31/10/2016 BBC Business Live


31/10/2016

Similar Content

Browse content similar to 31/10/2016. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

This is Business Live from BBC News with Ben Thompson and Sally Bundock.

:00:00.:00:00.

Brexit Anxieties - UK sales at the world's biggest

:00:00.:00:09.

advertising firm have "softened", according to the latest

:00:10.:00:11.

Live from London, that's our top story on 31st October.

:00:12.:00:33.

Fluctuations in sterling have swayed the World's top advertising agency,

:00:34.:00:36.

sales have slowed at WPP following the UK's

:00:37.:00:39.

And Brexit uncertainty puts pressure on Mark Carney to clarify how long

:00:40.:00:46.

he plans to stay in the job as Governor of the Bank of England.

:00:47.:00:58.

The market is looking like this at the start of a new week. We'll talk

:00:59.:01:01.

you through those numbers. The woman behind the Music

:01:02.:01:06.

of Black Origin awards Kanya King She will be talking to us about this

:01:07.:01:10.

year's ceremony and how to inspire the next generation

:01:11.:01:14.

of black entrepreneurs. As IKEA ditches aspirational ads

:01:15.:01:16.

to reflect the "daily grind". We want to know, should firms

:01:17.:01:21.

sell us the lifestyle Let us know, just use

:01:22.:01:23.

the hashtag #BBCBizLive. Advertising can often act as a key

:01:24.:01:41.

early indicator of change or stress in an economy,

:01:42.:01:46.

it's a bit like a canary When advertising does well it shows

:01:47.:01:58.

we are buying and selling, economies tend to be growing.

:01:59.:02:01.

The world's biggest advertising agency, WPP, has just

:02:02.:02:04.

published its third quarter results, and it says they reflect some

:02:05.:02:06.

In dollar terms worldwide sales were up 4.6% at $4.741 billion.

:02:07.:02:17.

In the UK sales were up 2.1% in the first period after the UK's

:02:18.:02:23.

The UK accounts for 14% of WPP's sales despite it being the company's

:02:24.:02:31.

But weighing on all of this is a huge fall in value of the pound

:02:32.:02:39.

which has had a huge affect on the value of the business.

:02:40.:02:46.

Sir Martin Sorrell the Chief Executive and founder of WPP

:02:47.:02:48.

joins me now from New York, where it's rather

:02:49.:02:51.

He has his Halloween pumpkin with him in the studio! It is known as

:02:52.:03:06.

the Trump pumpkin, the suntanned pumpkin! Will talk about the US

:03:07.:03:11.

election in a moment but let's focus on your results. Ben was outlining

:03:12.:03:15.

the fact it's been quite a difficult quarter and currency movement has

:03:16.:03:20.

quite a bit to do with that. A little bit of an exaggeration I

:03:21.:03:25.

think. It's been a good quarter, actually. You can't argue with sales

:03:26.:03:30.

up 24% at the end of the day. If you look at it on a like-for-like basis,

:03:31.:03:36.

yet to date, we are up 3.8% on revenue, 3.4 on net sales. A bit

:03:37.:03:40.

slower in the third quarter on a like-for-like basis whether you are

:03:41.:03:45.

looking at revenue or net sales. We had strong comparatives last year.

:03:46.:03:53.

If you look at it geographically, the US continues to be strong,

:03:54.:03:55.

continental Europe strong, places like India strong, Brazil better

:03:56.:03:58.

than expected. What's really interesting is that greater China

:03:59.:04:01.

and mainland China were strong in September and that was good because

:04:02.:04:06.

we had a weak first six months, we were flat in the first six months.

:04:07.:04:12.

Advertising and media, Digital and public relations and public affairs

:04:13.:04:17.

strong, too. An Brexit and the UK, the UK softened in Q3 although

:04:18.:04:23.

overall year-to-date we've done well, up over 3%. I think the

:04:24.:04:29.

possible reason is uncertainty over Brexit. Whenever you have a

:04:30.:04:33.

conversation with a client on the UK, the first thing that comes out

:04:34.:04:38.

of their mouth is the potential impact on the UK of Brexit. I hope

:04:39.:04:44.

Mark Carney stays, that will reduce the uncertainty. It will be a strong

:04:45.:04:50.

hand at the monetary teller. I hope he does stay. If he goes, that will

:04:51.:04:54.

introduce even more uncertainty. It's good to see the government

:04:55.:04:58.

supporting the car industry and I assume what they've done for Nissan

:04:59.:05:04.

or what they've promised will be extended to the whole industry.

:05:05.:05:08.

That's good news, too. Having said that there is still considerable

:05:09.:05:13.

uncertainty. 86% of your business is outside of the UK. You have talked

:05:14.:05:18.

about concerns about Brexit but what about this upcoming election in the

:05:19.:05:23.

United States and also some of the other uncertainties around the

:05:24.:05:25.

world? You've mentioned China were strong in September which is

:05:26.:05:29.

encouraging but it's still not clear really about the long-term outlook

:05:30.:05:33.

China. On China, I think you'll have to wait until the People's Congress

:05:34.:05:39.

next year. This time next year, when we seem further consolidation and

:05:40.:05:44.

the President's position and whether he might stay on for 15 years or ten

:05:45.:05:53.

years, we'll see whether having consolidated his power base he then

:05:54.:05:57.

moves to focus on the economy rather than more of the anti-corruption

:05:58.:06:00.

campaign. I think that will be the key issue. We'll have to wait until

:06:01.:06:05.

next year to see that. On the US, ever since Friday night I suppose

:06:06.:06:14.

the intervention has thrown a lot of uncertainty in. If you look at the

:06:15.:06:20.

electoral arithmetic it seems that Hillary Clinton will make it. Having

:06:21.:06:25.

said that either way, there are enough checks and balances in the

:06:26.:06:29.

American system. What James Comey did on Friday night might have made

:06:30.:06:33.

the position for the Republicans better in-house and better in the

:06:34.:06:37.

Senate than otherwise. If Clinton was to win the presidency the checks

:06:38.:06:43.

and balances are sufficient to prevent extremes. Having said that

:06:44.:06:46.

we may still have more gridlock and more deadlock. Whatever happens

:06:47.:06:50.

after November the 8th, whoever wrestles with the position of

:06:51.:06:56.

president in the Oval Office is going to have a lot of controversy

:06:57.:07:00.

surrounding it, generated by the FBI and some of the things that the

:07:01.:07:06.

Trump camp have said in relation to the electoral process. And the Trump

:07:07.:07:10.

following is extremely strong. He didn't get where he is today by not

:07:11.:07:17.

having a very significant, vociferous following. That

:07:18.:07:20.

uncertainty in and of itself is not good news. We've run out of time,

:07:21.:07:28.

surprisingly! What a shame! You've got to be in the studio next time,

:07:29.:07:34.

please! I promise you I will be, as long as we have a WPP logo and a

:07:35.:07:38.

pumpkin! I can't guarantee the pumpkin! If you guarantee the logo

:07:39.:07:45.

that's great! LAUGHTER Will see you soon! You can tell he works in

:07:46.:07:47.

advertising! The EU and Canada have signed

:07:48.:07:49.

a landmark free trade deal, which has been delayed for weeks

:07:50.:07:53.

over objections from the Belgian The pact has taken seven years

:07:54.:07:55.

to negotiate, it'll remove 99% of tariffs and generate billions

:07:56.:07:59.

of dollars worth of trade. It's also viewed as a possible model

:08:00.:08:03.

for the UK, following the country's Japanese electronics giant Sony

:08:04.:08:06.

cut its annual profit outlook by 10% due to losses on the sale

:08:07.:08:13.

of its battery business. The tech firm now expects

:08:14.:08:16.

profits of $2.6 billion for the year ending March,

:08:17.:08:20.

down some 30 billion yen down Sony is scheduled to release

:08:21.:08:23.

its first-half results tomorrow. On the business live page all of the

:08:24.:08:44.

details of the stories you need to follow. There is a story about Mark

:08:45.:08:48.

Carney and we'll be talking about that later. There's a lot of

:08:49.:08:52.

speculation of late about whether Mark Carney would step down as

:08:53.:08:56.

governor of the Bank of England. Given the interference from Downing

:08:57.:09:00.

Street. It's about the fact that he has an eight year term but there is

:09:01.:09:07.

a five-year option to end at that point if he wishes. It's not about

:09:08.:09:11.

him quitting in the near future but possibly going in 2018 as opposed to

:09:12.:09:18.

2021. Just to be clear, that's not him in the picture!

:09:19.:09:22.

Three of Japan's largest shipping firms are to merge

:09:23.:09:24.

Some radical restructuring of the three coming together. More signs

:09:25.:09:41.

the shipping sector is in trouble. To sail out of the stormy waters,

:09:42.:09:46.

companies are having to join forces. Japan's top three shipping companies

:09:47.:09:51.

are merging their container operations. They will form a joint

:09:52.:09:59.

venture by next July. Together they will make the sixth largest camp --

:10:00.:10:07.

shipping container firm in the world. What's really important is

:10:08.:10:11.

this consolidation comes after the global shipping industry has had to

:10:12.:10:15.

deal with the fallout from the collapse of South Korea's largest

:10:16.:10:22.

shipping firm. It is an industry suffering from overcapacity, low

:10:23.:10:25.

freight rates and slowing global demand, all coming together in a

:10:26.:10:40.

perfect storm. Thank you. Then make -- the markets are down over

:10:41.:10:45.

uncertainty over the US presidential election. Shares in major shipping

:10:46.:10:52.

firms jumping. Same sort of concerns for Europe ahead of what is now the

:10:53.:10:56.

final week before that big vote. In the UK we get the quarterly

:10:57.:11:00.

inflation report is on Thursday. Some expectations of whether Mark

:11:01.:11:04.

Carney will make a statement about his future. That could happen on

:11:05.:11:08.

Thursday to quell the speculation about whether he will leave early.

:11:09.:11:11.

We'll talk about that more in a moment but first let's head

:11:12.:11:12.

stateside. And Samira Hussain has

:11:13.:11:16.

the details about what's ahead This is the final full week of

:11:17.:11:23.

campaigning in the US presidential election and the latest US jobs

:11:24.:11:29.

report will certainly be fought in the last days. Before we get to

:11:30.:11:32.

Friday there are bits of business we need to look at. On Tuesday the US

:11:33.:11:38.

Federal reserve will begin its two-day meeting. Markets are not

:11:39.:11:42.

expecting a rise in interest rates at this meeting, given it comes just

:11:43.:11:47.

a few days before the presidential election. Also happening this week,

:11:48.:11:51.

Facebook will be reporting earnings and investors are expecting to see

:11:52.:11:56.

another boost to add revenue and users. Finally we will also be

:11:57.:12:00.

hearing from time Warner when they report their earnings. This comes as

:12:01.:12:05.

the company is in the process of being acquired by a T

:12:06.:12:12.

Joining us is Sue Noffke, UK Equities Fund Manager

:12:13.:12:18.

at the asset management firm Schroders.

:12:19.:12:21.

We've got the Federal reserve meeting, the Bank of England

:12:22.:12:26.

inflation report, all the speculation about Mark Carney.

:12:27.:12:30.

Interest-rate decisions from the Bank of England, too. You've got a

:12:31.:12:35.

long list of earnings. We will be busy this week. We are one week into

:12:36.:12:39.

a three-week earnings bonanza along with quite a lot of economic data as

:12:40.:12:44.

well. We had GDP figures from the UK and the US last week which were

:12:45.:12:49.

better than people had anticipated. It's the usual story with earnings,

:12:50.:12:55.

where companies are beating downgraded expectations but quite a

:12:56.:12:59.

mixed picture. Quite a lot of headwinds in the United States. The

:13:00.:13:04.

stronger dollar has been inhibiting some of those overseas earnings for

:13:05.:13:08.

US companies. And of course weaker sterling has been boosting a number

:13:09.:13:15.

of UK companies. All you get a mixed result like WPP. When you look at

:13:16.:13:23.

all these results, we are starting to piece together a picture. But

:13:24.:13:28.

it's quite hard to do because all of this data is telling us different

:13:29.:13:33.

things. We are sifting through and looking for real evidence. We've

:13:34.:13:38.

seen markets respond to currency movement, particularly in the UK,

:13:39.:13:42.

moving up those big international companies. Now we are looking for

:13:43.:13:48.

the underlying improvements and looking at forward statements as

:13:49.:13:52.

well as what has actually happened. It's quite an interesting scenario.

:13:53.:13:57.

I assume we can't expect much action from central banks this week. It may

:13:58.:14:04.

be again looking more to the commentary than the action at this

:14:05.:14:08.

particular point but all eyes are on those December meetings. Lovely to

:14:09.:14:14.

see you. I know you're going to talk us through the papers and will be

:14:15.:14:20.

talking about the IKEA move and whether adverts should be

:14:21.:14:26.

aspirational or reflect the gritty reality. I think they should be

:14:27.:14:28.

aspirational! We'll meet Kanya King -

:14:29.:14:31.

the co-founder of the Mobo Awards about creating a global brand,

:14:32.:14:36.

and how she uses her business You're with Business

:14:37.:14:38.

Live from BBC News. The Bank of England says "nothing

:14:39.:14:50.

has changed" following reports that governor Mark Carney could stand

:14:51.:14:54.

down, over claims of interference Mr Carney took over as governor

:14:55.:15:00.

in 2013 for an eight-year term, but with an option to leave

:15:01.:15:09.

after five years. Our Economics Editor,

:15:10.:15:11.

Kamal Ahmed has been following this. He's joining us in the business

:15:12.:15:24.

studio. There you are. We can see you. Explain to us why this. Dot.

:15:25.:15:32.

The bank of ringing has been forced to make this statement. Mark Carney

:15:33.:15:36.

has made it clear always he would make a decision about whether he was

:15:37.:15:43.

going to leave, as he originally planned, in 2018, after five years

:15:44.:15:47.

or he would extend his time at the bank until 2021, the more usual ATS

:15:48.:15:54.

for a Bank of England governor. Of course, once you announce you're

:15:55.:15:59.

going to make a decision at the end of year, speculation starts about

:16:00.:16:03.

what the might be -- the usual eight years. I think after the referendum

:16:04.:16:10.

he felt under some political pressure, the economic prognosis by

:16:11.:16:15.

many people was gloomy and then we had that Theresa May comment

:16:16.:16:20.

criticising the bank's monetary policy, saying it had bad side

:16:21.:16:26.

effects. But I think, since then, his resolve has stiffened somewhat.

:16:27.:16:29.

The economy has been performing rather more strongly endorse the

:16:30.:16:33.

bank has been praised for providing more monetary stimulus and cutting

:16:34.:16:37.

interest rates. Why does this matter? It's a question of

:16:38.:16:42.

volatility. If you look at how sterling has performed against the

:16:43.:16:47.

dollar, it's been on a downward path since the referendum. It's about

:16:48.:16:51.

certainty, so a lot of people in the markets believe Mark Carney should

:16:52.:16:55.

stay to provide that certainty until 2021. All right, thank you very much

:16:56.:17:02.

indeed. There is a lot more from him and his analysis etc on our website.

:17:03.:17:10.

We've mentioned all the speculation about Mark Carney. There's more

:17:11.:17:16.

about what Sir Martin said come on you heard him here, and it's a

:17:17.:17:20.

really busy day. More on Sony's results, as well.

:17:21.:17:25.

Advertising giant WPP has said slowing revenue growth in the UK may

:17:26.:17:30.

indicate the first signs of Brexit anxiety.

:17:31.:17:36.

A quick look at how markets are faring.

:17:37.:17:44.

Opec meeting which took place in Vienna on Friday, spilling over into

:17:45.:17:51.

Saturday, still no agreement, it would seem between members and

:17:52.:17:55.

nonmembers about supply cuts, production cuts, so that has caused

:17:56.:17:58.

the price of oil to fall. Another story affecting the markets today.

:17:59.:18:00.

And now let's get the inside track on the UK's MOBO awards.

:18:01.:18:03.

That stands for Music of Black Origin.

:18:04.:18:05.

This year's ceremony is happening in Glasgow on Friday.

:18:06.:18:07.

The awards were founded by Kanya King in 1996 to celebrate

:18:08.:18:10.

the wide-ranging genre in the mainstream media.

:18:11.:18:14.

And, believe it or not, she was given just six weeks to set

:18:15.:18:17.

Now it has developed into a mega event with 400 million viewers

:18:18.:18:24.

across over 200 countries and plans are afoot to expand the MOBO brand

:18:25.:18:28.

and its influence further into international territories

:18:29.:18:31.

She literally just made it. We are very thankful you are here. Just

:18:32.:18:48.

talk us through this full 's 1996, what made you come up with this

:18:49.:18:52.

idea? I know you weren't alone, there were two of you, and you made

:18:53.:18:56.

it happen in six weeks. In the mid-90s, the musical landscape was

:18:57.:19:00.

changing and there was an audience not being catered for, the dish

:19:01.:19:06.

urban music was on the margins of mainstream, and there was a kind of

:19:07.:19:11.

a vibrancy regarding some of the music genres like hip-hop and reggae

:19:12.:19:14.

that there was no mainstream platform where these genres could be

:19:15.:19:21.

appreciated. You are working in music and television so were fairly

:19:22.:19:24.

connected, but how easy was it to pull this off in six weeks? It

:19:25.:19:30.

sounds like quite a feat. I wasn't working in a musical industry. I was

:19:31.:19:34.

a research as an independent television production company, with

:19:35.:19:37.

no connections in the music industry, but I was one of these

:19:38.:19:43.

young people, very passionate about lots of different musical genres,

:19:44.:19:47.

and I hoped somebody else would do something about it and I think my

:19:48.:19:52.

overwhelming desire to celebrate reggae, soul, gospel music, left me

:19:53.:19:57.

to remortgage my house against my mother 's better judgment. You had

:19:58.:20:02.

quite a lucky break involving a chance meeting with someone. Talk me

:20:03.:20:08.

through that story. Oh, yes, as a young parent, I had multiple jobs at

:20:09.:20:15.

the time and I think this is a story where was working at Arsenal

:20:16.:20:20.

football ground, and I remember supervising in the boxes, and this

:20:21.:20:23.

young gentleman turned up in a bit of a flustered because it was meant

:20:24.:20:27.

to meet his young nephew and he was late, so I took charge of the

:20:28.:20:30.

situation, arranged for a meeting place for them to get together and

:20:31.:20:34.

then we got talking and he was really grateful so I had his

:20:35.:20:38.

undivided attention and when he tell you what he did for a living, he was

:20:39.:20:43.

empty of LWT, at the time, I couldn't resist telling him I

:20:44.:20:48.

amazing idea. Of course coming ahead of semi-times before but the

:20:49.:20:54.

difference in this case was he was grateful. -- so many times. He had

:20:55.:20:59.

to listen. He was very polite. He said to me, "I tell you what, what

:21:00.:21:04.

you need to do is send a proposal to me. I guarantee you'll get a

:21:05.:21:10.

meeting." With most of these things, you follow up straightaway and I got

:21:11.:21:14.

a meeting in the following week. And, I guess, that was my lucky

:21:15.:21:21.

break. Since 1996, in the UK we've got the was all over the world

:21:22.:21:26.

incidentally, we've all heard of the MOBO wards, big event we see and

:21:27.:21:30.

hear about but what impact has it had for black musicians since then

:21:31.:21:37.

and where are you going next? -- MOBO awards. Any person regardless

:21:38.:21:41.

of background colour should be able to discover their full potential of

:21:42.:21:46.

music. Basically, we wanted every kid in every classroom every

:21:47.:21:55.

community, to be inspired. So what we have tried to do is use the

:21:56.:22:00.

impact and influence of the MOBO brand to highlight issues and causes

:22:01.:22:03.

which are important to us. We've also been able to do that by

:22:04.:22:09.

championing and celebrating emerging talent so lots of artists around the

:22:10.:22:12.

world have had their first-ever platform on the MOBO stage. Briefly,

:22:13.:22:17.

time is tight, but there's been such progress with that and all the work

:22:18.:22:22.

MOBO has done to promote black musicians, do you still need a

:22:23.:22:25.

separate ceremony because I would imagine a lot of black artists are

:22:26.:22:31.

in the mainstream? You don't have to be black to win a MOBO award falls

:22:32.:22:34.

it's all about the spirit of the music as opposed to where the

:22:35.:22:41.

artist, what colour they are. It irrespective of background colour

:22:42.:22:44.

but the truth the matter is, if you look at the nominees this year,

:22:45.:22:48.

there is no other platform they would be celebrated and recognised

:22:49.:22:52.

to millions of people around the world. I think that's important for

:22:53.:22:56.

them. I look at our best newcomer category, they were unknown when

:22:57.:23:02.

they were nominated, and now of course, they've been elevated to

:23:03.:23:06.

mainstream status because of the MOBO backing. OK, thanks so much for

:23:07.:23:10.

coming in. It's a great story. We will watch it on Friday. Thank you

:23:11.:23:14.

very much. You've had more than six weeks to sort this out.

:23:15.:23:15.

LAUGHTER In a moment we'll take a look

:23:16.:23:17.

through the Business Pages. Real reveal what you thought of the

:23:18.:23:24.

IKEA adverts. But first here's a quick reminder

:23:25.:23:29.

of how to get in touch with us. Stay ahead of the braking business

:23:30.:23:36.

news. We will keep you up-to-date with the latest details. Insight and

:23:37.:23:41.

analysis from the BBC's team of editors right around the world. We

:23:42.:23:45.

want to hear from you, too full to get involved on the BBC business

:23:46.:23:53.

life web page. And on Twitter and Facebook. On TV and online, whenever

:23:54.:24:04.

you need to know. You have been in touch with one of the stories we

:24:05.:24:05.

discussed earlier. Sue Noffke, UK Equities Fund Manager

:24:06.:24:09.

at the asset management firm Let's talk again about IKEA and its

:24:10.:24:19.

advertising. It's a move away from aspiration and glossiness, the

:24:20.:24:21.

perfection, to something more humdrum, a bit more which reflects

:24:22.:24:33.

people. Normality. What we would all recognise behind our own front

:24:34.:24:37.

doors, really. A bit of mess. They are calling it the daily grind. A

:24:38.:24:42.

lot of people are saying this couple look very happy and this is not the

:24:43.:24:45.

norm because you are probably arguing or doing the ironing or

:24:46.:24:48.

something like that. Nonetheless, it's reflecting real life as opposed

:24:49.:24:54.

to all those aspirational things but a lot of people are getting in touch

:24:55.:24:58.

this morning. Jerome Kern are we supposed to wear its sackcloth and

:24:59.:25:03.

ashes as well? A world of aspiration is dismal for the David, I can see

:25:04.:25:08.

that. Anything aspirational seems out of reach this year. Why would

:25:09.:25:12.

you buy something you've already got? They have to sell you something

:25:13.:25:16.

you either don't have or don't need as part of the aspiration for some

:25:17.:25:19.

and that other business make money ultimately. IKEA have also coined

:25:20.:25:28.

the freeze repeats enough, -- phrase. They are in the business of

:25:29.:25:32.

selling stuff to people and I suppose it's a shift from things

:25:33.:25:36.

that perhaps we really do need or do want that fit into the day-to-day

:25:37.:25:40.

aspect of our lives. Whatever we think, I'm sure many of us will have

:25:41.:25:44.

the experience of not being able to put together those shelves. IKEA

:25:45.:25:48.

just wants to study the cupboards and shelves to store that stuff.

:25:49.:25:53.

Thank you for your company today. We will see you tomorrow. Bye-bye.

:25:54.:26:05.

For many of us, a decent day today with some mild weather and sunshine.

:26:06.:26:13.

Before we get there, we have some dense patches of fog to content with

:26:14.:26:17.

this morning affecting much of England and Wales. Visibility down

:26:18.:26:21.

to 50-100 metres in the worst

:26:22.:26:23.

Download Subtitles

SRT

ASS