07/10/2016 BBC Business Live


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airlines between 1.5 billion and 6.2 billion in 2025 each and every year.


This deal is voluntary. It is very important to remember. It does


become compulsory not until 2027, with some countries with the airline


sectors. Let's stay with this. Femke de Jong, the EU policy


Director at Carbon Market Watch, Great to have you with us. This has


been a long time coming, right? So many will say. When you look at the


grand scheme of it all, the bigger picture, 2%, that is what airlines


contribute, 2% the man-made CO2 emissions, that doesn't sound like a


lot, does it? Well, it depends on how you look at it. At this moment,


the aviation sector is one of the top ten global carbon polluters,


emitting more CO2 per year than the 129 lowest emitting countries. Its


emissions are set to quadruple in the coming decades, so it is a


problem that needs to be tackled, and we need... OK, great, but this


deal, is it the right deal, it is interesting. At the moment it is


only voluntary up until 2027, then it becomes mandatory. But correct me


if I'm wrong, it says it becomes mandatory for the countries with the


big airline sectors. What does that mean, a country with a big airline


sector? Well, it means that from the year 2021, up to over 60 countries


have committed to take part in this deal to curb aviation's climate


impact. This includes countries like the UK, the United States, but also


China, for example. What it does not do is represent a global scheme. So


it started off carbon neutral for 2020, it will not be reached because


it only covers 80% of aviation's emissions growth. What about


shipping? The shipping industry. Is there a similar deal in place? I


mean, talks about the shipping industry, all of those cargo ships


and carriers an uproarious, apparently, for emissions and


polluting -- note aureus. It is true that the emissions industry is one


of the sectors which have not been faced with binding carbon cuts, and


the same applies indeed to aviation. So far, aviation's emissions have


not been tackled by any global deal. The aviation sector operates in a


world where they do not pay fuel taxes, it is good that we start


addressing this problem and the deal yesterday is just the first step in


effect in order for us to limit global warming to levels that are


safe much more needs to be done. Thank you very much, we appreciate


your time, thank you for joining us from Brussels. Good to see that the


airline industry has got together and done something, maybe the


shipping industry needs to do the same, that's all I'm saying.


Voluntary until 2027, that's all I'm saying.


Shortly after currency markets opened in Asia on Friday,


the pound lost as much as 6.1% in two minutes.


It was the currency's lowest level since May 1985,


and the biggest intraday drop against the dollar since its plunge


in the wake of the UK's vote to leave the EU.


They are talking about a flash crash. What happened over there


during this trading session? Was it big fat thumbs? I'm not sure. That


was the initial guess among the traders here, and that is back


around 7am local time, just after midnight local time, the Stirling


started the plunge, they wondered if it was just a human error, also


known as a fat finger, because there was no obvious reason it could have


triggered a sell-off. But then it seemed like the plunge started


shortly after the Financial Times published an online article about


the French president talking about tough negotiations ahead of Brexit.


What happened was, a lot of banks have their computers set up to react


to certain keywords, and it seems like this FT article has triggered a


sell-off. It came as a huge surprise to many traders here in Asia. Thank


you, we appreciate the update, we will talk to you soon. We are asking


her if she can talk to the traders and get the pound up, I want it at a


record high! We will have more on that story a little later on with


our guest. Samsung Electronics says its third


quarter profits will be better than expected,


despite the damaging recall of its flagship Note 7 smartphones


over exploding batteries. Samsung says it probably made


profits of $7 billion in the three It releases full results


at the end of the month. Twitter shares have continued


to plunge after a report cast doubt The tech website Recode reported


that Google and Disney would not bid for the social network -


and that Apple was unlikely Cloud software maker Sales Force has


also been named, but has yet And the photo-sharing app Snapchat's


parent company is working on an initial public offering that


could value the company The Wall Street Journal is reporting


that Snap Inc is looking to sell What a success story. It's for the


young ones, actually! Let's be frank, let's be frank Viktoria


Komova on. At least I have an account! You've got to learn how to


use it now. Check out the Business Live page, a great site updated all


the time. Another reminder of Deutsche Bank, we have been talking


about but the past couple of weeks, a lot of worries, the IMF and global


organisations are saying it is the most dangerous bank in the world,


but we are saying there is no Lehmann Brothers moment. The


officials are trying to reduce that $14 billion fine, talking about


going down to about 5 million. -- 5 billion. But Jean-Claude Junker says


that Germany is not going to let this bank fail, it is too big to


fail and Beowulf Dublin. It's worth saying that the share price has


recovered yet again. We saw some big falls last week, it is recovered,


there is confident it is being shored up, although there are


rumours swirling. Let checking with the stock markets. The pound briefly


and mysteriously plummeted to fresh lows in early trading. Amid this,


persistent concerns about Britain's exit from the EU. The McKay in Japan


is down about 39 points at the end of the session, it followed a


turbulence session on Wall Street as well. European trade has been open


about 40 minutes, and of course everyone is keeping an eye on the


pound and seeing what is going on, the pound versus the dollar. We have


got some tweets, too. I will cover them during the rest of the


programme, keep tweeting. Let's talk to the bloke with the red races. --


red braces. Joining us is Justin


Urquhart-Stewart, co-founder and director of Seven Investment


Management. We normally talk about markets, can


we talk about a flash crash, this being in Asian trade with the pound


dropping. Let's explain to those who don't typically follow it, how does


this work? You have got various levels of foreign exchange trading,


a lot of it is done manually with individuals carrying out raids, but


the majority of these is carried out automatically, so they will have


programme trades operating foreign exchange, they will have


institutions doing their trading, there is a lot of background noise


going on. And as you were hearing just now, some of those trades will


react automatically, sometimes the words being said, the numbers being


breached, and an automatic trigger. In this case, it might be a French


swearword coming out and somebody reacts to what the French are saying


about the British and that reacts on the pound, that can happen, but


these should have brakes on them as well, they can only go so far. It


shouldn't have eight trigger effect like dominoes. Where we actually do


find out what happened here, it will be interesting, wasn't a human


reaction, a fat finger, somebody got the trade romcom or was it an


automated trade that carried on other automated trades with it. It


is worth saying that any automated system is being initially inputted


by people, and so what are the trigger points, for example, that


could trigger an automatic system to keep falling down? Are they looking


for words in the media, for example? Could it be our full but we are


talking about Brexit? We could actually be talking it down, is that


possible? What you do is you build an algorithm and that will be built


to react to certain things, normally it will be numbers coming through.


But it particular figures, if it goes below a certain level, but now


developments are going on, it react to news and particular words. The


markets are changing so rapidly now. It is not just mathematical, you


have designed it so it is reacting not quite do emotions but there are


keywords coming up it will have an impact. Smart machines, interesting.


So if I read that the UK economy would grow 10% next year, would that


help the pound go up? No. Still to come...


Our economics correspondent Andrew Walker will be here to talk


Could this be the data that cements the timing of the next rate


You're with Business Live from BBC News.


The reason we ask is because confidence among UK


businesses has returned to pretty much the level it was at before


the decision to leave the European Union.


Why did you say it like that? To keep them interested here in the UK!


And it's having a big impact on the number of staff that firms


But what about how much they're prepared to pay them?


Our business correspondent Theo Leggett has the answers.


The recruitment and employment in the Reg on have put out a report


saying that in September the number of permanent and temporary staff


taken on by companies have increased for the second successive month.


Back in June and July there was a dip around the time of the


referendum, now it is picking up again. Demand for Stav continues to


rise, biggest in the engineering sector. For permanent and temporary


staff it was in the hotel and catering sector and the


Confederation says it shows that businesses are getting over the


initial shock of the referendum result, shrugging it off. But there


are some important caveats. For a start, permanent hiring has not


increased in London and the Confederation says it is probably


because of concerns over what the EU result will mean for the financial


sector in particular, whether Pat Sporting rights are kept and whether


any business will move abroad. It says the number of people available


to fill roles is going down, which is a point of concern.


Britain looks like it is looking at a hard exit


from the EU, Theresa May not looking bad she will accept the free


movement of Labour. Could the immigration crackdown, if


we see one, lead to staff shortages? The recruitment and employment


Confederation seems to think it is a concern, they say, we urge the


Government to be mindful of talent shortages faced by many UK employee


is. Despite some of the rhetoric at the Conservative Party conference,


we will continue to need workers from overseas in a range of sectors


from engineering to health care. It says they need a rational debate


between business and Government about a sensible immigration policy.


Thank you very much. Can we quickly get on the screen the Business Live


page? Look at that, incredible, from the Bloomberg terminal, it shows the


drop, the fall off the cliff of the value of the pound during that Asian


trading session. The world's first aviation


pollution agreement has been approved


by the UN agency, ICAO. The deal is expected to limit


the growth of emissions A quick look at how


markets are faring. The European trading session has


opened and unsurprisingly the FTSE 100 rising yet again. Remember about


75% of the companies listed on the FTSE 100 are pretty international in


focus which means any fall in the value of sterling improves their


profit margins for anything coming in from America or Europe, anything


that they make abroad. That is why we often see this inverse


relationship between the value of the FTSE 100 going up and the value


of sterling going down, particularly against the dollar.


It's been a terrible week for sterling -


Globalisation has been on the agenda too this week,


with discussions about how increasing amounts of international


economic integration have affected incomes around the world.


Plus there's much to talk about on US jobs,


Let's get the Inside Track on all this with our economics


Good to see you. Happy Friday!


Let's start with the US jobs. Again, leaning towards whether we will get


an interest rate rise, will display into that?


Absolutely, we are expecting a figure of around 170,000 additional


jobs created in the last month in the United States economy. It has a


growing Labour force so you need to have a certain number of new jobs


created just to keep up with that but 170,000 would be better than


that keeping up level. So, yes, it would tend to play into the


possibility of bringing a rate rise, perhaps in December, which is what


most people in the financial world seemed to be expecting. Worth


remembering the other element is inflation, we have really low


inflation in the UK but the US is still below the fed's target but


still significantly higher at if you take out a volatile food and energy


prices it is getting towards the 2% target, 1.7% of the most recent


figure. The Fed has eye on inflationary pressures than the Bank


of England or the ECB. Not bad given what we are seeing in


Europe and here, and inflation rate closer to 2%, the ideal mark.


In the bulk of the developed world, inflation is seen as too low. In the


UK, the Eurozone and Japan. So, yes, I imagine we are going to move on to


talk about sterling doctor-macro I see what you are doing there!


Aren't you supposed to do that bit?! We will share some of these tweets,


what is the impact? It highlights the pros and cons of the week are


valued currency. Emil Sorheim, with an upcoming trip to the UK to


celebrate my birthday at the Royal Opera House, the weak pound is a


wonderful birthday gift! In terms of the link with inflation,


likely to see a boost in inflation if sterling remains weak.


First of all, happy birthday a meal! Normally a depreciation in the


currency is something you welcome on some grounds but worry about the


inflationary impact but these are not normal times as we have said so


many times. For the Bank of England, yes, there is that welcome aspect


which means it will push inflation up somewhere. There is a possibility


that if it is a very large ball and it has been substantial already, it


might push it up too far, through the Bank of England's target, and


the forecast from the International monetary fund this week suggested it


could get as high as 2.5%, which would be above the Bank of England's


target but not so much to be a huge problem in itself. The issues would


be if it went much further and obviously the question of whether


pay will keep up with any surge in inflation and whether it will affect


people's real incomes after inflation at first it.


Another treat here from Joe Richards who is talking about the impact in


terms of what they have to buy in stock, the goods that they need to


use and where they come from, and it has a big effect there.


For businesses that are importing a lot of components, raw materials,


surprise, yes, there is a direct affect on them. It will either be


reflected in what they charge their consumers, they may pass it on, or


maybe absorb it in lower profit margins, it is a decision they will


have to take. Some businesses I think will look at the situation of


demand for their goods and services and think, maybe we had better take


the hit in the margins and hope we will be able to recover the profit


later on. Bobby was around the world, -- for


viewers around the world, the UK imports more than it exports?


We have quite a large deficit in international trade, and one of the


hopes is the depreciation of sterling will make imports less


competitive, exports more competitive, and might reduce the


deficit over time. We will have to start making more


stuff! Manufacturers in particular are


sensitive to changes in the exchange rate so it may be helpful for them.


Andrew, always a pleasure, have a great weekend.


In a moment we'll take a look through the Business Pages but first


here's a quick reminder of how to get in touch with us.


The Business Live page is where you can stay


ahead with all the day's breaking business news.


We'll keep you up-to-date with all the latest details,


with insight and anaylsis from the BBC's team of editors


Get involved on the BBC Business Live webpage,


On Twitter we're @BBCBusiness, and you can find us on Facebook


Business Live on TV and online - whenever you need to know.


Justin Urquhart-Stewart is joining us again.


You liked this story, do you drink a lot of bottled water?


I don't, because I think it is wasteful and we have good sanitation


here, but not many people agree with me!


But London water is supposed to pass through the body of about nine


people! So long as they keep testing...


Tell us about the story? An article in the Guardian which takes the


industry, worth $157 billion, they reckon by 2020 it will grow to 280


billion, bottled water. All the different types, the different


names, there is one called Ugly, but some of the descriptions they come


up with, Coca-Cola's Smart Water, it just comes from Northumberland! Do


you remember Peckham Spring in Only Fools And Horses? It was a spoof on


bottled water, they made it up as coming from Peckham. But the idea of


this Smart Water, it is vapour distilled and Coca Cola says it is


inspired by clouds! You can get water from Fiji, or


Peckham Spring is! This started with our fixation in


the continent with Perrier, everyone wanted it but at least it had


bubbles, the still waters are all virtually the same but you pay a


premium price. Because it is Friday, can we skip


the president Obama thing and go with Indigo airlines, a Budget


carrier based in India, and it is the first time we have heard about


an airline doing this, childfree zones? You have kids, did you fly


with them? No!


Like the Royal family, you don't fly together!


It is a lovely idea, why hasn't anyone done it before? Does it mean


on the plane you are separated from the child, or you have to leave the


child behind?! You leave the child on the plane but


it is only a few rows behind! Those trolleys with the food in, you


could get several children on those trolleys, they would be wheeled back


down as you leave the plane! Your child, Sir?


Airlines, are you listening to this?!


As long as you get the right one on the way out!


Hello, cloud amounts may vary from one day to the next but the general


weather pattern really isn't going to change much in the next few days.


Most of the thick rain bearing cloud comes from the Atlantic but it just


stops to the west of us, it is getting blocked by a huge area of


high pressure centred over Scandinavia which is influencing our


weather. We are drawing in an easterly breeze, perhaps not as


strong as it has been, a lot of cloud on that breeze, maybe more


sunshine as we head into the afternoon but equally one or two


showers as well. After a frosty start with patchy fog, the best of


the sunshine across northern Scotland. It will be rather cloudy


for Northern Ireland, as it will be for southern Scotland, but for most


of England and Wales and little sunshine at times, the best of that


perhaps across north-west England and north-west Wales. One or two


showers dotted about, especially in eastern England. The easterly breeze


eases overnight, we could see more breaks in the crowd, showers across


East Anglia and the south-east of England, which could be on the sharp


side by the coast by the end of the night. Most places double figured,


Scotland standing out as being somewhat colder with patchy across


in the countryside. Early mist and fog lifting, then a little more


sunshine on offer on Saturday, cloud coming and going, most of the


showers across East Anglia and the south-east of England, where the


breeze will be fresher. But otherwise temperature is very


similar to date. In the sunshine, not feeling too bad. Similar on


Sunday, not much changing, showers chiefly for East Anglia and the


south-east of England, a lot of dry weather and sunshine at times. Much


more dangerous weather, though, on the other side of the Atlantic. This


is Hurricane Matthew, Haiti at the beginning of the week moving


northwards, a direct hit at Freeport in the Bahamas, now sitting just off


the coast of Florida. Slightly but still a major hurricane, category


three. A lot of rain with it, eight to 12 inches of rain, storm surge


and hurricane force winds across the coast of Florida, eventually heading


towards the Carolinas by the weekend.


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