24/11/2016 BBC Business Live


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


European governments are spending big to boost growth


Live from London, that's our top story on the 24th of November.


Britain's national debt set to hit almost ?2 trillion in the biggest


jump in borrowing since the financial crisis.


We look at Europe's deteriorating public finances.


Also in the programme: Flying high in China.


Skyscanner, the travel search business, has been sold to a Chinese


And as US markets rise, they fall in Europe.


The weak pound has boosted tourism in the UK.


So we hear from one hotel developer about plans to expand in Britain


But if you are planning a trip to London and you are eating out, it


could be costly. As a new list names and shames


the most expensive restaurants in the UK capital, we want to know


what's the most you've A very warm welcome to the


programme. Yesterday Britain's finance minister Philip Hammond gave


the autumn budget statement. He warned that after the vote


to leave the EU, the UK is on track for the biggest deterioration


in public finances since the '60s. Mr Hammond said that government debt


will hit 90 percent In other words, Britain will owe


almost as much as the whole Greece also hit the headlines


with its own debt crisis and its national debt is approaching


twice the size of its economy. But Italy and Portugal now also have


debts far bigger than their GDP And France is also more indebted


than the UK at 97.5 percent. It leaves governments very


vulnerable if borrowing costs start The group of developed nations,


the OECD, says governments should With me is Linda Yueh,


professor of economics A familiar face. Good to see you.


Everybody is die testing the news about the Autumn Statement, whether


it is good, bad or ugly. -- digesting the news. What is your


take on it? It is the job of the OBR to slow growth, and that is related


to the UK's decision to leave the European Union, and they think that


will add ?59 billion of debt, and the remaining ?122 billion will be


added to the national British debt because of decisions by the


Chancellor to invest more, which helps a bit. But what we should


probably take away from it is that you need growth to bring debt down,


and his investment in infrastructure and others is intended to boost


growth. Hopefully in his view that will be coming down eventually and


by the OBR's estimate it will peak in the next couple of years and then


come down again. To be clear you are talking about the JAMs, the just


about managing. Hard-working families not quite earning enough to


get through. In terms of the context that Ben outlined with Europe and


other economies, I know in the US for example, the debt to GDP ratio


is over 100%. And in Japan it is skyrocketing. Put it in perspective


for us. If you look across advanced nations, and obviously Japan is an


outlier, but the US and other European nations, debt levels since


the 2008 banking crisis have more than doubled, public debt. One of


the reasons for that is that when you have a financial crisis you have


a huge amount of debt, so the debate now is how to bring that debt down


nearly a decade after the crisis. In Europe they are talking about


boosting growth, investing in infrastructure, and the plan is to


invest 600 billion euros of infrastructure over the next few


years, and increasingly that is what Britain is doing and Japan has done


that for some time. President-elect Trump in America, that is what he is


intending to do as well. In terms of the risk that this debt poses for


the UK economy and for the US, it is not the same as Greece or Portugal


by any means, is it? No, it isn't. In the US and here, we control our


own currency, so we don't have to coordinate what we do. If you want


to spend more on infrastructure. Eurozone decides that for Greece,


for instance. They are different kettle of fish. The debate around


Greece is somewhat more striking because they clearly have had not


just about crisis but they have deep organs. Output is down since 2008 at


an implement is up 25% since then. Debt level is 125% of GDP. The


debate about to do with Greece's debt is about forgiveness. Debt


relief? Yes, writing off the debt, which is what you do for developing


countries, and that is a different kettle of fish for what we are doing


for developed economies. Thank you for that perspective. That will be


of interest to viewers around the world in terms of where we are with


the debt mountain, as it were. We will keep putting that into context


for you. In other business news: A strike by Lufthansa pilots is set


to continue for a third day after their union called


for the action to be Germany's flagship airline cancelled


900 flights yesterday and another 912 today,


affecting around 200,000 passengers. It's the 14th strike


since April by the union. Weak export figures have put


the brakes on German economic The German economy halved its growth


rate to 0.2 percent in the quarter despite rising private consumption


and higher state spending. Exports from the country fell by


0.4 percent on the quarter The Indian rupee has hit a record


low of 68.86 to the US dollar. The dollar has strengthened


on expectations of a rate hike next month following Donald Trump's shock


presidential election victory. There have also been concerns


about India's process of demonetisation as all 500


and 1000 rupee notes are removed from the economy,


prompting long queues outside It is a very busy day for business


news and there are lots of stories on the website, so dig deep. This


one about Airbnb. There are reports that Airbnb is in talks to buy


China's second biggest accommodation service, which I probably can't


pronounce. So far the Airbnb China focus has been on persuading


outbound travellers to book places around the world through them and


now it looks like they are looking to expand significantly in mainland


China, which is interesting. Keep your comments coming in about the


most expensive dinner you have had. The brilliant ones coming in. Lots


of grumpy comments. People not happy about spending money on food! Keep


them coming. Skyscanner, the UK-based


travel search business, has been bought by Ctrip,


China's biggest online travel Skyscanner is an Edinburgh-based


company. Nice to see you. This is an


interesting manoeuvre. Tell us more. Indeed. It is fair to say that we


have been hearing about Chinese companies going on a shopping spree


for quite some time, but unlike other deals that we have seen in


Hollywood entertainment or nuclear infrastructure, this deal has been


described by both bosses as win-win. Skyscanner allows users to compare


prices from different travel sites when searching for flights and


hotels. It is available in more than 30 languages with about 16 million


monthly active users. Ctrip is quite keen to get this global reach that


Skyscanner has got. Meanwhile Ctrip has quite a lot of money. It is one


of the best-known companies in China. Skyscanner just last year


looked for funding for expansion. Skyscanner has said it will continue


to operate independently of Ctrip's shares which are listed in the US.


They rose by 9% on the news. Thank you. An interesting story. This is


what is happening as far as the numbers are concerned. Shares in


Japan closing high up because of what is happening with the yen and


also expectations of what is happening in Europe. Europe is


funny. In the US, markets are rising with what the drum presidency will


mean for business, business friendly policies that he has proposed on the


campaign trail. -- Trump presidency. But in Europe there is the election


in Italy and in Holland and France and Germany early next year, all


weighing on the minds of investors. That is the current state of play in


Europe and more on that in just a moment.


Kathleen Brooks, research director at City Index, is here.


No action in the US because it is thanks giving and they are tapping


into the turkey. We had fed minutes out late last night. We have got the


reaction to the Autumn Statement happening at the moment. Certainly


from a currency perspective the more your government is willing to spend,


that is very good news for currencies. The dollar is doing


incredibly well and it is at a multi-year high events in various


currencies and the pound is doing well. -- against various currencies.


Austerity Europe is bad news for the Euro. And the stock market has


reached record highs. There are reports out there about the


divergences in the US and Europe in terms of where the money is going.


Europe is out of favour. The markets are not diving or anything, clearly,


but there is a different feel compared to the US. Definitely,


rocket has been put up the markets in the US and that is because


election risk has gone away. But how long will the Trump free lunch last?


He is talking about spending which is opposed to boost growth but it is


a temporary measure because at the end of the day you have got to pay


for it at somewhat. And what about the other anti-economic views he put


forward? People are taking an optimistic view in the stock market


that might not deliver. Autumn Statement yesterday from the UK


finance minister. Markets not very excited. All that attention is still


on the US? Definitely. It depends which market you are looking at. The


bond market did move with yields higher in the US and the UK. There


is a divergences. Overall it was a Loki Autumn Statement but it did


have a strong message behind it. -- low key. That is Philip Hammond's


style. Borrowing is back and it will be good for our economy, he says.


Watch this space. Looking ahead to December, everyone is looking to be


on the same page, with a rate hike in the US. The markets are


predicting a 100% chance of a hike, which I have never seen before. But


they could be wrong! If it doesn't happen there will be a tsunami! We


need some certainty! We are talking about expensive restaurants and you


are sending in your thoughts thick and fast. Keep them coming.


Still to come: How London is cashing in on China.


With a slump in the value of the pound after the Brexit vote,


we meet the hotel chain that says it's tapping into the Chinese


tourism trend with big expansion plans in the UK.


You're with Business Live from BBC News.


They make the toy trains, planes and automobiles that have


delighted children for decades but in a world of smartphones


and computer games, revenue has taken a hit.


We're talking about Hornby and they've just reported


Theo Leggett has been looking at them for us.


What do they show? On the face of it they don't look great. Hornby makes


toy trains like this one I prepared earlier. Also I fix kits, model


planes, Scalextric racing cars, but unfortunately they are not as


popular as they used to be, even though people like myself and my


cameraman Peter art enthusiasts. The underlying profit has gone down over


the last six months. It is making a loss. ?3.6 million in the six months


to the end of September against 4.3 million in the same period last


year. But there is more to this than meets the eye. Their debt has gone


down substantially. Why? That is because Hornby came close to


collapse earlier. They went cap in hand to shareholders, launched a


restructuring programme, have closed down unprofitable product lines,


getting rid of unprofitable concessions and so on, and at the


moment they say the recovery plan is an track. Did they use that pun?


They could be running out of steam! Because of Brexit Dahmer presumably


and the strength of the pound? Out of steam? Awful. There is a


potential Brexit problem for Hornby. They have had to raise their prices


because they saw as most of their products overseas. They pay for them


in dollars and much of what it sells is sold in pound sterling in the UK


and it books its profits in pounds sterling in the UK. The sum total of


that is if the pound goes down, the profits are eroded further, which is


something they have got to content with. They have had to raise their


prices 10% since October and there could be further price rises in the


pipeline, which is a potential headwind for the company.


Ben and I had a chat. We think you were a Hornby kind of a boy, did you


have them? My kids have a Scalextric and I play with it! I did have


trains but not Hornby. I said that! Dominos is going to open more stores


in the UK, it now wants 1600 up from the previous 1200.


You're watching Business Live - our top story.


The Office for Budget Responsibility has forecast a substantial rise


National debt as a proportion of GDP will rise to 90.2% in 2017-18.


80% is recommended as a working figure. That is in reaction to the


autumn state out yesterday. A quick look at how


markets are faring. We had some poor news from Germany


about exports, imports for the previous month. That hasn't damp


dampened trade there. The DAX is up by just under 0.4 of a percent.


Now - what impact will Brexit have on business in the UK?


It's the question everyone is asking, but few have answers.


Well, the immediate winners have been tourists travelling to the UK.


They've cashed in on the weak pound - making their money go further.


Sterling fell sharply after the vote to leave the EU and it's meant UK


One tour operator specialising in Chinese travel to Europe,


says it saw a 20% increase in inquiries and bookings for the UK


this summer compared to the same time last year.


And last year was already a record-breaking year for visits


from China to the UK with almost 270,000 visits.


And it's why Dorsett Hospitality International is choosing


the capital to expand its hotel network It's one of Asia's fastest


growing hotel groups, and run by Winnie Chiu.


She is now according to Forbes magazine one of Asia's most


Victoria sat down with her and asked why the company is pursuing


I think in terms of why, it's really because the company started in Hong


Kong and Hong Kong is one of the most favourite sort of destinations


of Chinese going overseas. It's still one of their preferred areas,


the city to go to, and therefore it's very natural for us to make a


China wallet strategy. Currently the hotel have 12 hotels in Hong Kong


and we are opening one more. And so our focus is out bound Chinese


travellers. To give you another example about the Chinese consumer,


I think another thing which is very important to them is connectivity.


In terms of if you look at the cellphone penetration, China is


probably the highest in the world, so in all our Dorsett Hotels, we


give you a phone, whichever category room you check into, we give you a


phone, you can call countries for free, we have done research in terms


of where our favourite customers go to, you can call eight countries for


free, it also works as a pocket Wi-Fi so you bring the phone out and


give yourself your own Wi-Fi. Our customers really benefitted from


that and really love it. Shouldn't you be developing shopping malls and


not hotels? I love the people development and my father is a


property developer so I know it. Whatever business you choose, you


have to choose something that you are very passionate about. I'm very


passionate about hotels. You are absolutely right, according to


statistics I when Chinese go overseas, they spend 73% on hop


shopping and only 12% on lodging. But you can see the statistics


actually moving, so again it's like when travellers started travelling,


you want to, because to have visa, suddenly feel refreshed like oh wow


I need to buy this for my family. The Chinese travellers are moving,


getting more experimental and experienced travel so it's not just


purely shopping, they would want to sight-see. Again, I think as the


nations develop their travelling behaviour, it gets more developed.


So from shopping in the beginning, it will move to others. And you are


not concerned about the impact of Brexit on the attractiveness of


London for example as a destination. Because of the weaker pound, it


brings more tourists. So if you look at the number of tourists, there's


been an increase. The lower sterling heralds higher sales, I think


currency plays a big part when it comes to tourism. I still find the


UK very competitive amongst a lot of other destinations. I think the


reason being the heritage, there's so much to it. Also I think another


really important element to that making the UK attractive is the


schooling system, the education system. From a long time ago that's


always been the Asians coming here to study and again while you feel


more related to the city, the UK is still then a preferred destination.


That was the boss of Dorsett Hospitality International.


It was 20 years ago yesterday that the original Tamagotchis


They're small egg-shaped computers that were like a digital pet.


The original launch sparked a short-lived cyber-pet craze.


Here's a look back at what was getting everyone excited in 1996.


20 years ago! LAUGHTER.


The memories are flooding back! What was yourses called? I can't


remember. What happened to it, him, her? I think I took the battery out


because it was annoying me. So you killed your pet, is that what you


are saying? No, I put it down. Right. Kathleen has returned and we


are going to discuss several stories in the papers. Also one is in


business Insider about the 35 most expensive tasting menus on the


planet. Many are in London. No big surprise there at all. We asked


viewers to get in touch. Your thoughts, have you eaten somewhere


so expensive that that's all you think about is the money and not the


quality of the food? I have to say, I'm not the biggest fan of a tasting


menu, too many things going on. Too many types? Too many different types


of food in one go, but my husband has a few stories to tell through


work, he spent ?650 once on some sea urchin. Your face says it all! It


wriggled on the plate. And paid ?650 for the privilege.


Someone did, it was a business thing. Harry paid ?150 a head in


Edinburgh in one of the TV chef's restaurants, he doesn't name names,


but says all I did was eat bread so he paid ?150 to eat bread. Our


colleague Jamie Robertson said, if you remember the food it was worth


it, if you remember the price it wasn't, which is a superb comment.


Well done, Jamie. Washington Post, Donald Trump is selling a $149 gold


finished Christmas ornament. It's classic. A picture here, you can


that can go on your tree. The red hat he wore throughout the


campaign's turned into the working class hero, as you mentioned. $150


for this Christmas bauble, I don't know how many of us will buy it, not


quite sure where the money is going to, is it to pay down the debt of


his campaign which I know they amass a huge amount during the


presidential election. 14 carat gold baseball cap, what more do you need?


! A nice dinner out perhaps. Thank you. That's all from us for another


day. See you very soon, bye. Good morning. Once again, we have


seen some big


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