagnostics, but


those things are becoming much more standard in cars already. We are


doing experimentation and things like on board diagnostics and dash


cams to catch what happens. Can you be specific about children? No


children, smearing or no dogs, no... You can. We say no smoking, no dogs,


but people can change their settings. We haven't set no children


yet! But I can understand why you might!


I have We have got three little boys between us.


US car giant Ford says it will have a mass-produced


self-driving car for sale by 2025 and now wants to be seen


However the firm has a long way to go if it's going to catch


up with the likes of Google, Volvo and Tesla.


Michelle Fleury reports now from Michigan where Ford is testing


You will be in a level four technology fusion.


That will drive autonomously with a safety driver.


He won't be doing anything and it will be driving through this campus


This is a 10,000 person campus with people doing what they do


So that's the level of capability we have right now.


Ford is keen to prove it can do anything Silicon Valley can.


Uber is launching a self-driving taxi service in Pittsburgh


It feels like being a passenger in an ordinary car.


Light beams and cameras are used to read the environment around the car.


So hang on a second, there's a truck right up in front.


There is also a stop sign so we're going to stop.


So you promise your foot wasn't on the brake?


I wouldn't call it a wild ride, but then that's probably no bad


thing when you're talking about driverless cars on the road.


The question of safety has come up again after a driver was killed


recently using at Teslar's auto pilot feature.


Part of the problem is that the technology is moving


faster than the rules can be written.


Would you get in a driverless car? It feels a bit early. I would want


to be behind the steering wheel with the option of overriding. Foot


hoovering over the brake. I might as well drive myself! The new ?5 is


entering circulation today and it is a plastic fiver. So it will last


longer. It will not get torn, it goes through ATMs in a better


fashion. And washing machines. It survives the washing machine, Jane,


do we need one of these? I haven't actually seen a five pound note


coming out of a cash machine for sometime. The ones I go to only seem


to issue ?10 notes! But yes, of course, they are used a lot and I


think this extends their life by five times so it has got to be worth


it. There are two issues, one, many people are saying with contactless


and the rise you can phone, your watch, your card, is it the time to


be bringing it out? We have these back in Northern Ireland, Northern


Bank issued plastic ?5 notes as a commemorative notes and I saw them


on eBay this morning for ?15. So maybe it is a good way to get a


return... No, I spent it. You spent them all in IKEA, didn't you?


Apparently they can be sticky because they're plastic. So if it is


hot they might stick together. This is in the Guardian.


Guardian Jean-Claude Juncker has launched an investigation. Explain


what's going on here. 140,000 people signed a petition about this. The


former EU Commissioner is going to have a lot of inside information as


to how the EU works and is it really, you know, is he going to


give that to Goldman Sachs, is he going to cross ethical lines? Is it


sort of too blurred, the lines are too blurred between politics and


business, and does it give Goldman Sachs an unfair advantage? If you


are an European Commission president does that mean that jobs you take


afterwards have to be specific, there is EU rules about that? There


is a life long obligation to act with integrity. For all of us. Yes.


Jane, thank you for your time today. She worked hard for Business Live


today. We appreciate that. That's it from Business Live today.


There will be more business news throughout the day on the channel:


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