31/10/2016 BBC Business Live


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


Brexit Anxieties - UK sales at the world's biggest


advertising firm have "softened", according to the latest


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


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


sales have slowed at WPP following the UK's


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


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


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


you through those numbers. The woman behind the Music


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


year's ceremony and how to inspire the next generation


of black entrepreneurs. As IKEA ditches aspirational ads


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


sell us the lifestyle Let us know, just use


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


early indicator of change or stress in an economy,


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


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


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


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


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


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


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


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


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


Sir Martin Sorrell the Chief Executive and founder of WPP


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


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


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


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


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


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


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


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


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


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


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


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


continental Europe strong, places like India strong, Brazil better


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


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


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


Advertising and media, Digital and public relations and public affairs


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


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


possible reason is uncertainty over Brexit. Whenever you have a


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


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


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


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


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


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


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


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


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


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


United States and also some of the other uncertainties around the


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


and balances are sufficient to prevent extremes. Having said that


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


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


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


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


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


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


having a very significant, vociferous following. That


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


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


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


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


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


advertising! The EU and Canada have signed


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


over objections from the Belgian The pact has taken seven years


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


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


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


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


of its battery business. The tech firm now expects


profits of $2.6 billion for the year ending March,


down some 30 billion yen down Sony is scheduled to release


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


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


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


speculation of late about whether Mark Carney would step down as


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


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


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


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


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


Three of Japan's largest shipping firms are to merge


Some radical restructuring of the three coming together. More signs


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


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


are merging their container operations. They will form a joint


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


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


this consolidation comes after the global shipping industry has had to


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


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


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


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


uncertainty over the US presidential election. Shares in major shipping


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


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


inflation report is on Thursday. Some expectations of whether Mark


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


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


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


stateside. And Samira Hussain has


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


campaigning in the US presidential election and the latest US jobs


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


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


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


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


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


Facebook will be reporting earnings and investors are expecting to see


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


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


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


Joining us is Sue Noffke, UK Equities Fund Manager


at the asset management firm Schroders.


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


inflation report, all the speculation about Mark Carney.


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


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


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


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


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


where companies are beating downgraded expectations but quite a


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


stronger dollar has been inhibiting some of those overseas earnings for


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


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


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


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


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


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


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


the underlying improvements and looking at forward statements as


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


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


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


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


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


talking about the IKEA move and whether adverts should be


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


aspirational! We'll meet Kanya King -


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


and how she uses her business You're with Business


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


has changed" following reports that governor Mark Carney could stand


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


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


after five years. Our Economics Editor,


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


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


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


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


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


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


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


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


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


he felt under some political pressure, the economic prognosis by


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


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


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


The economy has been performing rather more strongly endorse the


bank has been praised for providing more monetary stimulus and cutting


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


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


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


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


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


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


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


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


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


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


indicate the first signs of Brexit anxiety.


A quick look at how markets are faring.


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


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


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


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


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


That stands for Music of Black Origin.


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


The awards were founded by Kanya King in 1996 to celebrate


the wide-ranging genre in the mainstream media.


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


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


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


and its influence further into international territories


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


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


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


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


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


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


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


that there was no mainstream platform where these genres could be


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


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


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


a research as an independent television production company, with


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


championing and celebrating emerging talent so lots of artists around the


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


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


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


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


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


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


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


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


there is no other platform they would be celebrated and recognised


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


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


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


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


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


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


LAUGHTER In a moment we'll take a look


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


IKEA adverts. But first here's a quick reminder


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


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


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


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


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


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


discussed earlier. Sue Noffke, UK Equities Fund Manager


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


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


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


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


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


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


norm because you are probably arguing or doing the ironing or


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


this morning affecting much of England and Wales. Visibility down


to 50-100 metres in the worst


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