13/10/2016

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:00:00. > :00:09.This is Business Live from BBC News with Sally Bundock and Ben Thompson.

:00:10. > :00:12.Brexit breather for sterling - the pound holds on to gains made

:00:13. > :00:22.in the last few days but there's a bitter taste over Marmite

:00:23. > :00:26.The price of the spread is causing a war between global giants Tesco and

:00:27. > :00:27.Unilever. Live from London, that's our top

:00:28. > :00:44.story on Thursday 13th October. Sterling stays steady for now

:00:45. > :00:49.but could swing later as a legal challenge to the right

:00:50. > :00:51.of the Government to start the Brexit process without a vote

:00:52. > :00:54.in Parliament is posed. Tesco pulls dozens of household

:00:55. > :00:58.brands off its website - as the currency slump

:00:59. > :01:16.sparks a pricing row Markets are on tenterhooks, they are

:01:17. > :01:19.falling as traders digest the latest news on Chinese exports, how the

:01:20. > :01:28.pound is doing and the Federal Reserve minutes. How about a health

:01:29. > :01:30.record for your car? We will meet the firm that wants you to upload

:01:31. > :01:33.your documents to the internet. So today we want to know

:01:34. > :01:36.are you willing to pay 10% more I can't stand marmite, so no big

:01:37. > :01:52.brands in the supermarket. I can't stand marmite, so no big

:01:53. > :01:57.deal for me. But let us no. Use the hashtag #BBCBizLive.

:01:58. > :02:01.You have already sent in plenty of thoughts. We will try to mention

:02:02. > :02:04.them. There's been some relief

:02:05. > :02:07.for the battered pound, but how long will it last

:02:08. > :02:10.and what are some of According to calculations by the UK

:02:11. > :02:14.Treasury, leaving the EU single market, a so called "hard Brexit",

:02:15. > :02:17.could cost the economy as much as ?66 billion annually,

:02:18. > :02:26.that's around $80 billion. It says Britain's economy,

:02:27. > :02:29.its annual output or GDP, could be 9.5% smaller within 15

:02:30. > :02:32.years if it can't strike a deal giving access to the EU market

:02:33. > :02:35.and is forced to operate under These figures are disputed

:02:36. > :02:47.by Brexit supporters. But what can't be disputed

:02:48. > :02:50.is the impact all of this is having It has lost 18% of its value

:02:51. > :02:57.since the Brexit vote and has been down as much as 20%,

:02:58. > :03:00.but the UK consumer is already Tesco has withdrawn some of the most

:03:01. > :03:11.popular brands from its website, including Marmite spread, Vienetta

:03:12. > :03:15.ice cream and Persil washing powder, after Unilever tried to put up

:03:16. > :03:17.prices to compensate Look at the Tesco website this

:03:18. > :03:26.morning and you'll find that dozens of its top-selling

:03:27. > :03:29.products are unavailable. All the items, from Persil

:03:30. > :03:31.to Pot Noodles, are made They are believed to have

:03:32. > :03:41.demanded a 10% price hike, blaming the weakness of the pound

:03:42. > :03:43.since the Brexit vote. And so, one of the biggest consumer

:03:44. > :03:47.goods suppliers is said to have stopped deliveries to

:03:48. > :03:50.Britain's biggest retailer. For the time being at least,

:03:51. > :03:52.the problem seems to be I've just bought these

:03:53. > :03:57.Unilever items at the store here and there was plenty of product

:03:58. > :04:01.on the shelves. But some people are reporting

:04:02. > :04:04.problems buying these Marmite is made in the UK,

:04:05. > :04:11.so why should its price go up 10%? Some analysts say Unilever may be

:04:12. > :04:13.using the pound's fall as a pretext for increasing

:04:14. > :04:16.its prices across the board. Unilever has said nothing

:04:17. > :04:25.at all about the current dispute. Unilever said it was quite normal to

:04:26. > :04:27.increase costs because a currency had been devalued.

:04:28. > :04:40.In the battle of the Marmite jars, the former boss of another big

:04:41. > :04:43.supplier says Tesco will eventually have to give some ground.

:04:44. > :04:45.That's where Unilever will win because, despite the fact people may

:04:46. > :04:47.grumble about paying more for Marmite, they will

:04:48. > :04:49.pay more for Marmite and that's what the strength

:04:50. > :04:54.But then the people who pay more have less money

:04:55. > :05:01.So, two giants of the food world are facing up to each other

:05:02. > :05:20.Kathleen Brooks, Research Director, City Index, is with me.

:05:21. > :05:26.This is where it starts to get real. We can talk about numbers, the

:05:27. > :05:31.falling value of the pound, this is when it hits the real economy?

:05:32. > :05:35.Absolutely, the tangible effect of the falling pound that we have seen

:05:36. > :05:39.since June. Really, the pound has been accelerating its decline in the

:05:40. > :05:43.last two weeks. There will be more of this to come. It's gone from

:05:44. > :05:46.something we talk about on financial markets to the supermarket aisles,

:05:47. > :05:52.quite literally. What you think outcome will be for people? They

:05:53. > :05:56.will feel less well off? Those that cannot bear the generic alternative

:05:57. > :06:00.to marmite, they will pay more for their weekly shop? Wages are not

:06:01. > :06:04.really going up in any fast way, people will have to divert more

:06:05. > :06:08.funds to necessities, be that marmite, if that is your thing, or

:06:09. > :06:11.not. Ultimately, they will spend less elsewhere. Not good news for

:06:12. > :06:16.the economy when the necessities start to go up, that is what we

:06:17. > :06:19.really have to buy. The government will be watching this closely, so is

:06:20. > :06:24.the Bank of England. Inflation for them is not good at the moment,

:06:25. > :06:28.because interest rates are so low. Some winners and losers, this is

:06:29. > :06:32.clearly an issue where consumers will lose when it comes to the price

:06:33. > :06:35.of things in the supermarket, some winners in terms of making it

:06:36. > :06:39.cheaper to stay in the UK for tourism, more people coming to the

:06:40. > :06:43.UK, foreigners snapping up things in the UK, luxury goods are much

:06:44. > :06:53.cheaper. There is a tourism benefit, a staycation benefit? Absolutely. On

:06:54. > :06:58.one side you have winners, but then you have losers. They have to

:06:59. > :07:01.balance it. Not everybody is going to benefit. Tourism should

:07:02. > :07:05.definitely get a big lift from the fall in the pound. I believe it is

:07:06. > :07:12.already. That he had, we have a sense of what the Brexit timetable

:07:13. > :07:17.might be, the summer of 2017, sorry, 2018? When we might be leaving?

:07:18. > :07:22.Anyway, we have a sense of the timetable. It is stilling going to

:07:23. > :07:27.be sensitive from now until then? Will we look at these kind of

:07:28. > :07:30.swings? What are your thoughts? We tend to think the foreign exchange

:07:31. > :07:35.market tends to move in cycles. For a long time we had a weak dollar,

:07:36. > :07:39.now it seems to be the pound's turn. It is driven by politics, and

:07:40. > :07:43.unstable force. We don't really know too much about what is going to

:07:44. > :07:46.happen. Yes, they will trigger Article 50 by next March. We will

:07:47. > :07:50.probably leave two years after that. We don't know what that will look

:07:51. > :07:54.like and what the trade negotiations will look like. They will be behind

:07:55. > :07:59.closed doors, that is what Theresa May and David Davis said. That adds

:08:00. > :08:02.to uncertainty, which the pound doesn't like. If it still looks like

:08:03. > :08:06.there will be a big spat with Europe, it will be bad news for the

:08:07. > :08:12.pound for the next two years, maybe even longer. It is true, that

:08:13. > :08:15.volatility, get used to it, it will be here for a little while.

:08:16. > :08:21.Some of your comments, Mark says I might not notice a 10% rise, it just

:08:22. > :08:24.seems everything is getting more expensive. Helen says it is a great

:08:25. > :08:31.opportunity for smaller brands, alternatives. Flu, I am with you, I

:08:32. > :08:40.would not buy marmite if the price fell by 10%. -- Lee, I'm with you.

:08:41. > :08:42.What about Ben Jerry's? That is a very different matter.

:08:43. > :08:46.The boss of US banking giant Wells Fargo is to stand

:08:47. > :08:48.down following a scandal over its sales practices.

:08:49. > :08:50.The bank is investigating how two million accounts were opened

:08:51. > :08:53.without customers' permission to boost sales figures.

:08:54. > :08:56.Last month Wells Fargo was fined $185m and accused of "widespread

:08:57. > :09:03.illegal practices" by US regulators.

:09:04. > :09:05.Minutes from last month's US Federal Reserve meeting

:09:06. > :09:10.show its decision to keep interest rates unchanged was a "close call".

:09:11. > :09:14.They only held off because inflation was still running below the 2%

:09:15. > :09:17.target and there was no sign of rising wage pressure.

:09:18. > :09:19.They lend further weight to expectations that rates

:09:20. > :09:28.Let's turn to Asia now where markets are being hit by news

:09:29. > :09:44.Much of the recent news from China has been positive -

:09:45. > :10:03.Yes, well, it really fell far lower than estimates. To give you an idea,

:10:04. > :10:06.September, the value of September exports from China, fell 10% in US

:10:07. > :10:21.dollar terms against expectations, just a 3% fall was expected. It was

:10:22. > :10:24.forecasted to rise. With prices of key commodities, if you cut imports

:10:25. > :10:33.of crude oil, iron ore, copper, values rose, but imports fell. The

:10:34. > :10:40.Chinese yen has fallen against the dollar. Whatever trade has been

:10:41. > :10:45.done, it becomes less impressive when converted into dollars. The

:10:46. > :10:49.main factor is still we can global trade. Taiwan released similar

:10:50. > :10:53.figures. The key question is whether this is telling us something about

:10:54. > :10:55.China's uncertain recovery. We will know more about that as we get more

:10:56. > :11:05.data, including GDP next week. That story is really playing out

:11:06. > :11:21.when it comes to trade in Asia today. The news from China spooking

:11:22. > :11:24.investors. Companies that export goods out of Japan, their stocks

:11:25. > :11:28.fell because the yen was stronger. Hong Kong was really affected by

:11:29. > :11:36.news out of China, that is why the Hang Seng was hit hard. Let's look

:11:37. > :11:41.at Europe. Doing the damage today, energy stocks on these markets. The

:11:42. > :11:45.oil price has fallen a little. Confusion about what Opec might

:11:46. > :11:52.decide at the end of November, causing the price of oil to come off

:11:53. > :11:55.a little bit. The pound is down by 0.25% against the US dollar. We will

:11:56. > :12:01.see how it develops as the day progresses. An interesting afternoon

:12:02. > :12:09.in the UK Parliament regarding Brexit. It could cause the pound to

:12:10. > :12:13.fall further. Let's look to the US. Clear skies or turbulent ahead?

:12:14. > :12:16.Delta Airlines are scheduled to report third-quarter results this

:12:17. > :12:19.Thursday with the transatlantic business week, the Atlanta -based

:12:20. > :12:23.airline's cuts to flight capacity might be enough to prop up ticket

:12:24. > :12:28.prices. One of the big American carriers, its earnings can set the

:12:29. > :12:33.tone for what investors can expect for the rest of the industry.

:12:34. > :12:38.Turning to the economic front, the numbers of Americans claiming

:12:39. > :12:45.unemployment benefit rose this week to 250 3000. That is after falling

:12:46. > :12:48.to 249,000 last week. That is the lowest number since 1973.

:12:49. > :12:56.Joining us is Trevor Greetham, from Royal London Asset Management.

:12:57. > :13:01.Let's talk about the pound. I am going to get you to explain this.

:13:02. > :13:07.Yesterday the pound dropped to a 168 year low. This is on a trade

:13:08. > :13:13.weighted basis, as it is known as. Feel free to explain! Rather than

:13:14. > :13:17.looking at a particular exchange rate, the pound against the euro or

:13:18. > :13:21.the dollar, you work out whether traders, which countries matter in

:13:22. > :13:24.terms of imports and exports. The countries with more trade, you give

:13:25. > :13:29.a bigger weight to their exchange rate. You work out an average

:13:30. > :13:32.exchange rate, but what matters for the UK. On The Financial Times

:13:33. > :13:45.website, they say 168 year low against bank of England data. But

:13:46. > :13:48.this is actually probably an all-time low against trading

:13:49. > :13:52.partners. We touched on the fact that this is when it starts to

:13:53. > :13:56.affect our pockets, in the real economy, this is the stuff that

:13:57. > :14:00.matters. Before the Brexit vote, the tail end of last year, the current

:14:01. > :14:05.account deficit has never been that extreme. That means the UK imports a

:14:06. > :14:09.lot more than it exports. The pound is trying to find a new level, where

:14:10. > :14:15.exports can go up. Unfortunately, a lot of exports to Europe are

:14:16. > :14:18.financial services, not very price sensitive. Trying to find a level

:14:19. > :14:22.where imports can go down to balance the better. They go down through

:14:23. > :14:26.prices going up and people not being able to afford marmite any more, a

:14:27. > :14:35.bit of a tragedy. To make it clear, you love Marmite? We have stocked up

:14:36. > :14:38.already. Stockpile the marmite! That is clearly where it has gone.

:14:39. > :14:40.Still to come: Keeping you moving, we'll meet the firm that wants

:14:41. > :14:42.to help you simplify driving by keeping your tax,

:14:43. > :14:45.service and insurance details in one place and up to date.

:14:46. > :14:51.You're with Business Live from BBC News.

:14:52. > :14:56.A big day for corporate results in the UK,

:14:57. > :14:59.but we'll start with a boardroom reshuffle at Sports Direct.

:15:00. > :15:01.The Chief Financial Officer is to stand down, just weeks

:15:02. > :15:05.after the sportswear retailer's chief executive left the company.

:15:06. > :15:10.Theo Leggett is across this for us, from the Business Newsroom.

:15:11. > :15:29.It's another firm that's been hit by the weak pound.

:15:30. > :15:36.Being locked lot of people in the company itself and it has been

:15:37. > :15:41.criticised over Mrs Addis warehouse and it has been criticised by the

:15:42. > :15:47.government for that and the chief Executive recently stepped down.

:15:48. > :15:50.Mike Ashley, the founder, is now in that position. Investors are worried

:15:51. > :16:01.about the way this company is being run. The interim finance chief will

:16:02. > :16:05.not be sitting on the board. Loss of earnings, WH Smith doing well and

:16:06. > :16:14.also BSkyB doing well with a 7% jump in revenues. WH Smith has reported a

:16:15. > :16:19.increase in full-year profits. It is doing well in its travel stores at

:16:20. > :16:23.airports and railway stations which the business has been focusing on

:16:24. > :16:29.Hogmanay and where it can charge higher prices. We have also had a

:16:30. > :16:34.quarterly update from the sky. That has been a big increase in revenues.

:16:35. > :16:41.But the biggest increase in their revenues comes from the overseas

:16:42. > :16:45.markets, Germany, Austria and Italy. A digital, the company that

:16:46. > :16:52.specialises in computer gaming, they have not had it so good. Pre-tax

:16:53. > :16:59.profits from ?30 million and ?58.6 million. They say it is a bad market

:17:00. > :17:04.for computer consoles. A quick straw poll of the office and the studio

:17:05. > :17:10.and the tech team, which side are you on the Marmite debate? I very

:17:11. > :17:16.much love it, but my cameraman is a hater. It is a 50-50 split.

:17:17. > :17:27.You can A lot of results are out today.

:17:28. > :17:30.You You can 're watching Business Live,

:17:31. > :17:34.holding steady but the effects of falling sterling

:17:35. > :17:46.Marmite maker is pulling the spread from Tesco shelves over weak prices

:17:47. > :17:56.over the row between the retailer and the manufacturer.

:17:57. > :18:01.Just to clarify, it is the website. Tesco is saying it is not on the

:18:02. > :18:05.website at the moment, but it is still on the shelves. I can imagine

:18:06. > :18:12.the rush as we speak. And it is not just Marmite, there

:18:13. > :18:16.are whole load of other brands. But this is not a row about one

:18:17. > :18:19.supermarket and one manufacturer, it is around all suppliers and all

:18:20. > :18:22.is around all suppliers and all supermarkets.

:18:23. > :18:25.As we all lead increasingly busy lives it can sometimes be hard

:18:26. > :18:27.to keep track of things, such as personal documents.

:18:28. > :18:29.AA Automyze is a digital PA for your car.

:18:30. > :18:32.It keeps track of things like insurance, car tax and service

:18:33. > :18:37.reminders online then sends you messages when bills are due.

:18:38. > :18:41.And it's a bit more than the notion of going paperless -

:18:42. > :18:44.it enables users to build a transferrable digital

:18:45. > :18:47.record for a vehicle, which could be useful for a number

:18:48. > :18:58.Lucy Burnford, co-founder of AA Automyze joins me now.

:18:59. > :19:07.Nice to see you. So, forgive me, but it sounds like a very simple

:19:08. > :19:13.concept. It is about keeping all your paperwork in one place and you

:19:14. > :19:18.can get hold of it when you need to. The service record is important.

:19:19. > :19:24.What is it that makes you unique? It did not exist before we created it.

:19:25. > :19:28.First service history is valuable to you as the owner of the car and is

:19:29. > :19:32.the second owner you need to know what maintenance has been done on

:19:33. > :19:37.it. I bought a car that did not have the history and it cost me a lot of

:19:38. > :19:44.money to put right. You can transfer it from owner to owner. People

:19:45. > :19:45.forget to renew their MOT on time and there are different

:19:46. > :19:51.organisations that you have to engage with like the garage, the

:19:52. > :19:58.insurance company, the MOT people and the tax disc, all facilitated by

:19:59. > :20:01.different organisations. If decentralised and digitiser it takes

:20:02. > :20:06.the hassle out of owning a new car and you can get on with driving it.

:20:07. > :20:11.But those people who are on it when it comes to technology and digital

:20:12. > :20:15.advantages, they tend to be people who get all this organised and they

:20:16. > :20:21.get alerts on the MOT is due or the garage might get in touch with them

:20:22. > :20:25.and they are reminded already. Some people are reminded already, but we

:20:26. > :20:30.know there are a huge number of people who have driven a car without

:20:31. > :20:34.an MOT. If you have more than one car in your household or you have a

:20:35. > :20:38.small business with a business card, you are managing a fleet and it is a

:20:39. > :20:45.hassle to remember all of those dates and it is easier to get a

:20:46. > :20:51.digital service. People watching outside the UK, and MOT is a test of

:20:52. > :20:58.making sure that your car is worthy to drive. It is about not holding

:20:59. > :21:02.paper copies. Most people get an alert, I get an alert when my house

:21:03. > :21:07.insurance is due. How would you take the hassle out of it? Part of the

:21:08. > :21:15.hassle is shopping around to get a better deal. Yes, we have got the

:21:16. > :21:20.issue of when somebody gets an alert when something is due, but how do

:21:21. > :21:26.you know a high-quality garage will take your car? It is a consumer

:21:27. > :21:30.issue. We have got a network of 4000 independent garages around the UK

:21:31. > :21:36.and we have taken the shopping around hassle out so people can be

:21:37. > :21:39.confident. This business is your idea and you decided to give birth

:21:40. > :21:44.to the company when you were eight months pregnant! You teamed up with

:21:45. > :21:49.somebody who was technically aware to make the technology happened. It

:21:50. > :21:56.is a fairly competitive world, but you have teamed up with AA. For

:21:57. > :21:59.those watching outside, it is an organisation of 4 million users who

:22:00. > :22:04.use it as a rescue service if you break down. That is key, you get 4

:22:05. > :22:10.million people possibly using your service. We do, we were a start-up a

:22:11. > :22:16.couple of years ago and we went to see the AA about the opportunity for

:22:17. > :22:21.them to offer something for their members. They loved our idea and our

:22:22. > :22:26.commitment to building a garage network and four at the start-up to

:22:27. > :22:31.get access to their brand, their heritage and their customer base

:22:32. > :22:37.accelerated our business. Good to talk to you. Does this work for

:22:38. > :22:44.other areas, not just cars? Housing issues? Potentially in the future,

:22:45. > :22:50.at the moment we are focusing on cars, there are 35 million of them

:22:51. > :22:56.in the UK. Do you like Marmite? I love it.

:22:57. > :22:57.I am so outnumbered. I am in the lead, I am winning.

:22:58. > :23:02.In a moment we'll take a look through the Business Pages but first

:23:03. > :23:05.here's a quick reminder of how to get in touch with us.

:23:06. > :23:12.We will keep you up-to-date with all the latest details with insight and

:23:13. > :23:17.analysis from the BBC's team of editors around the world. We want to

:23:18. > :23:23.hear from you as well and get involved on the BBC business live

:23:24. > :23:31.web page. We are on Twitter and we can be found on Facebook as well. On

:23:32. > :23:35.TV and online, whenever you need to know. Lots of you have been in

:23:36. > :23:52.touch. Alistair says, not.

:23:53. > :23:56.The website. Some people say that now the pound is low, they want more

:23:57. > :24:01.money. When the pound was high, did we get

:24:02. > :24:05.a discount? Have we just read that one out? I am sorry, I am not

:24:06. > :24:08.listening to you. Some things never change. Trevor is

:24:09. > :24:15.Joining us is Trevor Greetham, from Royal London Asset Management.

:24:16. > :24:23.This is about inflatable defence equipment. It is the new weapon in

:24:24. > :24:30.Russia's arsenal. Look at that picture and that is how it starts

:24:31. > :24:37.off and look what it forms into. It is great for children's' parties. It

:24:38. > :24:45.is an inflatable device that you can blow up, so it looks like it in the

:24:46. > :24:55.idea is that this will be wasted on inflatable the boys. We really need

:24:56. > :24:58.is an inflatable on the like? Everyone has employed tricks in wall

:24:59. > :25:07.all the way back to the Trojan horse. There is nothing new here.

:25:08. > :25:12.Donald Rumsfeld press conference and he said in a now on America would

:25:13. > :25:16.release stories to the media, sometimes fallacious, to win the war

:25:17. > :25:23.on terror. The generals were not sure whether to write that down or

:25:24. > :25:35.not, but everyone does it. Give us your on and on and on with my? The

:25:36. > :25:41.pound could continue to balance a little bit, but in the end that is a

:25:42. > :25:43.red herring. There will be a vote on whether to do article 50 knot and

:25:44. > :25:50.whether to do article 50 knot and not the details.

:25:51. > :25:55.There will be more business news throughout the day on the BBC Live

:25:56. > :25:57.webpage and on World Business Report.