12/12/2016 BBC Business Live


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


Oil prices surge after producing nations agree a cut in output.


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


It's taken a while, but both Opec and non-Opec nations have finally


They're hoping to end more than two years of low oil prices.


Spanning the globe in a single leap.


Now travellers can fly non-stop from Australia to the UK.


We'll get the details from our Asia business hub.


And after more record rises on global stock markets -


that rise in crude prices has also pushed the numbers higher.


And we'll be getting the Inside Track on an energy


company that's electrifying African homes and businesses with a little


We'll be telling you how a little later.


It's being reported that Amazon workers have been sleeping in tents


close to the company's warehouse in Scotland.


Today we want to know what lengths have you gone to to be close


to your workplace in order to save time and money?


A very warm welcome to the programme. We are starting with oil.


Oil prices have surged in overnight trading.


Brent crude rose as high as $57.89 per barrel,


It has fallen back a little since then and a short while ago


it was trading at $56.64, still up 4%.


Well, the rise in prices comes after an historic deal was brokered


over the weekend at the Opec HQ in Vienna.


Opec of course is the cartel of oil-producing nations -


Saudi Arabia, the world's biggest oil exporter,


has committed to cuts of almost 500,000 barrels


In response, other non-Opec members - including Russia -


also agreed to cut their output in order to boost prices.


They are pledging to slash output by 558,000 barrels per day.


Also there were producers representing Azerbaijan,


Oman, Mexico, Malaysia, Sudan, South Sudan and Bahrain.


The moves come after more than two years of low oil prices, which have


The deal marks the first global pact for 15 years.


Manouchehr Takin, International oil and energy consultant is with me.


As Ben says, this is key, because you have Opec and non-OPEC members


agreeing. Yes, we have to remember that from January onwards they will


start cutting gradually, so they haven't reduced yet, but the market


despite sceptic and negative commentators, the market has reacted


positively. My feeling was that Opec would agree, and now they and


non-OPEC are agreeing. As you say, there are sceptics out there about


whether these countries would deliver on the promise in the New


Year. What makes you think they will do this time? Because it has taken


two years, the stand-off, who is going to blink first, and they have


all blinked together. Because they are all losing, so the amount of


reduction of volume they do compared with the increase in price, the


total revenue will be higher for all of them. And just to say that try to


counter that scepticism, Opec are saying we are having a meeting in


Vienna in May next year to review how it is all going. Yes, they are


setting up a steering committee. They had this before on previous


occasions, but they are serious. All these mechanisms are there, but they


will have change, if one country over produces, it will be seen in


the statistics. Mostly they have all suffered, even Saudi Arabia, the


richest country, has gone to loans and debt, so they are all cutting, a


little bit of price going up, it is worth their while. Just briefly,


Manouchehr, when this all kicks in on the production cuts take effect,


what are we looking at? That is the million dollar question, but they


are definitely up, we go to $60, $70. I don't think it will go much


higher. Opec is hoping for something about $60 or a little bit more,


because shale oil and other producers have come back a little,


and they will increase supply, and that will cap the price. The price


cannot go up that much. Manouchehr, thank you viewer time. Many energy


stocks higher, the likes of BP and Shelter trading higher today.


The Venezuelan government has announced it will replace


the country's highest denomination bank notes - the 100-bolivar note -


It hopes the move will combat smuggling and tackle


the chronic shortage of food and other basic items.


President Nicolas Maduro says smuggling gangs that operate


in border areas won't have time to repatriate the money.


A similar move in India recently caused chaos.


State carrier Iran Air has signed a deal to buy 80 passenger planes


It is the biggest US-Iran deal since the 1979 Islamic revolution.


Boeing says the deal is worth $16.6 billion


at current list prices, and had been approved


The first planes are scheduled for delivery in 2018.


It's being reported that Italy is ready to pump capital into Monte


dei Paschi di Siena, if the ailing bank fails to raise


the money it needs from investors to remain in business.


A source at the Italian Treasury is quoted as saying that "The bank's


existence and its clients' savings will be preserved under


On Sunday the bank had announced it would go ahead with plans to seek


It is a brand-new week, and we are struggling with technology. They


might not notice! We are just trying to find the live page, and we have a


new iPad, you may notice. We can't get the pictures to load on the


website. I have got it! But there are no pictures, for some reason.


Guys in the office, can you sort the pictures out, please? There we go!


We have a picture! You can tell it is a Monday morning, can't you? Some


of the stories they are covering, Italy is the story of the day,


because as we just mentioned there, Monte dei Paschi will be preserved,


that is crucial because that is the one that is most at risk as far as


debts are concerned in Italy. And shares are up in Italy on that


story. Australia is to build


a new airport in Sydney, PM Malcolm Turnbull gave the project


the green light just hours after it was confirmed that


new direct flights are to be launched between


Australia and the UK. It is quite phenomenal where we are


today given that in the 1930s when they first tried to get from London


to Australia by plane. That's right, but the deal to build Sydney's


second airport comes after seven decades of political squabbling, so


it is also big deal. It will be built at Badger's Creek, and the


first runway will open in 2020, and will take about a quarter of


Sydney's current capacity. Qantas announced plans to fly nonstop


between London and Australia, the 17 hour flight will start in March 2018


from London to Perth. This is just about boosting visitor numbers. The


new airport is central to Prime Minister Malcolm Turnbull's drive to


keep the economy turning over after the end of the money drive. Think


about how many films you will be able to watch in 17 hours on that


flight! Let me show you the market numbers. That is what has happened


in Asia, heading higher as a result of the stronger oil price. And that


is what you need to know as far as oil is concerned. A similar picture


we should savour Brent Crude listed in the UK. But let's take you to


Europe. We will keep a watch on events, markets tending to be


looking towards the US about what happens as far as Donald Trump is


concerned, that business friendly rhetoric we have heard from him, and


whether that comes to fruition, we will find out in the New Year. Let's


head stateside. Michelle Fleury has


the details about what's ahead The main focus for Wall Street is


this week's Federal reserve meeting. The bank is expected to raise


interest rates by a quarter point for the first time in 12 months. It


is a move that has been widely telegraphed, but what investors want


to know now is the size and frequency of future rate hikes.


Given the potential boost to the economy from a Trump administration


that has focused on tax cuts and stimulus spending. And Mr Trump was


my own business interest will be under the microscope this week. He


would announce his plans to avoid conflict-of-interest while he is in


office. For those looking for a diversion, Oracle launched its


second quarter earnings on Thursday, and how much longer will the


post-election rally last? They are keeping a night on the Jones


industrial average, which is surging towards 20,000 points.


That was Michelle Fleury. Joining us is Kathleen Brooks,


research director at City Index. Nice to see you. All of us touching


on lots of issues to talk about. Michelle talks about the Fed in


midweek, although everybody seems to agree on what is going to happen,


but it is a big deal? It is, not because of what they are going to


do, which is 100% likely that they will hike interest rates, but it is


what they say about next year, the year after. Will we Mbaye, rate hike


cycle in the US? Trump has lifted the market, his expectations,


wanting to boost inflation, but will the punch bowl be taken away before


the party has begun by the Fed signalling rate hikes? And if you


add that to oil prices rising, that will mean more inflation and higher


interest rates. And that will also be an issue for other inflation


targeting central banks like ours, like the ECB, so I think we could be


in the deathknell of the low interest-rate environment. Alex has


tweeted to say he likes how I pronounce Monte dei Paschi, so I


will say it again! So about this cash injection, reports say they


will bear it out at all costs, because they have to protect


investors? Yes it looks like they are going to get ready to bail it


out, but it is still banking on potentially Qataris coming in with


private capital. And surely the state isn't allowed to bailout the


bank according to rules set by Brussels. What they will do with


Monte dei Paschi is that will determine whether or not banking


union can go ahead. The banking union tried to split the impact of


banking risk and what goes on on a sovereign balance sheet, but they


may not be able to do it this time because it is too painful to let a


bank go to the wall. Too big to fail. Kathleen, good to see you,


have a good week. Why buying electricity in the UK


could help power parts of Kenya. We speak to the energy firm helping


thousands of Kenyan villages You're with Business


Live from BBC News. The British Chambers of Commerce has


upgraded its forecast It now believes GDP will grow


by 2.1% in 2016 up from 1.8%. But the long-term picture


isn't looking so rosy - it's now lowered forecasts


for 2018 to 1% from 1.4%. The Director General


of the BCC is Dr Adam Marshall Good morning. Talk us through these


numbers, because it strikes me given all this uncertainty we have seen


big predictions, up, down, left, right, for what the economy is going


to do. How confident are you that you have got these numbers right? We


always forecast steady growth in 2016, and we have raised it or not,


because we have seen a lot of firms adopting a business as usual


attitude, and cracking on doing deals through the course of this


year. But we do think it will come off the boil next year, we are


predicting 1.1% for next year and 1.4% for 2018, and the main factor


is inflation following the devaluation of sterling. Businesses


and consumers will be hit with inflation, and that will affect


their decisions. And what about Brexit? That is what prompted the


rise in inflation, and that devaluation of sterling as well, so


it is one of many factors. Luckily we are not looking at a recession,


nor are we looking at a spike in unemployment. We are just looking at


less inspiring growth over the couple of years to come. So what are


you saying to your members in the light of that? What do they need to


do to counter the falling growth? The first thing to do is make sure


your company is ready for change and uncertainty, and IAC businesses day


in and day out who say they are not just ready for it but looking


forward to it. At a micro level, you have a lot of firms out there who


are seen disruption and change as an opportunity to grab new markets and


grow and look at new places around the world they can export to. That


is fantastic. The economy as a whole other macro level doesn't feel quite


as confident, there is still uncertainty out there, so businesses


need to get ready and the Government needs to back up. Good to talk to


you, Dr Adam Marshall. Thank you very much indeed. Let's take you to


the live page, Asos is hiring 1500 staff and will put them in its


London HQ, this coming at a time where conditions were described as


exploitative. You're watching Business Live.


Our top story: Oil prices have surged after both


Opec and non-Opec nations The agreement comes after more


than two years of depressed prices. We are seeing the oil price surging.


You can see the markets in Europe fairly mixed, but the ones that are


winning today are the big oil majors, Total, BP, Shell, those


companies are pushing up the main indexes in Europe today.


Now, chances are you don't much think about your power provider.


You might shop around for a cheaper deal, but that's about it.


Well, now one firm says as well as offering cheaper prices,


Brighter World Energy says it can undercut the big six energy


providers in the UK and at the same time help areas in Africa


that don't yet have an electricity infrastructure.


The company says that for every 20,000 customers in the UK who sign


up, it will install a solar power rig in, an African


village that doesn't currently have any electricity.


The first solar powered micro-grid is expected to start operating


The company was founded just this year by 33-year-old former


journalist Cheryl Latham and hopes to invest ?1.4 million in Africa


I want to clarify, it is 2,000 customers, isn't it? For every 2,000


customers. Not 20,000! Just so we get that right because


20,000 is a big goal for you to achieve and you think you will hit


your 2,000 in the New Year, your first 2,000? Yeah, we do. We think


that people in the UK really under estimate the pour we are of their


purchase. Here in the UK we under estimate pour we are in general,


that's the power running to our homes, but the power that we've got


to talk about the world we want to live in and doing something


differently. We are being told that in the UK that the big six are


keeping prices higher. And we should be switching and we are not


switching as much as the regulators are telling us to and some companies


have gone bust in the meantime? Yeah, well GB Energy went bust


because it was selling energy too cheaply and we are here to inspire


customers, the majority of customers who are sitting on the expensive


standard tariffs to come over to our's and give back while they


switch on the lights at home. You will be making a profit and you will


be staying in business? We are a procht for purpose company. We are


backed by a not-for-profit energy Ofgem relayed supplier. It is a


very, very secure business model, so we cut out comparison sites and


don't pay inflated salaries and we want to ensure that UK customers can


give back to the world around them as well as make sure that they've


got the best presents under their own Christmas tree this year. Let's


talk about what you're doing internationally then. How does that


translate? If I'm a customer of yours, how does my money get used in


Africa? Energy equals opportunity. So if we can put down some solar


power grid where the sun is in abundance, children can study into


the evening, vaccines can be stored safely, streets and homes can be lit


at night. It sounds wonderful, but in terms of the logistics of it,


what have you had to do in terms of working with the authorities to make


sure this does happen. Do you have a team out there that install these


things? We have got a team out in of a rick rick and we have been out to


Africa on numerous occasions, we have spoken to the World Bank and


Government officials and there is a huge appetite because I think many


African nations know that rolling out grid infrastructure is


particularly extensive and reaching the most remote, the last mile


communities will be difficult and you have got to include the private


sector. What does it cost you as a company to put out one of the grids?


Between $70,000 and $100,000. US dollars? That's why it is a


community of people here in the UK switching on a community over in


Africa. It costs $70 for every customer to switch. If we cut that


out, we can use that to give back to people elsewhere. You are a former


journalist... Yes. Now you are running the company and heavily


involved in the work in Africa. How do you make the leap from there to


there? Well, this was the kind of company that I wanted to buy from


and it didn't exist and there is a whole new generation of people out


there that want it do good with their money and care about where


their money goes. I was a business editor on a national newspaper and I


was looking, I realised that businesses had a huge opportunity it


do some fundamental good in the world. So I ditched my career at 30,


I went and studied an M BA, I got involved in merge, in clean


technology and I built the business over the last two years and raised


investment and launched last month. Well, all the best. Thanks. Good


luck. I look forward to your switch! We will keep an eye on you, that's


for sure. 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 Live page is where you


can stay ahead with all the day's breaking business news. We'll keep


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


from the BBC's team of editors right around the world. And we want to


hear from tu. Get involved on the BBC Business Live web page at:


And on Twitter we're at: You can find us on Facebook at:


Business Live on TV and online whenever you need to know.


The BBC's Dominic O'Connell is with us.


What lengths have you gone to to get to work on time or save money? Let's


talk about the massive Italian bank to start with. Sources from the


Treasury are saying a rescue is in place. What do you know? Yes, I


don't know if it is completely done and dusted. Overnight the third


largest lender in Italy, it is very old, it is the oldest continuously


trading bank in the world, it has a long track record, but it trying to


stay afloat. If it is going to do the rescue deal, it will have to


bail-in its lenders. Some of the lenders are ordinary retail


investors. So you can imagine the Government coming to power, saying,


"You have to foot the bill for a banking collapse." Where is this


money coming from? The cornerstone was meant to be the state of Qatar.


Between the two of them you get to five billion. Whether it will


happen, without the Italian state having to intervene against Europe's


rules and you have another clash between the Italian national


Government and Brussels, the whole thing is not done and dusted yet. It


is very, I think, this has a long way to run. Dominic, an astonishing


story. Amazon workers in Scotland sleeping near the warehouse in


tents. That picture really is damning,


isn't it? It is actually. There have been a number of investigations into


Amazon's workplace practises and some of them uncovered some


unhealthy and unsavoury tactics. It is part of the whole two-speed


economy. Asos said it was going higher another 1500 people in --


hire people in London. These are in IT and marketing and planning. You


have this idea that in London and around the M25, highly skilled well


paid workers. Outside the M25, working for the same company,am


sorngs aso, you're not so secure and not so highly paid.


It is not just about Amazon, but it is the delivery people. There was


concern about the different smaller courier companies and the people who


work for them? Amazon, of course, subcontracts the delivery and a lot


of the delivery firms are subcontracted so they don't have


responsibility for the employment. Who are these people really working


for? We were discussing that, the crux of this is they have to pay ?10


to get on the bus to travel there because there is no other public


transport, but that takes a big chunk out of their money, but we


have to pay to get to work, is it fair this is a particular problem


for Amazon? It is wrong to decry Amazon, this is one example a few


people. We need to talk to the workforce, do they enjoy their job?


What would they be doing if they didn't have Amazon?


Thank you for your time. We're back tomorrow. Fingers crossed the tech


will work. See you soon. Bye-bye. Good morning. It has been a rather


grey start to the day. We've got a lot of low cloud around and


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