26/09/2016 BBC Business Live


26/09/2016

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One of the world's leading economists tell us - the BBC -

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the biggest threat to the global economy.

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Live from London, that's our top story on Monday, 26th September.

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Speaking to the BBC, the former International Monetary Fund Chief

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economist Ken Rogoff says that a hard landing for the Chinese

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Also in the programme...blast off for India!

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The world's fastest growing major economy puts eight satellites

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This is what the markets have been doing. Last week was not that bad.

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And we'll be getting the inside track on electronic

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voting - it's being done in a handful of countries -

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We'll be speaking to an industry leader later in the programme.

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And today, we're also looking at the Easyjet story

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about the world's youngest plane captain.

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She's just 26, flying with the world's youngest

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commercial airline pilot. He's 19 years old.

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does the age of your pilot matter to you?

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Get in touch using the hashtag #BBCBizLive.

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Welcome to the programme.

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The former chief economist of the International Monetary Fund

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has said that a slowdown in China is the greatest threat

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Ken Rogoff said that a calamitous "hard landing" for one of the main

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been slowing down faster than official figures suggest.

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So what is happening with China's economy?

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China's borrowings hit $25.6 trillion at the end of 2015.

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This figure includes government, corporate and household

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China's debt is now nearly 250% greater than the value

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of what it produces every year, or its GDP.

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This is due to Beijing's repeated use of cheap credit

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This has unleashed a huge, debt-fuelled spending binge.

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Ken Rogoff has been speaking to our economics editor, Kamal Ahmed.

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There is no question that China has been the engine of global growth.

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The US is picking up, but China is picking up and -- slowing down much

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more than official figures show. If you want to look at a part of the

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world that has a debt problem, look at China. They have been a credit

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fuelled growth. These things don't go on forever.

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Everyone says China is different, the state owns everything and they

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can control it - only to a point. I definitely worried about a hard

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landing for China. We are having a sharp already, and I worry about

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China becoming more of a problem. We have taken it for granted that

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whatever Europe and Japan are doing, at least China is moving along.

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There wasn't really a substitute for China. India may come a someday.

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They are doing better, but it has fallen behind sofa in size that it

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would not compensate. That is the area of the world I worry about

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most. What would mitigate the risk of a Chinese hard landing? What

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should China and the rest of the global economy do? That is a tough

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question. Ideally, you would like to regenerate growth and be more on

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your feet when this happens so that when China starts slowing down,

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Europe is doing better. The US is already doing better, some emerging

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markets are going better. You would like the rest of the world not to be

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dependent on China so much. But the IMF has marked down its forecasts

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for global growth nine years in a row. The rumour is that they are

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about to do it again. In the early stage, it was the advanced

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countries, but for some time now, it has been China. There are limits to

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what you can do when a country that big is slowing down.

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Richard Hunter is Head of Research at Wilson King

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Does he have a point? We have had guests on the show and other

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programmes where I have heard them go, Beijing says growth is

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officially around 7%, but realistically, on the ground, it is

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probably 4%. What is your take on that? That is possibly true. Some of

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the UK blue chips doing business out there would save 4% would be more

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realistic. That said, given the exponential growth China has been

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having, that is a number that a lot of countries would wish for. What

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about the banking system? Everyone compares this with what happened in

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2008, but the banking system in China is not tied into the western

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banking system. It is different. It has without question had a number of

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stimuli. China is going through a transformation from rural to urban.

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This will take the next decade and as time goes on, we will realise

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more and more that the Chinese do not look at their economy as we do

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in the US and UK on a quarterly basis. They have decade views mind.

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Any short-term bonds, there will be less concerned about. They might be

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less concerned about short-term bumps in the road, but how much of

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an impact does China, as the world's second largest economy, if it hits

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those bumps, do we elsewhere feel that? Of course. There are ripples

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in other economies. Generally speaking, when we have such anaemic

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growth elsewhere, it is the likes of China that we look to to keep the

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growth going. Richard, you are going to come back and talk through the

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papers, like these young pilots flying is around.

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The former head of the International Monetary Fund, Rodrigo Rato,

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is to go on trial on charges of corruption.

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The allegations date from when Mr Rato was chairman

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of the one of Spain's biggest banks, Bankia.

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It's claimed Mr Rato, and 65 other executives,

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spent $13.5m on personal expenses while working at Bankia.

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Mr Rato had also previously served as Spain's economy minister.

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A Singapore based firm has acquired a 49% stake in Rolling Stone,

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the magazine widely known as the voice of music

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Bandlab Technologies aims to expand Rolling Stone's business

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The Singapore firm has a portfolio of companies, including retail

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operations in the music industry which it hopes will contribute

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to the continued growth of the magazine

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The messaging app Snapchat has announced its first gadget -

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For a hip young company, it's chosen a rather

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The glasses can record up to 30 seconds of video at a time and go

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As part of the announcement, Snapchat is renaming itself

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Snap Inc, underlining the company's ambition to go beyond

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wine list used to be an old-fashioned word as well but that

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is not now. Let's look at the BBC page here. Monarch Airlines is one

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of the UK-based airline 's. With a lot of rumours that it is going

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under. We don't know where they started, but this engine talk about

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the Monarch engineers, who works tipped off yesterday afternoon, so

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they raced into work to pick up their tools. There are reports that

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some monarch claims sitting on the ground are being guarded. Looking at

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social media, a lot of tweets are coming from pilots saying that the

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planes are taking off, and they are saying to stop the rumours. Talking

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of flying, would you hop in a plane with a 19-year-old pilot? As young

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as you! Jamie! I can fly a simulator.

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Because India has India launched eight satellites into

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In recent months, the country has been launching an increasing number

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of foreign satellites, earning $120m in the process.

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I guess they have to show that they are earning money, because there was

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probably some controversy about a country where a large chunk of its

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population are still trying to feed themselves daily. And they have this

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space programme? That's right. It is a country that has often faced

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criticism for funding a space programme when we have so many other

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problems to deal with. Increasingly, though, India's space agency, when

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they have a launch for an Indian satellite - even today, the purpose

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of that launch was to put a weather forecasting satellite into space,

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which was for national purposes. But they always have some extra space in

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the vehicle, and they are trying to feel that extra space with

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satellites from foreign companies which pay India's space agency to

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carry them along. So far, including the five this morning, India has

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launched 79 foreign satellites. They have already secured deals to launch

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dozens more foreign satellites, and they are looking at it as a way to

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make their own operations more cost-effective. If you look

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globally, the need for space satellite launches has been

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increasing. There are companies that don't just want to put one or five

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satellites into space, but a constellation anywhere between 24

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and a satellites, and they can't always afford a satellite launch of

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their own. That is why they need to piggyback onto launches by countries

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like India and other space-faring nations. And there are even private

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companies like space X. Let's look at what the market is doing.

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We have seen a lot of optimism after Wednesday's decision from the

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Federal open markets committee not to raise interest rates. That seems

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to have been put off till later in the year.

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I think this will feed through into Europe as well. This was the end of

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last week. There are a few nerves about the election coming up as

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well. Samira Hussain

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has the details about what's ahead On Monday, the first of three US

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presidential debates between Democratic nominee Hillary Clinton

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and the Republican nominee Donald Trump. The presidential candidates

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will be tackling three major themes, one of which will be achieving

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prosperity. The 67th annual International astronautical

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conference will be meeting in Mexico. The conference runs until

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Wednesday, but interestingly, the SpaceX CEO will be laying out his

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plans to colonise Mars. Finally, the well's largest cruise ship operator

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Carnival will be reporting earnings. Investors will be paying close

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attention to any possible changes to Carnival's financial outlook for the

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rest of the year. It would be a response to global economic events

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that are really affecting consumer confidence. Let's talk oil.

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Spencer Welch is director of oil markets at IHS.

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The gathering at Doha failed to come to an agreement on whether to freeze

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production or not. I think the Saudis were cheeky to say they would

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only do it if Iran did it. But I think Iran is now playing catch-up

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and needs to get its economy up and running. There is no hope in heck

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that Iran is going to limit its production at the moment? I think

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you're right. It is unlikely that there will be a deal at the current

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meeting in Algiers. It is not a formal Opec meeting. It is a meeting

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of the International energy for. It just happens that most oil producers

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are there, so they will talk about the situation. But the way Saudi has

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treated this was to gain market share. Have they succeeded? Yes. In

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November 2014... Too so why can't they let the press go back up again?

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They would like the oil price to go up, but it is taking than expected.

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US production has been in decline. Saudi production has been

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increasing, so they have been gaining market share, but the price

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of recovery has not kicked off. If Saudi production was cut back, would

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that not push prices up? They tried that in the '80s and it took ten

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years. So if they cut production, they will lose market share. But

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even if they freeze production, which is what they are talking

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about, you would be freezing at record levels. They are turning this

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stuff out like there is no tomorrow. Absolutely. People talking about

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freezing are already at high production levels. So that will not

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make much difference to the market. Still to come -

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is the future electronic? Could you soon be casting your

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ballot by pressing a button We'll speak to a leader in the field

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of electronic voting You're with Business

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Live from BBC News. And now a look at some

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of the stories from around the UK- and the airline Monarch has been

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forced to respond to rumours it's Our Business Correspondent Dominic

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O'Connell has more on this - We were both wondering, engineers

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were tipped off yesterday. They raced back to work and grabbed their

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tools. Do we know whether rumours came from? It started last night

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when reports on social media two aircraft had been brought across

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from America to bring passengers back from resorts in case Monaarch

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got into trouble. Next-day, it celebrates its 50th anniversary of

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taking passengers to the Mediterranean. It released a

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statement this morning, I don't know if it was in talks with the Civil

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Aviation Authority last night, but a statement says it is in talks with

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its current stakeholders about a new financial investment. And that would

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set aside the CAA demand. Airlines need to have three months cash at

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hand to continue flying. So at the moment it looks like Monaarch will

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live to fly another day. It has had a rather chequered past? , Yes it is

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part of the old package industry, when you flew with the airline you

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booked accommodation with. It has been struggling, reinvented itself a

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couple of times, but two years ago in nearly went bust. It was sold to

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a new private owner and it has been enjoying a new lease of life. But

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one of its strengths, in the western Mediterranean, terrorist attacks in

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Turkey and Egypt have really hit it hard. Thanks very much indeed. Just

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before we move on, we like this story. He thought BHS was dead, but

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it is being brought back to life online. That's not bad. Online is

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the future, they say. Our top story - a former

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International Monetary Fund Chief economist says that a slowdown

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in China poses the biggest threat A quick look at how

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markets are faring. We had a good week with gains all

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round. And now let's get the

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Inside Track on the future of the democratic process -

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casting electronic votes. Today we're talking

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to an industry leader. Smartmatic provides technology

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and services to six using electronic voting

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systems: Belgium, Brazil, Estonia, the Philippines,

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USA and Venezuela. The company has managed elections

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across five continents and processed But critics are quick to warn

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that these sorts of systems can be vulnerable to cyber attacks -

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and we've had very high profile breaches recently, including Yahoo

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and the Clinton campaign. They are wondering whether the

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ballots can be vulnerable. Antonio Mugica, chief executive

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of Smartmatic is here. There are critics, what breaches

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have you had in that 3.7 billion votes. , Not even once in 12 years.

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How people tried, but you have to have the security systems? Yes, you

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have two things, you have to take security seriously, which we do. And

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then protecting an election system is more simple than many other

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systems. It only goes live for a few hours and it gives you a big

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advantage over hackers. What is interesting about this, does it

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change the habit of voters. Does it change the way they behave?

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Additional study is needed, but you make the voter more accessible and

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you make it easier for people with disabilities to vote, for senior

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people and illiterate people to vote. You bring in more inclusion

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and that has been extensively demonstrated. We have a big election

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coming up, and the world is watching very closely. The US presidential

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elections. The US uses a form of electronic voting. But there are

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differences, explained that. The US is a peculiar case because they use

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a lot of technology everywhere, but their technology is quite old. Their

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systems were developed ten to 15 years ago and they need a

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significant upgrade, which hasn't happened yet. Are electronic voting

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systems more popular in new democracies? In old democracies we

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have a settled way of doing things and it seems to work. New

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democracies, they think it is modern, secure and we go with this,

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is that where your market is? The largest user of the electronic

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voting is the United States. But it is not fully committed and gone the

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whole way to electronic voting? It is going the whole way, but it is

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just outdated. We are talking to more than 40 different countries

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that at some stage, they are making their voting digital. This is a

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gradual process. What is the biggest obstacle, security? No, the biggest

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obstacle is political will and a certain lack of momentum by some

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politicians. Is there a vested interest among politicians? The

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whole world works differently, but in some emerging markets, you could

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say those committing fraud don't want the fraud to go away, so they

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wouldn't want to bring in something that makes the system more

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transparent. Some older democracies, it is more about being afraid, risk

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averse. Don't touch anything because we will get in trouble. Great stuff,

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we appreciate your time. In a moment we'll take a look

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through the Business Pages but first here's a quick reminder of how

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to get in touch with us. Our pages where you can stay ahead

:22:41.:22:53.

with the breaking business news. We will keep you up-to-date with the

:22:54.:22:59.

latest details with insight and analysis from the BBC's team of

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visitors from around the world. We want to hear from you. Get Involved

:23:04.:23:10.

on the BBC live web page. On Twitter, and you can find us on

:23:11.:23:20.

Facebook on BBC business news. Richard Hunter is back to go through

:23:21.:23:28.

the papers. We have lots of a tweet on easyJet and does age matter. Ryan

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says age doesn't matter but he wants his pilot to be old enough to rent a

:23:37.:23:47.

car in the US. We all go through the same training scheme and when you

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ask, you are just another pilot. Someone else says Battle of Britain

:23:53.:23:57.

pilots were much younger than that. What do you reckon? If you have been

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through all those riggers and past, good luck to you. What about

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experience? You could apply that to anything. You could apply it to the

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Air France flight, the captain went and had his nap. The vice captain

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and they basically flew it into the ocean. Does experience count for

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something? Maybe it does. I am only guessing there is only a certain

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level that can take you to, but these individuals have done very

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well. Good luck to them. What is the story want to talk about? At the

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Brexit one. It is in the Financial Times, people in the city are more

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worried we will have a hard line over Brexiter not get this kind of

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things people in the city once. The banks having a passport to do

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business. This is basically going to get worse as time goes on. At this

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stage we have no details. It is inevitably causing uncertainty. The

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passport thing is a big question. There was a report last week, but

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potentially the passports coming in, exceeded the passports going out,

:25:25.:25:28.

which could change the game. But whatever happens and what comes out

:25:29.:25:32.

of this, the sooner the better, it is part of the UK's GDP, the

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financial services industry. It has got to be the top of the agenda.

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Richard Hunter, always a pleasure. Short and sweet, sorry about that.

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That is it from us today, more businesses throughout the day. We

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will see you soon. Goodbye.

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