23/11/2016 BBC Business Live


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


The UK Finance Minister gets set to announce billions


of pounds of new government spending amid forecasts


Live from London, that's our top story on Wednesday,


Increased funds will go to infrastructure,


research and those who are just managing, but will the national


Also in the programme - rumours Facebook is working


on censorship software to accommodate China's data requests


- the company has neither confirmed nor denied the reports -


Markets in Europe are mixed today, but everybody is celebrating on Wall


Street as the Dow goes above 19,000 for the first time.


The oil giant Shell serves 20 million customers a day


in its retail outlets that are attached to petrol stations.


So are they really a one-stop shop and what will the forecourt


It's Black Friday soon but some brands are scrapping big reductions.


We want to know, do you still wait for the sales?


Let us know - use the hashtag BBCBizLive.


The UK's Autumn Statement, which is just the Budget,


will be announced in a few hours' time.


It's especially important this time around because it's the first


fiscal plan that's been unveiled since Brexit.


And the UK leaving the EU means specific challenges


that the Government will have to face head-on.


Phillip Hammond is likely to pledge increased


?5 billion or $6.2 billion is the number being mentioned.


That's modest compared to say Donald Trump's one trillion dollars


Another area likely to get a cash infusion is research


and development in the science and tech sectors.


?2 billion - nearly two and half billion dollars -


will go to the industry, which is being touted


by the Government as a long term investment strategy


But the money to pay for this has to come from somewhere.


The government is likely to borrow ?100 billion over


With me in the studio is Kate Andrews, the news editor


at Institute of Economic Affairs, a conservative leaning think-tank


and in our Business newsroom our business editor Simon Jack.


Kate, if we look at what the Chancellor has to give away, there


is not much money in the pot? There is not a lot of wiggle room, is


there? Growth forecasts are down according to the Office for Budget


Responsibility and he is looking at higher inflation figures which is


why I think we are seeing stranger things in this Budget that have been


released. For example the big headlines are the fact that he is


going to try to ban letting fees this. Is something where the


Chancellor can come in and not have to commit any of his spending to


doing something that seems like he's trying to help those who are just


managing, but this is him basically skirting around the issue of the


housing crisis. He is not really in a position at the moment where he


can be flexible or bold in a lot of his statements. He has a looming


deficit and a debt that he's going to have to tackle. Simon Jack, Kate


outlining that there is not a lot of money really in the pot to be


distributed and also coming in that era of slowing economic growth.


That's what everyone will be keeping a really close eye on, won't they,


the forecasts? The news from today's Autumn Statement will be just


exactly how bad the public finances look over the coming years. Now


remember the original plan as early as just as soon as March of this


year, was that the Government wouldn't have to borrow any machine


at all by 2020. In fact, it would be getting more in in taxes than it was


spending. That's been ditched that as unrealistic. What we are going to


be looking at out for is how much money they will be borrowing per


year by the end of the Parliament. Some of the number crunchers reckon


it will be ?25 billion per year, that's adding ?25 billion every year


to a debt pile that the Chancellor has already called eye watering. So


what will be interesting is his language about about when he wants


to balance the books and over what time frame? It will not be some


date, it will be an aspiration, expect a lot of aspirations today


because aspirations are free and spend something not! Kate, do you


think he would hold back today, Philip Hammond, in terms of what he


may or may not announce, because he wants to wait for a Budget before an


election in 2020 and also a Budget that's during or after Brexit


negotiations? Certainly, well Brexit is that huge question mark, the UK


a net ?10 billion back. That it a net ?10 billion back. That it


would be normally paying to the EU, but it is not obvious that he will


have that money yet to play with depending on the relationship with


the EU going forward, some of that money might be going to the EU to


buy into the single market, perhaps. There is a big question mark for him


around what figures he is going to have to play with going forward, but


we should be concerned about the fact that the da debt is estimated


to be around 90% of the UK's annual GDP. It is staggering and it is not


money that can be put off forever. At some point future generations


will be taxed and borrowing will impact us and with Brexit looming


and everything, it is a gamble to be borrowing this much at this time.


Simon, the question is how much this is going to cost us as a result of


the vote to leave the EU? The very wildly ranging forecasts of what


that could mean? Yes, I think it will be tempting to look at the


March Budget and the way the OBR set out its plans there and look at this


one and compare the two and say the difference is the cost of Brexit and


over the next five years some will say that's ?100 billion. Economies


are dynamic things. It is difficult to ascribe one things. Are


businesses investing bes because of Brexit? Probably. Is inflation going


to be higher because of breaks snit Yes, because of the fall in the


pound. In today's forecast we will show that growth for this year looks


like it will come in exactly on target and yet we already know he's


going to miss his borrowing targets this year. Even when growth is on


target you can still miss your borrowing forecasts. So that Iing


that it is to do with Brexit, we have to be careful about how much we


definite ascribe to one phenomenon. Simon, thank you very much indeed.


Kate Andrews, news editor at the Institute of Economic Affairs,


really good to talk to you, thank you very much.


There is more on the website from the Autumn Statement. Special


coverage from our team who will stay across the announcements as they are


made. Special details there on the BBC News website. Just look for the


Autumn Statement 2016 section. Lufthansa has cancelled almost 900


flights after it lost a last-ditch The two-day strike began


at midnight local time. Lufthansa says about 100,000


passengers will be affected. The industrial action is part


of a long-running dispute involving 14 strikes in the past


two and a half years. Three Australian employees


of gambling group Crown Resorts, who were detained in China last


month, have been formally arrested. The three were among 18 Crown staff


held after a police operation, believed to target Crown's


marketing activities. Casino gambling and promoting


gambling abroad are The Japanese car maker Toyota


is recalling more than 800,000 minivans in North America over


concerns the sliding doors could open while


the vehicle is moving. The recall affects Sienna


minivans from 2011 to 2016. Toyota says it is still developing


a fix for the problem. Sally, you came up with a good fix?


I thought a lock might work well! The New York Times is reporting


Facebook has been working on a tool that could pave the way


for censoring certain content if the network


was ever to launch in China. Facebook has not confirmed or denied


the software's existence, It is learning more


about the country. Robin, tell us more about what


Facebook is supposedly thinking through? Well, the big question for


Facebook, it has one billion users, where does it get the next one


billion from? Facebook looks like that. You can't get it because it


hasn't been in this country since 2009. Mark Zuckerberg has a possible


solution. The potential here is vast. He met the president, we have


seen him running through the smog during visits in Beijing and we have


evidence, some might say in reports in the New York Times that Facebook


is trying to develop software which will allow it to exist in China and


exist by new rules and new laws that China insists on having if social


media giants are allowed to be here. That software will allow, according


to the New York Times certain content to be blocked from specific


geographic areas. Facebook and other social media giants do take down


some content, but this would allow third party actors, other companies,


to remove content at the behest of the Chinese Government. Very


interesting. Robin, thank you for filling us in.


Tell us what you think about that. Use the hashtag BBC Biz Live.


Most of the markets in Asia were higher. You can see hong don'ting


down at the close. The big story is the Dow. Going above 19,000 for the


first time, closing above that. You can see behind me there and all


markets in the US were at record levels at the close on Wall Street.


Let's look at Europe right now. Just to give you a sense of how the day


is progressing. All higher at the moment. It is a really interesting


time we're in. Is it a bubble we're experiencing in share markets? We


will talk about why we had a good session on Wall Street.


Here is Samira. Trading volumes will be light, but before carving the


turkey, there are a few bits of economic news to chew on the durable


goods orders for the month of October are expected to increase


1.5%. But non defence related capital goods orders are expecting


up 0.2%. Now, this is actually a closely watched number as it gives


us an idea of how businesses maybe planning on spending money going


forward. And new home sales, increase 0.3% in October.


Agriculture and construction equipment maker Deer are are


expected to report lower earnings due to a fall in products.


Mike Amey, Managing Director and Portfolio Manager at PIMCO is here


People were reluctant to commit their money before the election


because of the uncertainty created over previous, you know, political


events, Brexit for example. So I think there was money on the side


and the two things that happened really has been the focus from the


Trump campaign about Government spending and that's obviously helped


US stock markets. A bit of money on the side. But the two together and


there you go. Above 19,000. That's right. The challenge at this point


is do we keep going up or do we take a pause for breath as you mentioned?


The pause for breath could be the Fed move next month, do you think or


not? What will be the reaction when from interest rates go up next month


which most people believe they will? So we and most other people expect


the Fed to raise rates next month which will be the second time


they've done it. We get minutes today, don't we? We do. I think


really what investors think about is on the one hand with Trump you have


this positive, you know, Government spending story. On the other, you


have this kind of withdrawing from global trade and all those aspects


of the Trump policy. The markets are focussed on fiscal spending. If we


get more focus on the trade then things could become a bit more


challenging. Mike, for now, thank you.


The oil giant has more shops around the world


than Starbucks or MacDonald's and with low oil prices


squeezing petrol income, it's looking elsewhere


You're with Business Live from BBC News.


Thomas Cook has reported a ?41 million fall in profits


after what it called a difficult year for tourism after terror


Theo Leggett has been looking at the figures,


We saw it with easyJet, and this time Thomas Cook. That is true, but


look at my graph, see what has happened to Thomas Cook's share


price, up 9%. That is a strong reaction, because investors believe


that things could have been a long worse. If you look at their


underlying profits today, ?308 million earned in the year against


310 million last year, which flatters things a little, because of


the effects of the fall in sterling, which massaged the figure is a bit.


If you strip that out, there is a fall of ?41 million. They had to


deal with a number of outside factors, especially a fall in demand


in travel to Turkey, one of its major destinations, especially for


its German business, and it saw a drop in numbers to Egypt and


Tunisia, but they have been working hard to move their destinations away


from the eastern Mediterranean and more towards the western


Mediterranean, the Spanish islands, for example. It was prepared for a


drop-off in passenger numbers to areas like Turkey. Therefore it has


done better than expected, and as you can see, investors are quite


happy about that. The latest results ad. As the owner pointed out, shares


going up and up, at a time expected. They could look at our page,


dominated by events today, it is all about the Autumn Statement in the


UK. And not from our colleagues at BBC Radio 4. The Chancellor to


gloomy about the economy, apparently, but infrastructure


projects are on the cards. What that could mean in terms of jobs and


economic growth. We are right across this for you,


you can follow Simon Jack, and others, on Twitter. The live page


will be updating throughout the speech. I have been told it will be


a short one. Due to kick off at 12:30pm, full


coverage on the BBC. The UK's Finance Minister is poised


to announce billions of pounds' worth of new Government spending,


but is Britain's national-debt We will have the forecasts for


economic growth as well. We will stay across that for you.


In a world of falling oil prices and squeezed profit margins,


the companies selling it are increasingly looking for other


And that's clear on the petrol-station forecourt.


Shell runs the biggest single chain of petrol stations,


it's got around 43,000 around the world.


Close behind are China's state-owned Sinopec, Exxon Mobil and BP.


Shell is increasingly using those sites to sell


It got through 250 million cups of coffee last year


In fact, in the US it's come full circle, and the stores now dominate.


Around 80% of all motor fuel bought in the US is sold in


Istvan Kapitany is the executive vice president at Shell Retail.


Good morning. Good start, I got your name right! You were smiling when we


talked about how much coffee and drinks you sell, but it is an


important point, an important source of revenue. How has that changed? It


is rapid change in the last ten years. 35% of the customers who are


coming to the 44,000 service coming to the 44,000 service


stations around the world are buying fuel only, and 50% of them are


buying convenience retail items, like offing. In the UK we have the


biggest Costa Coffee chain, almost every Shell service station has won.


That is really growing, we are introducing it in more countries,


with global partners. I can see how drinks and food are ages for fit,


because people wanted on the go. But you can also pick up strange things,


flowers, call for your fire, although anybody buying flowers from


a petrol station will get it for -- in the neck! But they are not


convenient things. It is growing, it is interesting how habits are


changing. In many countries, we are starting to sell what we should have


been selling for a long time. Steak and kidney pie in the UK! We are


still working on the fish and chips programme! We need to become more of


a convenience outlet around the world. That is what the Gucci must


tell us, the reason why be do this is not just because of the oil price


being low, because it is what the Gucci must would like. You have had


a challenging recent couple of years, the cost of lower oil prices,


and many of the kickabout Lolo oil forever now, so that is a world you


have to get used to. But also, how we are moving around this changing,


the driverless vehicles conversation, electric vehicles, all


of that kind of thing. How will you change? What will you do to


accommodate those changes in the future? These changes are not


entirely new, some of the elements are, but if you look around the


world, we are selling biofuel, we are the number one in the world. We


are the only company which produces second-generation biofuel, it is


very environmentally friendly. We are selling petrol and diesel, more


and more, with all of the changes, we need to adapt, so we are at the


forefront of building hydrogen service station networks in Germany


and the US, and we are starting in the UK next year. Hydrogen -- one


fella is three minutes, so it is a good proposition. As you move into


that realm, hydrogen, biofuel or a battery change, cost is important.


From that point of view, I assume you are in a position of strength,


it is a brand we all know, wherever we are. It is more than 100 years,


it is a trusted brand, we have a strong brand preference, almost a


quarter of the world's motorists say, we prefer Shell. Where ever we


go and start with electric charging, there is a trust, because they know


we put research and technology behind it, we are spending $1.1


billion on research and development in the company, this is their sense


of the company technically. We are well prepared, and we are trying to


participate in shaping this. In hydrogen, electric charging we have


in Norway and Russia and Spain, and we are starting in the UK. What is


the one thing I can buy at one of your forecourt that I cannot buy


now? It will be the fish and chips, hopefully avoid you! It is a global


programme, we have that everywhere in the world! I will hold you to


that! If you are wondering, Hungary. Hence


the name. 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 life pages where you


can stay ahead, with all of the breaking business news. We can keep


you up-to-date with the latest details, with insight and analysis


from our team of editors around the world. We want to hear from you as


well. Get involved in the BBC web page. We are on Twitter and you can


find us on Facebook. On TV and online, whenever you need to know.


This is a story we asked if he was about, big sales are getting smaller


at department stores, Black Friday is traditionally the time when they


sell things cheaper, it is ready for Christmas and Thanksgiving, but


maybe not so much any more? Classically, we think sales on Black


Friday, but some of the core brands are resisting. In the department


stores, they say, I don't want to go on discount, I want to maintain my


price premium, and I will take the lower volume. A tug-of-war between


the department store and the brands in the store. For years, we have


been told it is relentless pressure and competition, so maybe there is a


bit of... Chris is challenging my attitude, he says, sales are of no


interest at all, nasty, cheap, unwanted stock and hideous queues.


Utter madness. Happy Wednesday morning! But it is all of those


images that we see. That's talk about Eurostar, operating between


Continental Europe and the UK, is axing 20 trains a week between


London and Brussels. Sadly, some of this is related to a fall in tourism


for that particular route. The number of daily trains will go down


from nine to seven. There will be more flights from London to


Brussels. That is interesting. Not super environmentally friendly. If


you read the comments, it is not lost on many people, talking about


the gravy train to Brussels. Maybe that is finally drying up. Not my


view, just the view of some of those comments underneath.


Thank you for your company, have a good day. Children for the Autumn


Statement. See you later. Goodbye.


The last few days have seen some extreme weather around the country.


Over four inches of rain in the south-west of England. Scenes of


flooding in the south-west. More recently further north as well, into


parts of northern


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