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This is Business Live from BBC News with Sally Bundock and Ben Thompson.
Brexit breather for sterling - the pound holds on to gains made
in the last few days but there's a bitter taste over Marmite
The price of the spread is causing a war between global giants Tesco and
Unilever. Live from London, that's our top
story on Thursday 13th October. Sterling stays steady for now
but could swing later as a legal challenge to the right
of the Government to start the Brexit process without a vote
in Parliament is posed. Tesco pulls dozens of household
brands off its website - as the currency slump
sparks a pricing row Markets are on tenterhooks, they are
falling as traders digest the latest news on Chinese exports, how the
pound is doing and the Federal Reserve minutes. How about a health
record for your car? We will meet the firm that wants you to upload
your documents to the internet. So today we want to know
are you willing to pay 10% more I can't stand marmite, so no big
brands in the supermarket. I can't stand marmite, so no big
deal for me. But let us no. Use the hashtag #BBCBizLive.
You have already sent in plenty of thoughts. We will try to mention
them. There's been some relief
for the battered pound, but how long will it last
and what are some of According to calculations by the UK
Treasury, leaving the EU single market, a so called "hard Brexit",
could cost the economy as much as ?66 billion annually,
that's around $80 billion. It says Britain's economy,
its annual output or GDP, could be 9.5% smaller within 15
years if it can't strike a deal giving access to the EU market
and is forced to operate under These figures are disputed
by Brexit supporters. But what can't be disputed
is the impact all of this is having It has lost 18% of its value
since the Brexit vote and has been down as much as 20%,
but the UK consumer is already Tesco has withdrawn some of the most
popular brands from its website, including Marmite spread, Vienetta
ice cream and Persil washing powder, after Unilever tried to put up
prices to compensate Look at the Tesco website this
morning and you'll find that dozens of its top-selling
products are unavailable. All the items, from Persil
to Pot Noodles, are made They are believed to have
demanded a 10% price hike, blaming the weakness of the pound
since the Brexit vote. And so, one of the biggest consumer
goods suppliers is said to have stopped deliveries to
Britain's biggest retailer. For the time being at least,
the problem seems to be I've just bought these
Unilever items at the store here and there was plenty of product
on the shelves. But some people are reporting
problems buying these Marmite is made in the UK,
so why should its price go up 10%? Some analysts say Unilever may be
using the pound's fall as a pretext for increasing
its prices across the board. Unilever has said nothing
at all about the current dispute. Unilever said it was quite normal to
increase costs because a currency had been devalued.
In the battle of the Marmite jars, the former boss of another big
supplier says Tesco will eventually have to give some ground.
That's where Unilever will win because, despite the fact people may
grumble about paying more for Marmite, they will
pay more for Marmite and that's what the strength
But then the people who pay more have less money
So, two giants of the food world are facing up to each other
Kathleen Brooks, Research Director, City Index, is with me.
This is where it starts to get real. We can talk about numbers, the
falling value of the pound, this is when it hits the real economy?
Absolutely, the tangible effect of the falling pound that we have seen
since June. Really, the pound has been accelerating its decline in the
last two weeks. There will be more of this to come. It's gone from
something we talk about on financial markets to the supermarket aisles,
quite literally. What you think outcome will be for people? They
will feel less well off? Those that cannot bear the generic alternative
to marmite, they will pay more for their weekly shop? Wages are not
really going up in any fast way, people will have to divert more
funds to necessities, be that marmite, if that is your thing, or
not. Ultimately, they will spend less elsewhere. Not good news for
the economy when the necessities start to go up, that is what we
really have to buy. The government will be watching this closely, so is
the Bank of England. Inflation for them is not good at the moment,
because interest rates are so low. Some winners and losers, this is
clearly an issue where consumers will lose when it comes to the price
of things in the supermarket, some winners in terms of making it
cheaper to stay in the UK for tourism, more people coming to the
UK, foreigners snapping up things in the UK, luxury goods are much
cheaper. There is a tourism benefit, a staycation benefit? Absolutely. On
one side you have winners, but then you have losers. They have to
balance it. Not everybody is going to benefit. Tourism should
definitely get a big lift from the fall in the pound. I believe it is
already. That he had, we have a sense of what the Brexit timetable
might be, the summer of 2017, sorry, 2018? When we might be leaving?
Anyway, we have a sense of the timetable. It is stilling going to
be sensitive from now until then? Will we look at these kind of
swings? What are your thoughts? We tend to think the foreign exchange
market tends to move in cycles. For a long time we had a weak dollar,
now it seems to be the pound's turn. It is driven by politics, and
unstable force. We don't really know too much about what is going to
happen. Yes, they will trigger Article 50 by next March. We will
probably leave two years after that. We don't know what that will look
like and what the trade negotiations will look like. They will be behind
closed doors, that is what Theresa May and David Davis said. That adds
to uncertainty, which the pound doesn't like. If it still looks like
there will be a big spat with Europe, it will be bad news for the
pound for the next two years, maybe even longer. It is true, that
volatility, get used to it, it will be here for a little while.
Some of your comments, Mark says I might not notice a 10% rise, it just
seems everything is getting more expensive. Helen says it is a great
opportunity for smaller brands, alternatives. Flu, I am with you, I
would not buy marmite if the price fell by 10%. -- Lee, I'm with you.
What about Ben Jerry's? That is a very different matter.
The boss of US banking giant Wells Fargo is to stand
down following a scandal over its sales practices.
The bank is investigating how two million accounts were opened
without customers' permission to boost sales figures.
Last month Wells Fargo was fined $185m and accused of "widespread
illegal practices" by US regulators.
Minutes from last month's US Federal Reserve meeting
show its decision to keep interest rates unchanged was a "close call".
They only held off because inflation was still running below the 2%
target and there was no sign of rising wage pressure.
They lend further weight to expectations that rates
Let's turn to Asia now where markets are being hit by news
Much of the recent news from China has been positive -
Yes, well, it really fell far lower than estimates. To give you an idea,
September, the value of September exports from China, fell 10% in US
dollar terms against expectations, just a 3% fall was expected. It was
forecasted to rise. With prices of key commodities, if you cut imports
of crude oil, iron ore, copper, values rose, but imports fell. The
Chinese yen has fallen against the dollar. Whatever trade has been
done, it becomes less impressive when converted into dollars. The
main factor is still we can global trade. Taiwan released similar
figures. The key question is whether this is telling us something about
China's uncertain recovery. We will know more about that as we get more
data, including GDP next week. That story is really playing out
when it comes to trade in Asia today. The news from China spooking
investors. Companies that export goods out of Japan, their stocks
fell because the yen was stronger. Hong Kong was really affected by
news out of China, that is why the Hang Seng was hit hard. Let's look
at Europe. Doing the damage today, energy stocks on these markets. The
oil price has fallen a little. Confusion about what Opec might
decide at the end of November, causing the price of oil to come off
a little bit. The pound is down by 0.25% against the US dollar. We will
see how it develops as the day progresses. An interesting afternoon
in the UK Parliament regarding Brexit. It could cause the pound to
fall further. Let's look to the US. Clear skies or turbulent ahead?
Delta Airlines are scheduled to report third-quarter results this
Thursday with the transatlantic business week, the Atlanta -based
airline's cuts to flight capacity might be enough to prop up ticket
prices. One of the big American carriers, its earnings can set the
tone for what investors can expect for the rest of the industry.
Turning to the economic front, the numbers of Americans claiming
unemployment benefit rose this week to 250 3000. That is after falling
to 249,000 last week. That is the lowest number since 1973.
Joining us is Trevor Greetham, from Royal London Asset Management.
Let's talk about the pound. I am going to get you to explain this.
Yesterday the pound dropped to a 168 year low. This is on a trade
weighted basis, as it is known as. Feel free to explain! Rather than
looking at a particular exchange rate, the pound against the euro or
the dollar, you work out whether traders, which countries matter in
terms of imports and exports. The countries with more trade, you give
a bigger weight to their exchange rate. You work out an average
exchange rate, but what matters for the UK. On The Financial Times
website, they say 168 year low against bank of England data. But
this is actually probably an all-time low against trading
partners. We touched on the fact that this is when it starts to
affect our pockets, in the real economy, this is the stuff that
matters. Before the Brexit vote, the tail end of last year, the current
account deficit has never been that extreme. That means the UK imports a
lot more than it exports. The pound is trying to find a new level, where
exports can go up. Unfortunately, a lot of exports to Europe are
financial services, not very price sensitive. Trying to find a level
where imports can go down to balance the better. They go down through
prices going up and people not being able to afford marmite any more, a
bit of a tragedy. To make it clear, you love Marmite? We have stocked up
already. Stockpile the marmite! That is clearly where it has gone.
Still to come: Keeping you moving, we'll meet the firm that wants
to help you simplify driving by keeping your tax,
service and insurance details in one place and up to date.
You're with Business Live from BBC News.
A big day for corporate results in the UK,
but we'll start with a boardroom reshuffle at Sports Direct.
The Chief Financial Officer is to stand down, just weeks
after the sportswear retailer's chief executive left the company.
Theo Leggett is across this for us, from the Business Newsroom.
It's another firm that's been hit by the weak pound.
Being locked lot of people in the company itself and it has been
criticised over Mrs Addis warehouse and it has been criticised by the
government for that and the chief Executive recently stepped down.
Mike Ashley, the founder, is now in that position. Investors are worried
about the way this company is being run. The interim finance chief will
not be sitting on the board. Loss of earnings, WH Smith doing well and
also BSkyB doing well with a 7% jump in revenues. WH Smith has reported a
increase in full-year profits. It is doing well in its travel stores at
airports and railway stations which the business has been focusing on
Hogmanay and where it can charge higher prices. We have also had a
quarterly update from the sky. That has been a big increase in revenues.
But the biggest increase in their revenues comes from the overseas
markets, Germany, Austria and Italy. A digital, the company that
specialises in computer gaming, they have not had it so good. Pre-tax
profits from ?30 million and ?58.6 million. They say it is a bad market
for computer consoles. A quick straw poll of the office and the studio
and the tech team, which side are you on the Marmite debate? I very
much love it, but my cameraman is a hater. It is a 50-50 split.
You can A lot of results are out today.
You You can 're watching Business Live,
holding steady but the effects of falling sterling
Marmite maker is pulling the spread from Tesco shelves over weak prices
over the row between the retailer and the manufacturer.
Just to clarify, it is the website. Tesco is saying it is not on the
website at the moment, but it is still on the shelves. I can imagine
the rush as we speak. And it is not just Marmite, there
are whole load of other brands. But this is not a row about one
supermarket and one manufacturer, it is around all suppliers and all
is around all suppliers and all supermarkets.
As we all lead increasingly busy lives it can sometimes be hard
to keep track of things, such as personal documents.
AA Automyze is a digital PA for your car.
It keeps track of things like insurance, car tax and service
reminders online then sends you messages when bills are due.
And it's a bit more than the notion of going paperless -
it enables users to build a transferrable digital
record for a vehicle, which could be useful for a number
Lucy Burnford, co-founder of AA Automyze joins me now.
Nice to see you. So, forgive me, but it sounds like a very simple
concept. It is about keeping all your paperwork in one place and you
can get hold of it when you need to. The service record is important.
What is it that makes you unique? It did not exist before we created it.
First service history is valuable to you as the owner of the car and is
the second owner you need to know what maintenance has been done on
it. I bought a car that did not have the history and it cost me a lot of
money to put right. You can transfer it from owner to owner. People
forget to renew their MOT on time and there are different
organisations that you have to engage with like the garage, the
insurance company, the MOT people and the tax disc, all facilitated by
different organisations. If decentralised and digitiser it takes
the hassle out of owning a new car and you can get on with driving it.
But those people who are on it when it comes to technology and digital
advantages, they tend to be people who get all this organised and they
get alerts on the MOT is due or the garage might get in touch with them
and they are reminded already. Some people are reminded already, but we
know there are a huge number of people who have driven a car without
an MOT. If you have more than one car in your household or you have a
small business with a business card, you are managing a fleet and it is a
hassle to remember all of those dates and it is easier to get a
digital service. People watching outside the UK, and MOT is a test of
making sure that your car is worthy to drive. It is about not holding
paper copies. Most people get an alert, I get an alert when my house
insurance is due. How would you take the hassle out of it? Part of the
hassle is shopping around to get a better deal. Yes, we have got the
issue of when somebody gets an alert when something is due, but how do
you know a high-quality garage will take your car? It is a consumer
issue. We have got a network of 4000 independent garages around the UK
and we have taken the shopping around hassle out so people can be
confident. This business is your idea and you decided to give birth
to the company when you were eight months pregnant! You teamed up with
somebody who was technically aware to make the technology happened. It
is a fairly competitive world, but you have teamed up with AA. For
those watching outside, it is an organisation of 4 million users who
use it as a rescue service if you break down. That is key, you get 4
million people possibly using your service. We do, we were a start-up a
couple of years ago and we went to see the AA about the opportunity for
them to offer something for their members. They loved our idea and our
commitment to building a garage network and four at the start-up to
get access to their brand, their heritage and their customer base
accelerated our business. Good to talk to you. Does this work for
other areas, not just cars? Housing issues? Potentially in the future,
at the moment we are focusing on cars, there are 35 million of them
in the UK. Do you like Marmite? I love it.
I am so outnumbered. I am in the lead, I am winning.
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.
We will keep you up-to-date with all the latest details with insight and
analysis from the BBC's team of editors around the world. We want to
hear from you as well and get involved on the BBC business live
web page. We are on Twitter and we can be found on Facebook as well. On
TV and online, whenever you need to know. Lots of you have been in
touch. Alistair says, not.
The website. Some people say that now the pound is low, they want more
money. When the pound was high, did we get
a discount? Have we just read that one out? I am sorry, I am not
listening to you. Some things never change. Trevor is
Joining us is Trevor Greetham, from Royal London Asset Management.
This is about inflatable defence equipment. It is the new weapon in
Russia's arsenal. Look at that picture and that is how it starts
off and look what it forms into. It is great for children's' parties. It
is an inflatable device that you can blow up, so it looks like it in the
idea is that this will be wasted on inflatable the boys. We really need
is an inflatable on the like? Everyone has employed tricks in wall
all the way back to the Trojan horse. There is nothing new here.
Donald Rumsfeld press conference and he said in a now on America would
release stories to the media, sometimes fallacious, to win the war
on terror. The generals were not sure whether to write that down or
not, but everyone does it. Give us your on and on and on with my? The
pound could continue to balance a little bit, but in the end that is a
red herring. There will be a vote on whether to do article 50 knot and
whether to do article 50 knot and not the details.
There will be more business news throughout the day on the BBC Live
webpage and on World Business Report.